Article 17 of the Civil Code

Prepared and submitted by:

Cleotilde R. Ilagan

Law 115

LSPU 2019

Article 17.  The forms and solemnities of contracts, wills and other public instruments shall be governed by the laws of the country in which they are executed.

When the acts referred to are executed before the diplomatic or consular officials of the Republic of the Philippines in a foreign country, solemnities established by the Philippine laws shall be observed in their execution.

Prohibitive laws concerning persons, their acts or property and those which have for their object public order, public policy and good customs shall not be rendered ineffective by laws and judgments promulgated, or by determinations or conventions agreed upon in a foreign country.

Performance and Enforcement.

• The due execution of contracts are regulated according to the law of the place of their execution
• Matters connected with the performance of contracts are regulated by the law in force at the place of performance.   
• Remedies, such as bringing of suit, admissibility of evidence, and the statute of limitations, depend upon the law of the place where the action is brought. (Gov’t. of Phil. v. Frank, 13 Phil. 236)

          The law is an application of the principle of lex loci celebrationis.  If a Filipino executes a contract abroad, the forms and solemnities of the same may be governed by the law of the place where the same is executed.

Illustration.

          Facts:

       

          A Filipino while in Hawaii executed a will instituting his heirs and disposing of his properties to them.  There were only two(2) witnesses to the will who did not sign the same in the presence of A and of one another.  Instead, the will was signed in three (3) different places.  Let us assume that the laws in Hawaii would allow the signing of the will not in the presence of the testator and the witnesses and still the will is VALID under such law. 

Issue:

  Is the will valid in the Philippines?

Held:

Yes, the will is valid in the Philippines because the solemnities of contracts or wills may be governed by the laws of the country where they are executed.

         But if the will was executed before the Philippine consul of Hawaii, the forms and solemnities under the Philippine law shall govern.  In this case, there must be three(3) instrumental witnesses and that the will must be signed by the testator in the presence of the three (3) witnesses and the three witnesses must sign in the presence of the testator and one of another, otherwise, the will is void.

ACTS BEFORE DIPLOMATIC AND CONSULAR OFFICE

Diplomatic and consular officials are representative of the state.  Hence, any act or contract made in a foreign country before diplomatic and consular officials must conform to the solemnities under Philippine law.  

Effects of laws, etc. on prohibitive laws concerning persons in the Philippines.

          Article 17 of the Civil Code says that if there is a law or determination  or judgment in a foreign country, the same shall not render ineffective prohibitive laws concerning persons, their property or acts of Filipinos.

Examples:

Facts:

          A and B are Filipino citizens.  They are married.  While vacationing in Las Vegas, Nevada, they divorced each other. 

Issues:

          Is the decree of divorce valid in the Philippines?

Held:

          The divorce decree cannot be valid in the Philippines as it is contrary to public policy and morals.  While it may be valid in Nevada, it is void in the Philippines and hence, it cannot render ineffective Philippine law that says that what governs the family rights, and duties, status, condition and legal capacity of the Filipinos is Philippine law.

Or, if A and B would agree to separate properties extrajudicially and the agreement is valid in Nevada, that is void in the Philippines because the spouses cannot have separation of properties without judicial order (Art. 134, Family Code)

“Article 134.  In the absence of an express  declaration in the marriage settlements, the separation of property between spouses during the marriage shall not take place except by judicial order.  Such judicial separation of property may either be voluntary or for sufficient cause. ”

          Or, if A and B agree to maintain live-in partners, the agreement is void as it is contrary to morals.  Even if the agreement is valid in Nevada, the same is void in the Philippines since it is contrary to morals.

Doctrine of Lex Loci Contractus.

    If the airline ticket is purchased in the Philippines, and rewritten abroad, the liability of the airline company in case of breach, the contract is governed by Philippine law.  This is the doctrine of Lex Loci Contractus.

As a general rule, according to the doctrine, the law of the place where the contract is made or entered into governs with respect to its nature and validity, obligation and interpretation.

Case Digest

Zalamea v. Court of Appeals, 228 SCRA 23

G.R. No. 104235 November 18, 1993

SPOUSES CESAR & SUTHIRA ZALAMEA and LIANA ZALAMEA, petitioners, 

vs.
HONORABLE COURT OF APPEALS and TRANSWORLD AIRLINES, INC., respondents.

FACTS:

Petitioners-spouses Cesar C. Zalamea and Suthira Zalamea, and their daughter, Liana Zalamea, purchased three (3) airline tickets from the Manila agent of respondent TransWorld Airlines, Inc. for a flight to New York to Los Angeles. The tickets of petitioners-spouses were purchased at a discount of 75% while that of their daughter was a full fare ticket. All three tickets represented confirmed reservations.

While in New York, petitioners received notice of the reconfirmation of their reservations for said flight. However, when petitioners checked in at 10:00 a.m., an hour earlier than the scheduled flight at 11:00 a.m., they were placed on the wait-list because the number of passengers who had checked in before them had already taken all the seats available on the flight. Liana Zalamea appeared as the No. 13 on the wait-list while the two other Zalameas were listed as "No. 34, showing a party of two." Out of the 42 names on the wait list, the first 22 name were eventually allowed to board the flight to Los Angeles, including petitioner Cesar Zalamea. The two others, on the other hand, at No. 34, being ranked lower than 22, were not able to fly. As it were, those holding full-fare tickets were given first priority among the wait-listed passengers. Mr.Zalamea, who was holding the full-fare ticket of his daughter, was allowed to board the plane; while his wife and daughter, who presented the discounted tickets were denied boarding. According to Mr.Zalamea, it was only later when he discovered the he was holding his daughter's full-fare ticket.

Even in the next TWA flight to Los Angeles Mrs.Zalamea and her daughter, could not be accommodated because it was also fully booked. Thus, they were constrained to book in another flight and purchased two tickets from American Airlines at a cost of Nine Hundred Eighteen ($918.00) Dollars.

          RTC court categorically ruled in favor of the petitioners declaring that TransWorld Airlines (TWA) indeed breached its contract of carriage with petitioners and the said breach was “characterized by bad faith”.  On appeal, the appellate court, MODIFIED the ruling of the lower court eliminating moral and exemplary damages to the petitioners because according to the respondent court, under the Code of Federal Regulations by the Civil Aeronautics Board of United States America, it is allowed to overbook flights, therefore, there is no FRAUD or BAD FAITH could be imputed on the part of the respondent airline.

          Petitioners raised the case on petition for review on certiorari.

ISSUES:

·       Whether or not respondent airline is guilty of fraud or bad faith

·    Whether  or not respondent airline is liable for moral and exemplary damages

HELD:

The Supreme Court speaking through Justice Nocon declared that even if the U.S. Code of Federal Regulations wherein overbooking is allowed, the same is not applicable to the case at bar in accordance with the principle of lex loci contractus which require that the law of the place where the airline ticket was issued should be applied by the court where the passengers are residents and nationals of the forum and the ticket is issued in such State by the defendant airline. Since the tickets were sold and issued in the Philippines, the applicable law in this case would be Philippine law. 

Respondent airline is guilty of fraud or bad faith because overbooking is not allowed as it amounts to bad faith, entitling the passengers concerned to moral damages (Alitalia Airways v. CA).  TWA placed itself to self-interest over the rights of the petitioners under their contracts of carriage.  The SC adjudged the respondent airline liable for moral and exemplary damages.

As a general rule, the law of the place where a contract is made  and entered into governs with respect to its nature and validity, obligation and interpretation.  This has been said to be the rule even though the place where the contract was made is different from the place where it is performed, and particularly so, if the place of the making and the place of the performance are the same.  Hence, the court should apply the law of the place where the airline is issued, when the passengers are residents and nationals of the forum of the ticket is issued in such State by the defendant airline.