BANK OF AMERICA NT AND SA VS. AMERICAN REALTY CORPORATION AND CA, GR. NO. 133876 (1999)

 FACTS:

 

Petitioner granted loans to 3 foreign corporations. As security, the latter mortgaged a property located in the Philippines owned by herein respondent ARC. ARC is a third-party mortgagor who pledged its own property in favor of the 3 debtor-foreign corporations. The debtors failed to pay. Thus, petitioner filed collection suits in foreign courts to enforce the loan. Subsequently, it filed a petition in the Sheriff to extra-judicially foreclose the said mortgage, which was granted. Private respondent filed an action before the RTC for the latter’s act of foreclosing extra-judicially the real estate mortgages despite the pendency of civil suits before foreign courts for the collection of the principal loan. The lower court rendered a decision in favor of private respondent ARC and the decision was affirmed by CA. According to petitioner the governing law should be the English law which provides that the mortgagee does not lose its security interest by simply filing civil actions for sums of money.

 

ISSUE: Whether English law should be applied instead of Philippine Law

 

RULING:

 

No. In a long line of decisions, this Court adopted the well-imbedded principle in our jurisdiction that there is no judicial notice of any foreign law. A foreign law must be properly pleaded and proved as a fact. Thus, if the foreign law involved is not properly pleaded and proved, our courts will presume that the foreign law is the same as our local or domestic or internal law. This is what we refer to as the doctrine of processual presumption. Foreign law should not be applied when its application would work undeniable injustice to the citizens or residents of the forum. To give justice is the most important function of law; hence, a law, or judgment or contract that is obviously unjust negates the fundamental principles of Conflict of Laws.