GOVERNMENT v MONTE DE PIEDAD

35 Phil. 728 Political Law Parens Patriae

In June 1863 a devastating earthquake occurred in the Philippines. The Spanish Government then
provided $400,000.00 as aid for the victims and it was received by the Philippine Treasury. Out
of the said amount, $80,000.00 was left untouched; it was then invested in the Monte de Piedad
Bank which in turn invested the amount in jewelries. But when the Philippine government later
tried to withdraw the said amount, the bank cannot provide for the amount. The government then
filed a complaint. The bank argued that the Philippine government is not an affected party hence
has no right to institute a complaint. The bank argues that the government was not the intended
beneficiary of the said amount.
ISSUE: Whether or not the Philippine government is competent to file a complaint against the
respondent bank.
HELD: Yes. The Philippine government is competent to institute action against Monte de
Piedad, this is in accordance with the doctrine of Parens Patriae. The government being the
protector of the rights of the people has the inherent supreme power to enforce such laws that
will promote the public interest. No other party has been entrusted with such right hence as
parents of the people the government has the right to take back the money intended for the
people.
Facts:
1. Spain paid $400,000 into the treasury of the Philippine Islands for the relief of those damaged by an
earthquake.

2. Upon the petition of Monte de Piedad, an institution under the control of the church, the Philippine
Government directed its treasurer to give $80,000 of the relief fund in Four (4)4 installments. As a
result, various petitions were filed, including the heirs of those entitled to the allotments. All prayed for
the State to bring suit against Monte de Piedad, and for it to pay with interest.
3.The Defendant appealed since all its funds have been exhausted already on various jewelry loans.
Issue: Whether the government is the proper authority to the cause of action
YES. The Philippine government, as a trustee towards the funds could maintain the action since there
has been no change of sovereignty. The state, as a sovereign, is the parens patriae of the people. These
principles are based upon public policy. The Philippine Government is not a mere nominal party because
it was exercising its sovereign functions or powers and was merely seeking to carry out a trust
developed upon it when the Philippine Islands was ceded to the United States. Finally, if said loan was
for ecclesiastical pious work, then Spain would not exercise its civil capacities.