Orion Savings Bank vs. Suzuki, GR No. 205487 November 12, 2014, J.Brion

Doctrine: Real or immovable property is exclusively subject to the laws of the country or state where it is located. (Lex Loci Rei Sitae)

Case Title: Orion Savings Bank vs. Suzuki, GR No. 205487 November 12, 2014, J.Brion

Facts:

Respondent Shigekane Suzuki (Suzuki) purchased a condominium unit and a parking lot at Cityland Pioneer, Mandaluyong City owned by Yung Sam Kang (Kang), a Korean national and a Special Resident Retiree's Visa (SRRV) holder. After paying the full amount, he demanded Kang for the delivery of the titles to the properties which during that time were allegedly in possession of Orion Bank’s Loans Officer Alexander Perez. Despite his demands, the titles were not delivered to him. He found out that Kang had left the country. It prompted him to check on the status of the properties. He learned that the documents representing the title to the properties had no existing encumbrance, except for an annotation which provided that any conveyance or encumbrance of the property shall be subject to approval by the Philippine Retirement Authority (PRA). Aside from these annotations, it also contained a cancelled entry for a mortgage loan with petitioner, Orion Savings Bank for one million pesos.
Despite the cancellation of the mortgage to Orion, the titles to the properties remained in possession of Perez. To protect his interests, Suzuki then executed an Affidavit of Adverse Claim and demanded delivery of the titles, but Perez refused.
Suzuki filed a complaint for specific performance and damages against Kang and Orion. According to Perez, Kang had obtained another loan and when he failed to pay, a Dacion en Pago has been executed in favor of petitioner. However, the Dacion en Pago was not duly registered not until it has to the knowledge of Suzuki.
The court ruled in favor of Suzuki and ordered petitioner to deliver the titles. The court found that Suzuki was an innocent purchaser for value whose rights over the properties prevailed over Orion’s and that Suzuki has exerted efforts to verify the status of the properties, but he did not find any existing encumbrance in the titles. Although Orion claims to have purchased the property by way of a Dacion en Pago, they never bothered to register or annotate it.
On their appeal, the petitioner contends that the Deed of Sale executed by Kang in favor of Suzuki is null and void because under the Korean law, any conveyance of a conjugal property should be made with the consent of both spouses.
The CA upheld Suzuki’s right over the properties. Petitioner filed then filed a petition for review on certiorari under Rule 45. Hence this present petition.
Issue/s:

Whether or not Korean Law should be applied in conveying the conjugal property of spouses Kang.

Held:
Korean law cannot be applied on this case. The Supreme Court ruled that real or immovable property is exclusively subject to the
laws of the country or state where it is located. The reason is found in the very nature of immovable property — its immobility. This general principle includes all rules governing the descent, alienation and transfer of immovable property and the validity, effect and construction of wills and other conveyances.
On the other hand, property relations between spouses are governed principally by their national laws. According to the Supreme Court the party invoking the application of a foreign law has the burden of proving the same to the court. Applying the words of the Supreme Court in this case, matters concerning the title and disposition of real property shall be governed by Philippine law while issues pertaining to the conjugal nature of the property shall be governed by South Korean law, provided it is proven as a fact.
In the present case, Orion, unfortunately failed to prove the South Korean law on the conjugal ownership of property. It merely attached a "Certification from the Embassy of the Republic of Korea" to prove the existence of Korean Law. This certification, does not qualify as sufficient proof of the conjugal nature of the property for there is no showing that it was properly authenticated by the seal of his office, as required under Section 24 of Rule 132 of the Rules of Court.
Since the South Korean law was not properly pleaded and proven, the International Law doctrine of presumed-identity approach or processual presumption comes into play in this case. The doctrine provides that where a foreign law is not pleaded or, even if pleaded, is not proven, the presumption is that foreign law is the same as Philippine Law.
Under Philippine Law, the phrase "Yung Sam Kang ‘married to' Hyun Sook Jung" is merely descriptive of the civil status of Kang. In other words, the import from the certificates of title is that Kang is the owner of the properties as they are registered in his name alone, and that he is married to Hyun Sook Jung.
The Supreme Court has held in numerous cases that registration of the property in the name of only one spouse does not negate the possibility of it being conjugal or community property. In those cases, however, there was proof that the properties, though registered in the name of only one spouse, were indeed either conjugal or community properties. Accordingly, they see no reason to declare as invalid Kang’s conveyance in favor of Suzuki for the supposed lack of spousal consent.