Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. 74930 February 13, 1989
RICARDO VALMONTE, OSWALDO CARBONELL, DOY DEL CASTILLO, ROLANDO
BARTOLOME, LEO OBLIGAR, JUN GUTIERREZ, REYNALDO BAGATSING, JUN "NINOY"
ALBA, PERCY LAPID, ROMMEL CORRO and ROLANDO FADUL, petitioners,
vs.
FELICIANO BELMONTE, JR., respondent.
Ricardo C. Valmonte for and in his own behalf and his co-petitioners.
The Solicitor General for respondent.

CORTES, J.:
Petitioners in this special civil action for mandamus with preliminary injunction invoke their right to
information and pray that respondent be directed:

(a) to furnish petitioners the list of the names of the Batasang

Pambansa members belonging to the UNIDO and PDP-Laban who
were able to secure clean loans immediately before the February 7
election thru the intercession/marginal note of the then First Lady
Imelda Marcos; and/or
(b) to furnish petitioners with certified true copies of the documents
evidencing their respective loans; and/or
(c) to allow petitioners access to the public records for the subject
information. (Petition, pp. 4-5; paragraphing supplied.]
The controversy arose when petitioner Valmonte wrote respondent Belmonte the following letter:
June 4, 1986
Hon. Feliciano Belmonte
GSIS General Manager
Arroceros, Manila

Sir:
As a lawyer, member of the media and plain citizen of our Republic, I am requesting
that I be furnished with the list of names of the opposition members of (the) Batasang
Pambansa who were able to secure a clean loan of P2 million each on guarranty
(sic) of Mrs. Imelda Marcos. We understand that OIC Mel Lopez of Manila was one
of those aforesaid MPs. Likewise, may we be furnished with the certified true copies
of the documents evidencing their loan. Expenses in connection herewith shall be
borne by us.
If we could not secure the above documents could we have access to them?
We are premising the above request on the following provision of the Freedom
Constitution of the present regime.
The right of the people to information on matters of public concern
shall be recognized. Access to official records, and to documents and
papers pertaining to official acts, transactions or decisions, shall be
afforded the citizen subject to such limitation as may be provided by
law. (Art. IV, Sec. 6).
We trust that within five (5) days from receipt hereof we will receive your favorable
response on the matter.
[Rollo, p. 7.]
To the aforesaid letter, the Deputy General Counsel of the GSIS replied:
June 17, 1986
Atty. Ricardo C. Valmonte
108 E. Benin Street
Caloocan City
Dear Compaero:
Possibly because he must have thought that it contained serious legal implications,
President & General Manager Feliciano Belmonte, Jr. referred to me for study and
reply your letter to him of June 4, 1986 requesting a list of the opposition members of
Batasang Pambansa who were able to secure a clean loan of P2 million each on
guaranty of Mrs. Imelda Marcos.
My opinion in this regard is that a confidential relationship exists between the GSIS
and all those who borrow from it, whoever they may be; that the GSIS has a duty to
its customers to preserve this confidentiality; and that it would not be proper for the
GSIS to breach this confidentiality unless so ordered by the courts.

As a violation of this confidentiality may mar the image of the GSIS as a reputable
financial institution, I regret very much that at this time we cannot respond positively
to your request.
Very truly yours,
(Sgd.) MEYNARDO A. TIRO
Deputy General Counsel
[Rollo, p. 40.]
On June 20, 1986, apparently not having yet received the reply of the Government Service and
Insurance System (GSIS) Deputy General Counsel, petitioner Valmonte wrote respondent another
letter, saying that for failure to receive a reply, "(W)e are now considering ourselves free to do
whatever action necessary within the premises to pursue our desired objective in pursuance of
public interest." [Rollo, p. 8.]
On June 26, 1986, Valmonte, joined by the other petitioners, filed the instant suit.
On July 19, 1986, the Daily Express carried a news item reporting that 137 former members of the
defunct interim and regular Batasang Pambansa, including ten (10) opposition members, were
granted housing loans by the GSIS [Rollo, p. 41.]
Separate comments were filed by respondent Belmonte and the Solicitor General. After petitioners
filed a consolidated reply, the petition was given due course and the parties were required to file their
memoranda. The parties having complied, the case was deemed submitted for decision.
In his comment respondent raises procedural objections to the issuance of a writ of mandamus,
among which is that petitioners have failed to exhaust administrative remedies.
Respondent claims that actions of the GSIS General Manager are reviewable by the Board of
Trustees of the GSIS. Petitioners, however, did not seek relief from the GSIS Board of Trustees. It is
therefore asserted that since administrative remedies were not exhausted, then petitioners have no
cause of action.
To this objection, petitioners claim that they have raised a purely legal issue, viz., whether or not they
are entitled to the documents sought, by virtue of their constitutional right to information. Hence, it is
argued that this case falls under one of the exceptions to the principle of exhaustion of administrative
remedies.
Among the settled principles in administrative law is that before a party can be allowed to resort to
the courts, he is expected to have exhausted all means of administrative redress available under the
law. The courts for reasons of law, comity and convenience will not entertain a case unless the
available administrative remedies have been resorted to and the appropriate authorities have been
given opportunity to act and correct the errors committed in the administrative forum. However, the
principle of exhaustion of administrative remedies is subject to settled exceptions, among which is
when only a question of law is involved [Pascual v. Provincial Board, 106 Phil. 466 (1959); Aguilar v.

Valencia, et al., G.R. No. L-30396, July 30, 1971, 40 SCRA 210; Malabanan v. Ramento, G.R. No. L2270, May 21, 1984, 129 SCRA 359.] The issue raised by petitioners, which requires the
interpretation of the scope of the constitutional right to information, is one which can be passed upon
by the regular courts more competently than the GSIS or its Board of Trustees, involving as it does a
purely legal question. Thus, the exception of this case from the application of the general rule on
exhaustion of administrative remedies is warranted. Having disposed of this procedural issue, We
now address ourselves to the issue of whether or not mandamus hes to compel respondent to
perform the acts sought by petitioners to be done, in pursuance of their right to information.
We shall deal first with the second and third alternative acts sought to be done, both of which involve
the issue of whether or not petitioners are entitled to access to the documents evidencing loans
granted by the GSIS.
This is not the first time that the Court is confronted with a controversy directly involving the
constitutional right to information. In Taada v. Tuvera, G.R. No. 63915, April 24,1985, 136 SCRA 27
and in the recent case of Legaspi v. Civil Service Commission, G.R. No. 72119, May 29, 1987,150
SCRA 530, the Court upheld the people's constitutional right to be informed of matters of public
interest and ordered the government agencies concerned to act as prayed for by the petitioners.
The pertinent provision under the 1987 Constitution is Art. 111, Sec. 7 which states:
The right of the people to information on matters of public concern shall be
recognized. Access to official records, and to documents, and papers pertaining to
official acts, transactions, or decisions, as well as to government research data used
as basis for policy development, shall be afforded the citizen, subject to such
limitations as may be provided by law.
The right of access to information was also recognized in the 1973 Constitution, Art. IV Sec. 6 of
which provided:
The right of the people to information on 'matters of public concern shall be
recognized. Access to official records, and to documents and papers pertaining to
official acts, transactions, or decisions, shall be afforded the citizen subject to such
limitations as may be provided by law.
An informed citizenry with access to the diverse currents in political, moral and artistic thought and
data relative to them, and the free exchange of ideas and discussion of issues thereon, is vital to the
democratic government envisioned under our Constitution. The cornerstone of this republican
system of government is delegation of power by the people to the State. In this system,
governmental agencies and institutions operate within the limits of the authority conferred by the
people. Denied access to information on the inner workings of government, the citizenry can become
prey to the whims and caprices of those to whom the power had been delegated. The postulate of
public office as a public trust, institutionalized in the Constitution (in Art. XI, Sec. 1) to protect the
people from abuse of governmental power, would certainly be were empty words if access to such
information of public concern is denied, except under limitations prescribed by implementing
legislation adopted pursuant to the Constitution.

Petitioners are practitioners in media. As such, they have both the right to gather and the obligation
to check the accuracy of information the disseminate. For them, the freedom of the press and of
speech is not only critical, but vital to the exercise of their professions. The right of access to
information ensures that these freedoms are not rendered nugatory by the government's
monopolizing pertinent information. For an essential element of these freedoms is to keep open a
continuing dialogue or process of communication between the government and the people. It is in
the interest of the State that the channels for free political discussion be maintained to the end that
the government may perceive and be responsive to the people's will. Yet, this open dialogue can be
effective only to the extent that the citizenry is informed and thus able to formulate its will intelligently.
Only when the participants in the discussion are aware of the issues and have access to information
relating thereto can such bear fruit.
The right to information is an essential premise of a meaningful right to speech and expression. But
this is not to say that the right to information is merely an adjunct of and therefore restricted in
application by the exercise of the freedoms of speech and of the press. Far from it. The right to
information goes hand-in-hand with the constitutional policies of full public disclosure * and honesty
in the public service. ** It is meant to enhance the widening role of the citizenry in governmental
decision-making as well as in checking abuse in government.
Yet, like all the constitutional guarantees, the right to information is not absolute. As stated in
Legaspi, the people's right to information is limited to "matters of public concern," and is further
"subject to such limitations as may be provided by law." Similarly, the State's policy of full disclosure
is limited to "transactions involving public interest," and is "subject to reasonable conditions
prescribed by law."
Hence, before mandamus may issue, it must be clear that the information sought is of "public
interest" or "public concern," and is not exempted by law from the operation of the constitutional
guarantee [Legazpi v. Civil Service Commission, supra, at p. 542.]
The Court has always grappled with the meanings of the terms "public interest" and "public concern".
As observed in Legazpi:
In determining whether or not a particular information is of public concern there is no
rigid test which can be applied. "Public concern" like "public interest" is a term that
eludes exact definition. Both terms embrace a broad spectrum of subjects which the
public may want to know, either because these directly affect their lives, or simply
because such matters naturally arouse the interest of an ordinary citezen. In the final
analysis, it is for the courts to determine on a case by case basis whether the matter
at issue is of interest or importance, as it relates to or affects the public. [Ibid. at p.
541]
In the Taada case the public concern deemed covered by the constitutional right to information was
the need for adequate notice to the public of the various laws which are to regulate the actions and
conduct of citezens. In Legaspi, it was the "legitimate concern of citezensof ensure that government
positions requiring civil service eligibility are occupied only by persons who are eligibles" [Supra at p.
539.]

The information sought by petitioners in this case is the truth of reports that certain Members of the
Batasang Pambansa belonging to the opposition were able to secure "clean" loans from the GSIS
immediately before the February 7, 1986 election through the intercession of th eformer First Lady,
Mrs. Imelda Marcos.
The GSIS is a trustee of contributions from the government and its employees and the administrator
of various insurance programs for the benefit of the latter. Undeniably, its funds assume a public
character. More particularly, Secs. 5(b) and 46 of P.D. 1146, as amended (the Revised Government
Service Insurance Act of 1977), provide for annual appropriations to pay the contributions,
premiums, interest and other amounts payable to GSIS by the government, as employer, as well as
the obligations which the Republic of the Philippines assumes or guarantees to pay. Considering the
nature of its funds, the GSIS is expected to manage its resources with utmost prudence and in strict
compliance with the pertinent laws or rules and regulations. Thus, one of the reasons that prompted
the revision of the old GSIS law (C.A. No. 186, as amended) was the necessity "to preserve at all
times the actuarial solvency of the funds administered by the System" [Second Whereas Clause,
P.D. No. 1146.] Consequently, as respondent himself admits, the GSIS "is not supposed to grant
'clean loans.'" [Comment, p. 8.] It is therefore the legitimate concern of the public to ensure that
these funds are managed properly with the end in view of maximizing the benefits that accrue to the
insured government employees. Moreover, the supposed borrowers were Members of the defunct
Batasang Pambansa who themselves appropriated funds for the GSIS and were therefore expected
to be the first to see to it that the GSIS performed its tasks with the greatest degree of fidelity and
that an its transactions were above board.
In sum, the public nature of the loanable funds of the GSIS and the public office held by the alleged
borrowers make the information sought clearly a matter of public interest and concern.
A second requisite must be met before the right to information may be enforced through mandamus
proceedings, viz., that the information sought must not be among those excluded by law.
Respondent maintains that a confidential relationship exists between the GSIS and its borrowers. It
is argued that a policy of confidentiality restricts the indiscriminate dissemination of information.
Yet, respondent has failed to cite any law granting the GSIS the privilege of confidentiality as regards
the documents subject of this petition. His position is apparently based merely on considerations of
policy. The judiciary does not settle policy issues. The Court can only declare what the law is, and
not what the law should be. Under our system of government, policy issues are within the domain of
the political branches of the government, and of the people themselves as the repository of all State
power.
Respondent however contends that in view of the right to privacy which is equally protected by the
Constitution and by existing laws, the documents evidencing loan transactions of the GSIS must be
deemed outside the ambit of the right to information.
There can be no doubt that right to privacy is constitutionally protected. In the landmark case of
Morfe v. Mutuc [130 Phil. 415 (1968), 22 SCRA 424], this Court, speaking through then Mr. Justice
Fernando, stated:

... The right to privacy as such is accorded recognition independently of its

identification with liberty; in itself, it is fully deserving of constitutional protection. The
language of Prof. Emerson is particularly apt: "The concept of limited government
has always included the idea that governmental powers stop short of certain
intrusions into the personal life of the citizen. This is indeed one of the basic
distinctions between absolute and limited government. UItimate and pervasive
control of the individual, in all aspects of his life, is the hallmark of the absolute. state,
In contrast, a system of limited government safeguards a private sector, which
belongs to the individual, firmly distinguishing it from the public sector, which the
state can control. Protection of this private sector protection, in other words, of the
dignity and integrity of the individual has become increasingly important as
modem society has developed. All the forces of technological age industrialization,
urbanization, and organization operate to narrow the area of privacy and facilitate
intrusion into it. In modern terms, the capacity to maintain and support this enclave of
private life marks the difference between a democratic and a totalitarian society." [at
pp. 444-445.]
When the information requested from the government intrudes into the privacy of a citizen, a
potential conflict between the rights to information and to privacy may arise. However, the competing
interests of these rights need not be resolved in this case. Apparent from the above-quoted
statement of the Court in Morfe is that the right to privacy belongs to the individual in his private
capacity, and not to public and governmental agencies like the GSIS. Moreover, the right cannot be
invoked by juridical entities like the GSIS. As held in the case of Vassar College v. Loose Wills
Biscuit Co. [197 F. 982 (1912)], a corporation has no right of privacy in its name since the entire
basis of the right to privacy is an injury to the feelings and sensibilities of the party and a corporation
would have no such ground for relief.
Neither can the GSIS through its General Manager, the respondent, invoke the right to privacy of its
borrowers. The right is purely personal in nature [Cf. Atkinson v. John Doherty & Co., 121 Mich 372,
80 N.W. 285, 46 L.RA. 219 (1899); Schuyler v. Curtis, 147 N.Y. 434, 42 N.E. 22, 31 L.R.A. 286
(1895)), and hence may be invoked only by the person whose privacy is claimed to be violated.
It may be observed, however, that in the instant case, the concerned borrowers themselves may not
succeed if they choose to invoke their right to privacy, considering the public offices they were
holding at the time the loans were alleged to have been granted. It cannot be denied that because of
the interest they generate and their newsworthiness, public figures, most especially those holding
responsible positions in government, enjoy a more limited right to privacy as compared to ordinary
individuals, their actions being subject to closer public scrutiny [Cf. Ayer Productions Pty. Ltd. v.
Capulong, G.R. Nos. 82380 and 82398, April 29, 1988; See also Cohen v. Marx, 211 P. 2d 321
(1949).]
Respondent next asserts that the documents evidencing the loan transactions of the GSIS are
private in nature and hence, are not covered by the Constitutional right to information on matters of
public concern which guarantees "(a)ccess to official records, and to documents, and papers
pertaining to official acts, transactions, or decisions" only.

It is argued that the records of the GSIS, a government corporation performing proprietary functions,
are outside the coverage of the people's right of access to official records.
It is further contended that since the loan function of the GSIS is merely incidental to its insurance
function, then its loan transactions are not covered by the constitutional policy of full public
disclosure and the right to information which is applicable only to "official" transactions.
First of all, the "constituent ministrant" dichotomy characterizing government function has long
been repudiated. In ACCFA v. Confederation of Unions and Government Corporations and Offices
(G.R. Nos. L-21484 and L-23605, November 29, 1969, 30 SCRA 6441, the Court said that the
government, whether carrying out its sovereign attributes or running some business, discharges the
same function of service to the people.
Consequently, that the GSIS, in granting the loans, was exercising a proprietary function would not
justify the exclusion of the transactions from the coverage and scope of the right to information.
Moreover, the intent of the members of the Constitutional Commission of 1986, to include
government-owned and controlled corporations and transactions entered into by them within the
coverage of the State policy of fun public disclosure is manifest from the records of the proceedings:
xxx xxx xxx
THE PRESIDING OFFICER (Mr. Colayco).
Commissioner Suarez is recognized.
MR. SUAREZ. Thank you. May I ask the Gentleman a few question?
MR. OPLE. Very gladly.
MR. SUAREZ. Thank you.
When we declare a "policy of full public disclosure of all its
transactions" referring to the transactions of the State and when
we say the "State" which I suppose would include all of the various
agencies, departments, ministries and instrumentalities of the
government....
MR. OPLE. Yes, and individual public officers, Mr. Presiding Officer.
MR. SUAREZ. Including government-owned and controlled corporations.
MR. OPLE. That is correct, Mr. Presiding Officer.
MR. SUAREZ. And when we say "transactions" which
should be distinguished from contracts, agreements,

or treaties or whatever, does the Gentleman refer to

the steps leading to the consummation of the
contract, or does he refer to the contract itself?
MR. OPLE. The "transactions" used here I suppose is
generic and, therefore, it can cover both steps leading
to a contract, and already a consummated contract,
Mr. Presiding Officer.
MR. SUAREZ. This contemplates inclusion of
negotiations leading to the consummation of the
transaction.
MR. OPLE. Yes, subject only
safeguards on the national interest.

to

reasonable

MR. SUAREZ. Thank you. [V Record of the

Constitutional
Commission
24-25.]
(Emphasis
supplied.)
Considering the intent of the framers of the Constitution which, though not binding upon the Court,
are nevertheless persuasive, and considering further that government-owned and controlled
corporations, whether performing proprietary or governmental functions are accountable to the
people, the Court is convinced that transactions entered into by the GSIS, a government-controlled
corporation created by special legislation are within the ambit of the people's right to be informed
pursuant to the constitutional policy of transparency in government dealings.
In fine, petitioners are entitled to access to the documents evidencing loans granted by the GSIS,
subject to reasonable regulations that the latter may promulgate relating to the manner and hours of
examination, to the end that damage to or loss of the records may be avoided, that undue
interference with the duties of the custodian of the records may be prevented and that the right of
other persons entitled to inspect the records may be insured [Legaspi v. Civil Service Commission,
supra at p. 538, quoting Subido v. Ozaeta, 80 Phil. 383, 387.] The petition, as to the second and
third alternative acts sought to be done by petitioners, is meritorious.
However, the same cannot be said with regard to the first act sought by petitioners, i.e., "to furnish
petitioners the list of the names of the Batasang Pambansa members belonging to the UNIDO and
PDP-Laban who were able to secure clean loans immediately before the February 7 election thru the
intercession/marginal note of the then First Lady Imelda Marcos."
Although citizens are afforded the right to information and, pursuant thereto, are entitled to "access
to official records," the Constitution does not accord them a right to compel custodians of official
records to prepare lists, abstracts, summaries and the like in their desire to acquire information on
matters of public concern.

It must be stressed that it is essential for a writ of mandamus to issue that the applicant has a welldefined, clear and certain legal right to the thing demanded and that it is the imperative duty of
defendant to perform the act required. The corresponding duty of the respondent to perform the
required act must be clear and specific [Lemi v. Valencia, G.R. No. L-20768, November 29,1968,126
SCRA 203; Ocampo v. Subido, G.R. No. L-28344, August 27, 1976, 72 SCRA 443.] The request of
the petitioners fails to meet this standard, there being no duty on the part of respondent to prepare
the list requested.
WHEREFORE, the instant petition is hereby granted and respondent General Manager of the
Government Service Insurance System is ORDERED to allow petitioners access to documents and
records evidencing loans granted to Members of the former Batasang Pambansa, as petitioners may
specify, subject to reasonable regulations as to the time and manner of inspection, not incompatible
with this decision, as the GSIS may deem necessary.
SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-9959 December 13, 1916
THE GOVERNMENT OF THE PHILIPPINE ISLANDS, represented by the Treasurer of the
Philippine Islands, plaintiff-appellee,
vs.
EL MONTE DE PIEDAD Y CAJA DE AHORRAS DE MANILA, defendant-appellant.
William A. Kincaid and Thomas L. Hartigan for appellant.
Attorney-General Avancea for appellee.

TRENT, J.:
About $400,000, were subscribed and paid into the treasury of the Philippine Islands by the
inhabitants of the Spanish Dominions of the relief of those damaged by the earthquake which took
place in the Philippine Islands on June 3, 1863. Subsequent thereto and on October 6 of that year, a
central relief board was appointed, by authority of the King of Spain, to distribute the moneys thus
voluntarily contributed. After a thorough investigation and consideration, the relief board allotted
$365,703.50 to the various sufferers named in its resolution, dated September 22, 1866, and, by
order of the Governor-General of the Philippine Islands, a list of these allotments, together with the
names of those entitled thereto, was published in the Official Gazette of Manila dated April 7, 1870.
There was later distributed, inaccordance with the above-mentioned allotments, the sum of
$30,299.65, leaving a balance of S365,403.85 for distribution. Upon the petition of the governing
body of the Monte de Piedad, dated February 1, 1833, the Philippine Government, by order dated
the 1st of that month, directed its treasurer to turn over to the Monte de Piedad the sum of $80,000
of the relief fund in installments of $20,000 each. These amounts were received on the following
dates: February 15, March 12, April 14, and June 2, 1883, and are still in the possession of the
Monte de Piedad. On account of various petitions of the persons, and heirs of others to whom the
above-mentioned allotments were made by the central relief board for the payment of those
amounts, the Philippine Islands to bring suit against the Monte de Piedad a recover, "through the
Attorney-General and in representation of the Government of the Philippine Islands," the $80.000,
together with interest, for the benefit of those persons or their heirs appearing in the list of names
published in the Official Gazette instituted on May 3, 1912, by the Government of the Philippine
Islands, represented by the Insular Treasurer, and after due trial, judgment was entered in favor of
the plaintiff for the sum of $80,000 gold or its equivalent in Philippine currency, together with legal
interest from February 28, 1912, and the costs of the cause. The defendant appealed and makes the
following assignment of errors:

1. The court erred in not finding that the eighty thousand dollars ($80,000), give to the Monte
de Piedad y Caja de Ahorros, were so given as a donation subject to one condition, to wit:
the return of such sum of money to the Spanish Government of these Islands, within eight
days following the day when claimed, in case the Supreme Government of Spain should not
approve the action taken by the former government.
2. The court erred in not having decreed that this donation had been cleared; said eighty
thousand dollars ($80,000) being at present the exclusive property of the appellant the
Monte de Piedad y Caja de Ahorros.
3. That the court erred in stating that the Government of the Philippine Islands has
subrogated the Spanish Government in its rights, as regards an important sum of money
resulting from a national subscription opened by reason of the earthquake of June 3, 1863,
in these Island.
4. That the court erred in not declaring that Act Numbered 2109, passed by the Philippine
Legislature on January 30, 1912, is unconstitutional.
5. That the court erred in holding in its decision that there is no title for the prescription of this
suit brought by the Insular Government against the Monte de Piedad y Caja de Ahorros for
the reimbursement of the eighty thousand dollars ($80,000) given to it by the late Spanish
Government of these Islands.
6. That the court erred in sentencing the Monte de Piedad y Caja de Ahorros to reimburse
the Philippine Government in the sum of eighty thousand dollars ($80,000) gold coin, or the
equivalent thereof in the present legal tender currency in circulation, with legal interest
thereon from February 28th, 1912, and the costs of this suit.
In the royal order of June 29, 1879, the Governor-General of the Philippine Islands was directed to
inform the home Government in what manner the indemnity might be paid to which, by virtue of the
resolutions of the relief board, the persons who suffered damage by the earthquake might be
entitled, in order to perform the sacred obligation which the Government of Spain had assumed
toward the donors.
The next pertinent document in order is the defendant's petition, dated February 1, 1883, addressed
to the Governor-General of the Philippine Islands, which reads:
Board of Directors of the Monte de Piedad of Manila Presidencia.
Excellency: The Board of Directors of the Monte de Piedad y Caja de Ahorros of Manila
informs your Excellency, First: That the funds which it has up to the present been able to
dispose of have been exhausted in loans on jewelry, and there only remains the sum of one
thousand and odd pesos, which will be expended between to-day and day after tomorrow.
Second: That, to maintain the credit of the establishment, which would be greatly injured
were its operations suspended, it is necessary to procure money. Third: That your Excellency
has proposed to His Majesty's Government to apply to the funds of the Monte de Piedad a

part of the funds held in the treasury derived form the national subscription for the relief of
the distress caused by the earthquake of 1863. Fourth: That in the public treasury there is
held at the disposal of the central earthquake relief board over $1090,000 which was
deposited in the said treasury by order of your general Government, it having been
transferred thereto from the Spanish-Filipino Bank where it had been held. fifth: That in the
straightened circumstances of the moment, your Excellency can, to avert impending disaster
to the Monte de Piedad, order that, out of that sum of one hundred thousand pesos held in
the Treasury at the disposal of the central relief board, there be transferred to the Monte de
Piedad the sum of $80,000, there to be held under the same conditions as at present in the
Treasury, to wit, at the disposal of the Relief Board. Sixth: That should this transfer not be
approved for any reason, either because of the failure of His Majesty's Government to
approve the proposal made by your Excellency relative to the application to the needs of the
Monte de Piedad of a pat of the subscription intended to believe the distress caused by the
earthquake of 1863, or for any other reason, the board of directors of the Monte de Piedad
obligates itself to return any sums which it may have received on account of the eighty
thousand pesos, or the whole thereof, should it have received the same, by securing a loan
from whichever bank or banks may lend it the money at the cheapest rate upon the security
of pawned jewelry. This is an urgent measure to save the Monte de Piedad in the present
crisis and the board of directors trusts to secure your Excellency's entire cooperation and
that of the other officials who have take part in the transaction.
The Governor-General's resolution on the foregoing petition is as follows:
GENERAL GOVERNMENT OF THE PHILIPPINES.
MANILA, February 1, 1883.
In view of the foregoing petition addressed to me 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 jewelry and that the small account remaining will scarcely
suffice to cover the transactions of the next two days, for which reason it entreats the general
Government that, in pursuance of its telegraphic advice to H. M. Government, the latter
direct that there be turned over to said Monte de Piedad $80,000 out of the funds in the
public treasury obtained from the national subscription for the relief of the distress caused by
the earthquake of 1863, said board obligating itself to return this sum should H. M.
Government, for any reason, not approve the said proposal, and for this purpose it will
procure funds by means of loans raised on pawned jewelry; it stated further that if the aid so
solicited is not furnished, it will be compelled to suspend operations, which would seriously
injure the credit of so beneficient an institution; and in view of the report upon the matter
made by the Intendencia General de Hacienda; and considering the fact that the public
treasury has on hand a much greater sum from the source mentioned than that solicited; and
considering that this general Government has submitted for the determination of H. M.
Government that the balance which, after strictly applying the proceeds obtained from the
subscription referred to, may remain 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,
believing that in so doing the wishes of the donors would be faithfully interpreted inasmuch
as those wishes were no other than to relieve distress, an act of charity which is exercised in

the highest degree by the Monte de Piedad, for it liberates needy person from the pernicious
effects of usury; and
Considering that the lofty purposes that brought about the creation of the pious institution
referred to would be frustrated, and that the great and laudable work of its establishment,
and that the great and laudable and valuable if the aid it urgently seeks is not granted, since
the suspension of its operations would seriously and regrettably damage the ever-growing
credit of the Monte de Piedad; and
Considering that if such a thing would at any time cause deep distress in the public mind, it
might be said that at the present juncture it would assume the nature of a disturbance of
public order because of the extreme poverty of the poorer classes resulting from the late
calamities, and because it is the only institution which can mitigate the effects of such
poverty; and
Considering that no reasonable objection can be made to granting the request herein
contained, for the funds in question are sufficiently secured in the unlikely event that H> M.
Government does not approve the recommendation mentioned, this general Government, in
the exercise of the extraordinary powers conferred upon it and in conformity with the report
of the Intendencia de Hacienda, resolves as follows:
First. Authority is hereby given to deliver to the Monte de Piedad, out of the sum held in the
public treasury of these Islands obtained from the national subscription opened by reason of
the earthquakes of 1863, amounts up to the sum $80,000, as its needs may require, in
installments of $20,000.
Second. The board of directors of the Monte de Piedad is solemnly bound to return, within
eight days after demand, the sums it may have so received, if H. M. Government does not
approve this resolution.
Third. The Intendencia General de Hacienda shall forthwith, and in preference to all other
work, proceed to prepare the necessary papers so that with the least possible delay the
payment referred to may be made and the danger that menaces the Monte de Piedad of
having to suspend its operations may be averted.
H. M. Government shall be advised hereof.
(Signed) P. DE RIVERA.

lawphi1.net

By the royal order of December 3, 1892, the Governor-General of the Philippine Islands was ordered
to "inform this ministerio what is the total sum available at the present time, taking into consideration
the sums delivered to the Monte de Piedad pursuant to the decree issued by your general
Government on February 1, 1883," and after the rights of the claimants, whose names were
published in the Official Gazette of Manila on April 7, 1870, and their heirs had been established, as
therein provided, as such persons "have an unquestionable right to be paid the donations assigned
to them therein, your general Government shall convoke them all within a reasonable period and
shall pay their shares to such as shall identify themselves, without regard to their financial status,"

and finally "that when all the proceedings and operations herein mentioned have been concluded
and the Government can consider itself free from all kinds of claims on the part of those interested in
the distribution of the funds deposited in the vaults of the Treasury, such action may be taken as the
circumstances shall require, after first consulting the relief board and your general Government and
taking account of what sums have been delivered to the Monte de Piedad and those that were
expended in 1888 to relieve public calamities," and "in order that all the points in connection with the
proceedings had as a result of the earthquake be clearly understood, it is indispensable that the
offices hereinbefore mentioned comply with the provisions contained in paragraphs 2 and 3 of the
royal order of June 25, 1879." On receipt of this Finance order by the Governor-General, the
Department of Finance was called upon for a report in reference to the $80,000 turned over to the
defendant, and that Department's report to the Governor-General dated June 28, 1893, reads:
Intendencia General de Hacienda de Filipinas (General Treasury of the Philippines)
Excellency. By Royal Order No. 1044 of December 3, last, it is provided that the persons
who sustained losses by the earthquakes that occurred in your capital in the year 1863 shall
be paid the amounts allotted to them out of the sums sent from Spain for this purpose, with
observance of the rules specified in the said royal order, one of them being that before
making the payment to the interested parties the assets shall be reduced to money. These
assets, during the long period of time that has elapsed since they were turned over to the
Treasury of the Philippine Islands, were used to cover the general needs of the
appropriation, a part besides being invested in the relief of charitable institutions and another
part to meet pressing needs occasioned by public calamities. On January 30, last, your
Excellency was please to order the fulfillment of that sovereign mandate and referred the
same to this Intendencia for its information and the purposes desired (that is, for compliance
with its directions and, as aforesaid, one of these being the liquidation, recovery, and deposit
with the Treasury of the sums paid out of that fund and which were expended in a different
way from that intended by the donors) and this Intendencia believed the moment had arrived
to claim from the board of directors of the Monte de Piedad y Caja de Ahorros the sum of
80,000 pesos which, by decree of your general Government of the date of February 1, 1883,
was loaned to it out of the said funds, the (Monte de Piedad) obligating itself to return the
same within the period of eight days if H. M. Government did not approve the delivery. On
this Intendencia's demanding from the Monte de Piedad the eighty thousand pesos, thus
complying with the provisions of the Royal Order, it was to be supposed that no objection to
its return would be made by the Monte de Piedad for, when it received the loan, it formally
engaged itself to return it; and, besides, it was indisputable that the moment to do so had
arrived, inasmuch as H. M. Government, in ordering that the assets of the earthquake relief
fund should he collected, makes express mention of the 80,000 pesos loaned to the Monte
de Piedad, without doubt considering as sufficient the period of ten years during which it has
been using this large sum which lawfully belongs to their persons. This Intendencia also
supposed that the Monte de Piedad no longer needed the amount of that loan, inasmuch as,
far from investing it in beneficient transactions, it had turned the whole amount into the
voluntary deposit funds bearing 5 per cent interests, the result of this operation being that the
debtor loaned to the creditor on interest what the former had gratuitously received. But the
Monte de Piedad, instead of fulfilling the promise it made on receiving the sum, after
repeated demands refused to return the money on the ground that only your Excellency, and
not the Intendencia (Treasury), is entitled to order the reimbursement, taking no account of

the fact that this Intendencia was acting in the discharge of a sovereign command, the
fulfillment of which your Excellency was pleased to order; and on the further ground that the
sum of 80,000 pesos which it received from the fund intended for the earthquake victims was
not received as a loan, but as a donation, this in the opinion of this Intendencia, erroneously
interpreting both the last royal order which directed the apportionment of the amount of the
subscription raised in the year 1863 and the superior decree which granted the loan,
inasmuch as in this letter no donation is made to the Monte de Piedad of the 80,000 pesos,
but simply a loan; besides, no donation whatever could be made of funds derived from a
private subscription raised for a specific purpose, which funds are already distributed and the
names of the beneficiaries have been published in the Gaceta, there being lacking only the
mere material act of the delivery, which has been unduly delayed. In view of the unexpected
reply made by the Monte de Piedad, and believing it useless to insist further in the matter of
the claim for the aforementioned loan, or to argue in support thereof, this Intendencia
believes the intervention of your Excellency necessary in this matter, if the royal Order No.
1044 of December 3, last, is to be complied with, and for this purpose I beg your Excellency
kindly to order the Monte de Piedad to reimburse within the period of eight days the 80,000
which it owes, and that you give this Intendencia power to carry out the provisions of the said
royal order. I must call to the attention of your Excellency that the said pious establishment,
during the last few days and after demand was made upon it, has endorsed to the SpanishFilipino Bank nearly the whole of the sum which it had on deposit in the general deposit
funds.
The record in the case under consideration fails to disclose any further definite action taken by either
the Philippine Government or the Spanish Government in regard to the $80,000 turned over to the
Monte de Piedad.
In the defendant's general ledger the following entries appear: "Public Treasury: February 15, 1883,
$20,000; March 12, 1883, $20,000; April 14, 1883, $20,000; June 2, 1883, $20,000, total $80,000."
The book entry for this total is as follows: "To the public Treasury derived from the subscription for
the earthquake of 1863, $80,000 received from general Treasury as a returnable loan, and without
interest." The account was carried in this manner until January 1, 1899, when it was closed by
transferring the amount to an account called "Sagrada Mitra," which latter account was a loan of
$15,000 made to the defendant by the Archbishop of Manila, without interest, thereby placing the
"Sagrada Mitra" account at $95,000 instead of $15,000. The above-mentioned journal entry for
January 1, 1899, reads: "Sagrada Mitra and subscription, balance of these two account which on this
date are united in accordance with an order of the Exmo. Sr. Presidente of the Council transmitted
verbally to the Presidente Gerente of these institutions, $95,000."
On March 16, 1902, the Philippine government called upon the defendant for information concerning
the status of the $80,000 and received the following reply:
MANILA, March 31, 1902.
To the Attorney-General of the Department of Justice of the Philippine Islands.

SIR: In reply to your courteous letter of the 16th inst., in which you request information from
this office as to when and for what purpose the Spanish Government delivered to the Monte
de Piedad eighty thousand pesos obtained from the subscription opened in connection with
the earthquake of 1863, as well as any other information that might be useful for the report
which your office is called upon to furnish, I must state to your department that the books
kept in these Pious Institutions, and which have been consulted for the purpose, show that
on the 15th of February, 1883, they received as a reimbursable loan and without interest,
twenty thousand pesos, which they deposited with their own funds. On the same account
and on each of the dates of March 12, April 14 and June 2 of the said year, 1883, they also
received and turned into their funds a like sum of twenty thousand pesos, making a total of
eighty thousand pesos. (Signed) Emilio Moreta.
I hereby certify that the foregoing is a literal copy of that found in the letter book No. 2 of
those Pious Institutions.
Manila, November 19, 1913
(Sgd.) EMILIO LAZCANOTEGUI,
Secretary
(Sgd.) O. K. EMILIO MORETA,
Managing Director.
The foregoing documentary evidence shows the nature of the transactions which took place
between the Government of Spain and the Philippine Government on the one side and the Monte de
Piedad on the other, concerning the $80,000. The Monte de Piedad, after setting forth in its petition
to the Governor-General its financial condition and its absolute necessity for more working capital,
asked that out of the sum of $100,000 held in the Treasury of the Philippine Islands, at the disposal
of the central relief board, there be transferred to it the sum of $80,000 to be held under the same
conditions, to wit, "at the disposal of the relief board." The Monte de Piedad agreed that if the
transfer of these funds should not be approved by the Government of Spain, the same would be
returned forthwith. It did not ask that the $80,000 be given to it as a donation. The GovernorGeneral, after reciting the substance of the petition, stated that "this general Government has
submitted for the determination of H. M. Government that the balance which, after strictly applying
the proceeds obtained from the subscription referred to, may remain 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 "considering that no reasonable objection can be made to granting the request
herein contained," directed the transfer of the $80,000 to be made with the understanding that "the
Board of Directors of the Monte de Piedad is solemnly bound to return, within eight days after
demand, the sums it may have so received, if H. M. Government does not approve this resolution." It
will be noted that the first and only time the word "donation" was used in connection with the $80,000
appears in this resolution of the Governor-General. It may be inferred from the royal orders that the
Madrid Government did tacitly approve of the transfer of the $80,000 to the Monte de Piedad as a
loan without interest, but that Government certainly did not approve such transfer as a donation for
the reason that the Governor-General was directed by the royal order of December 3, 1892, to
inform the Madrid Government of the total available sum of the earthquake fund, "taking into
consideration the sums delivered to the Monte de Piedad pursuant to the decree issued by your

general Government on February 1, 1883." This language, nothing else appearing, might admit of
the interpretation that the Madrid Government did not intend that the Governor-General of the
Philippine Islands should include the $80,000 in the total available sum, but when considered in
connection with the report of the Department of Finance there can be no doubt that it was so
intended. That report refers expressly to the royal order of December 3d, and sets forth in detail the
action taken in order to secure the return of the $80,000. The Department of Finance, acting under
the orders of the Governor-General, understood that the $80,000 was transferred to the Monte de
Piedad well knew that it received this sum as a loan interest." The amount was thus carried in its
books until January, 1899, when it was transferred to the account of the "Sagrada Mitra" and was
thereafter known as the "Sagrada Mitra and subscription account." Furthermore, the Monte de
Piedad recognized and considered as late as March 31, 1902, that it received the $80,000 "as a
returnable loan, and without interest." Therefore, there cannot be the slightest doubt the fact that the
Monte de Piedad received the $80,000 as a mere loan or deposit and not as a donation.
Consequently, the first alleged error is entirely without foundation.
Counsel for the defendant, in support of their third assignment of error, say in their principal brief
that:
The Spanish nation was professedly Roman Catholic and its King enjoyed the distinction of
being deputy ex officio of the Holy See and Apostolic Vicar-General of the Indies, and as
such it was his duty to protect all pious works and charitable institutions in his kingdoms,
especially those of the Indies; among the latter was the Monte de Piedad of the Philippines,
of which said King and his deputy the Governor-General of the Philippines, as royal vicepatron, were, in a special and peculiar manner, the protectors; the latter, as a result of the
cession of the Philippine Islands, Implicitly renounced this high office and tacitly returned it to
the Holy See, now represented by the Archbishop of Manila; the national subscription in
question was a kind of foundation or pious work, for a charitable purpose in these Islands;
and the entire subscription not being needed for its original purpose, the royal vice-patron,
with the consent of the King, gave the surplus thereof to an analogous purpose; the
fulfillment of all these things involved, in the majority, if not in all cases, faithful compliance
with the duty imposed upon him by the Holy See, when it conferred upon him the royal
patronage of the Indies, a thing that touched him very closely in his conscience and religion;
the cessionary Government though Christian, was not Roman Catholic and prided itself on
its policy of non-interference in religious matters, and inveterately maintained a complete
separation between the ecclesiastical and civil powers.
In view of these circumstances it must be quite clear that, even without the express
provisions of the Treaty of Paris, which apparently expressly exclude such an idea, it did not
befit the honor of either of the contracting parties to subrogate to the American Government
in lieu of the Spanish Government anything respecting the disposition of the funds delivered
by the latter to the Monte de Piedad. The same reasons that induced the Spanish
Government to take over such things would result in great inconvenience to the American
Government in attempting to do so. The question was such a delicate one, for the reason
that it affected the conscience, deeply religious, of the King of Spain, that it cannot be
believed that it was ever his intention to confide the exercise thereof to a Government like
the American. (U. S. vs. Arredondo, 6 Pet. [U. S.], 711.)

It is thus seen that the American Government did not subrogate the Spanish Government or
rather, the King of Spain, in this regard; and as the condition annexed to the donation was
lawful and possible of fulfillment at the time the contract was made, but became impossible
of fulfillment by the cession made by the Spanish Government in these Islands, compliance
therewith is excused and the contract has been cleared thereof.
The contention of counsel, as thus stated, in untenable for two reason, (1) because such contention
is based upon the erroneous theory that the sum in question was a donation to the Monte de Piedad
and not a loan, and (2) because the charity founded by the donations for the earthquake sufferers is
not and never was intended to be an ecclesiastical pious work. The first proposition has already
been decided adversely to the defendant's contention. As to the second, the record shows clearly
that the fund was given by the donors for a specific and definite purpose the relief of the
earthquake sufferers and for no other purpose. The money was turned over to the Spanish
Government to be devoted to that purpose. The Spanish Government remitted the money to the
Philippine Government to be distributed among the suffers. All officials, including the King of Spain
and the Governor-General of the Philippine Islands, who took part in the disposal of the fund, acted
in their purely civil, official capacity, and the fact that they might have belonged to a certain church
had nothing to do with their acts in this matter. The church, as such, had nothing to do with the fund
in any way whatever until the $80,000 reached the coffers of the Monte de Piedad (an institution
under the control of the church) as a loan or deposit. If the charity in question had been founded as
an ecclesiastical pious work, the King of Spain and the Governor-General, in their capacities as
vicar-general of the Indies and as royal vice-patron, 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 Government, because the right to so act would have arisen out of the special
agreement between the Government of Spain and the Holy See, based on the union of the church
and state which was completely separated with the change of sovereignty.
And in their supplemental brief counsel say:
By the conceded facts the money in question is part of a charitable subscription. The donors
were persons in Spain, the trustee was the Spanish Government, the donees, the cestuis
que trustent, were certain persons in the Philippine Islands. The whole matter is one of
trusteeship. This is undisputed and indisputable. It follows that the Spanish Government at
no time was the owner of the fund. Not being the owner of the fund it could not transfer the
ownership. Whether or not it could transfer its trusteeship it certainly never has expressly
done so and the general terms of property transfer in the Treaty of Paris are wholly
insufficient for such a purpose even could Spain have transferred its trusteeship without the
consent of the donors and even could the United States, as a Government, have accepted
such a trust under any power granted to it by the thirteen original States in the Constitution,
which is more than doubtful. It follows further that this Government is not a proper party to
the action. The only persons who could claim to be damaged by this payment to the Monte, if
it was unlawful, are the donors or the cestuis que trustent, and this Government is neither.
If "the whole matter is one of trusteeship," and it being true that the Spanish Government could not,
as counsel say, transfer the ownership of the fund to the Monte de Piedad, the question arises, who
may sue to recover this loan? It needs no argument to show that the Spanish or Philippine

Government, as trustee, could maintain an action for this purpose had there been no change of
sovereignty and if the right of action has not prescribed. But those governments were something
more than mere common law trustees of the fund. In order to determine their exact status with
reference to this fund, it is necessary to examine the law in force at the time there transactions took
place, which are the law of June 20, 1894, the royal decree of April 27. 1875, and the instructions
promulgated on the latter date. These legal provisions were applicable to the Philippine Islands
(Benedicto vs. De la Rama, 3 Phil. Rep., 34)
The funds collected as a result of the national subscription opened in Spain by royal order of the
Spanish Government and which were remitted to the Philippine Government to be distributed among
the earthquake sufferers by the Central Relief Board constituted, under article 1 of the law of June
20, 1894, and article 2 of the instructions of April 27, 1875, a special charity of a temporary nature as
distinguished from a permanent public charitable institution. As the Spanish Government initiated the
creation of the fund and as the donors turned their contributions over to that Government, it became
the duty of the latter, under article 7 of the instructions, to exercise supervision and control over the
moneys thus collected to the end that the will of the donors should be carried out. The relief board
had no power whatever to dispose of the funds confided to its charge for other purposes than to
distribute them among the sufferers, because paragraph 3 of article 11 of the instructions conferred
the power upon the secretary of the interior of Spain, and no other, to dispose of the surplus funds,
should there be any, by assigning them to some other charitable purpose or institution. The secretary
could not dispose of any of the funds in this manner so long as they were necessary for the specific
purpose for which they were contributed. The secretary had the power, under the law above
mentioned to appoint and totally or partially change the personnel of the relief board and to authorize
the board to defend the rights of the charity in the courts. The authority of the board consisted only in
carrying out the will of the donors as directed by the Government 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 .The secretary of the interior, as the representative of His Majesty's Government,
exercised these powers and duties through the Governor-General of the Philippine Islands. The
Governments of Spain and of the Philippine Islands in complying with their duties conferred upon
them by law, acted in their governmental capacities in attempting to carry out the intention of the
contributors. It will this be seen that those governments were something more, as we have said, than
mere trustees of the fund.
It is further contended that the obligation on the part of the Monte de Piedad to return the $80,000 to
the Government, even considering it a loan, was wiped out on the change of sovereignty, or inn
other words, the present Philippine Government cannot maintain this action for that reason. This
contention, if true, "must result from settled principles of rigid law," as it cannot rest upon any title to
the fund in the Monte de Piedad acquired prior to such change. While the obligation to return the
$80,000 to the Spanish Government was still pending, war between the United States and Spain
ensued. Under the Treaty of Paris of December 10, 1898, the Archipelago, known as the Philippine
Islands, was ceded to the United States, the latter agreeing to pay Spain the sum of $20,000,000.
Under the first paragraph of the eighth article, Spain relinquished to the United States "all buildings,
wharves, barracks, forts, structures, public highways, and other immovable property which, in
conformity with law, belonged to the public domain, and as such belonged to the crown of Spain." As
the $80,000 were not included therein, it is said that the right to recover this amount did not,
therefore, pass to the present sovereign. This, in our opinion, does not follow as a necessary

consequence, as the right to recover does not rest upon the proposition that the $80,000 must be
"other immovable property" mentioned in article 8 of the treaty, but upon contractual obligations
incurred before the Philippine Islands were ceded to the United States. We will not inquire what
effect his cession had upon the law of June 20, 1849, the royal decree of April 27, 1875, and the
instructions promulgated on the latter date. In Vilas vs. Manila (220 U. S., 345), the court said:
That there is a total abrogation of the former political relations of the inhabitants of the ceded
region is obvious. That all laws theretofore in force which are in conflict with the political
character, constitution, or institutions of the substituted sovereign, lose their force, is also
plain. (Alvarez y Sanchez vs. United States, 216 U. S., 167.) But it is equally settled in the
same public law that the great body of municipal law which regulates private and domestic
rights continues in force until abrogated or changed by the new ruler.
If the above-mentioned legal provisions are in conflict with the political character, constitution or
institutions of the new sovereign, they became inoperative or lost their force upon the cession of the
Philippine Islands to the United States, but if they are among "that great body of municipal law which
regulates private and domestic rights," they continued in force and are still in force unless they have
been repealed by the present Government. That they fall within the latter class is clear from their
very nature and character. They are laws which are not political in any sense of the word. They
conferred upon the Spanish Government the right and duty to supervise, regulate, and to some
extent control charities and charitable institutions. The present sovereign, in exempting "provident
institutions, savings banks, etc.," all of which are in the nature of charitable institutions, from taxation,
placed such institutions, in so far as the investment in securities are concerned, under the general
supervision of the Insular Treasurer (paragraph 4 of section 111 of Act No. 1189; see also Act No.
701).
Furthermore, upon the cession of the Philippine Islands the prerogatives of he crown of Spain
devolved upon he United States. In Magill vs. Brown (16 Fed. Cas., 408), quoted with approval in
Mormon Charch vs. United States (136 U. S.,1, 57), the court said:
The Revolution devolved on the State all the transcendent power of Parliament, and the
prerogative of the crown, and gave their Acts the same force and effect.
In Fontain vs. Ravenel (17 Hw., 369, 384), Mr. Justice McLean, delivering the opinion of the court in
a charity case, said:
When this country achieved its independence, the prerogatives of the crown devolved upon
the people of the States. And this power still remains with them except so fact as they have
delegated a portion of it to the Federal Government. The sovereign will is made known to us
by legislative enactment. The State as a sovereign, is the parens patriae.
Chancelor Kent says:
In this country, the legislature or government of the State, as parens patriae, has the right to
enforce all charities of public nature, by virtue of its general superintending authority over the
public interests, where no other person is entrusted with it. (4 Kent Com., 508, note.)

The Supreme Court of the United States in Mormon Church vs. United States, supra, after approving
also the last quotations, said:
This prerogative of parens patriae is inherent in the supreme power of every State, whether
that power is lodged in a royal person or in the legislature, and has no affinity to those
arbitrary powers which are sometimes exerted by irresponsible monarchs to the great
detriment of the people and the destruction of their liberties. On the contrary, it is a most
beneficient functions, and often necessary to be exercised in the interest of humanity, and for
the prevention of injury to those who cannot protect themselves.
The court in the same case, after quoting from Sohier vs. Mass. General Hospital (3 Cush., 483,
497), wherein the latter court held that it is deemed indispensible that there should be a power in the
legislature to authorize the same of the estates of in facts, idiots, insane persons, and persons not
known, or not in being, who cannot act for themselves, said:
These remarks in reference to in facts, insane persons and person not known, or not in
being, apply to the beneficiaries of charities, who are often in capable of vindicating their
rights, and justly look for protection to the sovereign authority, acting as parens patriae. They
show that this beneficient functions has not ceased t exist under the change of government
from a monarchy to a republic; but that it now resides in the legislative department, ready to
be called into exercise whenever required for the purposes of justice and right, and is a
clearly capable of being exercised in cases of charities as in any other cases whatever.
In People vs. Cogswell (113 Cal. 129, 130), it was urged that the plaintiff was not the real party in
interest; that the Attorney-General had no power to institute the action; and that there must be an
allegation and proof of a distinct right of the people as a whole, as distinguished from the rights of
individuals, before an action could be brought by the Attorney-General in the name of the people.
The court, in overruling these contentions, held that it was not only the right but the duty of the
Attorney-General to prosecute the action, which related to charities, and approved the following
quotation from Attorney-General vs. Compton (1 Younge & C. C., 417):
Where property affected by a trust for public purposes is in the hands of those who hold it
devoted to that trust, it is the privilege of the public that the crown should be entitled to
intervene by its officers for the purpose of asserting, on behalf on the public generally, the
public interest and the public right, which, probably, no individual could be found effectually
to assert, even if the interest were such as to allow it. (2 Knet's Commentaries, 10th ed., 359;
Lewin on Trusts, sec. 732.)
It is further urged, as above indicated, that "the only persons who could claim to be damaged by this
payment to the Monte, if it was unlawful, are the donors or the cestuis que trustent, and this
Government is neither. Consequently, the plaintiff is not the proper party to bring the action." The
earthquake fund was the result or the accumulation of a great number of small contributions. The
names of the contributors do not appear in the record. Their whereabouts are unknown. They parted
with the title to their respective contributions. The beneficiaries, consisting of the original sufferers
and their heirs, could have been ascertained. They are quite numerous also. And no doubt a large
number of the original sufferers have died, leaving various heirs. It would be impracticable for them

to institute an action or actions either individually or collectively to recover the $80,000. The only
course that can be satisfactorily pursued is for the Government to again assume control of the fund
and devote it to the object for which it was originally destined.
The impracticability of pursuing a different course, however, is not the true ground upon which the
right of the Government to maintain the action rests. The true ground is that the money being given
to a charity became, in a measure, public property, only applicable, it is true, to the specific purposes
to which it was intended to be devoted, but within those limits consecrated to the public use, and
became part of the public resources for promoting the happiness and welfare of the Philippine
Government. (Mormon Church vs. U. S., supra.) To deny the Government's right to maintain this
action would be contrary to sound public policy, as tending to discourage the prompt exercise of
similar acts of humanity and Christian benevolence in like instances in the future.
As to the question raised in the fourth assignment of error relating to the constitutionality of Act No.
2109, little need be said for the reason that we have just held that the present Philippine
Government is the proper party to the action. The Act is only a manifestation on the part of the
Philippine Government to exercise the power or right which it undoubtedly had. The Act is not, as
contended by counsel, in conflict with the fifth section of the Act of Congress of July 1, 1902,
because it does not take property without due process of law. In fact, the defendant is not the owner
of the $80,000, but holds it as a loan subject to the disposal of the central relief board. Therefor,
there can be nothing in the Act which transcends the power of the Philippine Legislature.
In Vilas vs. Manila, supra, the plaintiff was a creditor of the city of Manila as it existed before the
cession of the Philippine Islands to the United States by the Treaty of Paris of December 10, 1898.
The action was brought upon the theory that the city, under its present charter from the Government
of the Philippine Islands, was the same juristic person, and liable upon the obligations of the old city.
This court held that the present municipality is a totally different corporate entity and in no way liable
for the debts of the Spanish municipality. The Supreme Court of the United States, in reversing this
judgment and in holding the city liable for the old debt, said:
The juristic identity of the corporation has been in no wise affected, and, in law, the present
city is, in every legal sense, the successor of the old. As such it is entitled to the property and
property rights of the predecessor corporation, and is, in law, subject to all of its liabilities.
In support of the fifth assignment of error counsel for the defendant argue that as the Monte de
Piedad declined to return the $80,000 when ordered to do so by the Department of Finance in June,
1893, the plaintiff's right of action had prescribed at the time this suit was instituted on May 3, 1912,
citing and relying upon article 1961, 1964 and 1969 of the Civil Code. While on the other hand, the
Attorney-General contends that the right of action had not prescribed (a) because the defense of
prescription cannot be set up against the Philippine Government, (b) because the right of action to
recover a deposit or trust funds does not prescribe, and (c) even if the defense of prescription could
be interposed against the Government and if the action had, in fact, prescribed, the same was
revived by Act No. 2109.
The material facts relating to this question are these: The Monte de Piedad received the $80,000 in
1883 "to be held under the same conditions as at present in the treasury, to wit, at the disposal of the

relief board." In compliance with the provisions of the royal order of December 3, 1892, the
Department of Finance called upon the Monte de Piedad in June, 1893, to return the $80,000. The
Monte declined to comply with this order upon the ground that only the Governor-General of the
Philippine Islands and not the Department of Finance had the right to order the reimbursement. The
amount was carried on the books of the Monte as a returnable loan until January 1, 1899, when it
was transferred to the account of the "Sagrada Mitra." On March 31, 1902, the Monte, through its
legal representative, stated in writing that the amount in question was received as a reimbursable
loan, without interest. Act No. 2109 became effective January 30, 1912, and the action was instituted
on May 3rd of that year.
Counsel for the defendant treat the question of prescription as if the action was one between
individuals or corporations wherein the plaintiff is seeking to recover an ordinary loan. Upon this
theory June, 1893, cannot be taken as the date when the statute of limitations began to run, for the
reason that the defendant acknowledged in writing on March 31, 1902, that the $80,000 were
received as a loan, thereby in effect admitting that it still owed the amount. (Section 50, Code of Civil
Procedure.) But if counsels' theory is the correct one the action may have prescribed on May 3,
1912, because more than ten full years had elapsed after March 31, 1902. (Sections 38 and 43,
Code of Civil Procedure.)
Is the Philippine Government bound by the statute of limitations? The Supreme Court of the United
States in U. S. vs. Nashville, Chattanooga & St. Louis Railway Co. (118 U. S., 120, 125), said:
It is settled beyond doubt or controversy upon the foundation of the great principle of
public policy, applicable to all governments alike, which forbids that the public interests
should be prejudiced by the negligence of the officers or agents to whose care they are
confided that the United States, asserting rights vested in it as a sovereign government, is
not bound by any statute of limitations, unless Congress has clearly manifested its intention
that it should be so bound. (Lindsey vs. Miller, 6 Pet. 666; U. S. vs. Knight, 14 Pet., 301;
Gibson vs. Chouteau, 13 Wall., 92; U. S. vs. Thompson, 98 U. S., 486; Fink vs. O'Neil, 106
U. S., 272, 281.)
In Gibson vs. Choteau, supra, the court said:
It is a matter of common knowledge that statutes of limitation do not run against the State.
That no laches can be imputed to the King, and that no time can bar his rights, was the
maxim of the common laws, and was founded on the principle of public policy, that as he was
occupied with the cares of government he ought not to suffer from the negligence of his
officer and servants. The principle is applicable to all governments, which must necessarily
act through numerous agents, and is essential to a preservation of the interests and property
of the public. It is upon this principle that in this country the statutes of a State prescribing
periods within which rights must be prosecuted are not held to embrace the State itself,
unless it is expressly designated or the mischiefs to be remedied are of such a nature that it
must necessarily be included. As legislation of a State can only apply to persons and thing
over which the State has jurisdiction, the United States are also necessarily excluded from
the operation of such statutes.

In 25 Cyc., 1006, the rule, supported by numerous authorities, is stated as follows:

In the absence of express statutory provision to the contrary, statute of limitations do not as a
general rule run against the sovereign or government, whether state or federal. But the rule
is otherwise where the mischiefs to be remedied are of such a nature that the state must
necessarily be included, where the state goes into business in concert or in competition with
her citizens, or where a party seeks to enforces his private rights by suit in the name of the
state or government, so that the latter is only a nominal party.
In the instant case the Philippine Government is not a mere nominal party because it, in bringing and
prosecuting this action, is exercising its sovereign functions or powers and is seeking to carry out a
trust developed upon it when the Philippine Islands were ceded to the United States. The United
States having in 1852, purchased as trustee for the Chickasaw Indians under treaty with that tribe,
certain bonds of the State of Tennessee, the right of action of the Government on the coupons of
such bonds could not be barred by the statute of limitations of Tennessee, either while it held them in
trust for the Indians, or since it became the owner of such coupons. (U. S. vs. Nashville, etc., R. Co.,
supra.) So where lands are held in trust by the state and the beneficiaries have no right to sue, a
statute does not run against the State's right of action for trespass on the trust lands. (Greene Tp.
vs. Campbell, 16 Ohio St., 11; see also Atty.-Gen. vs. Midland R. Co., 3 Ont., 511 [following Reg. vs.
Williams, 39 U. C. Q. B., 397].)
These principles being based "upon the foundation of the great principle of public policy" are, in the
very nature of things, applicable to the Philippine Government.
Counsel in their argument in support of the sixth and last assignments of error do not question the
amount of the judgment nor do they question the correctness of the judgment in so far as it allows
interest, and directs its payment in gold coin or in the equivalent in Philippine currency.
For the foregoing reasons the judgment appealed from is affirmed, with costs against the appellant.
So ordered.
Torres, Johnson and Araullo, JJ., concur.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC

G.R. No. L-23096 April 27, 1972

MARTIN NERY and LEONCIA L. DE LEON, petitioners,
vs.

ROSARIO, ALFREDO, MARIANO, PACIFICO, ONOFRE, TEOFILO, LOLOY and TRINIDAD, all
surnamed LORENZO, respondents.
G.R. No. L-23376 April 27, 1972
DIONISIO, PERFECTO, MARIA REBECCA, ASUNCION, MAURO, and, LOURDES, all surnamed
LORENZO, petitioners,
vs.
MARTIN NERY and LEONCIA L. DE LEON, respondents.
Salonga, Ordonez, Yap, Sicat & Associates for petitioners.
Estanistao A. Fernandez for respondents.

FERNANDO, J.:p
The point to be resolved in these two petitions for the review of a decision of the respondent Court of
Appeals dated April 30, 1964 is the extent of the rights acquired by the vendees, the spouses Martin
Nery and Leoncia L. de Leon 1 arising from a sale of a parcel of land, four (4) hectares more or less,
situated in Malaking Kahoy, Paraaque, Rizal. The vendor, Bienvenida de la Isla, was the widow of
the deceased Leoncio Lorenzo and guardian of their children, Dionisio, Perfecto, Maria Rebeeca,
Asuncion, Mauro and Lourdes, 2 who thereafter challenged the validity of such a transaction. It was
their contention that notwithstanding an order authorizing the sale from the probate court on June 2,
1953, it could be, impugned as they were not informed of such a move. Moreover, the guardianship
proceeding, instituted on December 7, 1950, was heard without the two elder children, Dionisio and
Perfecto Lorenzo being notified although they were then more than 14 years of age. The heirs of
Silvestra Ferrer, who originally owned one-fourth of the property in question, 3 intervened in such
action. In the lower court decision, they were adjudged co-owners of the aforesaid one-fourth portion
of the property, the sale by the widow being considered null and void insofar as they were
concerned. The rights of the Children of Leoncio Lorenzo and Bienvenida de la Isla to one-half of the
three-fourths appertaining to such spouses were likewise accorded recognition.
The matter was then elevated to the respondent Court of Appeals by the spouses Martin Nery and
Leoncia L. de Leon. Respondent Court in its decision, now subject of this review, declared valid the
deed of sale executed by the mother Bienvenida de la Isla in favor of the spouses Nery and de Leon
as to the whole three-fourths, without prejudice however to the children demanding from their mother
their participation in the amount paid for the sale of such property. It thus ignored the grave
jurisdictional defects that attended the challenged orders, starting with the two elder children not
being notified of the petition for guardianship, even if they were already above 14, as pointed out and
stressed in their petition for review. There is need then for the exercise of the corrective power of this
Court. The original decision of the lower court has much more to recommend it. Thereby, the rights
of the children are fully respected. With a restoration in full of what was decided by the lower court,
there is a corresponding modification of the judgment of the Court of Appeals. So we decide.

The antecedents of the case were set forth in the appealed decision thus: "After hearing the
evidence, the lower court handed down decision on June 24, 1961, finding that in the guardianship
proceedings, the court acquired no jurisdiction over the persons of the minors who were not notified
of the petition, at least 2 of them being over 14 years of age; that as the inventory submitted by the
guardian stated that the minors had no real estate, the court did not acquire jurisdiction over the real
property of the minors and could not have validly authorized its sale, and the total absence of the
requisite notice necessarily rendered the order of sale, ... null and void, and the defendant, Martin S.
Nery, a lawyer, could not be considered a purchaser in good faith of the one-half portion of the land
belonging to the minors; ... that as Silvestra Ferrer, one of the sisters of Florentino Ferrer, did not
sign the deed of sale ... upon her death in 1952, her 1/4 portion of the land passed to her nearest
relatives, the third-party plaintiffs who are children of her sister, Tomasa Ferrer, whose action had not
prescribed 'because from the death of Silvestra Ferrer in 1952 up to the filing of the third-party
complaint on September 3, 1958, barely six yeaxs had elapsed'; and that the remaining 3/4 of the
land in question was the conjugal property of Leoncio Lorenzo and his wife, Bienvenida de la Isla,
1/2 of which, upon the demise of Leoncio, corresponding to Bienvenida and the other half to their
children, the herein plaintiffs, in equal shares." 4
Why respondent Court reached the decision it did on appeal was explained this way: "It is
unquestioned that the property in question formerly belonged to Florentino Ferrer and his three
sisters, Agueda, Tomasa and Silvestra, and brother, Meliton. When, after the death of Florentino, that
is, on December 6, 1943, the document denominated 'Bilihan Ganap Nang Lupang-Bukid', ... was
executed in favor of Leoncio F. Lorenzo, one of the children of Agueda and married to Bienvenida de
la Isla, by said Agueda, Tomasa and the children of Meliton, already deceased, said Leoncio merely
acquired the participation of said sellers, equivalent to 3/4 undivided part of said land, and became a
co-owner to that extent with Silvestra who did not execute said document and, therefore,did not sell
her 1/4 undivided portion of the said land, which 1/4 undivided portion passed, upon her demise in
1952, to her nearest relatives who are the third-party plaintiffs Rosario, Alfredo, Mariano, Pacifica,
Onofre, Teofilo, Loloy and Trinidad all surnamed Lorenzo, the children of her deceased sister,
Tomasa. Bienvenida de la Isla, then the wife of said Leoncio F. Lorenzo, knew of this purchase made
by her deceased husband, and she had no right to mortgage the whole land which, for taxation
purposes was declared in her husband's name, without the consent of aforenamed successors-ininterest of Silvestra Ferrer, much less sell the same afterwards to the defendant spouses, Martin S.
Nery and Leoncia L. de Leon, even if authorized by the guardianship court, said authority having
been granted upon her misrepresentation, contained in her petition of May 26, 1953, that her minor
children, the plaintiff's herein, were the owners in common of 1/2 portion of the land in question, the
other 1/2 pertaining to her. However, inasmuch as the said minor plaintiffs were really the owners in
common of 1/2 of 3/4 undivided part of the said land, and the other 1/2, to their mother and guardian,
the orders of the guardianship court authorizing the guardian to sell the real property of the minors,
and approving the deed of sale executed in accordance with said authority must be construed as
referring to the correct real property of the said minors." 5
Hence its dispositive portion provided as follows: "[Wherefore], the appealed judgment is hereby
modified by declaring that the deed of sale ..., executed by Bienvenida de la Isla in favor of the
defendants valid only insofar as the undivided 3/4 portion of the land in question is concerned, as to
which portion, the defendants are declared owners, and that the third-party plaintiffs, Rosario,
Alfredo, Mariano, Pacifica, Onofre, Teofilo, Loloy and Trinidad, all surnamed Lorenzo, are declared

owners in common of the remaining undivided 1/4 portion of the said land. In all other respects, the
appealed judgment is hereby affirmed. No Costs." 6
The spouses Martin Nery and Leoncia L. de Leon and the children of the deceased Leoncio Lorenzo
and the vendor, Bienvenida de la Isla, not being satisfied with the above decision instituted the
petitions for review. As noted at the outset, the failure of respondent Court of Appeals to give due
weight to the grave jurisdictional defect that tainted the guardianship proceeding resulted in its
judgment suffering the corrosion of substantial legal error. The rights of the children of Leoncio
Lorenzo as upheld by the lower court must, to repeat, be maintained. In that sense, the decision of
the respondent Court of Appeals is subject to modification. Insofar however as it affirmed the lower
court decision sustaining the claim of the heirs of Silvestra Ferrer, 7 it is free from any infirmity.
1. What is indisputable in the light of the controlling legal doctrines is that it was the lower court and
not the respondent Court of Appeals that yielded obeisance to the applicable procedural rule. It is
worded thus: "When a petition for the appointment of a general guardian is filed, the court shall fix a
time and place for hearing the same, and shall cause reasonable notice thereof to be given to the
persons mentioned in the petition residing in the province, including the minor if above 14 years of
age or the incompetent himself, and may direct other general or special notice thereof to be given." 8
The late Chief Justice Moran was quite explicit as to its jurisdictional character. These are his words:
"Service of the notice upon the minor if above 14 years of age or upon the incompetent, is
jurisdictional. Without such notice, the court acquires no jurisdiction to appoint a guardian." 9
The case cited by him in support of such view is Yangco v. Court of First Instance, 10 a 1915 decision.
As was therein made clear: "There is no need for interpretation or construction of the word in the
case before us. Its meaning is so clear that interpretation and construction are unnecessary. Our
simple duty is to leave untouched the meaning with which the English language has endowed the
word; and that is the meaning which the ordinary reader would accord to it on reading a sentence in
which it was found. Where language is plain, subtle refinements which tinge words so as to give
them the color of a particular judicial theory are not only unnecessary but decidedly harmful. That
which has caused so much confusion in the law, which has made it so difficult for the public to
understand and know what the law is with respect to a given matter, is in considerable measure the
unwarranted interference by judicial tribunals with the English language as found in statutes and
contracts, cutting out words here and inserting them there, making them fit personal ideas of what
the legislature ought to have done or what parties should have agreed upon, giving them meanings
which they do not ordinarily have, cutting, trimming, fitting, changing and coloring until lawyers
themselves are unable to advise their clients as to the meaning of a given statute or contract until it
has been submitted to some court for its 'interpretation and construction.' " 11
Respondent Court of Appeals cannot therefore be sustained in its assumption that the probate court
could have authorized the sale in question. The jurisdictional infirmity was too patent to be
overcome. It was the lower court that acted correctly. There is the more reason for deciding as we do
considering that the rights of minors are involved. It is a distinctive feature of our law, one that is
quite commendable, that whenever their welfare may be affected, its solicitude is made manifest.
The rights of young are not to be ignored. Precisely their stage of immaturity calls for every
procedural principle being observed before their interest in property to which they have a claim could
be adversely affected. It does not matter that their guardian is their mother . As far back as 1811, in

Salunga v. Evangelista, 12 Chief Justice Arellano took note that even a mother could have an "interest
opposed to that of her children." 13 That may not have been the precise situation in this case, but
certainly from the facts as found by the Court of Appeals, the Lorenzo children would have been
better protected if they were notified as is required by law. If there is any occasion then why there
should be a strict insistence on rule having the impress of a jurisdictional requirement, this is it.
Moreover, where minors are involved, the State acts as parens patriae. To it is cast the duty of
protecting the rights of persons or individual who because of age or incapacity are in an unfavorable
position, vis-a-vis other parties. Unable as they are to take due care of what concerns them, they
have the political community to look after their welfare. This obligation the state must live up to. It
cannot be recreant to such a trust. As was set forth in an opinion of the United States Supreme
Court: "This prerogative of parens patriae is inherent in the supreme power of every State, whether
that power is lodged in a royal person or in the legislature, and has no affinity to those arbitrary
powers which are sometimes exerted by irresponsible monarchs to the great detriment of the people
and the destruction of their liberties. On the contrary, it is a most beneficent function, and often
necessary to be exercised in the interest of humanity, and for the prevention of injury to those who
cannot protect themselves." 14
2. Much less could the decision arrived at both by the lower court and respondent Court of Appeals
15
as
to
the
heirs
of
Silvestra
Ferrer
being
entitled
to
one-fourth of the property in question be set aside. At no time had the deceased Leoncio Lorenzo
ever denied that he was holding such property in the capacity of trustee for them. At the time then
that the settlement of his estate was pending in the probate court, his widow, Bienvenida de la Isla,
the vendor, could not assert any other right, except that traceable to her late husband. Respondent
Court of Appeals did note that petitioner Martin S. Nery is a lawyer. As a member of the bar, he could
not have been unaware that his vendor could not sell to him more than she rightfully could dispose
of. It is much too late in the day to depart from the well-settled principle as to a trustee being
incapable of acquiring interest opposed to that of his principal. So it was announced in Severino v.
Severino. 16 That is in conformity with an overmastering requirement of equity and conscience. He
should thus be held to the strictest degree of acccountability. The law would lay itself open to welldeserved criticism if a principle other than the above were followed. The Nery spouses ought to be
aware that it would be unthinkable to deny its authoritative force whenever called for.
The spouses Martin Nery and Leoncia L. de Leon would demonstrate its inapplicability by the two
principal errors assigned, namely, that Silvestra Ferrer did sell her share of the property as far back
as 1943 and that even if it were not so, the deceased Leoncio Lorenzo and thereafter his widow,
Bienvenida de la Isla did assert rights of ownership therein. It is obvious that on the face of such
alleged errors that they are essentially factual. We are thus precluded from inquiring into their
veracity as on such a matter what was decided by respondent Court of Appeals is binding on us.
Moreover, as to the alleged prescription, the issue was resolved satisfactorily by the lower court in
this fashion: "The action of said children of Tomasa Ferrer has not as yet prescribed because from
the death of Silvestra Ferrer in 1952 up to the filing of the third-party complaint on September 3,
1958, barely six years had elapsed. Moreover, there is no clear and satisfactory evidence that
Leoncio Lorenzo and his successors-in-interest had been in continuous, adverse, and open
possession, and under claim of ownership, of the one-fourth portion corresponding to Silvestra
Ferrer as to acquire same by acquisitive prescription." 17 Consequently, it was appropriate for the

Court of Appeals to affirm the judgment of the lower court insofar as it recognized the rights of the
heir of Silvestra Ferrer to one-fourth of the land sold.
WHEREFORE, premises considered with the modification as above set forth that Dionisio, Perfecto,
Maria Rebecca, Asuncion, Mauro and Lourdes, all surnamed Lorenzo, children of the deceased
Leoncio Lorenzo and Bienvenida de la Isla are adjudged co-owners to the extent of one-half of the
three-fourths of the property in question, as was decreed by the lower court, the appealed decision
of the Court of Appeals is affirmed. With costs against Martin Nery and Leoncia L. de Leon.
Reyes, J.B.L., Actg. C.J., Makalintal, Zaldivar, Castro, Teehankee, Barredo, Makasiar and Antonio,
JJ., concur.
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION

G.R. No. L-25843 July 25, 1974

MELCHORA CABANAS, plaintiff-appellee,
vs.
FRANCISCO PILAPIL, defendant-appellant.
Seno, Mendoza & Associates for plaintiff-appellee.
Emilio Benitez, Jr. for defendant-appellant.

FERNANDO, J.:p
The disputants in this appeal from a question of law from a lower court decision are the mother and
the uncle of a minor beneficiary of the proceeds of an insurance policy issued on the life of her
deceased father. The dispute centers as to who of them should be entitled to act as trustee thereof .
The lower court applying the appropriate Civil Code provisions decided in favor of the mother, the
plaintiff in this case. Defendant uncle appealed. As noted, the lower court acted the way it did
following the specific mandate of the law. In addition, it must have taken into account the principle
that in cases of this nature the welfare of the child is the paramount consideration. It is not an
unreasonable assumption that between a mother and an uncle, the former is likely to lavish more
care on and pay greater attention to her. This is all the more likely considering that the child is with
the mother. There are no circumstances then that did militate against what conforms to the natural
order of things, even if the language of the law were not as clear. It is not to be lost sight of either
that the judiciary pursuant to its role as an agency of the State as parens patriae, with an even

greater stress on family unity under the present Constitution, did weigh in the balance the opposing
claims and did come to the conclusion that the welfare of the child called for the mother to be
entrusted with such responsibility. We have to affirm.
The appealed decision made clear: "There is no controversy as to the facts. " 1 The insured,
Florentino Pilapil had a child, Millian Pilapil, with a married woman, the plaintiff, Melchora Cabanas.
She was ten years old at the time the complaint was filed on October 10, 1964. The defendant,
Francisco Pilapil, is the brother of the deceased. The deceased insured himself and instituted as
beneficiary, his child, with his brother to act as trustee during her minority. Upon his death, the
proceeds were paid to him. Hence this complaint by the mother, with whom the child is living,
seeking the delivery of such sum. She filed the bond required by the Civil Code. Defendant would
justify his claim to the retention of the amount in question by invoking the terms of the insurance
policy. 2
After trial duly had, the lower court in a decision of May 10, 1965, rendered judgment ordering the
defendant to deliver the proceeds of the policy in question to plaintiff. Its main reliance was on
Articles 320 and 321 of the Civil Code. The former provides: "The father, or in his absence the
mother, is the legal administrator of the property pertaining to the child under parental authority. If the
property is worth more than two thousand pesos, the father or mother shall give a bond subject to
the approval of the Court of First Instance." 3 The latter states: "The property which the
unemancipated child has acquired or may acquire with his work or industry, or by any lucrative title,
belongs to the child in ownership, and in usufruct to the father or mother under whom he is under
parental authority and whose company he lives; ... 4
Conformity to such explicit codal norm is apparent in this portion of the appealed decision: "The
insurance proceeds belong to the beneficiary. The beneficiary is a minor under the custody and
parental authority of the plaintiff, her mother. The said minor lives with plaintiff or lives in the
company of the plaintiff. The said minor acquired this property by lucrative title. Said property,
therefore, belongs to the minor child in ownership, and in usufruct to the plaintiff, her mother. Since
under our law the usufructuary is entitled to possession, the plaintiff is entitled to possession of the
insurance proceeds. The trust, insofar as it is in conflict with the above quoted provision of law, is
pro tanto null and void. In order, however, to protect the rights of the minor, Millian Pilapil, the plaintiff
should file an additional bond in the guardianship proceedings, Sp. Proc. No. 2418-R of this Court to
raise her bond therein to the total amount of P5,000.00." 5
It is very clear, therefore, considering the above, that unless the applicability of the two cited Civil
Code provisions can be disputed, the decision must stand. There is no ambiguity in the language
employed. The words are rather clear. Their meaning is unequivocal. Time and time again, this Court
has left no doubt that where codal or statutory norms are cast in categorical language, the task
before it is not one of interpretation but of application. 6 So it must be in this case. So it was in the
appealed decision.
1. It would take more than just two paragraphs as found in the brief for the defendant-appellant 7 to
blunt the force of legal commands that speak so plainly and so unqualifiedly. Even if it were a
question of policy, the conclusion will remain unaltered. What is paramount, as mentioned at the
outset, is the welfare of the child. It is in consonance with such primordial end that Articles 320 and

321 have been worded. There is recognition in the law of the deep ties that bind parent and child. In
the event that there is less than full measure of concern for the offspring, the protection is supplied
by the bond required. With the added circumstance that the child stays with the mother, not the
uncle, without any evidence of lack of maternal care, the decision arrived at can stand the test of the
strictest scrutiny. It is further fortified by the assumption, both logical and natural, that infidelity to the
trust imposed by the deceased is much less in the case of a mother than in the case of an uncle.
Manresa, commenting on Article 159 of the Civil Code of Spain, the source of Article 320 of the Civil
Code, was of that view: Thus "El derecho y la obligacion de administrar el Patrimonio de los hijos es
una consecuencia natural y lgica de la patria potestad y de la presuncin de que nadie cuidar de
los bienes de acqullos con mas cario y solicitude que los padres. En nuestro Derecho antiguo
puede decirse que se hallaba reconocida de una manera indirecta aquelia doctrina, y asi se
desprende de la sentencia del Tribunal Supremeo de 30 de diciembre de 1864, que se refiere a la
ley 24, tit. XIII de la Partida 5. De la propia suerte aceptan en general dicho principio los Codigos
extranjeros, con las limitaciones y requisitos de que trataremos mis adelante." 8
2. The appealed decision is supported by another cogent consideration. It is buttressed by its
adherence to the concept that the judiciary, as an agency of the State acting as parens patriae, is
called upon whenever a pending suit of litigation affects one who is a minor to accord priority to his
best interest. It may happen, as it did occur here, that family relations may press their respective
claims. It would be more in consonance not only with the natural order of things but the tradition of
the country for a parent to be preferred. it could have been different if the conflict were between
father and mother. Such is not the case at all. It is a mother asserting priority. Certainly the judiciary
as the instrumentality of the State in its role of parens patriae, cannot remain insensible to the
validity of her plea. In a recent case, 9 there is this quotation from an opinion of the United States
Supreme Court: "This prerogative of parens patriae is inherent in the supreme power of every State,
whether that power is lodged in a royal person or in the legislature, and has no affinity to those
arbitrary powers which are sometimes exerted by irresponsible monarchs to the great detriment of
the people and the destruction of their liberties." What is more, there is this constitutional provision
vitalizing this concept. It reads: "The State shall strengthen the family as a basic social institution." 10
If, as the Constitution so wisely dictates, it is the family as a unit that has to be strengthened, it does
not admit of doubt that even if a stronger case were presented for the uncle, still deference to a
constitutional mandate would have led the lower court to decide as it did.
WHEREFORE, the decision of May 10, 1965 is affirmed. Costs against defendant-appellant.
Zaldivar (Chairman), Antonio, Fernandez and Aquino, JJ., concur.
Barredo, J., took no part.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC

G.R. No. L-31685 July 31, 1975

RAMON A. GONZALES, petitioner,
vs.
IMELDA R. MARCOS, as Chairman of the Cultural Center of the Philippines, Father HORACIO
DE LA COSTA, I. P. SOLIONGCO, ERNESTO RUFINO, ANTONIO MADRIGAL, and ANDRES
SORIANO, as Members thereof, respondents.
Ramon A. Gonzales in his own behalf.
Acting Solicitor General Hugo E. Gutierrez; Jr. and Assistant Solicitor General Reynato S. Puno for
respondent Imelda R. Marcos.
Siguion Reyna, Montecillo, Beto and Ongsiako for respondents.

FERNANDO, J.:
It was the novelty of the constitutional question raised, there being an imputation by petitioner
Ramon A. Gonzales of an impermissible encroachment by the President of the Philippines on the
legislative prerogative, that led this Tribunal to give due course to an appeal by certiorari from an
order of dismissal by the Court of First Instance of Manila. 1 More specifically, the issue centered on
the validity of the creation in Executive Order No. 30 of a trust for the benefit of the Filipino people
under the name and style of the Cultural Center of the Philippines entrusted with the task to
construct a national theatre, a national music hall, an arts building and facilities, to awaken our
people's consciousness in the nation's cultural heritage and to encourage its assistance in the
preservation, promotion, enhancement and development thereof, with the Board of Trustees to be
appointed by the President, the Center having as its estate the real and personal property vested in
it as well as donations received, financial commitments that could thereafter be collected, and gifts
that may be forthcoming in the future. 2 It was likewise alleged that the Board of Trustees did accept
donations from the private sector and did secure from the Chemical Bank of New York a loan of $5
million guaranteed by the National Investment & Development Corporation as well as $3.5 million
received from President Johnson of the United States in the concept of war damage funds, all
intended for the construction of the Cultural Center building estimated to cost P48 million. The Board
of Trustees has as its Chairman the First Lady, Imelda Romualdez Marcos, who is named as the
principal respondent. 3 In an order of dismissal by the then Judge, now Justice of the Court of
Appeals, Jose G. Bautista of a suit for prohibition filed in the Court of First Instance of Manila, stress

was laid on the funds administered by the Center as coming from donations and contributions, with
not a single centavo raised by taxation, and the absence of any pecuniary or monetary interest of
petitioner that could in any wise be prejudiced distinct from those of the general public. Moreover,
reference was made to the admission by petitioner of the desirability of the objective of Executive
Order No. 30, his objection arising from the alleged illegality of its issuance. 4
There was a motion of respondents to file a motion to dismiss this appeal by certiorari, and it was
granted in a resolution of March 5, 1970. Such a pleading was submitted to this Court twelve days
later, where it was contended that Executive Order No. 30 represented the legitimate exercise of
executive power, there being no invasion of the legislative domain and that it was supplementary to
rather than a disregard of Republic Act No. 4165 creating the National Commission on Culture. In
this exhaustive motion to dismiss, the point was likewise raised that petitioner did not have the
requisite personality to contest as a taxpayer the validity of the executive order in question, as the
funds held by the Cultural Center came from donations and contributions, not one centavo being
raised by taxation. 5 Thereafter, a manifestation was filed by the then Solicitor General, now
Associate Justice, Felix Q. Antonio, adopting "the Motion to Dismiss the Petition dated February 25,
1970, filed by respondents with this Honorable Court." 6 There was an opposition to such motion to
dismiss on the part of petitioner. 7 That was the status of the case, there being no further pleadings
filed except two motions for extension of time to file answer submitted by the Solicitor General and
granted by this Court, when on July 22, 1975, there was a second motion to dismiss on the part of
respondents through the Acting Solicitor General Hugo E. Gutierrez Jr. and Assistant Solicitor
General Reynato S. Puno. It is therein set forth: "(1) As stated in the petition itself its undeniable
quintessence is [the allegation of] "an executive usurpation of legislative powers, hence,
respondents in enforcing the same, are acting without jurisdiction, hence, are restrainable by
prohibition." ... (2) On October 5, 1972, Presidential Decree No. 15 ... was promulgated creating the
Cultural Center of the Philippines, defining its objectives, powers and functions and other purposes.
Section 4, thereof was amended by Presidential Decree No. 179 ... enacted on April 26, 1973. It is
submitted that it is now moot and academic to discuss the constitutionality of Executive Order No. 30
considering the promulgation of PD Nos. 15 and 179, done by the President in the exercise of
legislative powers under martial law. Executive Order No. 30 has ceased to exist while PD Nos. 15
and 179 meet all the constitutional arguments raised in the petition at bar." 8
It would thus appear that the petition cannot succeed. There is no justification for setting aside the
order of dismissal. Notwithstanding the exhaustive and scholarly pleadings submitted by petitioner
on his own behalf, the burden of persuasion to warrant a reversal of the action of the lower court was
not met. Both on procedural and substantive grounds, a case for prohibition was not made out,
notwithstanding the valiant efforts of petitioner. With this latest manifestation, that Executive Order
No. 30 had been superseded by Presidential Decree Nos. 15 and 179, the moot and academic
character of this appeal by certiorari became rather obvious. To repeat, the petition must fail.
1. It may not be amiss though to consider briefly both the procedural and substantive grounds that
led to the lower court's order of dismissal. It was therein pointed out as "one more valid reason" why
such an outcome was unavoidable that "the funds administered by the President of the Philippines
came from donations [and] contributions [not] by taxation." Accordingly, there was that absence of
the "requisite pecuniary or monetary interest." 9 The stand of the lower court finds support in judicial
precedents. 10 This is not to retreat from the liberal approach followed in Pascual v. Secretary of

Public Works, 11 foreshadowed by People v. Vera, 12 where the doctrine of standing was first fully
discussed. It is only to make clear that petitioner, judged by orthodox legal learning, has not satisfied
the elemental requisite for a taxpayer's suit. Moreover, even on the assumption that public funds
raised by taxation were involved, it does not necessarily follow that such kind of an action to assail
the validity of a legislative or executive act has to be passed upon. This Court, as held in the recent
case of Tan v. Macapagal, 13 "is not devoid of discretion as to whether or not it should be
entertained." 14 The lower court thus did not err in so viewing the situation.
2. Nor was the lower court any more impressed by the contention that there was an encroachment
on the legislative prerogative discernible in the issuance of Executive Order No. 30. It first took note
of the exchange of diplomatic notes between the Republic of the Philippines and the United States
as to the use of a special fund coming from the latter for a Philippine cultural development project.
Then, as set forth in the order of dismissal, it explained why no constitutional objection could be
validly interposed. Thus: "When the President, therefore, acted by disposing of a matter of general
concern (Section 63, Rev. Adm. Code) in accord with the constitutional injunction to promote arts
and letters (Section 4, Article XIV, Constitution of the Philippines) and issued Executive Order No.
30, he simply carried out the purpose of the trust in establishing the Cultural Center of the
Philippines as the instrumentality through which this agreement between the two governments would
be realized. Needless to state, the President alone cannot and need not personally handle the duties
of a trustee for and in behalf of the Filipino people in relation with this trust. He can do this by means
of an executive order by creating as he did, a group of persons, who would receive and administer
the trust estate, responsible to the President. As head of the State, as chief executive, as
spokesman in domestic and foreign affairs, in behalf of the estate as parens patriae, it cannot be
successfully questioned that the President has authority to implement for the benefit of the Filipino
people by creating the Cultural Center consisting of private citizens to administer the private
contributions and donations given not only by the United States government but also by private
persons." 15
There is impressive juridical support for the stand taken by the lower court. Justice Malcolm in
Government of the Philippine Islands v. Springer 16 took pains to emphasize: "Just as surely as the
duty of caring for governmental property is neither judicial nor legislative in character is it as surely
executive." 17 It Would be an unduly narrow or restrictive view of such a principle if the public funds
that accrued by way of donation from the United States and financial contributions for the Cultural
Center project could not be legally considered as "governmental property." They may be acquired
under the concept of dominium, the state as a persona in law not being deprived of such an
attribute, thereafter to be administered by virtue of its prerogative of imperium. 18 What is a more
appropriate agency for assuring that they be not wasted or frittered away than the Executive, the
department precisely entrusted with management functions? It would thus appear that for the
President to refrain from taking positive steps and await the action of the then Congress could be
tantamount to dereliction of duty. He had to act; time was of the essence. Delay was far from
conducive to public interest. It was as simple as that. Certainly then, it could be only under the most
strained construction of executive power to conclude that in taking the step he took, he transgressed
on terrain constitutionally reserved for Congress.
This is not to preclude legislative action in the premises. While to the Presidency under the 1935
Constitution was entrusted the responsibility for administering public property, the then Congress

could provide guidelines for such a task. Relevant in this connection is the excerpt from an opinion of
Justice Jackson in Youngstown Sheet & Tube Co. v. Sawyer: 19 "When the President acts in absence
of either a congressional grant or denial of authority, he can only rely upon his own independent
powers, but there is a zone of twilight in which he and Congress may have concurrent authority, or in
which its distribution is uncertain. Therefore, congressional inertia, indifference or quiescence may
sometimes, at least as a practical matter, enable, if not invite, measures on independent presidential
responsibility. In this area, any actual test of power is likely to depend on the imperative of events
and contemporary imponderables rather than on abstract theories of law." 20 To vary the phraseology,
to recall Thomas Reed Powell, if Congress would continue to keep its peace notwithstanding the
action taken by the executive department, it may be considered as silently vocal. In plainer
language, it could be an instance of silence meaning consent. The Executive Order assailed was
issued on June 25, 1966. Congress until the time of the filing of the petition on August 26, 1969
remained quiescent. Parenthetically, it may be observed that petitioner waited until almost the day of
inaugurating the Cultural Center on September 11, 1969 before filing his petition in the lower court.
However worthy of commendation was his resolute determination to keep the Presidency within the
bounds of its competence, it cannot be denied that the remedy, if any, could be supplied by
Congress asserting itself in the premises. Instead, there was apparent conformity on its part to the
way the President saw fit to administer such governmental property.
3. The futility of this appeal by certiorari becomes even more apparent with the issuance of
Presidential Decree No. 15 on October 5, 1972. As contended by the Solicitor General, the matter,
as of that date, became moot and academic. Executive Order No. 30 was thus superseded. The
institution known as the Cultural Center is other than that assailed in this suit. In that sense a coup
de grace was administered to this proceeding. The labored attempt of petitioner could thus be set at
rest. This particular litigation is at an end. There is, too, relevance in the observation that the
aforesaid decree is part of the law of the land. So the Constitution provides. 21
4. It only remains to be added that respondents as trustees lived up fully to the weighty responsibility
entrusted to them. The task imposed on them was performed with competence, fidelity, and
dedication. That was to be expected. From the inception of the Marcos Administration, the First Lady
has given unsparingly of herself in the encouragement and support of literary, musical, and artistic
endeavors and in the appreciation of our rich and diverse cultural heritage. The rest of the then
Board of Trustees, named as the other respondents, were equally deserving of their being chosen
for this worthy project. One of them, the late I.P Soliongco, was in his lifetime one of the most gifted
men of letters. Father Horacio de la Costa is a historian and scholar of international repute.
Respondents Ernesto Rufino, Antonio Madrigal and Andres Soriano, all men of substance, have
contributed in time and money to civic efforts. It is not surprising then that the Cultural Center
became a reality, the massive and imposing structure constructed at a shorter period and at a lower
cost than at first thought possible. What is of even greater significance, with a portion thereof being
accessible at modest admission prices, musical and artistic performances of all kinds are within
reach of the lower-income groups. Only thus may meaning be imparted to the Constitutional
provision that arts and letters shall be under State patronage. 22 For equally important as the
encouragement and support for talented Filipinos with a creative spark is the diffusion of the
opportunity for the rest of their countrymen to savour the finer things in life. Who knows, if state
efforts along these lines are diligently pursued, that what was said by Justice Holmes about France
could apply to the Philippines. Thus: "We have not that respect for art that is one of the glories of

France." 23 In justice to petitioner Gonzales, it may be noted that he did not question the wisdom or
soundness of the goal of having a Cultural Center or the disbursement of the funds by respondents.
It is the absence of statutory authority that bothered him. The lower court did not see things in the
same light. It is easily understandable why, as the preceding discussion has made clear, it cannot be
said that such a conclusion suffered from legal infirmity. What is more, with the issuance of
Presidential Decree No. 15, the suit, to repeat, has assumed a moot and academic character.
WHEREFORE, this appeal by certiorari to review the lower court's order of dismissal dated
December 4, 1969 is dismissed.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-5

September 17, 1945

CO KIM CHAM (alias CO KIM CHAM), petitioner,

vs.
EUSEBIO VALDEZ TAN KEH and ARSENIO P. DIZON, Judge of First Instance of Manila,
respondents.1
Marcelino Lontok for petitioner.
P. A. Revilla for respondent Valdez Tan Keh.
Respondent Judge Dizon in his own behalf.
FERIA, J.:
This petition for mandamus in which petitioner prays that the respondent judge of the lower court be
ordered to continue the proceedings in civil case No. 3012 of said court, which were initiated under
the regime of the so-called Republic of the Philippines established during the Japanese military
occupation of these Islands.
The respondent judge refused to take cognizance of and continue the proceedings in said case on
the ground that the proclamation issued on October 23, 1944, by General Douglas MacArthur had
the effect of invalidating and nullifying all judicial proceedings and judgements of the court of the
Philippines under the Philippine Executive Commission and the Republic of the Philippines
established during the Japanese military occupation, and that, furthermore, the lower courts have no
jurisdiction to take cognizance of and continue judicial proceedings pending in the courts of the
defunct Republic of the Philippines in the absence of an enabling law granting such authority . And
the same respondent, in his answer and memorandum filed in this Court, contends that the
government established in the Philippines during the Japanese occupation were no de facto
governments.
On January 2, 1942, the Imperial Japanese Forces occupied the City of Manila, and on the next day
their Commander in Chief proclaimed "the Military Administration under law over the districts
occupied by the Army." In said proclamation, it was also provided that "so far as the Military
Administration permits, all the laws now in force in the Commonwealth, as well as executive and
judicial institutions, shall continue to be effective for the time being as in the past," and "all public
officials shall remain in their present posts and carry on faithfully their duties as before."
A civil government or central administration organization under the name of "Philippine Executive
Commission was organized by Order No. 1 issued on January 23, 1942, by the Commander in Chief
of the Japanese Forces in the Philippines, and Jorge B. Vargas, who was appointed Chairman
thereof, was instructed to proceed to the immediate coordination of the existing central

administrative organs and judicial courts, based upon what had existed therefore, with approval of
the said Commander in Chief, who was to exercise jurisdiction over judicial courts.
The Chairman of the Executive Commission, as head of the central administrative organization,
issued Executive Orders Nos. 1 and 4, dated January 30 and February 5, 1942, respectively, in
which the Supreme Court, Court of Appeals, Courts of First Instance, and the justices of the peace
and municipal courts under the Commonwealth were continued with the same jurisdiction, in
conformity with the instructions given to the said Chairman of the Executive Commission by the
Commander in Chief of Japanese Forces in the Philippines in the latter's Order No. 3 of February 20,
1942, concerning basic principles to be observed by the Philippine Executive Commission in
exercising legislative, executive and judicial powers. Section 1 of said Order provided that "activities
of the administration organs and judicial courts in the Philippines shall be based upon the existing
statutes, orders, ordinances and customs. . . ."
On October 14, 1943, the so-called Republic of the Philippines was inaugurated, but no substantial
change was effected thereby in the organization and jurisdiction of the different courts that
functioned during the Philippine Executive Commission, and in the laws they administered and
enforced.
On October 23, 1944, a few days after the historic landing in Leyte, General Douglas MacArthur
issued a proclamation to the People of the Philippines which declared:
1. That the Government of the Commonwealth of the Philippines is, subject to the supreme
authority of the Government of the United States, the sole and only government having legal
and valid jurisdiction over the people in areas of the Philippines free of enemy occupation
and control;
2. That the laws now existing on the statute books of the Commonwealth of the Philippines
and the regulations promulgated pursuant thereto are in full force and effect and legally
binding upon the people in areas of the Philippines free of enemy occupation and control;
and
3. That all laws, regulations and processes of any other government in the Philippines than
that of the said Commonwealth are null and void and without legal effect in areas of the
Philippines free of enemy occupation and control.
On February 3, 1945, the City of Manila was partially liberated and on February 27, 1945, General
MacArthur, on behalf of the Government of the United States, solemnly declared "the full powers and
responsibilities under the Constitution restored to the Commonwealth whose seat is here established
as provided by law."
In the light of these facts and events of contemporary history, the principal questions to be resolved
in the present case may be reduced to the following:(1) Whether the judicial acts and proceedings of
the court existing in the Philippines under the Philippine Executive Commission and the Republic of
the Philippines were good and valid and remained so even after the liberation or reoccupation of the
Philippines by the United States and Filipino forces; (2)Whether the proclamation issued on October

23, 1944, by General Douglas MacArthur, Commander in Chief of the United States Army, in which
he declared "that all laws, regulations and processes of any of the government in the Philippines
than that of the said Commonwealth are null and void and without legal effect in areas of the
Philippines free of enemy occupation and control," has invalidated all judgements and judicial acts
and proceedings of the said courts; and (3) If the said judicial acts and proceedings have not been
invalidated by said proclamation, whether the present courts of the Commonwealth, which were the
same court existing prior to, and continued during, the Japanese military occupation of the
Philippines, may continue those proceedings pending in said courts at the time the Philippines were
reoccupied and liberated by the United States and Filipino forces, and the Commonwealth of the
Philippines were reestablished in the Islands.
We shall now proceed to consider the first question, that is, whether or not under the rules of
international law the judicial acts and proceedings of the courts established in the Philippines under
the Philippine Executive Commission and the Republic of the Philippines were good and valid and
remained good and valid even after the liberation or reoccupation of the Philippines by the United
States and Filipino forces.
1. It is a legal truism in political and international law that all acts and proceedings of the legislative,
executive, and judicial departments of a de facto government are good and valid. The question to be
determined is whether or not the governments established in these Islands under the names of the
Philippine Executive Commission and Republic of the Philippines during the Japanese military
occupation or regime were de facto governments. If they were, the judicial acts and proceedings of
those governments remain good and valid even after the liberation or reoccupation of the Philippines
by the American and Filipino forces.
There are several kinds of de facto governments. The first, or government de facto in a proper legal
sense, is that government that gets possession and control of, or usurps, by force or by the voice of
the majority, the rightful legal governments and maintains itself against the will of the latter, such as
the government of England under the Commonwealth, first by Parliament and later by Cromwell as
Protector. The second is that which is established and maintained by military forces who invade and
occupy a territory of the enemy in the course of war, and which is denominated a government of
paramount force, as the cases of Castine, in Maine, which was reduced to British possession in the
war of 1812, and Tampico, Mexico, occupied during the war with Mexico, by the troops of the United
States. And the third is that established as an independent government by the inhabitants of a
country who rise in insurrection against the parent state of such as the government of the Southern
Confederacy in revolt not concerned in the present case with the first kind, but only with the second
and third kinds of de facto governments.
Speaking of government "de facto" of the second kind, the Supreme Court of the United States, in
the case of Thorington vs. Smith (8 Wall., 1), said: "But there is another description of government,
called also by publicists a government de facto, but which might, perhaps, be more aptly
denominated a government of paramount force. Its distinguishing characteristics are (1), that its
existence is maintained by active military power with the territories, and against the rightful authority
of an established and lawful government; and (2), that while it exists it necessarily be obeyed in civil
matters by private citizens who, by acts of obedience rendered in submission to such force, do not
become responsible, or wrongdoers, for those acts, though not warranted by the laws of the rightful

government. Actual governments of this sort are established over districts differing greatly in extent
and conditions. They are usually administered directly by military authority, but they may be
administered, also, civil authority, supported more or less directly by military force. . . . One example
of this sort of government is found in the case of Castine, in Mine, reduced to British possession in
the war of 1812 . . . U. S. vs. Rice (4 Wheaton, 253). A like example is found in the case of Tampico,
occupied during the war with Mexico, by the troops of the United States . . . Fleming vs. Page (9
Howard, 614). These were cases of temporary possessions of territory by lawfull and regular
governments at war with the country of which the territory so possessed was part."
The powers and duties of de facto governments of this description are regulated in Section III of the
Hague Conventions of 1907, which is a revision of the provisions of the Hague Conventions of 1899
on the same subject of said Section III provides "the authority of the legislative power having actually
passed into the hands of the occupant, the latter shall take steps in his power to reestablish and
insure, as far as possible, public order and safety, while respecting, unless absolutely prevented, the
laws in force in the country."
According to the precepts of the Hague Conventions, as the belligerent occupant has the right and is
burdened with the duty to insure public order and safety during his military occupation, he possesses
all the powers of a de facto government, and he can suspended the old laws and promulgate new
ones and make such changes in the old as he may see fit, but he is enjoined to respect, unless
absolutely prevented by the circumstances prevailing in the occupied territory, the municipal laws in
force in the country, that is, those laws which enforce public order and regulate social and
commercial life of the country. On the other hand, laws of a political nature or affecting political
relations, such as, among others, the right of assembly, the right to bear arms, the freedom of the
press, and the right to travel freely in the territory occupied, are considered as suspended or in
abeyance during the military occupation. Although the local and civil administration of justice is
suspended as a matter of course as soon as a country is militarily occupied, it is not usual for the
invader to take the whole administration into his own hands. In practice, the local ordinary tribunals
are authorized to continue administering justice; and judges and other judicial officers are kept in
their posts if they accept the authority of the belligerent occupant or are required to continue in their
positions under the supervision of the military or civil authorities appointed, by the Commander in
Chief of the occupant. These principles and practice have the sanction of all publicists who have
considered the subject, and have been asserted by the Supreme Court and applied by the President
of the United States.
The doctrine upon this subject is thus summed up by Halleck, in his work on International Law (Vol.
2, p. 444): "The right of one belligerent to occupy and govern the territory of the enemy while in its
military possession, is one of the incidents of war, and flows directly from the right to conquer. We,
therefore, do not look to the Constitution or political institutions of the conqueror, for authority to
establish a government for the territory of the enemy in his possession, during its military occupation,
nor for the rules by which the powers of such government are regulated and limited. Such authority
and such rules are derived directly from the laws war, as established by the usage of the of the
world, and confirmed by the writings of publicists and decisions of courts in fine, from the law of
nations. . . . The municipal laws of a conquered territory, or the laws which regulate private rights,
continue in force during military occupation, excepts so far as they are suspended or changed by the

acts of conqueror. . . . He, nevertheless, has all the powers of a de facto government, and can at his
pleasure either change the existing laws or make new ones."
And applying the principles for the exercise of military authority in an occupied territory, which were
later embodied in the said Hague Conventions, President McKinley, in his executive order to the
Secretary of War of May 19,1898, relating to the occupation of the Philippines by United States
forces, said in part: "Though the powers of the military occupant are absolute and supreme, and
immediately operate upon the political condition of the inhabitants, the municipal laws of the
conquered territory, such as affect private rights of person and property and provide for the
punishment of crime, are considered as continuing in force, so far as they are compatible with the
new order of things, until they are suspended or superseded by the occupying belligerent; and in
practice they are not usually abrogated, but are allowed to remain in force and to be administered by
the ordinary tribunals, substantially as they were before the occupation. This enlightened practice is,
so far as possible, to be adhered to on the present occasion. The judges and the other officials
connected with the administration of justice may, if they accept the authority of the United States,
continue to administer the ordinary law of the land as between man and man under the supervision
of the American Commander in Chief." (Richardson's Messages and Papers of President, X, p. 209.)
As to "de facto" government of the third kind, the Supreme Court of the United States, in the same
case of Thorington vs. Smith, supra, recognized the government set up by the Confederate States
as a de facto government. In that case, it was held that "the central government established for the
insurgent States differed from the temporary governments at Castine and Tampico in the
circumstance that its authority did no originate in lawful acts of regular war; but it was not, on the
account, less actual or less supreme. And we think that it must be classed among the governments
of which these are examples. . . .
In the case of William vs. Bruffy (96 U. S. 176, 192), the Supreme Court of the United States,
discussing the validity of the acts of the Confederate States, said: "The same general form of
government, the same general laws for the administration of justice and protection of private rights,
which had existed in the States prior to the rebellion, remained during its continuance and
afterwards. As far as the Acts of the States do not impair or tend to impair the supremacy of the
national authority, or the just rights of citizens under the Constitution, they are, in general, to be
treated as valid and binding. As we said in Horn vs. Lockhart (17 Wall., 570; 21 Law. ed., 657): "The
existence of a state of insurrection and war did not loosen the bonds of society, or do away with civil
government or the regular administration of the laws. Order was to be preserved, police regulations
maintained, crime prosecuted, property protected, contracts enforced, marriages celebrated, estates
settled, and the transfer and descent of property regulated, precisely as in the time of peace. No
one, that we are aware of, seriously questions the validity of judicial or legislative Acts in the
insurrectionary States touching these and kindered subjects, where they were not hostile in their
purpose or mode of enforcement to the authority of the National Government, and did not impair the
rights of citizens under the Constitution'. The same doctrine has been asserted in numerous other
cases."
And the same court, in the case of Baldy vs. Hunter (171 U. S., 388, 400), held: "That what occured
or was done in respect of such matters under the authority of the laws of these local de facto
governments should not be disregarded or held to be invalid merely because those governments

were organized in hostility to the Union established by the national Constitution; this, because the
existence of war between the United States and the Confederate States did not relieve those who
are within the insurrectionary lines from the necessity of civil obedience, nor destroy the bonds of
society nor do away with civil government or the regular administration of the laws, and because
transactions in the ordinary course of civil society as organized within the enemy's territory although
they may have indirectly or remotely promoted the ends of the de facto or unlawful government
organized to effect a dissolution of the Union, were without blame 'except when proved to have been
entered into with actual intent to further invasion or insurrection:'" and "That judicial and legislative
acts in the respective states composing the so-called Confederate States should be respected by
the courts if they were not hostile in their purpose or mode of enforcement to the authority of the
National Government, and did not impair the rights of citizens under the Constitution."
In view of the foregoing, it is evident that the Philippine Executive Commission, which was organized
by Order No. 1, issued on January 23, 1942, by the Commander of the Japanese forces, was a civil
government established by the military forces of occupation and therefore a de facto government of
the second kind. It was not different from the government established by the British in Castine,
Maine, or by the United States in Tampico, Mexico. As Halleck says, "The government established
over an enemy's territory during the military occupation may exercise all the powers given by the
laws of war to the conqueror over the conquered, and is subject to all restrictions which that code
imposes. It is of little consequence whether such government be called a military or civil government.
Its character is the same and the source of its authority the same. In either case it is a government
imposed by the laws of war, and so far it concerns the inhabitants of such territory or the rest of the
world, those laws alone determine the legality or illegality of its acts." (Vol. 2, p. 466.) The fact that
the Philippine Executive Commission was a civil and not a military government and was run by
Filipinos and not by Japanese nationals, is of no consequence. In 1806, when Napoleon occupied
the greater part of Prussia, he retained the existing administration under the general direction of a
french official (Langfrey History of Napoleon, 1, IV, 25); and, in the same way, the Duke of Willington,
on invading France, authorized the local authorities to continue the exercise of their functions,
apparently without appointing an English superior. (Wellington Despatches, XI, 307.). The Germans,
on the other hand, when they invaded France in 1870, appointed their own officials, at least in
Alsace and Lorraine, in every department of administration and of every rank. (Calvo, pars. 2186-93;
Hall, International Law, 7th ed., p. 505, note 2.)
The so-called Republic of the Philippines, apparently established and organized as a sovereign state
independent from any other government by the Filipino people, was, in truth and reality, a
government established by the belligerent occupant or the Japanese forces of occupation. It was of
the same character as the Philippine Executive Commission, and the ultimate source of its authority
was the same the Japanese military authority and government. As General MacArthur stated in
his proclamation of October 23, 1944, a portion of which has been already quoted, "under enemy
duress, a so-called government styled as the 'Republic of the Philippines' was established on
October 14, 1943, based upon neither the free expression of the people's will nor the sanction of the
Government of the United States." Japan had no legal power to grant independence to the
Philippines or transfer the sovereignty of the United States to, or recognize the latent sovereignty of,
the Filipino people, before its military occupation and possession of the Islands had matured into an
absolute and permanent dominion or sovereignty by a treaty of peace or other means recognized in
the law of nations. For it is a well-established doctrine in International Law, recognized in Article 45

of the Hauge Conventions of 1907 (which prohibits compulsion of the population of the occupied
territory to swear allegiance to the hostile power), the belligerent occupation, being essentially
provisional, does not serve to transfer sovereignty over the territory controlled although the de jure
government is during the period of occupancy deprived of the power to exercise its rights as such.
(Thirty Hogshead of Sugar vs. Boyle, 9 Cranch, 191; United States vs. Rice, 4 Wheat., 246; Fleming
vs. Page, 9 Howard, 603; Downes vs. Bidwell, 182 U. S., 345.) The formation of the Republic of the
Philippines was a scheme contrived by Japan to delude the Filipino people into believing in the
apparent magnanimity of the Japanese gesture of transferring or turning over the rights of
government into the hands of Filipinos. It was established under the mistaken belief that by doing so,
Japan would secure the cooperation or at least the neutrality of the Filipino people in her war against
the United States and other allied nations.
Indeed, even if the Republic of the Philippines had been established by the free will of the Filipino
who, taking advantage of the withdrawal of the American forces from the Islands, and the occupation
thereof by the Japanese forces of invasion, had organized an independent government under the
name with the support and backing of Japan, such government would have been considered as one
established by the Filipinos in insurrection or rebellion against the parent state or the Unite States.
And as such, it would have been a de facto government similar to that organized by the confederate
states during the war of secession and recognized as such by the by the Supreme Court of the
United States in numerous cases, notably those of Thorington vs. Smith, Williams vs. Bruffy, and
Badly vs. Hunter, above quoted; and similar to the short-lived government established by the Filipino
insurgents in the Island of Cebu during the Spanish-American war, recognized as a de facto
government by the Supreme Court of the United States in the case of McCleod vs. United States
(299 U. S., 416). According to the facts in the last-named case, the Spanish forces evacuated the
Island of Cebu on December 25, 1898, having first appointed a provisional government, and shortly
afterwards, the Filipinos, formerly in insurrection against Spain, took possession of the Islands and
established a republic, governing the Islands until possession thereof was surrendered to the United
States on February 22, 1898. And the said Supreme Court held in that case that "such government
was of the class of de facto governments described in I Moore's International Law Digest, S 20, . . .
'called also by publicists a government de facto, but which might, perhaps, be more aptly
denominated a government of paramount force . . '." That is to say, that the government of a country
in possession of belligerent forces in insurrection or rebellion against the parent state, rests upon the
same principles as that of a territory occupied by the hostile army of an enemy at regular war with
the legitimate power.
The governments by the Philippine Executive Commission and the Republic of the Philippines during
the Japanese military occupation being de facto governments, it necessarily follows that the judicial
acts and proceedings of the courts of justice of those governments, which are not of a political
complexion, were good and valid, and, by virtue of the well-known principle of postliminy
(postliminium) in international law, remained good and valid after the liberation or reoccupation of the
Philippines by the American and Filipino forces under the leadership of General Douglas MacArthur.
According to that well-known principle in international law, the fact that a territory which has been
occupied by an enemy comes again into the power of its legitimate government of sovereignty, "does
not, except in a very few cases, wipe out the effects of acts done by an invader, which for one
reason or another it is within his competence to do. Thus judicial acts done under his control, when
they are not of a political complexion, administrative acts so done, to the extent that they take effect

during the continuance of his control, and the various acts done during the same time by private
persons under the sanction of municipal law, remain good. Were it otherwise, the whole social life of
a community would be paralyzed by an invasion; and as between the state and the individuals the
evil would be scarcely less, it would be hard for example that payment of taxes made under
duress should be ignored, and it would be contrary to the general interest that the sentences passed
upon criminals should be annulled by the disappearance of the intrusive government ." (Hall,
International Law, 7th ed., p. 518.) And when the occupation and the abandonment have been each
an incident of the same war as in the present case, postliminy applies, even though the occupant
has acted as conqueror and for the time substituted his own sovereignty as the Japanese intended
to do apparently in granting independence to the Philippines and establishing the so-called Republic
of the Philippines. (Taylor, International Law, p. 615.)
That not only judicial but also legislative acts of de facto governments, which are not of a political
complexion, are and remain valid after reoccupation of a territory occupied by a belligerent occupant,
is confirmed by the Proclamation issued by General Douglas MacArthur on October 23, 1944, which
declares null and void all laws, regulations and processes of the governments established in the
Philippines during the Japanese occupation, for it would not have been necessary for said
proclamation to abrogate them if they were invalid ab initio.
2. The second question hinges upon the interpretation of the phrase "processes of any other
government" as used in the above-quoted proclamation of General Douglas MacArthur of October
23, 1944 that is, whether it was the intention of the Commander in Chief of the American Forces
to annul and void thereby all judgments and judicial proceedings of the courts established in the
Philippines during the Japanese military occupation.
The phrase "processes of any other government" is broad and may refer not only to the judicial
processes, but also to administrative or legislative, as well as constitutional, processes of the
Republic of the Philippines or other governmental agencies established in the Islands during the
Japanese occupation. Taking into consideration the fact that, as above indicated, according to the
well-known principles of international law all judgements and judicial proceedings, which are not of a
political complexion, of the de facto governments during the Japanese military occupation were good
and valid before and remained so after the occupied territory had come again into the power of the
titular sovereign, it should be presumed that it was not, and could not have been, the intention of
General Douglas MacArthur, in using the phrase "processes of any other government" in said
proclamation, to refer to judicial processes, in violation of said principles of international law. The
only reasonable construction of the said phrase is that it refers to governmental processes other
than judicial processes of court proceedings, for according to a well-known rule of statutory
construction, set forth in 25 R. C. L., p. 1028, "a statute ought never to be construed to violate the
law of nations if any other possible construction remains."
It is true that the commanding general of a belligerent army of occupation, as an agent of his
government, may not unlawfully suspend existing laws and promulgate new ones in the occupied
territory, if and when the exigencies of the military occupation demand such action. But even
assuming that, under the law of nations, the legislative power of a commander in chief of military
forces who liberates or reoccupies his own territory which has been occupied by an enemy, during
the military and before the restoration of the civil regime, is as broad as that of the commander in

chief of the military forces of invasion and occupation (although the exigencies of military
reoccupation are evidently less than those of occupation), it is to be presumed that General Douglas
MacArthur, who was acting as an agent or a representative of the Government and the President of
the United States, constitutional commander in chief of the United States Army, did not intend to act
against the principles of the law of nations asserted by the Supreme Court of the United States from
the early period of its existence, applied by the Presidents of the United States, and later embodied
in the Hague Conventions of 1907, as above indicated. It is not to be presumed that General
Douglas MacArthur, who enjoined in the same proclamation of October 23, 1944, "upon the loyal
citizens of the Philippines full respect and obedience to the Constitution of the Commonwealth of the
Philippines," should not only reverse the international policy and practice of his own government, but
also disregard in the same breath the provisions of section 3, Article II, of our Constitution, which
provides that "The Philippines renounces war as an instrument of national policy, and adopts the
generally accepted principles of international law as part of the law of the Nation."
Moreover, from a contrary construction great inconvenience and public hardship would result, and
great public interests would be endangered and sacrificed, for disputes or suits already adjudged
would have to be again settled accrued or vested rights nullified, sentences passed on criminals set
aside, and criminals might easily become immune for evidence against them may have already
disappeared or be no longer available, especially now that almost all court records in the Philippines
have been destroyed by fire as a consequence of the war. And it is another well-established rule of
statutory construction that where great inconvenience will result from a particular construction, or
great public interests would be endangered or sacrificed, or great mischief done, such construction
is to be avoided, or the court ought to presume that such construction was not intended by the
makers of the law, unless required by clear and unequivocal words. (25 R. C. L., pp. 1025, 1027.)
The mere conception or thought of possibility that the titular sovereign or his representatives who
reoccupies a territory occupied by an enemy, may set aside or annul all the judicial acts or
proceedings of the tribunals which the belligerent occupant had the right and duty to establish in
order to insure public order and safety during military occupation, would be sufficient to paralyze the
social life of the country or occupied territory, for it would have to be expected that litigants would not
willingly submit their litigation to courts whose judgements or decisions may afterwards be annulled,
and criminals would not be deterred from committing crimes or offenses in the expectancy that they
may escaped the penalty if judgments rendered against them may be afterwards set aside.
That the proclamation has not invalidated all the judgements and proceedings of the courts of justice
during the Japanese regime, is impliedly confirmed by Executive Order No. 37, which has the force
of law, issued by the President of the Philippines on March 10, 1945, by virtue of the emergency
legislative power vested in him by the Constitution and the laws of the Commonwealth of the
Philippines. Said Executive order abolished the Court of Appeals, and provided "that all case which
have heretofore been duly appealed to the Court of Appeals shall be transmitted to the Supreme
Court final decision." This provision impliedly recognizes that the judgments and proceedings of the
courts during the Japanese military occupation have not been invalidated by the proclamation of
General MacArthur of October 23, because the said Order does not say or refer to cases which have
been duly appealed to said court prior to the Japanese occupation, but to cases which had therefore,
that is, up to March 10, 1945, been duly appealed to the Court of Appeals; and it is to be presumed
that almost all, if not all, appealed cases pending in the Court of Appeals prior to the Japanese

military occupation of Manila on January 2, 1942, had been disposed of by the latter before the
restoration of the Commonwealth Government in 1945; while almost all, if not all, appealed cases
pending on March 10, 1945, in the Court of Appeals were from judgments rendered by the Court of
First Instance during the Japanese regime.
The respondent judge quotes a portion of Wheaton's International Law which say: "Moreover when it
is said that an occupier's acts are valid and under international law should not be abrogated by the
subsequent conqueror, it must be remembered that no crucial instances exist to show that if his acts
should be reversed, any international wrong would be committed. What does happen is that most
matters are allowed to stand by the restored government, but the matter can hardly be put further
than this." (Wheaton, International Law, War, 7th English edition of 1944, p. 245.) And from this
quotion the respondent judge "draws the conclusion that whether the acts of the occupant should be
considered valid or not, is a question that is up to the restored government to decide; that there is no
rule of international law that denies to the restored government to decide; that there is no rule of
international law that denies to the restored government the right of exercise its discretion on the
matter, imposing upon it in its stead the obligation of recognizing and enforcing the acts of the
overthrown government."
There is doubt that the subsequent conqueror has the right to abrogate most of the acts of the
occupier, such as the laws, regulations and processes other than judicial of the government
established by the belligerent occupant. But in view of the fact that the proclamation uses the words
"processes of any other government" and not "judicial processes" prisely, it is not necessary to
determine whether or not General Douglas MacArthur had power to annul and set aside all
judgments and proceedings of the courts during the Japanese occupation. The question to be
determined is whether or not it was his intention, as representative of the President of the United
States, to avoid or nullify them. If the proclamation had, expressly or by necessary implication,
declared null and void the judicial processes of any other government, it would be necessary for this
court to decide in the present case whether or not General Douglas MacArthur had authority to
declare them null and void. But the proclamation did not so provide, undoubtedly because the author
thereof was fully aware of the limitations of his powers as Commander in Chief of Military Forces of
liberation or subsequent conqueror.
Not only the Hague Regulations, but also the principles of international law, as they result from the
usages established between civilized nations, the laws of humanity and the requirements of the
public of conscience, constitute or from the law of nations. (Preamble of the Hague Conventions;
Westlake, International Law, 2d ed., Part II, p. 61.) Article 43, section III, of the Hague Regulations or
Conventions which we have already quoted in discussing the first question, imposes upon the
occupant the obligation to establish courts; and Article 23 (h), section II, of the same Conventions,
which prohibits the belligerent occupant "to declare . . . suspended . . . in a Court of Law the rights
and action of the nationals of the hostile party," forbids him to make any declaration preventing the
inhabitants from using their courts to assert or enforce their civil rights. (Decision of the Court of
Appeals of England in the case of Porter vs. Fruedenburg, L.R. [1915], 1 K.B., 857.) If a belligerent
occupant is required to establish courts of justice in the territory occupied, and forbidden to prevent
the nationals thereof from asserting or enforcing therein their civil rights, by necessary implication,
the military commander of the forces of liberation or the restored government is restrained from
nullifying or setting aside the judgments rendered by said courts in their litigation during the period of

occupation. Otherwise, the purpose of these precepts of the Hague Conventions would be thwarted,
for to declare them null and void would be tantamount to suspending in said courts the right and
action of the nationals of the territory during the military occupation thereof by the enemy. It goes
without saying that a law that enjoins a person to do something will not at the same time empower
another to undo the same. Although the question whether the President or commanding officer of the
United States Army has violated restraints imposed by the constitution and laws of his country is
obviously of a domestic nature, yet, in construing and applying limitations imposed on the executive
authority, the Supreme Court of the United States, in the case of Ochoa, vs. Hernandez (230 U.S.,
139), has declared that they "arise from general rules of international law and from fundamental
principles known wherever the American flag flies."
In the case of Raymond vs. Thomas (91 U.S., 712), a special order issued by the officer in command
of the forces of the United States in South Carolina after the end of the Civil War, wholly annulling a
decree rendered by a court of chancery in that state in a case within its jurisdiction, was declared
void, and not warranted by the acts approved respectively March 2, 1867 (14 Stat., 428), and July 19
of the same year (15 id., 14), which defined the powers and duties of military officers in command of
the several states then lately in rebellion. In the course of its decision the court said; "We have
looked carefully through the acts of March 2, 1867 and July 19, 1867. They give very large
governmental powers to the military commanders designated, within the States committed
respectively to their jurisdiction; but we have found nothing to warrant the order here in question. . . .
The clearest language would be necessary to satisfy us that Congress intended that the power given
by these acts should be so exercised. . . . It was an arbitrary stretch of authority, needful to no good
end that can be imagined. Whether Congress could have conferred the power to do such an act is a
question we are not called upon to consider. It is an unbending rule of law that the exercise of
military power, where the rights of the citizen are concerned, shall never be pushed beyond what the
exigency requires. (Mithell vs. Harmony, 13 How., 115; Warden vs. Bailey, 4 Taunt., 67; Fabrigas vs.
Moysten, 1 Cowp., 161; s.c., 1 Smith's L.C., pt. 2, p. 934.) Viewing the subject before us from the
standpoint indicated, we hold that the order was void."
It is, therefore, evident that the proclamation of General MacArthur of October 23, 1944, which
declared that "all laws, regulations and processes of any other government in the Philippines than
that of the said Commonwealth are null and void without legal effect in areas of the Philippines free
of enemy occupation and control," has not invalidated the judicial acts and proceedings, which are
not a political complexion, of the courts of justice in the Philippines that were continued by the
Philippine Executive Commission and the Republic of the Philippines during the Japanese military
occupation, and that said judicial acts and proceedings were good and valid before and now good
and valid after the reoccupation of liberation of the Philippines by the American and Filipino forces.
3. The third and last question is whether or not the courts of the Commonwealth, which are the same
as those existing prior to, and continued during, the Japanese military occupation by the Philippine
Executive Commission and by the so-called Republic of the Philippines, have jurisdiction to continue
now the proceedings in actions pending in said courts at the time the Philippine Islands were
reoccupied or liberated by the American and Filipino forces, and the Commonwealth Government
was restored.

Although in theory the authority the authority of the local civil and judicial administration is
suspended as a matter of course as soon as military occupation takes place, in practice the invader
does not usually take the administration of justice into his own hands, but continues the ordinary
courts or tribunals to administer the laws of the country which he is enjoined, unless absolutely
prevented, to respect. As stated in the above-quoted Executive Order of President McKinley to the
Secretary of War on May 19, 1898, "in practice, they (the municipal laws) are not usually abrogated
but are allowed to remain in force and to be administered by the ordinary tribunals substantially as
they were before the occupation. This enlightened practice is, so far as possible, to be adhered to on
the present occasion." And Taylor in this connection says: "From a theoretical point of view it may be
said that the conqueror is armed with the right to substitute his arbitrary will for all preexisting forms
of government, legislative, executive and judicial. From the stand-point of actual practice such
arbitrary will is restrained by the provision of the law of nations which compels the conqueror to
continue local laws and institution so far as military necessity will permit." (Taylor, International Public
Law, p.596.) Undoubtedly, this practice has been adopted in order that the ordinary pursuits and
business of society may not be unnecessarily deranged, inasmuch as belligerent occupation is
essentially provisional, and the government established by the occupant of transient character.
Following these practice and precepts of the law of nations, Commander in Chief of the Japanese
Forces proclaimed on January 3, 1942, when Manila was occupied, the military administration under
martial law over the territory occupied by the army, and ordered that "all the laws now in force in the
Commonwealth, as well as executive and judicial institutions, shall continue to be affective for the
time being as in the past," and "all public officials shall remain in their present post and carry on
faithfully their duties as before." When the Philippine Executive Commission was organized by Order
No. 1 of the Japanese Commander in Chief, on January 23, 1942, the Chairman of the Executive
Commission, by Executive Orders Nos. 1 and 4 of January 30 and February 5, respectively,
continued the Supreme Court, Court of Appeals, Court of First Instance, and justices of the peace of
courts, with the same jurisdiction in conformity with the instructions given by the Commander in
Chief of the Imperial Japanese Army in Order No. 3 of February 20, 1942. And on October 14, 1943
when the so-called Republic of the Philippines was inaugurated, the same courts were continued
with no substantial change in organization and jurisdiction thereof.
If the proceedings pending in the different courts of the Islands prior to the Japanese military
occupation had been continued during the Japanese military administration, the Philippine Executive
Commission, and the so-called Republic of the Philippines, it stands to reason that the same courts,
which had become reestablished and conceived of as having in continued existence upon the
reoccupation and liberation of the Philippines by virtue of the principle of postliminy (Hall,
International Law, 7th ed., p. 516), may continue the proceedings in cases then pending in said
courts, without necessity of enacting a law conferring jurisdiction upon them to continue said
proceedings. As Taylor graphically points out in speaking of said principles "a state or other
governmental entity, upon the removal of a foreign military force, resumes its old place with its right
and duties substantially unimpaired. . . . Such political resurrection is the result of a law analogous to
that which enables elastic bodies to regain their original shape upon removal of the external force,
and subject to the same exception in case of absolute crushing of the whole fibre and content."
(Taylor, International Public Law, p. 615.)

The argument advanced by the respondent judge in his resolution in support in his conclusion that
the Court of First Instance of Manila presided over by him "has no authority to take cognizance of,
and continue said proceedings (of this case) to final judgment until and unless the Government of
the Commonwealth of the Philippines . . . shall have provided for the transfer of the jurisdiction of the
courts of the now defunct Republic of the Philippines, and the cases commenced and the left
pending therein," is "that said courts were a government alien to the Commonwealth Government.
The laws they enforced were, true enough, laws of the Commonwealth prior to Japanese
occupation, but they had become the laws and the courts had become the institutions of Japan
by adoption (U.S. vs. Reiter. 27 F. Cases, No. 16146), as they became later on the laws and
institutions of the Philippine Executive Commission and the Republic of the Philippines."
The court in the said case of U.S. vs. Reiter did not and could not say that the laws and institutions
of the country occupied if continued by the conqueror or occupant, become the laws and the courts,
by adoption, of the sovereign nation that is militarily occupying the territory. Because, as already
shown, belligerent or military occupation is essentially provisional and does not serve to transfer the
sovereignty over the occupied territory to the occupant. What the court said was that, if such laws
and institutions are continued in use by the occupant, they become his and derive their force from
him, in the sense that he may continue or set them aside. The laws and institution or courts so
continued remain the laws and institutions or courts of the occupied territory. The laws and the courts
of the Philippines, therefore, did not become, by being continued as required by the law of nations,
laws and courts of Japan. The provision of Article 45, section III, of the Hague Conventions of 1907
which prohibits any compulsion of the population of occupied territory to swear allegiance to the
hostile power, "extends to prohibit everything which would assert or imply a change made by the
invader in the legitimate sovereignty. This duty is neither to innovate in the political life of the
occupied districts, nor needlessly to break the continuity of their legal life. Hence, so far as the courts
of justice are allowed to continue administering the territorial laws, they must be allowed to give their
sentences in the name of the legitimate sovereign " (Westlake, Int. Law, Part II, second ed., p. 102).
According to Wheaton, however, the victor need not allow the use of that of the legitimate
government. When in 1870, the Germans in France attempted to violate that rule by ordering, after
the fall of the Emperor Napoleon, the courts of Nancy to administer justice in the name of the "High
German Powers occupying Alsace and Lorraine," upon the ground that the exercise of their powers
in the name of French people and government was at least an implied recognition of the Republic,
the courts refused to obey and suspended their sitting. Germany originally ordered the use of the
name of "High German Powers occupying Alsace and Lorraine," but later offered to allow use of the
name of the Emperor or a compromise. (Wheaton, International Law, War, 7th English ed. 1944, p.
244.)
Furthermore, it is a legal maxim, that excepting that of a political nature, "Law once established
continues until changed by the some competent legislative power. It is not change merely by change
of sovereignty." (Joseph H. Beale, Cases on Conflict of Laws, III, Summary Section 9, citing
Commonwealth vs. Chapman, 13 Met., 68.) As the same author says, in his Treatise on the Conflict
on Laws (Cambridge, 1916, Section 131): "There can no break or interregnum in law. From the time
the law comes into existence with the first-felt corporateness of a primitive people it must last until
the final disappearance of human society. Once created, it persists until a change take place, and
when changed it continues in such changed condition until the next change, and so forever.

Conquest or colonization is impotent to bring law to an end; in spite of change of constitution, the law
continues unchanged until the new sovereign by legislative acts creates a change."
As courts are creatures of statutes and their existence defends upon that of the laws which create
and confer upon them their jurisdiction, it is evident that such laws, not being a political nature, are
not abrogated by a change of sovereignty, and continue in force "ex proprio vigore" unless and until
repealed by legislative acts. A proclamation that said laws and courts are expressly continued is not
necessary in order that they may continue in force. Such proclamation, if made, is but a declaration
of the intention of respecting and not repealing those laws. Therefore, even assuming that Japan
had legally acquired sovereignty over these Islands, which she had afterwards transferred to the socalled Republic of the Philippines, and that the laws and the courts of these Islands had become the
courts of Japan, as the said courts of the laws creating and conferring jurisdiction upon them have
continued in force until now, it necessarily follows that the same courts may continue exercising the
same jurisdiction over cases pending therein before the restoration of the Commonwealth
Government, unless and until they are abolished or the laws creating and conferring jurisdiction
upon them are repealed by the said government. As a consequence, enabling laws or acts providing
that proceedings pending in one court be continued by or transferred to another court, are not
required by the mere change of government or sovereignty. They are necessary only in case the
former courts are abolished or their jurisdiction so change that they can no longer continue taking
cognizance of the cases and proceedings commenced therein, in order that the new courts or the
courts having jurisdiction over said cases may continue the proceedings. When the Spanish
sovereignty in the Philippine Islands ceased and the Islands came into the possession of the United
States, the "Audiencia" or Supreme Court was continued and did not cease to exist, and proceeded
to take cognizance of the actions pending therein upon the cessation of the Spanish sovereignty
until the said "Audiencia" or Supreme Court was abolished, and the Supreme Court created in
Chapter II of Act No. 136 was substituted in lieu thereof. And the Courts of First Instance of the
Islands during the Spanish regime continued taking cognizance of cases pending therein upon the
change of sovereignty, until section 65 of the same Act No. 136 abolished them and created in its
Chapter IV the present Courts of First Instance in substitution of the former. Similarly, no enabling
acts were enacted during the Japanese occupation, but a mere proclamation or order that the courts
in the Island were continued.
On the other hand, during the American regime, when section 78 of Act No. 136 was enacted
abolishing the civil jurisdiction of the provost courts created by the military government of occupation
in the Philippines during the Spanish-American War of 1898, the same section 78 provided for the
transfer of all civil actions then pending in the provost courts to the proper tribunals, that is, to the
justices of the peace courts, Court of First Instance, or Supreme Court having jurisdiction over them
according to law. And later on, when the criminal jurisdiction of provost courts in the City of Manila
was abolished by section 3 of Act No. 186, the same section provided that criminal cases pending
therein within the jurisdiction of the municipal court created by Act No. 183 were transferred to the
latter.
That the present courts as the same courts which had been functioning during the Japanese regime
and, therefore, can continue the proceedings in cases pending therein prior to the restoration of the
Commonwealth of the Philippines, is confirmed by Executive Order No. 37 which we have already
quoted in support of our conclusion in connection with the second question. Said Executive Order

provides"(1) that the Court of Appeals created and established under Commonwealth Act No. 3 as
amended, be abolished, as it is hereby abolished," and "(2) that all cases which have heretofore
been duly appealed to the Court of Appeals shall be transmitted to the Supreme Court for final
decision. . . ." In so providing, the said Order considers that the Court of Appeals abolished was the
same that existed prior to, and continued after, the restoration of the Commonwealth Government;
for, as we have stated in discussing the previous question, almost all, if not all, of the cases pending
therein, or which had theretofore (that is, up to March 10, 1945) been duly appealed to said court,
must have been cases coming from the Courts of First Instance during the so-called Republic of the
Philippines. If the Court of Appeals abolished by the said Executive Order was not the same one
which had been functioning during the Republic, but that which had existed up to the time of the
Japanese occupation, it would have provided that all the cases which had, prior to and up to that
occupation on January 2, 1942, been dully appealed to the said Court of Appeals shall be
transmitted to the Supreme Court for final decision.
It is, therefore, obvious that the present courts have jurisdiction to continue, to final judgment, the
proceedings in cases, not of political complexion, pending therein at the time of the restoration of the
Commonwealth Government.
Having arrived at the above conclusions, it follows that the Court of First Instance of Manila has
jurisdiction to continue to final judgment the proceedings in civil case No. 3012, which involves civil
rights of the parties under the laws of the Commonwealth Government, pending in said court at the
time of the restoration of the said Government; and that the respondent judge of the court, having
refused to act and continue him does a duty resulting from his office as presiding judge of that court,
mandamus is the speedy and adequate remedy in the ordinary course of law, especially taking into
consideration the fact that the question of jurisdiction herein involved does affect not only this
particular case, but many other cases now pending in all the courts of these Islands.
In view of all the foregoing it is adjudged and decreed that a writ of mandamus issue, directed to the
respondent judge of the Court of First Instance of Manila, ordering him to take cognizance of and
continue to final judgment the proceedings in civil case No. 3012 of said court. No pronouncement
as to costs. So ordered.
Moran, C.J., Ozaeta, Paras, Jaranilla and Pablo, JJ., concur.

Republic
SUPREME
Manila

of

the

Philippines
COURT

EN BANC
G.R. No. L-21484

November 29, 1969

THE AGRICULTURAL CREDIT and COOPERATIVE FINANCING ADMINISTRATION (ACCFA),

petitioner,
vs.
ACCFA SUPERVISORS' ASSOCIATION, ACCFA WORKERS' ASSOCIATION, and THE COURT
OF INDUSTRIAL RELATIONS, respondents.
Deogracias E. Lerma and Esmeraldo U. Guloy for petitioner Agricultural Credit and Cooperative
Financing
Administration.
Office of the Agrarian Counsel, Department of Justice for petitioner Agricultural Credit Administration
J. C. Espinas and Associates for respendents Confederation of Unions in Government Corporations
Offices, et al. Mariano B. Tuason for respondent Court of Industrial Relations.
MAKALINTAL, J.:
These are two separate appeals by certiorari from the decision dated March 25, 1963 (G.R. No. L21484) and the order dated May 21, 1964 (G.R. No. L-23605) as affirmed by the resolutions en
banc, of the Court of Industrial Relations, in Cases Nos. 3450-ULP and 1327-MC, respectively. The
parties, except the Confederation of Unions in Government Corporations and Offices (CUGCO),
being practically the same and the principal issues involved related, only one decision is now
rendered in these two cases.
The Agricultural Credit and Cooperative Financing Administration (ACCFA) was a government
agency created under Republic Act No. 821, as amended. Its administrative machinery was
reorganized and its name changed to Agricultural Credit Administration (ACA) under the Land
Reform Code (Republic Act No. 3844). On the other hand, the ACCFA Supervisors' Association
(ASA) and the ACCFA Workers' Association (AWA), hereinafter referred to as the Unions, are labor
organizations composed of the supervisors and the rank-and-file employees, respectively, in the
ACCFA (now ACA).
G.R. No. L-21484
On September 4, 1961 a collective bargaining agreement, which was to be effective for a period of
one (1) year from July 1, 1961, was entered into by and between the Unions and the ACCFA. A few
months thereafter, the Unions started protesting against alleged violations and non-implementation
of said agreement. Finally, on October 25, 1962 the Unions declared a strike, which was ended
when the strikers voluntarily returned to work on November 26, 1962.

On October 30, 1962 the Unions, together with its mother union, the Confederation of Unions in
Government Corporations and Offices (CUGCO), filed a complaint with the Court of Industrial
Relations against the ACCFA (Case No. 3450-ULP) for having allegedly committed acts of unfair
labor practice, namely: violation of the collective bargaining agreement in order to discourage the
members of the Unions in the exercise of their right to self-organization, discrimination against said
members in the matter of promotions, and refusal to bargain. The ACCFA denied the charges and
interposed as affirmative and special defenses lack of jurisdiction of the CIR over the case, illegality
of the bargaining contract, expiration of said contract and lack of approval by the office of the
President of the fringe benefits provided for therein. Brushing aside the foregoing defenses, the CIR
in its decision dated March 25, 1963 ordered the ACCFA:
1. To cease and desist from committing further acts tending to discourage the members of
complainant unions in the exercise of their right to self-organization;
2. To comply with and implement the provision of the collective bargaining contract executed
on September 4, 1961, including the payment of P30.00 a month living allowance;
3. To bargain in good faith and expeditiously with the herein complainants.
The ACCFA moved to reconsider but was turned down in a resolution dated April 25, 1963 of the CIR
en banc. Thereupon it brought this appeal by certiorari.
The ACCFA raises the following issues in its petition, to wit:
1. Whether or not the respondent court has jurisdiction over this case, which in turn depends
on whether or not ACCFA exercised governmental or proprietary functions.
2. Whether or not the collective bargaining agreement between the petitioner and the
respondent union is valid; if valid, whether or not it has already lapsed; and if not, whether or
not its (sic) fringe benefits are already enforceable.
3. Whether or not there is a legal and/or factual basis for the finding of the respondent court
that the petitioner had committed acts of unfair labor practice.
4. Whether or not it is within the competence of the court to enforce the collective bargaining
agreement between the petitioner and the respondent unions, the same having already
expired.
G.R. No. L-23605
During the pendency of the above mentioned case (G.R. No. L-21484), specifically on August 8,
1963, the President of the Philippines signed into law the Agricultural Land Reform Code (Republic
Act No. 3844), which among other things required the reorganization of the administrative machinery
of the Agricultural Credit and Cooperative Financing Administration (ACCFA) and changed its name
to Agricultural Credit Administration (ACA). On March 17, 1964 the ACCFA Supervisors' Association
and the ACCFA Workers' Association filed a petition for certification election with the Court of

Industrial Relations (Case No. 1327-MC) praying that they be certified as the exclusive bargaining
agents for the supervisors and rank-and-file employees, respectively, in the ACA. The trial Court in
its order dated March 30, 1964 directed the Manager or Officer-in-Charge of the ACA to allow the
posting of said order "for the information of all employees and workers thereof," and to answer the
petition. In compliance therewith, the ACA, while admitting most of the allegations in the petition,
denied that the Unions represented the majority of the supervisors and rank-and-file workers,
respectively, in the ACA. It further alleged that the petition was premature, that the ACA was not the
proper party to be notified and to answer the petition, and that the employees and supervisors could
not lawfully become members of the Unions, nor be represented by them. However, in a joint
manifestation of the Unions dated May 7, 1964, with the conformity of the ACA Administrator and of
the Agrarian Counsel in his capacity as such and as counsel for the National Land Reform Council, it
was agreed "that the union petitioners in this case represent the majority of the employees in their
respective bargaining units" and that only the legal issues raised would be submitted for the
resolution of the trial Court.
Finding the remaining grounds for ACA's opposition to the petition to be without merit, the trial Court
in its order dated May 21, 1964 certified "the ACCFA Workers' Association and the ACCFA
Supervisors' Association as the sole and exclusive bargaining representatives of the rank-and-file
employees and supervisors, respectively, of the Agricultural Credit Administration." Said order was
affirmed by the CIR en banc in its resolution dated August 24, 1964.
On October 2, 1964 the ACA filed in this Court a petition for certiorari with urgent motion to stay the
CIR order of May 21, 1964. In a resolution dated October 6, 1964, this Court dismissed the petition
for "lack of adequate allegations," but the dismissal was later reconsidered when the ACA complied
with the formal requirement stated in said resolution. As prayed for, this Court ordered the CIR to
stay the execution of its order of May 21, 1964.
In this appeal, the ACA in effect challenges the jurisdiction of the CIR to entertain the petition of the
Unions for certification election on the ground that it (ACA) is engaged in governmental functions.
The Unions join the issue on this single point, contending that the ACA forms proprietary functions.
Under Section 3 of the Agricultural Land Reform Code the ACA was established, among other
governmental agencies,1 to extend credit and similar assistance to agriculture, in pursuance of the
policy enunciated in Section 2 as follows:
SEC. 2. Declaration of Policy. It is the policy of the State:
(1) To establish owner-cultivatorships and the economic family-size farm as the basis of
Philippine agriculture and, as a consequence, divert landlord capital in agriculture to
industrial development;
(2) To achieve a dignified existence for the small farmers free from pernicious institutional
restraints and practices;
(3) To create a truly viable social and economic structure in agriculture conducive to greater
productivity and higher farm incomes;

(4) To apply all labor laws equally and without discrimination to both industrial and
agricultural wage earners;
(5) To provide a more vigorous and systematic land resettlement program and public land
distribution; and
(6) To make the small farmers more independent, self-reliant and responsible citizens, and a
source of genuine strength in our democratic society.
The implementation of the policy thus enunciated, insofar as the role of the ACA therein is
concerned, is spelled out in Sections 110 to 118, inclusive, of the Land Reform Code. Section 110
provides that "the administrative machinery of the ACCFA shall be reorganized to enable it to align
its activities with the requirements and objective of this Code and shall be known as the Agricultural
Credit Administration." Under Section 112 the sum of P150,000,000 was appropriated out of national
funds to finance the additional credit functions of the ACA as a result of the land reform program laid
down in the Code. Section 103 grants the ACA the privilege of rediscounting with the Central Bank,
the Development Bank of the Philippines and the Philippine National Bank. Section 105 directs the
loaning activities of the ACA "to stimulate the development of farmers' cooperatives," including those
"relating to the production and marketing of agricultural products and those formed to manage and/or
own, on a cooperative basis, services and facilities, such as irrigation and transport systems,
established to support production and/or marketing of agricultural products." Section 106 deals with
the extension by ACA of credit to small farmers in order to stimulate agricultural production. Sections
107 to 112 lay down certain guidelines to be followed in connection with the granting of loans, such
as security, interest and supervision of credit. Sections 113 to 118, inclusive, invest the ACA with
certain rights and powers not accorded to non-governmental entities, thus:
SEC. 113. Auditing of Operations. For the effective supervision of farmers' cooperatives,
the head of the Agricultural Credit Administration shall have the power to audit their
operations, records and books of account and to issue subpoena and subpoena duces
tecum to compel the attendance of witnesses and the production of books, documents and
records in the conduct of such audit or of any inquiry into their affairs. Any person who,
without lawful cause, fails to obey such subpoena or subpoena duces tecum shall, upon
application of the head of Agricultural Credit Administration with the proper court, be liable to
punishment for contempt in the manner provided by law and if he is an officer of the
Association, to suspension or removal from office.
SEC. 114. Prosecution of officials. The Agricultural Credit Administration, through the
appropriate provincial or city fiscal, shall have the power to file and prosecute any and all
actions which it may have against any and all officials or employees of farmers' cooperatives
arising from misfeasance or malfeasance in office.
SEC. 115. Free Notarial Service. Any justice of the peace, in his capacity as notary exofficio, shall render service free of charge to any person applying for a loan under this Code
either in administering the oath or in the acknowledgment of instruments relating to such
loan.

SEC. 116. Free Registration of Deeds. Any register of deeds shall accept for registration,
free of charge any instrument relative to a loan made under this Code.
SEC. 117. Writing-off Unsecured and Outstanding Loans. Subject to the approval of the
President upon recommendation of the Auditor General, the Agricultural Credit
Administration may write-off from its books, unsecured and outstanding loans and accounts
receivable which may become uncollectible by reason of the death or disappearance of the
debtor, should there be no visible means of collecting the same in the foreseeable future, or
where the debtor has been verified to have no income or property whatsoever with which to
effect payment. In all cases, the writing-off shall be after five years from the date the debtor
defaults.
SEC. 118. Exemption from Duties, Taxes and Levies. The Agricultural Credit
Administration is hereby exempted from the payment of all duties, taxes, levies, and fees,
including docket and sheriff's fees, of whatever nature or kind, in the performance of its
functions and in the exercise of its powers hereunder.
The power to audit the operations of farmers' cooperatives and otherwise inquire into their affairs, as
given by Section 113, is in the nature of the visitorial power of the sovereign, which only a
government agency specially delegated to do so by the Congress may legally exercise.
On March 19, 1964 Executive Order No. 75 was promulgated. It is entitled: "Rendering in Full Force
and Effect the Plan of Reorganization Proposed by the Special Committee on Reorganization of
Agencies for Land Reform for the Administrative Machinery of the Agricultural Land Reform Code,"
and contains the following pertinent provisions:
Section 3. The Land Reform Project Administration2 shall be considered a single organization
and the personnel complement of the member agencies including the legal officers of the
Office of the Agrarian Counsel which shall provide legal services to the LRPA shall be
regarded as one personnel pool from which the requirements of the operations shall be
drawn and subject only to the civil service laws, rules and regulations, persons from one
agency may be freely assigned to positions in another agency within the LRPA when the
interest of the service so demands.
Section 4. The Land Reform Project Administration shall be considered as one organization
with respect to the standardization of job descriptions position classification and wage and
salary structures to the end that positions involving the same or equivalent qualifications and
equal responsibilities and effort shall have the same remuneration.
Section 5. The Civil Service laws, rules and regulations with respect to promotions,
particularly in the consideration of person next in rank, shall be made applicable to the Land
Reform Project Administration as a single agency so that qualified individuals in one member
agency must be considered in considering promotion to higher positions in another member
agency.

The implementation of the land reform program of the government according to Republic Act No.
3844 is most certainly a governmental, not a proprietary, function; and for that purpose Executive
Order No. 75 has placed the ACA under the Land Reform Project Administration together with the
other member agencies, the personnel complement of all of which are placed in one single pool and
made available for assignment from one agency to another, subject only to Civil Service laws, rules
and regulations, position classification and wage structures.
The appointing authority in respect of the officials and employees of the ACA is the President of the
Philippines, as stated in a 1st indorsement by his office to the Chairman of the National Reform
Council dated May 22, 1964, as follows:
Appointments of officials and employees of the National Land Reform Council and its
agencies may be made only by the President, pursuant to the provisions of Section 79(D) of
the Revised Administrative Code. In accordance with the policy and practice, such
appointments should be prepared for the signature of the Executive Secretary, "By Authority
ofthe President".3
When the Agricultural Reform Code was being considered by the Congress, the nature of the ACA
was the subject of the following exposition on the Senate floor:
Senator Tolentino: . . . . "The ACA is not going to be a profit making institution. It is supposed
to be a public service of the government to the lessees and farmer-owners of the lands that
may be bought after expropriation from owners. It is the government here that is the lender.
The government should not exact a higher interest than what we are telling a private
landowner now in his relation to his tenants if we give to their farmers a higher rate of
interest . . . ." (pp. 17 & 18, Senate Journal No. 16, July 3, 1963)
The reason is obvious, to pinpoint responsibility for many losses in the government, in order to avoid
irresponsible lending of government money to pinpoint responsibility for many losses . . . .
Senator Manglapus: ". . . But assuming that hypothesis, that is the reason why we are
appropriating P150,000,000.00 for the Agricultural Credit Administration which will go to
intensified credit operations on the barrio level . . ." (p. 3, Senate Journal No. 7).
That it is the reason why we are providing for the expansion of the ACCFA and the weeding out of
the cooperative activity of the ACCFA and turning this over to the Agricultural Productivity
Commission, so that the Agricultural Credit Administration will concentrate entirely on the facilitation
of credit on the barrio level with the massive support of 150 million provided by the government. . . .
(pp. 4 & 5 of Senate Journal No. 7, July 3, 1963)
. . . But by releasing them from this situation, we feel that we are putting them in a much better
condition than that in which they are found by providing them with a business-like way of obtaining
credit, not depending on a paternalistic system but one which is business-like that is to say, a
government office, which on the barrio level will provide them that credit directly . . . . (p. 40, Senate
Journal No. 7, July 3, 1963) (emphasis supplied).

The considerations set forth above militate quite strongly against the recognition of collective
bargaining powers in the respondent Unions within the context of Republic Act No. 875, and hence
against the grant of their basic petition for certification election as proper bargaining units. The ACA
is a government office or agency engaged in governmental, not proprietary functions. These
functions may not be strictly what President Wilson described as "constituent" (as distinguished from
"ministrant"),4 such as those relating to the maintenance of peace and the prevention of crime, those
regulating property and property rights, those relating to the administration of justice and the
determination of political duties of citizens, and those relating to national defense and foreign
relations. Under this traditional classification, such constituent functions are exercised by the State
as attributes of sovereignty, and not merely to promote the welfare, progress and prosperity of the
people these letter functions being ministrant he exercise of which is optional on the part of the
government.
The growing complexities of modern society, however, have rendered this traditional classification of
the functions of government quite unrealistic, not to say obsolete. The areas which used to be left to
private enterprise and initiative and which the government was called upon to enter optionally, and
only "because it was better equipped to administer for the public welfare than is any private
individual or group of individuals," 5 continue to lose their well-defined boundaries and to be absorbed
within activities that the government must undertake in its sovereign capacity if it is to meet the
increasing social challenges of the times. Here as almost everywhere else the tendency is
undoubtedly towards a greater socialization of economic forces. Here of course this development
was envisioned, indeed adopted as a national policy, by the Constitution itself in its declaration of
principle concerning the promotion of social justice.
It was in furtherance of such policy that the Land Reform Code was enacted and the various
agencies, the ACA among them, established to carry out its purposes. There can be no dispute as to
the fact that the land reform program contemplated in the said Code is beyond the capabilities of any
private enterprise to translate into reality. It is a purely governmental function, no less than, say, the
establishment and maintenance of public schools and public hospitals. And when, aside from the
governmental objectives of the ACA, geared as they are to the implementation of the land reform
program of the State, the law itself declares that the ACA is a government office, with the formulation
of policies, plans and programs vested no longer in a Board of Governors, as in the case of the
ACCFA, but in the National Land Reform Council, itself a government instrumentality; and that its
personnel are subject to Civil Service laws and to rules of standardization with respect to positions
and salaries, any vestige of doubt as to the governmental character of its functions disappears.
In view of the foregoing premises, we hold that the respondent Unions are not entitled to the
certification election sought in the Court below. Such certification is admittedly for purposes of
bargaining in behalf of the employees with respect to terms and conditions of employment, including
the right to strike as a coercive economic weapon, as in fact the said unions did strike in 1962
against the ACCFA (G.R. No. L-21824).6 This is contrary to Section 11 of Republic Act No. 875,
which provides:
SEC. 11. Prohibition Against Strike in the Government The terms and conditions of
employment in the Government, including any political subdivision or instrumentality thereof,
are governed by law and it is declared to be the policy of this Act that employees therein

shall not strike for the purposes of securing changes or modification in their terms and
conditions of employment. Such employees may belong to any labor organization which
does not impose the obligation to strike or to join in strike: Provided, However, that this
section shall apply only to employees employed in governmental functions of the
Government including but not limited to governmental corporations.7
With the reorganization of the ACCFA and its conversion into the ACA under the Land Reform Code
and in view of our ruling as to the governmental character of the functions of the ACA, the decision
of the respondent Court dated March 25, 1963, and the resolution en banc affirming it, in the unfair
labor practice case filed by the ACCFA, which decision is the subject of the present review in G. R.
No. L-21484, has become moot and academic, particularly insofar as the order to bargain
collectively with the respondent Unions is concerned.
What remains to be resolved is the question of fringe benefits provided for in the collective
bargaining contract of September 4, 1961. The position of the ACCFA in this regard is that the said
fringe benefits have not become enforceable because the condition that they should first be
approved by the Office of the President has not been complied with. The Unions, on the other hand,
contend that no such condition existed in the bargaining contract, and the respondent Court upheld
this contention in its decision.
It is to be listed that under Section 3, Article XIV, of the agreement, the same "shall not become
effective unless and until the same is duly ratified by the Board of Governors of the Administration."
Such approval was given even before the formal execution of the agreement, by virtue of
"Resolution No. 67, Regular Meeting No. 7, FY 1960-61, held on August 17, 1961," but with the
proviso that "the fringe benefits contained therein shall take effect only if approved by the office of
the President." The condition is, therefore, deemed to be incorporated into the agreement by
reference.
On October 23, 1962 the Office of the President, in a letter signed by the Executive Secretary,
expressed its approval of the bargaining contract "provided the salaries and benefits therein fixed
are not in conflict with applicable laws and regulations, are believed to be reasonable considering
the exigencies of the service and the welfare of the employees, and are well within the financial
ability of the particular corporation to bear."
On July 1, 1963 the ACCFA management and the Unions entered into an agreement for the
implementation of the decision of the respondent Court concerning the fringe benefits, thus:
In the meantime, only Cost of Living Adjustment, Longevity Pay, and Night Differential
Benefits accruing from July 1, 1961 to June 30, 1963 shall be paid to all employees entitled
thereto, in the following manner:
A) The sum of P180,000 shall be set aside for the payment of:
1) Night differential benefits for Security Guards.
2) Cost of Living Adjustment and Longevity Pay.

3) The unpaid balance due employees on Item A (1) and (2) this paragraph shall be paid in
monthly installments as finances permit but not beyond December 20, 1963.
3. All benefits accruing after July 1, 1963, shall be allowed to accumulate but payable only
after all benefits accruing up to June 30, 1963, as per CIR decision hereinabove referred to
shall have been settled in full; provided, however, that commencing July 1, 1963 and for a
period of only two (2) months thereafter (during which period the ACCFA and the Unions
shall negotiate a new Collective Bargaining Agreement) the provisions of the September 4,
1961 Collective Bargaining Agreement shall be temporarily suspended, except as to Cost of
Living Adjustment and "political" or non-economic privileges and benefits thereunder.
On July 24, 1963 the ACCFA Board of Governors ratified the agreement thus entered into, pursuant
to the provision thereof requiring such ratification, but with the express qualification that the same
was "without prejudice to the pending appeal in the Supreme Court . . . in Case No. 3450-ULP." The
payment of the fringe benefits agreed upon, to our mind, shows that the same were within the
financial capability of the ACCFA then, and hence justifies the conclusion that this particular
condition imposed by the Office of the President in its approval of the bargaining contract was
satisfied.
We hold, therefore, that insofar as the fringe benefits already paid are concerned, there is no reason
to set aside the decision of the respondent Court, but that since the respondent Unions have no right
to the certification election sought by them nor, consequently, to bargain collectively with the
petitioner, no further fringe benefits may be demanded on the basis of any collective bargaining
agreement.
The decisions and orders appealed from are set aside and/or modified in accordance with the
foregoing pronouncements. No costs.
Concepcion, C.J., Reyes, J.B.L., Dizon, Sanchez, Castro, Teehankee and Barredo, JJ., concur.
Zaldivar, J., concurs in the result.

Republic
SUPREME
Manila

of

the

Philippines
COURT

EN BANC
G.R. No. 1051

May 19, 1903

THE
UNITED
STATES,
vs.
FRED L. DORR, ET AL., defendants-appellants.
F.
G.
Solicitor-General Araneta for appellee.

Waite

complainant-appellee,

for

appellants.

LADD, J.:
The defendants have been convicted upon a complaint charging them with the offense of writing,
publishing, and circulating a scurrilous libel against the Government of the United States and the
Insular Government of the Philippine Islands. The complaint is based upon section 8 of Act No. 292
of the Commission, which is as follows:
Every person who shall utter seditious words or speeches, write, publish, or circulate
scurrilous libels against the Government of the United States or the Insular Government of
the Philippine Islands, or which tend to disturb or obstruct any lawful officer in executing his
office, or which tend to instigate others to cabal or meet together for unlawful purposes, or
which suggest or incite rebellious conspiracies or riots, or which tend to stir up the people
against the lawful authorities, or to disturb the peace of the community, the safety and order
of the Government, or who shall knowingly conceal such evil practices, shall be punished by
a fine not exceeding two thousand dollars or by imprisonment not exceeding two years, or
both, in the discretion of the court.
The alleged libel was published as an editorial in the issue of the "Manila Freedom" of April 6, 1902,
under the caption of "A few hard facts."
The Attorney-General in his brief indicates the following passages of the article as those upon which
he relies to sustain the conviction:
Sidney Adamson, in a late letter in "Leslie's Weekly," has the following to say of the action of
the Civil Commission in appointing rascally natives to important Government positions:
"It is a strong thing to say, but nevertheless true, that the Civil Commission, through
its ex-insurgent office holders, and by its continual disregard for the records of
natives obtained during the military rule of the Islands, has, in its distribution of
offices, constituted a protectorate over a set of men who should be in jail or deported.
. . . [Reference is then made to the appointment of one Tecson as justice of the

peace.] This is the kind of foolish work that the Commission is doing all over the
Islands, reinstating insurgents and rogues and turning down the men who have
during the struggle, at the risk of their lives, aided the Americans."
xxx xxx xxx
There is no doubt but that the Filipino office holders of the Islands are in a good many
instances rascals.
xxx xxx xxx
The commission has exalted to the highest positions in the Islands Filipinos who are alleged
to be notoriously corrupt and rascally, and men of no personal character.
xxx xxx xxx
Editor Valdez, of "Miau," made serious charges against two of the native Commissioners charges
against Trinidad H. Pardo de Tavera, which, if true, would brand the man as a coward and a rascal,
and with what result? . . . [Reference is then made to the prosecution and conviction of Valdez for
libel "under a law which specifies that the greater the truth the greater the libel."] Is it the desire of
the people of the United States that the natives against whom these charges have been made
(which, if true, absolutely vilify their personal characters) be permitted to retain their seats on the
Civil Commission, the executive body of the Philippine Government, without an investigation?
xxx xxx xxx
It is a notorious fact that many branches of the Government organized by the Civil
Commission are rotten and corrupt. The fiscal system, upon which life, liberty, and justice
depends, is admitted by the Attorney-General himself to be most unsatisfactory. It is a fact
that the Philippine judiciary is far from being what it should. Neither fiscals nor judges can be
persuaded to convict insurgents when they wish to protect them.
xxx xxx xxx
Now we hear all sorts of reports as to rottenness existing in the province [of Tayabas], and
especially the northern end of it; it is said that it is impossible to secure the conviction of
lawbreakers and outlaws by the native justices, or a prosecution by the native fiscals.
xxx xxx xxx
The long and short of it is that Americans will not stand for an arbitrary government,
especially when evidences of carpetbagging and rumors of graft are too thick to be pleasant.
We do not understand that it is claimed that the defendants succeeded in establishing at the trial the
truth of any of the foregoing statements. The only question which we have considered is whether
their publication constitutes an offense under section 8 of Act No. 292, above cited.

Several allied offenses or modes of committing the same offense are defined in that section, viz: (1)
The uttering of seditious words or speeches; (2) the writing, publishing, or circulating of scurrilous
libels against the Government of the United States or the Insular Government of the Philippine
Islands; (3) the writing, publishing, or circulating of libels which tend to disturb or obstruct any lawful
officer in executing his office; (4) or which tend to instigate others to cabal or meet together for
unlawful purposes; (5) or which suggest or incite rebellious conspiracies or riots; (6) or which tend to
stir up the people against the lawful authorities or to disturb the peace of the community, the safety
and order of the Government; (7) knowingly concealing such evil practices.
The complaint appears to be framed upon the theory that a writing, in order to be punishable as a
libel under this section, must be of a scurrilous nature and directed against the Government of the
United States or the Insular Government of the Philippine Islands, and must, in addition, tend to
some one of the results enumerated in the section. The article in question is described in the
complaint as "a scurrilous libel against the Government of the United States and the Insular
Government of the Philippine Islands, which tends to obstruct the lawful officers of the United States
and the Insular Government of the Philippine Islands in the execution of their offices, and which
tends to instigate others to cabal and meet together for unlawful purposes, and which suggests and
incites rebellious conspiracies, and which tends to stir up the people against the lawful authorities,
and which disturbs the safety and order of the Government of the United States and the Insular
Government of the Philippine Islands." But it is "a well-settled rule in considering indictments that
where an offense may be committed in any of several different modes, and the offense, in any
particular instance, is alleged to have been committed in two or more modes specified, it is sufficient
to prove the offense committed in any one of them, provided that it be such as to constitute the
substantive offense" (Com. vs. Kneeland, 20 Pick., Mass., 206, 215), and the defendants may,
therefore, be convicted if any one of the substantive charges into which the complaint may be
separated has been made out.
We are all, however, agreed upon the proposition that the article in question has no appreciable
tendency to "disturb or obstruct any lawful officer in executing his office," or to "instigate" any person
or class of persons "to cabal or meet together for unlawful purposes," or to "suggest or incite
rebellious conspiracies or riots," or to "stir up the people against the lawful authorities or to disturb
the peace of the community, the safety and order of the Government." All these various tendencies,
which are described in section 8 of Act No. 292, each one of which is made an element of a certain
form of libel, may be characterized in general terms as seditious tendencies. This is recognized in
the description of the offenses punished by this section, which is found in the title of the act, where
they are defined as the crimes of the "seditious utterances, whether written or spoken."
Excluding from consideration the offense of publishing "scurrilous libels against the Government of
the United States or the Insular Government of the Philippine Islands," which may conceivably stand
on a somewhat different footing, the offenses punished by this section all consist in inciting, orally or
in writing, to acts of disloyalty or disobedience to the lawfully constituted authorities in these Islands.
And while the article in question, which is, in the main, a virulent attack against the policy of the Civil
Commission in appointing natives to office, may have had the effect of exciting among certain
classes dissatisfaction with the Commission and its measures, we are unable to discover anything in
it which can be regarded as having a tendency to produce anything like what may be called
disaffection, or, in other words, a state of feeling incompatible with a disposition to remain loyal to the

Government and obedient to the laws. There can be no conviction, therefore, for any of the offenses
described in the section on which the complaint is based, unless it is for the offense of publishing a
scurrilous libel against the Government of the of the United States or the Insular Government of the
Philippine Islands.
Can the article be regarded as embraced within the description of "scurrilous libels against the
Government of the United States or the Insular Government of the Philippine Islands?" In the
determination of this question we have encountered great difficulty, by reason of the almost entire
lack of American precedents which might serve as a guide in the construction of the law. There are,
indeed, numerous English decisions, most of them of the eighteenth century, on the subject of
libelous attacks upon the "Government, the constitution, or the law generally," attacks upon the
Houses of Parliament, the Cabinet, the Established Church, and other governmental organisms, but
these decisions are not now accessible to us, and, if they were, they were made under such different
conditions from those which prevail at the present day, and are founded upon theories of
government so foreign to those which have inspired the legislation of which the enactment in
question forms a part, that they would probably afford but little light in the present inquiry. In England,
in the latter part of the eighteenth century, any "written censure upon public men for their conduct as
such," as well as any written censure "upon the laws or upon the institutions of the country," would
probably have been regarded as a libel upon the Government. (2 Stephen, History of the Criminal
Law of England, 348.) This has ceased to be the law in England, and it is doubtful whether it was
ever the common law of any American State. "It is true that there are ancient dicta to the effect that
any publication tending to "possess the people with an ill opinion of the Government" is a seditious
libel ( per Holt, C. J., in R. vs. Tuchin, 1704, 5 St. Tr., 532, and Ellenborough, C. J., in R. vs. Cobbett,
1804, 29 How. St. Tr., 49), but no one would accept that doctrine now. Unless the words used
directly tend to foment riot or rebellion or otherwise to disturb the peace and tranquility of the
Kingdom, the utmost latitude is allowed in the discussion of all public affairs." (11 Enc. of the Laws of
England, 450.) Judge Cooley says (Const. Lim., 528): "The English common law rule which made
libels on the constitution or the government indictable, as it was administered by the courts, seems
to us unsuited to the condition and circumstances of the people of America, and therefore never to
have been adopted in the several States."
We find no decisions construing the Tennessee statute (Code, sec. 6663), which is apparently the
only existing American statute of a similar character to that in question, and from which much of the
phraseology of then latter appears to have been taken, though with some essential modifications.
The important question is to determine what is meant in section 8 of Act No. 292 by the expression
"the Insular Government of the Philippine Islands." Does it mean in a general and abstract sense the
existing laws and institutions of the Islands, or does it mean the aggregate of the individuals by
whom the government of the Islands is, for the time being, administered? Either sense would
doubtless be admissible.
We understand, in modern political science, . . . by the term government, that institution or aggregate
of institutions by which an independent society makes and carries out those rules of action which are
unnecessary to enable men to live in a social state, or which are imposed upon the people forming
that society by those who possess the power or authority of prescribing them. Government is the
aggregate of authorities which rule a society. By "dministration, again, we understand in modern

times, and especially in more or less free countries, the aggregate of those persons in whose hands
the reins of government are for the time being (the chief ministers or heads of departments)."
(Bouvier, Law Dictionary, 891.) But the writer adds that the terms "government" and "administration"
are not always used in their strictness, and that "government" is often used for "administration."
In the act of Congress of July 14, 1798, commonly known as the "Sedition Act," it is made an offense
to "write, print, utter, or published," or to "knowingly and willingly assist or aid in writing, printing,
uttering, or publishing any false, scandalous, and malicious writing or writings against the
Government of the United States, or either House of the Congress of the United States, or the
President of the United States, with intent to defame the said Government, or either House of the
said Congress, or the said President, or to bring them, or either of them, into contempt or disrepute,
or to excite against them or either or any of them the hatred of the good people of the United States,"
etc. The term "government" would appear to be used here in the abstract sense of the existing
political system, as distinguished from the concrete organisms of the Government the Houses of
Congress and the Executive which are also specially mentioned.
Upon the whole, we are of the opinion that this is the sense in which the term is used in the
enactment under consideration.
It may be said that there can be no such thing as a scurrilous libel, or any sort of a libel, upon an
abstraction like the Government in the sense of the laws and institutions of a country, but we think an
answer to this suggestion is that the expression "scurrilous libel" is not used in section 8 of Act No.
292 in the sense in which it is used in the general libel law (Act No. 277) that is, in the sense of
written defamation of individuals but in the wider sense, in which it is applied in the common law
to blasphemous, obscene, or seditious publications in which there may be no element of defamation
whatever. "The word 'libel' as popularly used, seems to mean only defamatory words; but words
written, if obscene, blasphemous, or seditious, are technically called libels, and the publication of
them is, by the law of England, an indictable offense." (Bradlaugh vs. The Queen, 3 Q. B. D., 607,
627, per Bramwell L. J. See Com. vs. Kneeland, 20 Pick., 206, 211.)
of this nature is Republica vs. Dennie, 4 Yeates (Pa.), 267, where the While libels upon forms of
government, unconnected with defamation of individuals, must in the nature of things be of
uncommon occurrence, the offense is by no means an imaginary one. An instance of a prosecution
for an offense essentially defendant was indicted "as a factious and seditious person of a wicked
mind and unquiet and turbulent disposition and conversation, seditiously, maliciously, and willfully
intending, as much as in him lay, to bring into contempt and hatred the independence of the United
States, the constitution of this Commonwealth and of the United States, to excite popular discontent
and dissatisfaction against the scheme of polity instituted, and upon trial in the said United States
and in the said Commonwealth, to molest, disturb, and destroy the peace and tranquility of the said
United States and of the said Commonwealth, to condemn the principles of the Revolution, and
revile, depreciate, and scandalize the characters of the Revolutionary patriots and statesmen, to
endanger, subvert, and totally destroy the republican constitutions and free governments of the said
United States and this Commonwealth, to involve the said United States and this Commonwealth in
civil war, desolation, and anarchy, and to procure by art and force a radical change and alteration in
the principles and forms of the said constitutions and governments, without the free will, wish, and
concurrence of the people of the said United States and this Commonwealth, respectively," the

charge being that "to fulfill, perfect, and bring to effect his wicked, seditious, and detestable
intentions aforesaid he . . . falsely, maliciously, factiously, and seditiously did make, compose, write,
and publish the following libel, to wit; 'A democracy is scarcely tolerable at any period of national
history. Its omens are always sinister and its powers are unpropitious. With all the lights or
experience blazing before our eyes, it is impossible not to discover the futility of this form of
government. It was weak and wicked at Athens, it was bad in Sparta, and worse in Rome. It has
been tried in France and terminated in despotism. it was tried in England and rejected with the
utmost loathing and abhorrence. It is on its trial here and its issue will be civil war, desolation, and
anarchy. No wise man but discerns its imperfections; no good man but shudders at its miseries; no
honest man but proclaims its fraud, and no brave man but draws his sword against its force. The
institution of a scheme of polity so radically contemptible and vicious is a memorable example of
what the villainy of some men can devise, the folly of others receive, and both establish, in despite of
reason, reflection, and sensation.'"
An attack upon the lawfully established system of civil government in the Philippine Islands, like that
which Dennie was accused of making upon the republican form of government lawfully established
in the United States and in the State of Pennsylvania would, we think, if couched in scandalous
language, constitute the precise offense described in section 8 of Act No. 292 as a scurrilous libel
against the Insular Government of the Philippine Islands.
Defamation of individuals, whether holding official positions or not, and whether directed to their
public conduct or to their private life, may always be adequately punished under the general libel
law. Defamation of the Civil Commission as an aggregation, it being "a body of persons definite and
small enough for its individual members to be recognized as such" (Stephen, Digest of the Criminal
Law, art. 277), as well as defamation of any of the individual members of the Commission or of the
Civil Governor, either in his public capacity or as a private individual, may be so punished. The
general libel law enacted by the Commission was in force when Act No. 292, was passed. There was
no occasion for any further legislation on the subject of libels against the individuals by whom the
Insular Government is administered against the Insular Government in the sense of the aggregate
of such individuals. There was occasion for stringent legislation against seditious words or libels, and
that is the main if not the sole purpose of the section under consideration. It is not unreasonable to
suppose that the Commission, in enacting this section, may have conceived of attacks of a
malignant or scurrilous nature upon the existing political system of the United States, or the political
system established in these Islands by the authority of the United States, as necessarily of a
seditious tendency, but it is not so reasonable to suppose that they conceived of attacks upon the
personnel of the government as necessarily tending to sedition. Had this been their view it seems
probable that they would, like the framers of the Sedition Act of 1798, have expressly and specifically
mentioned the various public officials and collegiate governmental bodies defamation of which they
meant to punish as sedition.
The article in question contains no attack upon the governmental system of the United States, and it
is quite apparent that, though grossly abusive as respects both the Commission as a body and some
of its individual members, it contains no attack upon the governmental system by which the authority
of the United States is enforced in these Islands. The form of government by a Civil Commission and
a Civil Governor is not assailed. It is the character of the men who are intrusted with the
administration of the government that the writer is seeking to bring into disrepute by impugning the

purity of their motives, their public integrity, and their private morals, and the wisdom of their policy.
The publication of the article, therefore, no seditious tendency being apparent, constitutes no offense
under Act No. 292, section 8.
The judgment of conviction is reversed and the defendants are acquitted, with costs de oficio.
Arellano, C.J. Torres, Willard and Mapa, JJ., concur.