This document summarizes key principles of property law, specifically regarding the lex situs rule and its exceptions. The lex situs rule dictates that the law of the place where property is situated governs issues of ownership and interests in that property. For immovables, this includes capacity to own, formalities of transfer, validity of transfers and mortgages. Exceptions are succession matters, which are governed by the nationality of the deceased, and contractual rights/obligations, governed by the proper law of the contract.

1. Chapters 21-23
1. Property
2. Succession & Administration
3. Recognition and Enforcement of Foreign
Judgments
4F - Group 8: Aguilar. Dela Rama. Federis. Malto. Oracion. Reyes. Valerio.

2. Chapter 21: Property
Introduction
1. Lex Situs Rule
Immovables
1. Rationale of Lex Situs
2. Nature and Scope of Lex Situs
3. Exceptions to the Lex Situs Rule
Movables
1. Lex Situs as to Movables
2. Classes of Movables and the Scope of the Lex Situs
3. Intellectual Property Rights

3. Lex Situs Rule
- Law of the place where the property is situated
- Art 16, NCC: “Real property as well as personal property
is subject to the law of the country were it is
situated.”

4. Immovables
- Enumerated under Art. 415, NCC.
- Attached to the land
- Forms part of an integral part of an immovable
- Whatever is placed thereon by the owner:
- With the intention to attach them permanently, or
- To be used in an industry to be carried thereon
- Real rights over immovable property

5. Immovables
- Suit before PH court
- Subject matter: Thing located in California
- Issue: What law governs whether thing is immovable or not
- Held: California Law
- Ratio: The question in all these cases is not so much what are or
ought to be deemed movables or not, but what are deemed to so by the
law of the place where they are situated. If they are deemed part of
the land, they must be treated as such in every place in which any
controversy shall arise.

6. Rationale of the Lex Situs Rule as to Immovables
- Lex Situs: Governing law for all questions on ownership
of immovable and interests therein
- Rationale:
- Certainty
- Predictability
- Uniformity of Result
- Maximum Enforceability
- Need to protect reasonable expectations of interested parties
- The very nature of immovables, their immobility, provides
the reason for the application of lex situs.

7. Nature and Scope of Lex Situs: Immovables
- Immovables are governed by the lex situs.
- Internal law of the situs vs. Entire law of the situs
(including conflicts rules)
- Task of sitting court: To reach the same result as the
court of the situs
- Reason: The court situs is in a better position to effectuate its
adjudication, other courts are in a poorer position
- To achieve uniformity, court sitting elsewhere must handle
the problem as nearly as possible as the court situs would
have handled it.

8. Nature and Scope of Lex Situs: Immovables
1. Capacity to take and transfer immovables
2. Formalities of conveyance
3. Essential validity and effect of the transfer
4. Interpretation and effect of conveyance
5. Validity and effect of mortgages and other encumbrances
6. Marital interest in land
7. Equitable interests in land

9. 1. capacity to take and transfer immovables
- Lex situs determines such issues as:
- (1) Who may own the land
- (2) Conditions under which the land may be held
- (3) Uses to which the land may be put
- A person’s capacity to transfer interests in or convey
immovables is governed in all respects by the law of the
situs.

10. 1. capacity to take and transfer immovables
Ex:
A married woman makes a note in State A giving
as security for it a mortgage on land in State
B, where she has no power to make conveyance.
Status:
- Unenforceable mortgage
- Valid personal obligation

11. 2. Formalities of conveyance
“Formalities”
- Writing
- Seal
- Witnesses
- Acknowledgment
Governed by the law of the situs
Thus, foreign court will apply the law that would be applied
by the situs.

12. 3. Essential validity and effect of the transfer
- Determined by the law that would be applied by the courts
of the situs
- Courts of situs applied its own local law, PH court
should do the same.
- Courts of situs applied local law of another State, PH
court should do the same.

13. 4. Interpretation and effect of conveyance
Issue Law Applicable
Interpretation of
ambiguities
Law of the Situs
What parties meant (Q of
fact)
Law contemplated by
Parties
Legal effect of
Conveyance
Law of the Situs

14. 5. Validity and Effect of mortgages
● Law of the situs governs the creation and effect of liens
● Internal law of the situs applies to:
○ a. Formal validity of the mortgage
○ b. Capacity of the mortgagor
○ c. Nature of the interest in the land
○ d. Validity and effect of Foreclosure
○ e. Method for Foreclosure
● GR:
○ (1) Whether a lien creates interest in land and
○ (2) Nature of interest
- determined by the law that would be applied by the
courts of the situs.

15. 6. Marital Interest in Land
● Governed by the law that would be applied by
the courts of the situs
● Ex:
○ Spouses H and W
■ Nationality: Filipino
■ Domicile: California
■ Subject Land: New York
■ Venue: Philippine court
■ Resolution: PH court should rule in the same manner
New York (situs) courts would have.

16. 7. Equitable interests in land
● Determined by the law that would be applied by the
courts of the situs
● Ex:
○ Juan dela Cruz enters into a contract to sell land to John Smith
for $100K.
■ Contract entered into in - Manila
■ Subject land - California
○ Then, Juan sells the same land to Pedro Martinez for $120K.
○ Issue: Whether Smith (first buyer) has equitable interest in the
land
○ Law Applicable: Law that would be applied by California (situs)
courts.

17. Exceptions to the lex situs rule
1. Succession
Article 16(2), NCC:
Intestate and testamentary successions, both with respect to:
- order of succession
- amount of successional rights
- intrinsic validity of testamentary provisions
shall be regulated by the national law of the person whose
succession is under consideration, whatever may be the nature
of the property and regardless of the country wherein said
property may be found.

18. Exceptions to the lex situs rule
1. Succession
ARTICLE 1039, NCC:
Capacity to succeed is governed by the law of
the nation of the decedent.

19. Exceptions to the lex situs rule
2. Contractual Rights and Liabilities
- Law that regulates the contract as a whole

20. Exceptions to the lex situs rule
3. Validity and Effect of the Obligation Secured
- Governed by principles applicable to contracts

21. Exceptions to the lex situs rule
3. Validity and Effect of the Obligation Secured
● E.g.
○ The proper law of a promissory note is the law of State 1 and the
mortgaged land is in State 2.
Subject Law Applicable
Validity and effect of mortgage State 2’s law (situs)
Validity and effect of note State 1’s law

22. Exceptions to the lex situs rule
3. Validity and Effect of the Obligation Secured
● E.g.
○ The proper law of a promissory note is the law of State 1 and the
mortgaged land is in State 2.
Status Effect
Note: Valid; Mortgage: Invalid Personal obligation remains
Note: Void; Mortgage: Valid Personal obligation is
ineffective

23. Exceptions to the lex situs rule
4. Validity of the contract to transfer land
- Determined by the proper law of the contract