EN BANC

G.R. No. L-9959 December 13, 1916

THE GOVERNMENT OF THE PHILIPPINE ISLANDS, rere!e"#e$ b% #&e Tre'!(rer o) #&e P&*+**"e
I!+'"$!, Plaintiff-Appellee , vs. EL MONTE DE PIEDAD , -A.A DE AHORRAS DE MANILA, Defendant-
Appellant.

TRENT, J.: chanrobles virtual law library
About $400,000, were subscribed and paid into the treasury of the Philippine slands by the inhabitants of
the !panish "o#inions of the relief of those da#a$ed by the earth%ua&e which too& place in the Philippine
slands on 'une (, )*+(. !ubse%uent thereto and on ,ctober + of that year, a central relief board was
appointed, by authority of the -in$ of !pain, to distribute the #oneys thus voluntarily contributed. After a
thorou$h investi$ation and consideration, the relief board allotted $(+.,/0(..0 to the various sufferers
na#ed in its resolution, dated !epte#ber 00, )*++, and, by order of the 1overnor21eneral of the Philippine
slands, a list of these allot#ents, to$ether with the na#es of those entitled thereto, was published in the
,fficial 1a3ette of 4anila dated April /, )*/0. 5here was later distributed, inaccordance with the above2
#entioned allot#ents, the su# of $(0,066.+., leavin$ a balance of !(+.,40(.*. for distribution. 7pon the
petition of the $overnin$ body of the Monte de Piedad, dated 8ebruary ), )*((, the Philippine 1overn#ent,
by order dated the )st of that #onth, directed its treasurer to turn over to the Monte de Piedad the su# of
$*0,000 of the relief fund in install#ents of $00,000 each. 5hese a#ounts were received on the followin$
dates9 8ebruary )., 4arch )0, April )4, and 'une 0, )**(, and are still in the possession of the Monte de
Piedad. ,n account of various petitions of the persons, and heirs of others to who# the above2#entioned
allot#ents were #ade by the central relief board for the pay#ent of those a#ounts, the Philippine slands to
brin$ suit a$ainst the Monte de Piedad a recover, :throu$h the Attorney21eneral and in representation of the
1overn#ent of the Philippine slands,: the $*0.000, to$ether with interest, for the benefit of those persons
or their heirs appearin$ in the list of na#es published in the ,fficial 1a3ette instituted on 4ay (, )6)0, by
the 1overn#ent of the Philippine slands, represented by the nsular 5reasurer, and after due trial, ;ud$#ent
was entered in favor of the plaintiff for the su# of $*0,000 $old or its e%uivalent in Philippine currency,
to$ether with le$al interest fro# 8ebruary 0*, )6)0, and the costs of the cause. 5he defendant appealed
and #a&es the followin$ assi$n#ent of errors9
). 5he court erred in not findin$ that the ei$hty thousand dollars <$*0,000=, $ive to the Monte de Piedad y
Caja de Ahorros, were so $iven as a donation sub;ect to one condition, to wit9 the return of such su# of
#oney to the !panish 1overn#ent of these slands, within ei$ht days followin$ the day when clai#ed, in
case the !upre#e 1overn#ent of !pain should not approve the action ta&en by the for#er
$overn#ent.chanroblesvirtualawlibrary chanrobles virtual law library
0. 5he court erred in not havin$ decreed that this donation had been cleared> said ei$hty thousand dollars
<$*0,000= bein$ at present the e?clusive property of the appellant the Monte de Piedad y Caja de
Ahorros.chanroblesvirtualawlibrary chanrobles virtual law library
(. 5hat the court erred in statin$ that the 1overn#ent of the Philippine slands has subro$ated the !panish
1overn#ent in its ri$hts, as re$ards an i#portant su# of #oney resultin$ fro# a national subscription
opened by reason of the earth%ua&e of 'une (, )*+(, in these sland.chanroblesvirtualawlibrary chanrobles virtual lawlibrary
4. 5hat the court erred in not declarin$ that Act Nu#bered 0)06, passed by the Philippine @e$islature on
'anuary (0, )6)0, is unconstitutional.chanroblesvirtualawlibrary chanrobles virtual law library
.. 5hat the court erred in holdin$ in its decision that there is no title for the prescription of this suit brou$ht
by the nsular 1overn#ent a$ainst the Monte de Piedad y Caja de Ahorros for the rei#burse#ent of the
ei$hty thousand dollars <$*0,000= $iven to it by the late !panish 1overn#ent of these slands.chanroblesvirtualawlibrary chanrobles virtual law library
+. 5hat the court erred in sentencin$ the Monte de Piedad y Caja de Ahorros to rei#burse the Philippine
1overn#ent in the su# of ei$hty thousand dollars <$*0,000= $old coin, or the e%uivalent thereof in the
present le$al tender currency in circulation, with le$al interest thereon fro# 8ebruary 0*th, )6)0, and the
costs of this suit.
n the royal order of 'une 06, )*/6, the 1overnor21eneral of the Philippine slands was directed to infor#
the ho#e 1overn#ent in what #anner the inde#nity #i$ht be paid to which, by virtue of the resolutions of
the relief board, the persons who suffered da#a$e by the earth%ua&e #i$ht be entitled, in order to perfor#
the sacred obli$ation which the 1overn#ent of !pain had assu#ed toward the donors.chanroblesvirtualawlibrary chanrobles virtual lawlibrary
5he ne?t pertinent docu#ent in order is the defendantAs petition, dated 8ebruary ), )**(, addressed to the
1overnor21eneral of the Philippine slands, which reads9chanrobles virtual law library
Board of "irectors of the Monte de Piedad of 4anila Presidencia.
E?cellency9 5he Board of "irectors of the Monte de Piedad y Caja de Ahorros of 4anila infor#s your
E?cellency, 8irst9 5hat the funds which it has up to the present been able to dispose of have been e?hausted
in loans on ;ewelry, and there only re#ains the su# of one thousand and odd pesos, which will be e?pended
between to2day and day after to#orrow. !econd9 5hat, to #aintain the credit of the establish#ent, which
would be $reatly in;ured were its operations suspended, it is necessary to procure #oney. 5hird9 5hat your
E?cellency has proposed to Bis 4a;estyAs 1overn#ent to apply to the funds of the Monte de Piedad a part of
the funds held in the treasury derived for# the national subscription for the relief of the distress caused by
the earth%ua&e of )*+(. 8ourth9 5hat in the public treasury there is held at the disposal of the central
earth%ua&e relief board over $)060,000 which was deposited in the said treasury by order of your $eneral
1overn#ent, it havin$ been transferred thereto fro# the !panish28ilipino Ban& where it had been held. fifth9
5hat in the strai$htened circu#stances of the #o#ent, your E?cellency can, to avert i#pendin$ disaster to
the Monte de Piedad, order that, out of that su# of one hundred thousand pesos held in the 5reasury at the
disposal of the central relief board, there be transferred to the Monte de Piedad the su# of $*0,000, there
to be held under the sa#e conditions as at present in the 5reasury, to wit, at the disposal of the Relief
Board. !i?th9 5hat should this transfer not be approved for any reason, either because of the failure of Bis
4a;estyAs 1overn#ent to approve the proposal #ade by your E?cellency relative to the application to the
needs of theMonte de Piedad of a pat of the subscription intended to believe the distress caused by the
earth%ua&e of )*+(, or for any other reason, the board of directors of the Monte de Piedad obli$ates itself to
return any su#s which it #ay have received on account of the ei$hty thousand pesos, or the whole thereof,
should it have received the sa#e, by securin$ a loan fro# whichever ban& or ban&s #ay lend it the #oney
at the cheapest rate upon the security of pawned ;ewelry. 2 5his is an ur$ent #easure to save the Monte de
Piedad in the present crisis and the board of directors trusts to secure your E?cellencyAs entire cooperation
and that of the other officials who have ta&e part in the transaction.
5he 1overnor21eneralAs resolution on the fore$oin$ petition is as follows9
1ENECA@ 1,DECN4EN5 ,8 5BE PB@PPNE!.
4AN@A, February 1, 1883 chanrobles virtual lawlibrary
n view of the fore$oin$ petition addressed to #e by the board of directors of the Monte de Piedad of this
city, in which it is stated that the funds which the said institution counted upon are nearly all invested in
loans on ;ewelry and that the s#all account re#ainin$ will scarcely suffice to cover the transactions of the
ne?t two days, for which reason it entreats the $eneral 1overn#ent that, in pursuance of its tele$raphic
advice to B. 4. 1overn#ent, the latter direct that there be turned over to said Monte de Piedad $*0,000 out
of the funds in the public treasury obtained fro# the national subscription for the relief of the distress
caused by the earth%ua&e of )*+(, said board obli$atin$ itself to return this su# should B. 4. 1overn#ent,
for any reason, not approve the said proposal, and for this purpose it will procure funds by #eans of loans
raised on pawned ;ewelry> it stated further that if the aid so solicited is not furnished, it will be co#pelled to
suspend operations, which would seriously in;ure the credit of so beneficient an institution> and in view of
the report upon the #atter #ade by the ntendencia 1eneral de Bacienda> and considerin$ the fact that the
public treasury has on hand a #uch $reater su# fro# the source #entioned than that solicited> and
considerin$ that this $eneral 1overn#ent has sub#itted for the deter#ination of B. 4. 1overn#ent that the
balance which, after strictly applyin$ the proceeds obtained fro# the subscription referred to, #ay re#ain as
a surplus should be delivered to the Monte de Piedad, either as a donation, or as a loan upon the security of
the credit of the institution, believin$ that in so doin$ the wishes of the donors would be faithfully
interpreted inas#uch as those wishes were no other than to relieve distress, an act of charity which is
e?ercised in the hi$hest de$ree by the Monte de Piedad, for it liberates needy person fro# the pernicious
effects of usury> andchanrobles virtual law library
Considerin$ that the lofty purposes that brou$ht about the creation of the pious institution referred to would
be frustrated, and that the $reat and laudable wor& of its establish#ent, and that the $reat and laudable
and valuable if the aid it ur$ently see&s is not $ranted, since the suspension of its operations would seriously
and re$rettably da#a$e the ever2$rowin$ credit of the Monte de Piedad> andchanrobles virtual law library
Considerin$ that if such a thin$ would at any ti#e cause deep distress in the public #ind, it #i$ht be said
that at the present ;uncture it would assu#e the nature of a disturbance of public order because of the
e?tre#e poverty of the poorer classes resultin$ fro# the late cala#ities, and because it is the only
institution which can #iti$ate the effects of such poverty> andchanrobles virtual lawlibrary
Considerin$ that no reasonable ob;ection can be #ade to $rantin$ the re%uest herein contained, for the
funds in %uestion are sufficiently secured in the unli&ely event that BE 4. 1overn#ent does not approve the
reco##endation #entioned, this $eneral 1overn#ent, in the e?ercise of the e?traordinary powers conferred
upon it and in confor#ity with the report of the ntendencia de Bacienda, resolves as follows9chanrobles virtual lawlibrary
8irst. Authority is hereby $iven to deliver to the Monte de Piedad, out of the su# held in the public treasury
of these slands obtained fro# the national subscription opened by reason of the earth%ua&es of )*+(,
a#ounts up to the su# $*0,000, as its needs #ay re%uire, in install#ents of $00,000.chanroblesvirtualawlibrary chanrobles virtual law library
!econd. 5he board of directors of the Monte de Piedad is sole#nly bound to return, within ei$ht days after
de#and, the su#s it #ay have so received, if B. 4. 1overn#ent does not approve this resolution.chanroblesvirtualawlibrary chanrobles virtual lawlibrary
5hird. 5he ntendencia 1eneral de Bacienda shall forthwith, and in preference to all other wor&, proceed to
prepare the necessary papers so that with the least possible delay the pay#ent referred to #ay be #ade
and the dan$er that #enaces the Monte de Piedad of havin$ to suspend its operations #ay be averted.chanroblesvirtualawlibrary chanrobles
virtual law library
B. 4. 1overn#ent shall be advised hereof.
<!i$ned= P. "E CDECA.
By the royal order of "ece#ber (, )*60, the 1overnor21eneral of the Philippine slands was ordered to
:infor# this !inisterio what is the total su# available at the present ti#e, ta&in$ into consideration the
su#s delivered to the Monte de Piedad pursuant to the decree issued by your $eneral 1overn#ent on
8ebruary ), )**(,: and after the ri$hts of the clai#ants, whose na#es were published in the ,fficial 1a3ette
of 4anila on April /, )*/0, and their heirs had been established, as therein provided, as such persons :have
an un%uestionable ri$ht to be paid the donations assi$ned to the# therein, your $eneral 1overn#ent shall
convo&e the# all within a reasonable period and shall pay their shares to such as shall identify the#selves,
without re$ard to their financial status,: and finally :that when all the proceedin$s and operations herein
#entioned have been concluded and the 1overn#ent can consider itself free fro# all &inds of clai#s on the
part of those interested in the distribution of the funds deposited in the vaults of the 5reasury, such action
#ay be ta&en as the circu#stances shall re%uire, after first consultin$ the relief board and your $eneral
1overn#ent and ta&in$ account of what su#s have been delivered to the Monte de Piedad and those that
were e?pended in )*** to relieve public cala#ities,: and :in order that all the points in connection with the
proceedin$s had as a result of the earth%ua&e be clearly understood, it is indispensable that the offices
hereinbefore #entioned co#ply with the provisions contained in para$raphs 0 and ( of the royal order of
'une 0., )*/6.: ,n receipt of this 8inance order by the 1overnor21eneral, the "epart#ent of 8inance was
called upon for a report in reference to the $*0,000 turned over to the defendant, and that "epart#entAs
report to the 1overnor21eneral dated 'une 0*, )*6(, reads9
"ntenden#ia $eneral de %a#ienda de Filipinas <1eneral 5reasury of the Philippines= 2 E?cellency. 2 By Coyal
,rder No. )044 of "ece#ber (, last, it is provided that the persons who sustained losses by the earth%ua&es
that occurred in your capital in the year )*+( shall be paid the a#ounts allotted to the# out of the su#s
sent fro# !pain for this purpose, with observance of the rules specified in the said royal order, one of the#
bein$ that before #a&in$ the pay#ent to the interested parties the assets shall be reduced to #oney. 5hese
assets, durin$ the lon$ period of ti#e that has elapsed since they were turned over to the 5reasury of the
Philippine slands, were used to cover the $eneral needs of the appropriation, a part besides bein$ invested
in the relief of charitable institutions and another part to #eet pressin$ needs occasioned by public
cala#ities. ,n 'anuary (0, last, your E?cellency was please to order the fulfill#ent of that soverei$n
#andate and referred the sa#e to this "ntenden#ia for its infor#ation and the purposes desired <that is, for
co#pliance with its directions and, as aforesaid, one of these bein$ the li%uidation, recovery, and deposit
with the 5reasury of the su#s paid out of that fund and which were e?pended in a different way fro# that
intended by the donors= and this ntendencia believed the #o#ent had arrived to clai# fro# the board of
directors of the Monte de Piedad y Caja de Ahorros the su# of *0,000 pesos which, by decree of your
$eneral 1overn#ent of the date of 8ebruary ), )**(, was loaned to it out of the said funds, the <Monte de
Piedad= obli$atin$ itself to return the sa#e within the period of ei$ht days if B. 4. 1overn#ent did not
approve the delivery. ,n this ntendenciaAs de#andin$ fro# the Monte de Piedad the ei$hty thousand pesos,
thus co#plyin$ with the provisions of the Coyal ,rder, it was to be supposed that no ob;ection to its return
would be #ade by the Monte de Piedad for, when it received the loan, it for#ally en$a$ed itself to return it>
and, besides, it was indisputable that the #o#ent to do so had arrived, inas#uch as B. 4. 1overn#ent, in
orderin$ that the assets of the earth%ua&e relief fund should he collected, #a&es e?press #ention of the
*0,000 pesos loaned to the Monte de Piedad, without doubt considerin$ as sufficient the period of ten years
durin$ which it has been usin$ this lar$e su# which lawfully belon$s to their persons. 5his "ntenden#ia also
supposed that the Monte de Piedad no lon$er needed the a#ount of that loan, inas#uch as, far fro#
investin$ it in beneficient transactions, it had turned the whole a#ount into the voluntary deposit funds
bearin$ . per cent interests, the result of this operation bein$ that the debtor loaned to the creditor on
interest what the for#er had $ratuitously received. But the Monte de Piedad, instead of fulfillin$ the pro#ise
it #ade on receivin$ the su#, after repeated de#ands refused to return the #oney on the $round that only
your E?cellency, and not the "ntenden#ia <5reasury=, is entitled to order the rei#burse#ent, ta&in$ no
account of the fact that this ntendencia was actin$ in the dischar$e of a soverei$n co##and, the fulfill#ent
of which your E?cellency was pleased to order> and on the further $round that the su# of *0,000 pesos
which it received fro# the fund intended for the earth%ua&e victi#s was not received as a loan, but as a
donation, this in the opinion of this "ntenden#ia, erroneously interpretin$ both the last royal order which
directed the apportion#ent of the a#ount of the subscription raised in the year )*+( and the superior
decree which $ranted the loan, inas#uch as in this letter no donation is #ade to theMonte de Piedad of the
*0,000 pesos, but si#ply a loan> besides, no donation whatever could be #ade of funds derived fro# a
private subscription raised for a specific purpose, which funds are already distributed and the na#es of the
beneficiaries have been published in the $a#eta, there bein$ lac&in$ only the #ere #aterial act of the
delivery, which has been unduly delayed. n view of the une?pected reply #ade by the Monte de Piedad, and
believin$ it useless to insist further in the #atter of the clai# for the afore#entioned loan, or to ar$ue in
support thereof, this "ntenden#ia believes the intervention of your E?cellency necessary in this #atter, if the
royal ,rder No. )044 of "ece#ber (, last, is to be co#plied with, and for this purpose be$ your E?cellency
&indly to order the Monte de Piedad to rei#burse within the period of ei$ht days the *0,000 which it owes,
and that you $ive this ntendencia power to carry out the provisions of the said royal order. #ust call to
the attention of your E?cellency that the said pious establish#ent, durin$ the last few days and after
de#and was #ade upon it, has endorsed to the !panish28ilipino Ban& nearly the whole of the su# which it
had on deposit in the $eneral deposit funds.
5he record in the case under consideration fails to disclose any further definite action ta&en by either the
Philippine 1overn#ent or the !panish 1overn#ent in re$ard to the $*0,000 turned over to the Monte de
Piedad.chanroblesvirtualawlibrary chanrobles virtual law library
n the defendantAs $eneral led$er the followin$ entries appear9 :Public 5reasury9 8ebruary )., )**(,
$00,000> 4arch )0, )**(, $00,000> April )4, )**(, $00,000> 'une 0, )**(, $00,000, total $*0,000.: 5he
boo& entry for this total is as follows9 :5o the public 5reasury derived fro# the subscription for the
earth%ua&e of )*+(, $*0,000 received fro# $eneral 5reasury as a returnable loan, and without interest.:
5he account was carried in this #anner until 'anuary ), )*66, when it was closed by transferrin$ the
a#ount to an account called :!a$rada 4itra,: which latter account was a loan of $).,000 #ade to the
defendant by the Archbishop of 4anila, without interest, thereby placin$ the :!a$rada 4itra: account at
$6.,000 instead of $).,000. 5he above2#entioned ;ournal entry for 'anuary ), )*66, reads9 :!a$rada 4itra
and subscription, balance of these two account which on this date are united in accordance with an order of
the&'!o (r Presidente of the Council trans#itted verbally to the Presidente $erente of these institutions,
$6.,000.: chanrobles virtual law library
,n 4arch )+, )600, the Philippine $overn#ent called upon the defendant for infor#ation concernin$ the
status of the $*0,000 and received the followin$ reply9
4AN@A, 4arch (), )600.
)o the Attorney-$eneral of the Depart!ent of *usti#e of the Philippine "slands
!C9 n reply to your courteous letter of the )+th inst., in which you re%uest infor#ation fro# this office as
to when and for what purpose the !panish 1overn#ent delivered to the Monte de Piedad ei$hty thousand
pesos obtained fro# the subscription opened in connection with the earth%ua&e of )*+(, as well as any
other infor#ation that #i$ht be useful for the report which your office is called upon to furnish, #ust state
to your depart#ent that the boo&s &ept in these Pious nstitutions, and which have been consulted for the
purpose, show that on the ).th of 8ebruary, )**(, they received as a rei#bursable loan and without
interest, twenty thousand pesos, which they deposited with their own funds. ,n the sa#e account and on
each of the dates of 4arch )0, April )4 and 'une 0 of the said year, )**(, they also received and turned into
their funds a li&e su# of twenty thousand pesos, #a&in$ a total of ei$hty thousand pesos. 2 <!i$ned= E#ilio
4oreta.chanroblesvirtualawlibrary chanrobles virtual law library
hereby certify that the fore$oin$ is a literal copy of that found in the letter boo& No. 0 of those Pious
nstitutions.chanroblesvirtualawlibrary chanrobles virtual lawlibrary
4anila, Nove#ber )6, )6)(
<!$d.= E4@, @AFCAN,5E17,
(e#retary chanrobles virtual law library
<!$d.= ,. -. E4@, 4,CE5A,
Mana+in+ Dire#tor
5he fore$oin$ docu#entary evidence shows the nature of the transactions which too& place between the
1overn#ent of !pain and the Philippine 1overn#ent on the one side and the Monte de Piedad on the other,
concernin$ the $*0,000. 5he Monte de Piedad, after settin$ forth in its petition to the 1overnor21eneral its
financial condition and its absolute necessity for #ore wor&in$ capital, as&ed that out of the su# of
$)00,000 held in the 5reasury of the Philippine slands, at the disposal of the central relief board, there be
transferred to it the su# of $*0,000 to be held under the sa#e conditions, to wit, :at the disposal of the
relief board.: 5he 4onte de Piedad a$reed that if the transfer of these funds should not be approved by the
1overn#ent of !pain, the sa#e would be returned forthwith. t did not as& that the $*0,000 be $iven to it
as a donation. 5he 1overnor21eneral, after recitin$ the substance of the petition, stated that :this $eneral
1overn#ent has sub#itted for the deter#ination of B. 4. 1overn#ent that the balance which, after strictly
applyin$ the proceeds obtained fro# the subscription referred to, #ay re#ain as a surplus, should be
delivered to the Monte de Piedad, either as a donation, or as a loan upon the security of the credit of the
institution,: and :considerin$ that no reasonable ob;ection can be #ade to $rantin$ the re%uest herein
contained,: directed the transfer of the $*0,000 to be #ade with the understandin$ that :the Board of
"irectors of theMonte de Piedad is sole#nly bound to return, within ei$ht days after de#and, the su#s it
#ay have so received, if B. 4. 1overn#ent does not approve this resolution.: t will be noted that the first
and only ti#e the word :donation: was used in connection with the $*0,000 appears in this resolution of the
1overnor21eneral. t #ay be inferred fro# the royal orders that the 4adrid 1overn#ent did tacitly approve
of the transfer of the $*0,000 to the 4onte de Piedad as a loan without interest, but that 1overn#ent
certainly did not approve such transfer as a donation for the reason that the 1overnor21eneral was directed
by the royal order of "ece#ber (, )*60, to infor# the 4adrid 1overn#ent of the total available su# of the
earth%ua&e fund, :ta&in$ into consideration the su#s delivered to the Monte de Piedad pursuant to the
decree issued by your $eneral 1overn#ent on 8ebruary ), )**(.: 5his lan$ua$e, nothin$ else appearin$,
#i$ht ad#it of the interpretation that the 4adrid 1overn#ent did not intend that the 1overnor21eneral of
the Philippine slands should include the $*0,000 in the total available su#, but when considered in
connection with the report of the "epart#ent of 8inance there can be no doubt that it was so intended. 5hat
report refers e?pressly to the royal order of "ece#ber (d, and sets forth in detail the action ta&en in order
to secure the return of the $*0,000. 5he "epart#ent of 8inance, actin$ under the orders of the 1overnor2
1eneral, understood that the $*0,000 was transferred to the Monte de Piedad well &new that it received this
su# as a loan interest.: 5he a#ount was thus carried in its boo&s until 'anuary, )*66, when it was
transferred to the account of the :!a$rada 4itra: and was thereafter &nown as the :!a$rada 4itra and
subscription account.: 8urther#ore, the Monte de Piedad reco$ni3ed and considered as late as 4arch (),
)600, that it received the $*0,000 :as a returnable loan, and without interest.: 5herefore, there cannot be
the sli$htest doubt the fact that the Monte de Piedad received the $*0,000 as a #ere loan or deposit and
not as a donation. Conse%uently, the first alle$ed error is entirely without foundation.chanroblesvirtualawlibrary chanrobles virtual lawlibrary
Counsel for the defendant, in support of their third assi$n#ent of error, say in their principal brief that9
5he !panish nation was professedly Co#an Catholic and its -in$ en;oyed the distinction of bein$ deputy e'
offi#io of the Boly !ee and Apostolic Dicar21eneral of the ndies, and as such it was his duty to protect all
pious wor&s and charitable institutions in his &in$do#s, especially those of the ndies> a#on$ the latter was
the Monte de Piedad of the Philippines, of which said -in$ and his deputy the 1overnor21eneral of the
Philippines, as royal vice2patron, were, in a special and peculiar #anner, the protectors> the latter, as a
result of the cession of the Philippine slands, #plicitly renounced this hi$h office and tacitly returned it to
the Boly !ee, now represented by the Archbishop of 4anila> the national subscription in %uestion was a &ind
of foundation or pious wor&, for a charitable purpose in these slands> and the entire subscription not bein$
needed for its ori$inal purpose, the royal vice2patron, with the consent of the -in$, $ave the surplus thereof
to an analo$ous purpose> the fulfill#ent of all these thin$s involved, in the #a;ority, if not in all cases,
faithful co#pliance with the duty i#posed upon hi# by the Boly !ee, when it conferred upon hi# the royal
patrona$e of the ndies, a thin$ that touched hi# very closely in his conscience and reli$ion> the cessionary
1overn#ent thou$h Christian, was not Co#an Catholic and prided itself on its policy of non2interference in
reli$ious #atters, and inveterately #aintained a co#plete separation between the ecclesiastical and civil
powers.chanroblesvirtualawlibrary chanrobles virtual law library
n view of these circu#stances it #ust be %uite clear that, even without the e?press provisions of the 5reaty
of Paris, which apparently e?pressly e?clude such an idea, it did not befit the honor of either of the
contractin$ parties to subro$ate to the A#erican 1overn#ent in lieu of the !panish 1overn#ent anythin$
respectin$ the disposition of the funds delivered by the latter to the Monte de Piedad. 5he sa#e reasons that
induced the !panish 1overn#ent to ta&e over such thin$s would result in $reat inconvenience to the
A#erican 1overn#ent in atte#ptin$ to do so. 5he %uestion was such a delicate one, for the reason that it
affected the conscience, deeply reli$ious, of the -in$ of !pain, that it cannot be believed that it was ever his
intention to confide the e?ercise thereof to a 1overn#ent li&e the A#erican. <7. !. ,s Arredondo, + Pet. G7.
!.H, /)).=chanrobles virtual law library
t is thus seen that the A#erican 1overn#ent did not subro$ate the !panish 1overn#ent or rather, the -in$
of !pain, in this re$ard> and as the condition anne?ed to the donation was lawful and possible of fulfill#ent
at the ti#e the contract was #ade, but beca#e i#possible of fulfill#ent by the cession #ade by the !panish
1overn#ent in these slands, co#pliance therewith is e?cused and the contract has been cleared thereof.
5he contention of counsel, as thus stated, in untenable for two reason, <)= because such contention is based
upon the erroneous theory that the su# in %uestion was a donation to the Monte de Piedad and not a loan,
and <0= because the charity founded by the donations for the earth%ua&e sufferers is not and never was
intended to be an ecclesiastical pious wor&. 5he first proposition has already been decided adversely to the
defendantAs contention. As to the second, the record shows clearly that the fund was $iven by the donors for
a specific and definite purpose 2 the relief of the earth%ua&e sufferers 2 and for no other purpose. 5he
#oney was turned over to the !panish 1overn#ent to be devoted to that purpose. 5he !panish 1overn#ent
re#itted the #oney to the Philippine 1overn#ent to be distributed a#on$ the suffers. All officials, includin$
the -in$ of !pain and the 1overnor21eneral of the Philippine slands, who too& part in the disposal of the
fund, acted in their purely civil, official capacity, and the fact that they #i$ht have belon$ed to a certain
church had nothin$ to do with their acts in this #atter. 5he church, as such, had nothin$ to do with the fund
in any way whatever until the $*0,000 reached the coffers of the Monte de Piedad <an institution under the
control of the church= as a loan or deposit. f the charity in %uestion had been founded as an ecclesiastical
pious wor&, the -in$ of !pain and the 1overnor21eneral, in their capacities as vicar2$eneral of the ndies
and as royal vice2patron, respectively, would have disposed of the fund as such and not in their civil
capacities, and such functions could not have been transferred to the present Philippine 1overn#ent,
because the ri$ht to so act would have arisen out of the special a$ree#ent between the 1overn#ent of
!pain and the Boly !ee, based on the union of the church and state which was co#pletely separated with
the chan$e of soverei$nty.chanroblesvirtualawlibrary chanrobles virtual law library
And in their supple#ental brief counsel say9
By the conceded facts the #oney in %uestion is part of a #haritable subs#ription. 5he donors were persons in
!pain, the trustee was the !panish 1overn#ent, the donees, the #estuis -ue trustent, were certain persons
in the Philippine slands. 5he whole #atter is one of trusteeship. 5his is undisputed and indisputable. t
follows that the !panish 1overn#ent at no ti#e was the owner of the fund. Not bein$ the owner of the fund
it #ould not transfer the ownership. Ihether or not it could transfer its trusteeship it certainly never
has e'pressly done so and the $eneral ter#s of property transfer in the 5reaty of Paris are wholly insufficient
for such a purpose even could !pain have transferred its trusteeship without the consent of the donors and
even could the 7nited !tates, as a 1overn#ent, have accepted such a trust under any power $ranted to it
by the thirteen ori$inal !tates in the Constitution, which is #ore than doubtful. t follows further that this
1overn#ent is not a proper party to the action. 5he only persons who could clai# to be da#a$ed by this
pay#ent to the 4onte, if it was unlawful, are the donors or the #estuis -ue trustent, and this 1overn#ent is
neither.
f :the whole #atter is one of trusteeship,: and it bein$ true that the !panish 1overn#ent could not, as
counsel say, transfer the ownership of the fund to the Monte de Piedad, the %uestion arises, who #ay sue to
recover this loanJ t needs no ar$u#ent to show that the !panish or Philippine 1overn#ent, as trustee,
could #aintain an action for this purpose had there been no chan$e of soverei$nty and if the ri$ht of action
has not prescribed. But those $overn#ents were so#ethin$ #ore than #ere co##on law trustees of the
fund. n order to deter#ine their e?act status with reference to this fund, it is necessary to e?a#ine the law
in force at the ti#e there transactions too& place, which are the law of 'une 00, )*64, the royal decree of
April 0/. )*/., and the instructions pro#ul$ated on the latter date. 5hese le$al provisions were applicable
to the Philippine slands <Benedicto ,s "e la Ca#a, ( Phil. Cep., (4=chanrobles virtual law library
5he funds collected as a result of the national subscription opened in !pain by royal order of the !panish
1overn#ent and which were re#itted to the Philippine 1overn#ent to be distributed a#on$ the earth%ua&e
sufferers by the Central Celief Board constituted, under article ) of the law of 'une 00, )*64, and article 0 of
the instructions of April 0/, )*/., a special charity of a te#porary nature as distin$uished fro# a per#anent
public charitable institution. As the !panish 1overn#ent initiated the creation of the fund and as the donors
turned their contributions over to that 1overn#ent, it beca#e the duty of the latter, under article / of the
instructions, to e?ercise supervision and control over the #oneys thus collected to the end that the will of
the donors should be carried out. 5he relief board had no power whatever to dispose of the funds confided
to its char$e for other purposes than to distribute the# a#on$ the sufferers, because para$raph ( of article
)) of the instructions conferred the power upon the secretary of the interior of !pain, and no other, to
dispose of the surplus funds, should there be any, by assi$nin$ the# to so#e other charitable purpose or
institution. 5he secretary could not dispose of any of the funds in this #anner so lon$ as they were
necessary for the specific purpose for which they were contributed. 5he secretary had the power, under the
law above #entioned to appoint and totally or partially chan$e the personnel of the relief board and to
authori3e the board to defend the ri$hts of the charity in the courts. 5he authority of the board consisted
only in carryin$ out the will of the donors as directed by the 1overn#ent whose duty it was to watch over
the acts of the board and to see that the funds were applied to the purposes for which they were contributed
.5he secretary of the interior, as the representative of Bis 4a;estyAs 1overn#ent, e?ercised these powers
and duties throu$h the 1overnor21eneral of the Philippine slands. 5he 1overn#ents of !pain and of the
Philippine slands in co#plyin$ with their duties conferred upon the# by law, acted in their $overn#ental
capacities in atte#ptin$ to carry out the intention of the contributors. t will this be seen that those
$overn#ents were so#ethin$ #ore, as we have said, than #ere trustees of the fund.chanroblesvirtualawlibrary chanrobles virtual lawlibrary
t is further contended that the obli$ation on the part of the Monte de Piedad to return the $*0,000 to the
1overn#ent, even considerin$ it a loan, was wiped out on the chan$e of soverei$nty, or inn other words, the
present Philippine 1overn#ent cannot #aintain this action for that reason. 5his contention, if true, :#ust
result fro# settled principles of ri$id law,: as it cannot rest upon any title to the fund in theMonte de
Piedad ac%uired prior to such chan$e. Ihile the obli$ation to return the $*0,000 to the !panish 1overn#ent
was still pendin$, war between the 7nited !tates and !pain ensued. 7nder the 5reaty of Paris of "ece#ber
)0, )*6*, the Archipela$o, &nown as the Philippine slands, was ceded to the 7nited !tates, the latter
a$reein$ to pay !pain the su# of $00,000,000. 7nder the first para$raph of the ei$hth article, !pain
relin%uished to the 7nited !tates :all buildin$s, wharves, barrac&s, forts, structures, public hi$hways, and
other i##ovable property which, in confor#ity with law, belon$ed to the public do#ain, and as such
belon$ed to the crown of !pain.: As the $*0,000 were not included therein, it is said that the ri$ht to
recover this a#ount did not, therefore, pass to the present soverei$n. 5his, in our opinion, does not follow
as a necessary conse%uence, as the ri$ht to recover does not rest upon the proposition that the $*0,000
#ust be :other i##ovable property: #entioned in article * of the treaty, but upon contractual obli$ations
incurred before the Philippine slands were ceded to the 7nited !tates. Ie will not in%uire what effect his
cession had upon the law of 'une 00, )*46, the royal decree of April 0/, )*/., and the instructions
pro#ul$ated on the latter date. n Dilas ,s 4anila <000 7. !., (4.=, the court said9
5hat there is a total abro$ation of the for#er political relations of the inhabitants of the ceded re$ion is
obvious. 5hat all laws theretofore in force which are in conflict with the political character, constitution, or
institutions of the substituted soverei$n, lose their force, is also plain. <Alvare3 y !anche3 ,s 7nited !tates,
0)+ 7. !., )+/.= But it is e%ually settled in the sa#e public law that the $reat body of #unicipal law which
re$ulates private and do#estic ri$hts continues in force until abro$ated or chan$ed by the new ruler.
f the above2#entioned le$al provisions are in conflict with the political character, constitution or institutions
of the new soverei$n, they beca#e inoperative or lost their force upon the cession of the Philippine slands
to the 7nited !tates, but if they are a#on$ :that $reat body of #unicipal law which re$ulates private and
do#estic ri$hts,: they continued in force and are still in force unless they have been repealed by the present
1overn#ent. 5hat they fall within the latter class is clear fro# their very nature and character. 5hey are laws
which are not political in any sense of the word. 5hey conferred upon the !panish 1overn#ent the ri$ht and
duty to supervise, re$ulate, and to so#e e?tent control charities and charitable institutions. 5he present
soverei$n, in e?e#ptin$ :provident institutions, savin$s ban&s, etc.,: all of which are in the nature of
charitable institutions, fro# ta?ation, placed such institutions, in so far as the invest#ent in securities are
concerned, under the $eneral supervision of the nsular 5reasurer <para$raph 4 of section ))) of Act No.
))*6> see also Act No. /0)=.chanroblesvirtualawlibrary chanrobles virtual law library
8urther#ore, upon the cession of the Philippine slands the prero$atives of he crown of !pain devolved upon
he 7nited !tates. n 4a$ill,s Brown <)+ 8ed. Cas., 40*=, %uoted with approval in 4or#on Charch ,s 7nited
!tates <)(+ 7. !.,), ./=, the court said9
5he Cevolution devolved on the !tate all the transcendent power of Parlia#ent, and the prero$ative of the
crown, and $ave their Acts the sa#e force and effect.
n 8ontain ,s Cavenel <)/ Bw., (+6, (*4=, 4r. 'ustice 4c@ean, deliverin$ the opinion of the court in a charity
case, said9
Ihen this country achieved its independence, the prero$atives of the crown devolved upon the people of the
!tates. And this power still re#ains with the# e?cept so fact as they have dele$ated a portion of it to the
8ederal 1overn#ent. 5he soverei$n will is #ade &nown to us by le$islative enact#ent. 5he !tate as a
soverei$n, is the parens patriae.
Chancelor -ent says9
n this country, the le$islature or $overn#ent of the !tate, as parens patriae, has the ri$ht to enforce all
charities of public nature, by virtue of its $eneral superintendin$ authority over the public interests, where
no other person is entrusted with it. <4 -ent Co#., .0*, note.=
5he !upre#e Court of the 7nited !tates in 4or#on Church ,s 7nited !tates, supra, after approvin$ also
the last %uotations, said9
5his prero$ative of parens patriae is inherent in the supre#e power of every !tate, whether that power is
lod$ed in a royal person or in the le$islature, and has no affinity to those arbitrary powers which are
so#eti#es e?erted by irresponsible #onarchs to the $reat detri#ent of the people and the destruction of
their liberties. ,n the contrary, it is a #ost beneficient functions, and often necessary to be e?ercised in the
interest of hu#anity, and for the prevention of in;ury to those who cannot protect the#selves.
5he court in the sa#e case, after %uotin$ fro# !ohier ,s 4ass. 1eneral Bospital <( Cush., 4*(, 46/=,
wherein the latter court held that it is dee#ed indispensible that there should be a power in the le$islature
to authori3e the sa#e of the estates of in facts, idiots, insane persons, and persons not &nown, or not in
bein$, who cannot act for the#selves, said9
5hese re#ar&s in reference to in facts, insane persons and person not &nown, or not in bein$, apply to the
beneficiaries of charities, who are often in capable of vindicatin$ their ri$hts, and ;ustly loo& for protection to
the soverei$n authority, actin$ as parens patriae. 5hey show that this beneficient functions has not ceased t
e?ist under the chan$e of $overn#ent fro# a #onarchy to a republic> but that it now resides in the
le$islative depart#ent, ready to be called into e?ercise whenever re%uired for the purposes of ;ustice and
ri$ht, and is a clearly capable of bein$ e?ercised in cases of charities as in any other cases whatever.
n People ,s Co$swell <))( Cal. )06, )(0=, it was ur$ed that the plaintiff was not the real party in interest>
that the Attorney21eneral had no power to institute the action> and that there #ust be an alle$ation and
proof of a distinct ri$ht of the people as a whole, as distin$uished fro# the ri$hts of individuals, before an
action could be brou$ht by the Attorney21eneral in the na#e of the people. 5he court, in overrulin$ these
contentions, held that it was not only the ri$ht but the duty of the Attorney21eneral to prosecute the action,
which related to charities, and approved the followin$ %uotation fro# Attorney21eneral ,s Co#pton <)
Koun$e L C. C., 4)/=9
Ihere property affected by a trust for public purposes is in the hands of those who hold it devoted to that
trust, it is the privile$e of the public that the crown should be entitled to intervene by its officers for the
purpose of assertin$, on behalf on the public $enerally, the public interest and the public ri$ht, which,
probably, no individual could be found effectually to assert, even if the interest were such as to allow it. <0
-netAs Co##entaries, )0th ed., (.6> @ewin on 5rusts, sec. /(0.=
t is further ur$ed, as above indicated, that :the only persons who could clai# to be da#a$ed by this
pay#ent to the 4onte, if it was unlawful, are the donors or the #estuis -ue trustent, and this 1overn#ent is
neither. Conse%uently, the plaintiff is not the proper party to brin$ the action.: 5he earth%ua&e fund was the
result or the accu#ulation of a $reat nu#ber of s#all contributions. 5he na#es of the contributors do not
appear in the record. 5heir whereabouts are un&nown. 5hey parted with the title to their respective
contributions. 5he beneficiaries, consistin$ of the ori$inal sufferers and their heirs, could have been
ascertained. 5hey are %uite nu#erous also. And no doubt a lar$e nu#ber of the ori$inal sufferers have died,
leavin$ various heirs. t would be i#practicable for the# to institute an action or actions either individually
or collectively to recover the $*0,000. 5he only course that can be satisfactorily pursued is for the
1overn#ent to a$ain assu#e control of the fund and devote it to the ob;ect for which it was ori$inally
destined.chanroblesvirtualawlibrary chanrobles virtual lawlibrary
5he i#practicability of pursuin$ a different course, however, is not the true $round upon which the ri$ht of
the 1overn#ent to #aintain the action rests. 5he true $round is that the #oney bein$ $iven to a charity
beca#e, in a #easure, public property, only applicable, it is true, to the specific purposes to which it was
intended to be devoted, but within those li#its consecrated to the public use, and beca#e part of the public
resources for pro#otin$ the happiness and welfare of the Philippine 1overn#ent. <4or#on Church ,s 7.
!., supra.= 5o deny the 1overn#entAs ri$ht to #aintain this action would be contrary to sound public policy,
as tendin$ to discoura$e the pro#pt e?ercise of si#ilar acts of hu#anity and Christian benevolence in li&e
instances in the future.chanroblesvirtualawlibrary chanrobles virtual lawlibrary
As to the %uestion raised in the fourth assi$n#ent of error relatin$ to the constitutionality of Act No. 0)06,
little need be said for the reason that we have ;ust held that the present Philippine 1overn#ent is the proper
party to the action. 5he Act is only a #anifestation on the part of the Philippine 1overn#ent to e?ercise the
power or ri$ht which it undoubtedly had. 5he Act is not, as contended by counsel, in conflict with the fifth
section of the Act of Con$ress of 'uly ), )600, because it does not ta&e property without due process of law.
n fact, the defendant is not the owner of the $*0,000, but holds it as a loan sub;ect to the disposal of the
central relief board. 5herefor, there can be nothin$ in the Act which transcends the power of the Philippine
@e$islature.chanroblesvirtualawlibrary chanrobles virtual lawlibrary
n .ilas ,s Manila, supra, the plaintiff was a creditor of the city of 4anila as it e?isted before the cession of
the Philippine slands to the 7nited !tates by the 5reaty of Paris of "ece#ber )0, )*6*. 5he action was
brou$ht upon the theory that the city, under its present charter fro# the 1overn#ent of the Philippine
slands, was the sa#e ;uristic person, and liable upon the obli$ations of the old city. 5his court held that the
present #unicipality is a totally different corporate entity and in no way liable for the debts of the !panish
#unicipality. 5he !upre#e Court of the 7nited !tates, in reversin$ this ;ud$#ent and in holdin$ the city
liable for the old debt, said9
5he ;uristic identity of the corporation has been in no wise affected, and, in law, the present city is, in every
le$al sense, the successor of the old. As such it is entitled to the property and property ri$hts of the
predecessor corporation, and is, in law, sub;ect to all of its liabilities.
n support of the fifth assi$n#ent of error counsel for the defendant ar$ue that as the Monte de
Piedad declined to return the $*0,000 when ordered to do so by the "epart#ent of 8inance in 'une, )*6(,
the plaintiffAs ri$ht of action had prescribed at the ti#e this suit was instituted on 4ay (, )6)0, citin$ and
relyin$ upon article )6+), )6+4 and )6+6 of the Civil Code. Ihile on the other hand, the Attorney21eneral
contends that the ri$ht of action had not prescribed <a= because the defense of prescription cannot be set up
a$ainst the Philippine 1overn#ent, <b= because the ri$ht of action to recover a deposit or trust funds does
not prescribe, and <c= even if the defense of prescription could be interposed a$ainst the 1overn#ent and if
the action had, in fact, prescribed, the sa#e was revived by Act No. 0)06.chanroblesvirtualawlibrary chanrobles virtual law library
5he #aterial facts relatin$ to this %uestion are these9 5he Monte de Piedad received the $*0,000 in )**( :to
be held under the sa#e conditions as at present in the treasury, to wit, at the disposal of the relief board.:
n co#pliance with the provisions of the royal order of "ece#ber (, )*60, the "epart#ent of 8inance called
upon the Monte de Piedad in 'une, )*6(, to return the $*0,000. 5he 4onte declined to co#ply with this
order upon the $round that only the 1overnor21eneral of the Philippine slands and not the "epart#ent of
8inance had the ri$ht to order the rei#burse#ent. 5he a#ount was carried on the boo&s of the 4onte as a
returnable loan until 'anuary ), )*66, when it was transferred to the account of the :!a$rada 4itra.: ,n
4arch (), )600, the 4onte, throu$h its le$al representative, stated in writin$ that the a#ount in %uestion
was received as a rei#bursable loan, without interest. Act No. 0)06 beca#e effective 'anuary (0, )6)0, and
the action was instituted on 4ay (rd of that year.chanroblesvirtualawlibrary chanrobles virtual law library
Counsel for the defendant treat the %uestion of prescription as if the action was one between individuals or
corporations wherein the plaintiff is see&in$ to recover an ordinary loan. 7pon this theory 'une, )*6(,
cannot be ta&en as the date when the statute of li#itations be$an to run, for the reason that the defendant
ac&nowled$ed in writin$ on 4arch (), )600, that the $*0,000 were received as a loan, thereby in effect
ad#ittin$ that it still owed the a#ount. <!ection .0, Code of Civil Procedure.= But if counselsA theory is the
correct one the action #ay have prescribed on 4ay (, )6)0, because #ore than ten full years had elapsed
after 4arch (), )600. <!ections (* and 4(, Code of Civil Procedure.=chanrobles virtual lawlibrary
s the Philippine 1overn#ent bound by the statute of li#itationsJ 5he !upre#e Court of the 7nited !tates in
7. !. ,s Nashville, Chattanoo$a L !t. @ouis Cailway Co. <))* 7. !., )00, )0.=, said9
t is settled beyond doubt or controversy 2 upon the foundation of the $reat principle of public policy,
applicable to all $overn#ents ali&e, which forbids that the public interests should be pre;udiced by the
ne$li$ence of the officers or a$ents to whose care they are confided 2 that the 7nited !tates, assertin$
ri$hts vested in it as a soverei$n $overn#ent, is not bound by any statute of li#itations, unless Con$ress
has clearly #anifested its intention that it should be so bound. <@indsey ,s4iller, + Pet. +++> 7.
!. ,s -ni$ht, )4 Pet., (0)> 1ibson ,s Chouteau, )( Iall., 60> 7. !. ,s 5ho#pson, 6* 7. !., 4*+>
8in&,s ,ANeil, )0+ 7. !., 0/0, 0*).=
n 1ibson ,s Choteau, supra, the court said9
t is a #atter of co##on &nowled$e that statutes of li#itation do not run a$ainst the !tate. 5hat no laches
can be i#puted to the -in$, and that no ti#e can bar his ri$hts, was the #a?i# of the co##on laws, and
was founded on the principle of public policy, that as he was occupied with the cares of $overn#ent he
ou$ht not to suffer fro# the ne$li$ence of his officer and servants. 5he principle is applicable to all
$overn#ents, which #ust necessarily act throu$h nu#erous a$ents, and is essential to a preservation of the
interests and property of the public. t is upon this principle that in this country the statutes of a !tate
prescribin$ periods within which ri$hts #ust be prosecuted are not held to e#brace the !tate itself, unless it
is e?pressly desi$nated or the #ischiefs to be re#edied are of such a nature that it #ust necessarily be
included. As le$islation of a !tate can only apply to persons and thin$ over which the !tate has ;urisdiction,
the 7nited !tates are also necessarily e?cluded fro# the operation of such statutes.
n 0. Cyc., )00+, the rule, supported by nu#erous authorities, is stated as follows9
n the absence of e?press statutory provision to the contrary, statute of li#itations do not as a $eneral rule
run a$ainst the soverei$n or $overn#ent, whether state or federal. But the rule is otherwise where the
#ischiefs to be re#edied are of such a nature that the state #ust necessarily be included, where the state
$oes into business in concert or in co#petition with her citi3ens, or where a party see&s to enforces his
private ri$hts by suit in the na#e of the state or $overn#ent, so that the latter is only a no#inal party.
n the instant case the Philippine 1overn#ent is not a #ere no#inal party because it, in brin$in$ and
prosecutin$ this action, is e?ercisin$ its soverei$n functions or powers and is see&in$ to carry out a trust
developed upon it when the Philippine slands were ceded to the 7nited !tates. 5he 7nited !tates havin$ in
)*.0, purchased as trustee for the Chic&asaw ndians under treaty with that tribe, certain bonds of the
!tate of 5ennessee, the ri$ht of action of the 1overn#ent on the coupons of such bonds could not be barred
by the statute of li#itations of 5ennessee, either while it held the# in trust for the ndians, or since it
beca#e the owner of such coupons. <7. !. ,sNashville, etc., C. Co., supra.= !o where lands are held in trust
by the state and the beneficiaries have no ri$ht to sue, a statute does not run a$ainst the !tateAs ri$ht of
action for trespass on the trust lands. <1reene 5p. ,s Ca#pbell, )+ ,hio !t., ))> see also Atty.2
1en. ,s4idland C. Co., ( ,nt., .)) Gfollowin$ Ce$. ,s Iillia#s, (6 7. C. M. B., (6/H.=chanrobles virtual lawlibrary
5hese principles bein$ based :upon the foundation of the $reat principle of public policy: are, in the very
nature of thin$s, applicable to the Philippine 1overn#ent.chanroblesvirtualawlibrary chanrobles virtual law library
Counsel in their ar$u#ent in support of the si?th and last assi$n#ents of error do not %uestion the a#ount
of the ;ud$#ent nor do they %uestion the correctness of the ;ud$#ent in so far as it allows interest, and
directs its pay#ent in $old coin or in the e%uivalent in Philippine currency.chanroblesvirtualawlibrary chanrobles virtual law library
8or the fore$oin$ reasons the ;ud$#ent appealed fro# is affir#ed, with costs a$ainst the appellant. !o
ordered.chanroblesvirtualawlibrary chanrobles virtual law library
)orres, *ohnson and Araullo, **, #on#ur
Moreland, *, did not si+n
Parens Patriae


On June 3, 1863 a devastating earthquake occurred in the Philippines. The Spanish Doinions then provided !"##,###.##
as aid $or the victis and it %as received &' the Philippine Treasur'. Out o$ the aid, !8#,###.## %as le$t untouched( it %as
then invested in the )onte de Piedad *ank %hich in turn invested the aount in +e%elries. *ut %hen the Philippine
governent later tried to %ithdra% the said aount, the &ank cannot provide $or the aount. The &ank argued that the
Philippine governent is not an a$$ected part' hence has no right to institute a coplaint. *ank argues that the governent
%as not the intended &ene$iciar' o$ the said aount.

ISSUE: ,hether or not the Philippine governent is copetent to $ile a coplaint against the respondent &ank-

HELD: The Philippine governent is copetent to institute action against )onte de Piedad, this is in accordance %ith the
doctrine o$ Parens Patriae. The governent &eing the protector o$ the rights o$ the people has the inherent supree po%er
to en$orce such la%s that %ill proote the pu&lic interest. .o other part' has &een entrusted %ith such right hence as
/parents0 o$ the people the governent has the right to take &ack the one' intended $or the people.