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
factogovernment, 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 factogovernment.
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
actualintent 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
juregovernment 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
Badlyvs. 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 so-called 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.

Co Kim Chan v Valdez Tan Keh

Facts of the case: Co Kim Chan had a pending civil case, initiated during the Japanese occupation, with the Court of First Instance of
Manila. After the Liberation of the Manila and the American occupation, Judge Arsenio Dizon refused to continue hearings on the case,
saying that a proclamation issued by General Douglas MacArthur had invalidated and nullified all judicial proceedings and judgments of
the courts of the Philippines and, without an enabling law, lower courts have no jurisdiction to take cognizance of and continue judicial
proceedings pending in the courts of the defunct Republic of the Philippines (the Philippine government under the Japanese).
The court resolved three issues:
1. Whether or not judicial proceedings and decisions made during the Japanese occupation were valid and remained valid even after
the American occupation;
2. Whether or not the October 23, 1944 proclamation MacArthur issued in which he declared 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 invalidated all judgments and judicial acts and proceedings of the courts;
3. And whether or not if they were not invalidated by MacArthurs proclamation, those courts could continue hearing the cases pending
before them.
Ratio: Political and international law recognizes that all acts and proceedings of a de facto government are good and valid. The
Philippine Executive Commission and the Republic of the Philippines under the Japanese occupation may be considered de facto
governments, supported by the military force and deriving their authority from the laws of war.
Municipal laws and private laws, however, usually remain in force unless suspended or changed by the conqueror. Civil obedience is
expected even during war, for 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. And if they were not valid, then it would not have been necessary for MacArthur to
come out with a proclamation abrogating them.
The second question, the court said, hinges on the interpretation of the phrase processes of any other government and whether or not
he intended it to annul all other judgments and judicial proceedings of courts during the Japanese military occupation.
IF, according to international law, non-political judgments and judicial proceedings of de facto governments are valid and remain valid
even after the occupied territory has been liberated, then it could not have been MacArthurs intention to refer to judicial processes,
which would be in violation of international law.
A well-known rule of statutory construction is: A statute ought never to be construed to violate the law of nations if any other possible
construction remains.
Another is that where great inconvenience will result from a particular construction, 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.
Annulling judgments of courts made during the Japanese occupation would clog the dockets and violate international law, therefore
what MacArthur said should not be construed to mean that judicial proceedings are included in the phrase processes of any other
governments.
In the case of US vs Reiter, the court said that if such laws and institutions are continued in use by the occupant, they become his and
derive their force from him. The laws and courts of the Philippines did not become, by being continued as required by the law of
nations, laws and courts of Japan.
It is a legal maxim that, excepting of a political nature, law once established continues until changed by some competent legislative
power. IT IS NOT CHANGED MERELY BY CHANGE OF SOVEREIGNTY. Until, of course, the new sovereign by legislative act
creates a change.
Therefore, even assuming that Japan legally acquired sovereignty over the Philippines, and the laws and courts of the Philippines had
become courts of Japan, as the said courts and laws creating and conferring jurisdiction upon them have continued in force until now, it
follows that the same courts may continue exercising the same jurisdiction over cases pending therein before the restoration of the
Commonwealth Government, until abolished or the laws creating and conferring jurisdiction upon them are repealed by the said
government.
DECISION: Writ of mandamus issued to the 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.
Summary of ratio:
1. International law says the acts of a de facto government are valid and civil laws continue even during occupation unless repealed.
2. MacArthur annulled proceedings of other governments, but this cannot be applied on judicial proceedings because such a
construction would violate the law of nations.
3. Since the laws remain valid, the court must continue hearing the case pending before it.
***3 kinds of de facto government: one established through rebellion (govt gets possession and control through force or the voice of the
majority and maintains itself against the will of the rightful government)
through occupation (established and maintained by military forces who invade and occupy a territory of the enemy in the course of war;
denoted as a government of paramount force)
through insurrection (established as an independent government by the inhabitants of a country who rise in insurrection against the
parent state)


Co Kim Cham vs. Valdez Tan Keh and Dizon75 Phil 113Feria, J.FactsThe respondent judge of the lower
court refused to take cognizance of and continue the proceeding of civil case No. 3012 of said court which
was initiated under the regime of the so-called Republic of the Philippines established during the
Japanese military occupation of thePhilippines. He argued that the proclamation issued by Gen. Douglas
MacArthur had the effectof invalidating and nullifying all judicial proceedings and judgements of the
courts of the saidgovernments. He also argued that the said governments during the Japanese occupation
were notde facto governments.

Issue: Whether or not the governments established in the Philippines under the names of Philippines
Executive Commission and Republic of the Philippines during the Japanese military occupation or regime
were de facto governments.

Held The Supreme Court held that the Philippine Executive Commission which was organized by Order
No. 1 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. The source of its authority comes
from the Japanese military, it is a government imposed by the laws of war. The same is true with the
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
Japanese forces of occupation.

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-49 November 12, 1945

WILLIAM F. PERALTA, petitioner,

vs.
THE DIRECTOR OF PRISONS, respondent.

William F. Peralta in his own behalf.

Office of the Solicitor General Taada for respondent.
City Fiscal Mabanag as amicus curiae.

FERIA, J.:
Petitioner-defendant, a member of the Metropolitan Constabulary of Manila charged with the supervision and control
of the production, procurement and distribution of goods and other necessaries as defined in section 1 of Act No. 9
of the National Assembly of the so-called Republic of the Philippines, was prosecuted for the crime of robbery as
defined and penalized by section 2 (a) of Act No. 65 of the same Assembly. He was found guilty and sentenced to
life imprisonment, which he commenced to serve on August 21, 1944, by the Court of Special and Exclusive
Criminal Jurisdiction, created in section 1 of Ordinance No. 7 promulgated by the President of the so-called Republic
of the Philippines, pursuant to the authority conferred upon him by the Constitution and laws of the said Republic.
And the procedure followed in the trial was the summary one established in Chapter II of Executive Order No. 157 of
the Chairman of the Executive Commission, made applicable to the trial violations of said Act No. 65 by section 9
thereof and section 5 of said Ordinance No. 7.

The petition for habeas corpus is based on the ground that the Court of Special and Executive Criminal Jurisdiction
created by Ordinance No. 7 "was a political instrumentality of the military forces of the Japanese Imperial Army, the
aims and purposes of which are repugnant to those aims and political purposes of the Commonwealth of the
Philippines, as well as those of the United States of America, and therefore, null and void ab initio," that the
provisions of said Ordinance No. 7 are violative of the fundamental laws of the Commonwealth of the Philippines
and "the petitioner has been deprived of his constitutional rights"; that the petitioner herein is being punished by a
law created to serve the political purpose of the Japanese Imperial Army in the Philippines, and "that the penalties
provided for are much (more) severe than the penalties provided for in the Revised Penal Code."

The Solicitor General, in his answer in behalf of the respondent, states that, in his own opinion, for the reasons
expressed in his brief in the case of People of the Philippines, plaintiff-appellant, vs. Benedicto Jose y Santos,
defendant-appellee, G. R. No. L-22 (p. 612, post), the acts and proceedings taken and had before the said Court of
Special and Exclusive Criminal Jurisdiction which resulted in the conviction and imprisonment of the herein
petitioner, should now be denied force and efficacy, and therefore the petition for habeas corpus should be granted.
The reasons advanced by the Solicitor General in said brief and in his reply memorandum in support of his
contention are, that the Court of Special and Exclusive Criminal Jurisdiction created, and the summary procedure
prescribed therefor, by said Ordinance No. 7 in connection with Executive Order No. 157 of the Chairman of the
Executive Commission are tinged with political complexion; that the procedure prescribed in Ordinance No. 7 does
not afford a fair trial, violates the Constitution of the Commonwealth, and impairs the Constitutional rights of accused
persons under their legitimate Constitution. And he cites, in support of this last proposition, the decisions of the
Supreme Court of the United States in the cases of Texas vs. White (7 Wall., 700, 743); Horn vs. Lockart (17 Wall.,
570, 581); United States vs. Home Insurance Co. (22 Wall., 99, 104); Sprott vs. United States (20 Wall., 459).

The City Fiscal of Manila appeared before this Court as amicus curiae. In his memorandum he submits that the
petition for habeas corpus be denied on the following grounds: That the Court of Special and Exclusive Criminal
Jurisdiction and the Acts, Ordinances and Executive Orders, creating it are not of a political complexion, for said
Court was created, and the crimes and offenses placed under its jurisdiction were penalized heavily, in response to
an urgent necessity, according to the preamble of Ordinance No. 7; that the right to appeal in a criminal case is not
a constitutional right; and that the summary procedure established in said Ordinance No. 7 is not violative of the
provision of Article III, section 1 (18) of the Constitution of the Commonwealth, to the effect that no person shall be
compelled to be a witness against himself, nor of the provision of section 1 (1) of the same Article that no person
shall be deprived of life, liberty, or property without due process of law.

The features of the summary procedure adopted by Ordinance No. 7, assailed by the petitioner and the Solicitor
General as impairing the constitutional rights of an accused are: that court may interrogate the accused and
witnesses before trial in order to clarify the points in dispute; that the refusal of the accused to answer the questions
may be considered unfavorable to him; that if from the facts admitted at the preliminary interrogatory it appears that
the defendant is guilty, he may be immediately convicted; and that the sentence of the sentence of the court is not
appealable, except in case of death penalty which cannot be executed unless and until reviewed and affirmed by a
special division of the Supreme Court composed of three Justices.

Before proceeding further, and in order to determine the law applicable to the questions involved in the present
case, it is necessary to bear in mind the nature and status of the government established in these Islands by the
Japanese forces of occupation under the designation of Republic of the Philippines.

In the case of Co Kim Cham vs. Valdez Tan Keh and Dizon (G. R. No. L-5, pp. 113, 127, ante), recently decided,
this Court, speaking through the Justice who pens this decision, held:
 In view of the foregoing, it is evident that the Philippines 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 Tanpico, 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 as 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.

And speaking of the so-called Republic of the Philippines in the same decision, this Court said:

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 peoples" 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.

As the so-called Republic of the Philippines was a de facto government of the second kind (of paramount force), as
the government established in Castine, Maine, during its occupation by the British forces and as that of Tampico,
Mexico, occupied during the war with that the country by the United State Army, the question involved in the present
case cannot be decided in the light of the Constitution of the Commonwealth Government; because the belligerent
occupant was totally independent of the constitution of the occupied territory in carrying out the administration over
said territory; and the doctrine laid down by the Supreme Court of the United States in the cases involving the
validity of judicial and legislative acts of the Confederate States, considered as de facto governments of the third
kind, does not apply to the acts of the so-called Republic of the Philippines which is a de facto government of
paramount force. The Constitution of the so-called Republic of the Philippines can neither be applied, since the
validity of an act of a belligerent occupant cannot be tested in the light of another act of the same occupant, whose
criminal jurisdiction is drawn entirely from the law martial as defined in the usages of nations.

In the case of United States vs. Rice (4 Wheaton, 246), the Supreme Court of the United States held that, by the
military occupation of Castine, Maine, the sovereignty of the United States in the territory was, of course,
suspended, and the laws of the United States could no longer be rightfully enforced there or be obligatory upon the
inhabitants who remained and submitted to the belligerent occupant. By the surrender the inhabitants passed under
a temporary allegiance to the British government, and were bound by such laws, and such only, as it chose to
recognize and impose. And Oppenheim, in his Treatise on International Law, says that, in carrying out the
administration over the occupied territory and its inhabitants, "the (belligerent) occupant is totally independent of the
constitution and the laws of the territory, since occupation is an aim of warfare, and the maintenance and safety of
his forces, and the purpose of war, stand in the foreground of his interest and must be promoted under all
circumstances or conditions. (Vol. II, Sixth Edition, Revised, 1944, p. 342.)

The doctrine laid down in the decisions of the Supreme Court of the United States (in the cases of Texas vs. White,
7 Wall., 700; Horn vs. Lockart, 17 Wall., 570; Williams vs. Bruffy, 96 U. S., 176 United States vs. Home Insurance
Co., 20 Wall., 249; Sprott vs. United States, 20 Wall., 459, and others) that the judicial and legislative acts of the
Confederate States which impaired the rights of the citizens under the Constitution of the United States or of the
States, or were in conflict with those constitutions, were null and void, is not applicable to the present case. Because
that doctrine rests on the propositions that "the concession (of belligerency) made to the Confederate Government .
. . sanctioned no hostile legislation . . . and it impaired in no respect the rights of loyal and citizens as they existed at
the commencement of hostilities" (Williams vs. Bruffy, supra);that the Union is perpetual and indissoluble, and the
obligation of allegiance to the to the estate and obedience to her laws and the estate constitution, subject to the
Constitution of the United States, remained unimpaired during the War of Secession (Texas vs. White, supra) and
that the Confederate States "in most, if not in all instances, merely transferred the existing state organizations to the
support of a new and different national head. the same constitution, the same laws for the protection of the property
and personal rights remained and were administered by the same officers." (Sprott vs. United States, supra). In fine,
because in the case of the Confederate States, the constitution of each state and that of the United States or the
Union continued in force in those states during the War of Secession; while the Constitution of the Commonwealth
Government was suspended during the occupation of the Philippines by the Japanese forces of the belligerent
occupant at regular war with the United States.

The question which we have to resolve in the present case in the light of the law of nations are, first, the validity of
the creation of the Court of Special and Exclusive Criminal Jurisdiction, and of the summary procedure adopted for
that court; secondly, the validity of the sentence which imprisonment during the Japanese military occupation; and
thirdly, if they were then valid, the effect on said punitive sentence of the reoccupation of the Philippines and the
restoration therein of the Commonwealth Government.

(1) As to the validity of the creation of the Court of Special and Exclusive Criminal Jurisdiction by Ordinance No. 7,
the only factor to be considered is the authority of the legislative power which promulgated said law or ordinance. It
is well established in International Law that "The criminal jurisdiction established by the invader in the occupied
territory finds its source neither in the laws of the conquering or conquered state, it is drawn entirely form the law
martial as defined in the usages of nations. The authority thus derived can be asserted either through special
tribunals, whose authority and procedure is defined in the military code of the conquering state, or through the
ordinary courts and authorities of the occupied district." (Taylor, International Public Law, p. 598.) The so-called
Republic of the Philippines, being a governmental instrumentality of the belligerent occupant, had therefore the
power or was competent to create the Court of Special and Exclusive Criminal Jurisdiction. No question may arise
as to whether or not a court is of political complexion, for it is mere a governmental agency charged with the duty of
applying the law to cases falling within its jurisdiction. Its judgments and sentences may be of political complexion,
or not depending upon the nature or character of the law so applied. There is no room for doubt, therefore, as to the
validity of the creation of the court in question.

With respect to the Summary procedure adopted by Ordinance No. 7, and followed in the trial of the case which
resulted in the conviction of the herein petitioner, there is also no question as to the power or competence of the
belligerent occupant to promulgate the law providing for such procedure. For "the invader deals freely with the
relations of the inhabitants of the occupied territory towards himself . . . for his security also, he declares certain
acts, not forbidden by the ordinary laws of the country, to be punishable; and he so far suspends the laws which
guard personal liberty as is required for the summary punishment of any one doing such acts." (Hall's International
Law, seventh ed., p. 5000). A belligerent "occupant may where necessary, set up military courts instead of the
ordinary courts; and in case, and in so far as, he admits the administration of justice by the ordinary courts, he may
nevertheless, so far as is necessary for military purposes, or for the maintenance of public order and
safetytemporarily alter the laws, especially the Criminal Law, on the basis of which justice is administered as well as
the laws regarding procedure." (Oppenheim's International Law, Vol. II, sixth edition, 1944, p.349.)

No objection can be set up to the legality of its provisions in the light of the precepts of our Commonwealth
Constitution relating to the rights of accused under that Constitution, because the latter was not in force during the
period of the Japanese military occupation, as we have already stated. Nor may said Constitution be applied upon
its revival at the time of the re-occupation of the Philippines by virtue of the principle of postliminium because "a
constitution should operate prospectively only, unless the words employed show a clear intention that it should have
a retrospective effect" (Cooley's Constitutional Limitations, seventh edition, page 97, and cases quoted and cited in
the footnote), especially as regards laws of procedure applied to cases already terminated completely.

The only restrictions or limitations imposed upon the power of a belligerent occupant to alter the laws or promulgate
new ones, especially the criminal law as well as the laws regarding procedure, so far as it is necessary for military
purposes, that is, for his control of the territory and the safety and protection of his army, are those imposed by the
Hague Regulations, the usages established by civilized nations, the laws of humanity and the requirements of public
conscience. It is obvious that the summary procedure under consideration does not violate those precepts. It cannot
be considered as violating the laws of humanity and public conscience, for it is less objectionable, even from the
point of view of those who are used to the accusatory system of criminal procedure than the procedural laws based
on the semi-inquisitorial or mixed system prevailing in France and other countries in continental Europe.

(2) The validity of the sentence rendered by the Court of Special and Exclusive Criminal Jurisdiction which imposes
life imprisonment upon the herein petitioner, depends upon the competence or power of the belligerent occupant to
promulgate Act No. 65 which punishes the crime of which said petitioner was convicted.

Westlake says that Article XLIII, Section III, of the Hague Conventions of 1907 "indicates that the laws to be
enforced by the occupant consist of, first, the territorial law in general, as that which stands to the public order and
social and commercial life of the district in a relation of mutual adaptation, so that any needless displacement of it
would defeat the object which the invader is enjoined to have in view, and secondly, such variations of the territorial
law as may be required by real necessity and are not expressly prohibited by any of the rules which will come before
us. Such variations will naturally be greatest in what concerns the relation of the communities and individuals within
the district to the invading army and its followers, it being necessary for the protection of the latter, and for the
unhindered prosecution of the war by them, that acts committed to their detriment shall not only lose what
justification the territorial law might give them as committed against enemies, but shall be repressed more severely
than the territorial law would repress acts committed against fellow subjects. Indeed the entire relation between the
invaders and the invaded, so far as it may fall within the criminal department whether by the intrinsic nature of the
acts done or in consequence of the regulations made by the invaders, may be considered as taken out of the
territorial law and referred to what is called martial law." (Westlake, International Law, Part II, War, p. 96.)

According to Hyde (International Law, Vol. II, p. 386), the term "martial law," in so far as it is used to describe any
fact in relation to belligerent occupation, does not refer to a particular code or system of law, or to a special agency
entrusted with its administration. The term merely signifies that the body of law actually applied, having the sanction
of military authority, is essentially martial. All law, by whomsoever administered, in an occupied district martial law;
and it is none the less so when applied by civil courts in matters devoid of special interest to the occupant. The
words "martial law" are doubtless suggestive of the power of the occupant to share the law as he sees fit; that is, to
determine what shall be deemed lawful or unlawful acts, to establish tests for ascertaining the guilt of offenders, to
fix penalties, and generally to administer justice through such agencies as the found expedient.

And the United States Rules of Land Warfare provide that the belligerent occupant may promulgate such new laws
and regulations as military necessity demands, and in this class will be included those laws which come into being
as a result of military rule; that is, those which establish new crimes and offenses incident to a state of war and are
necessary for the control of the country and the protection of the army, for the principal object of the occupant is to
provide for the security of the invading army and to contribute to its support and efficiency and the success of its
operations. (Pub. 1940, pp. 76, 77.)

From the above it appears clear that it was within the power and competence of the belligerent occupant to
promulgate, through the National Assembly of the so-called Republic of the Philippines, Act No. 65 of the said
Assembly, which penalizes the crimes of robbery and other offenses by imprisonment ranging from the maximum
period of the imprisonment prescribed by the laws and ordinances promulgated by the President of the so-called
Republic as minimum, to life imprisonment or death as maximum. Although these crimes are defined in the Revised
Penal Code, they were altered and penalized by said Act No. 65 with different and heavier penalties, as new crimes
and offenses demanded by military necessity, incident to a state of war, and necessary for the control of the country
by the belligerent occupant, the protection and safety of the army of occupation, its support and efficiency, and the
success of its operations.

They are not the same ordinary offenses penalized by the Revised Penal Code. The criminal acts penalized by
said Act No. 65 are those committed by persons charged or connected with the supervision and control of the
production, procurement and distribution of foods and other necessaries; and the penalties imposed upon the
violators are different from and much heavier than those provided by the Revised Penal Code for the same ordinary
crimes. The acts penalized by said Act were taken out of the territorial law or Revised Penal Code, and referred to
what is called martial law by international jurists, defined above by Hyde, in order, not only to prevent food and other
necessaries from reaching the "guerrillas" which were harassing the belligerent occupant from every nook and
corner of the country, but also to preserve the food supply and other necessaries in order that, in case of necessity,
the Imperial Japanese forces could easily requisition them, as they did, and as they had the right to do in
accordance with the law of nations for their maintenance and subsistence (Art. LII, Sec. III, Hague Conventions of
1907). Especially taking into consideration the fact, of which this court may take judicial notice, that the Imperial
Japanese Army had depended mostly for their supply upon the produce of this country.

The crimes penalized by Act No. 65 as well as the crimes against national security and the law of nations, to wit:
treason, espionage, inciting war, violation of neutrality, correspondence with hostile country, flight to enemy's
country, piracy; and the crimes against public order, such as rebellion, sedition and disloyalty, illegal possession of
firearms and other, penalized by Ordinance No. 7 and placed under jurisdiction of the Court of Special and
Exclusive Criminal Jurisdiction are all of a political complexion, because the acts constituting those offenses were
punished, as are all political offenses, for public rather than private reasons, and were acts in aid or favor of the
enemy and against the welfare, safety and security of the belligerent occupant. While it is true that these offenses,
when committed against the Commonwealth or United States Government, are defined and also penalized by the
territorial law Revised Penal Code, they became inapplicable as crimes against the occupier upon the occupation of
the Islands by the Japanese forces. And they had to be taken out of the territorial law and made punishable by said
Ordinance No. 7, for they were not penalized before under the Revised Penal Code when committed against the
belligerent occupant or the government established by him in these Island. They are also considered by some
writers as war crimes in a broad sense. In this connection Wheaton observes the following:

"Of 'war crimes' the number is naturally indefinite, depending as they do on the acts from time to time ordered to be
done or forbidden to be done in the martial law proclamation or regulations of the invading or occupying
commander. Thus, in the Anglo-Boer war, the British military authorities proclaimed the following to be offenses
against their martial law; Being in possession of arms, ammunition, etc.; traveling without a permit; sending
prohibited goods; holding meetings other than those allowed; using seditious language; spreading alarmist reports;
overcharging for goods; wearing uniforms without due authority; going out of doors between certain hours; injuring
military animals or stores; being in possession, without a permit, of horses, vehicles, cycles, etc.; hindering those in
execution of military orders; trespassing on defense works. Such offenses, together with several others, were
specified in the Japanese regulations made in the Russo-Japanese war." (Wheaton's International Law, War,
seventh edition, 1944, p. 242.)

It is, therefore, evident that the sentence rendered by the Court of Special and Exclusive Criminal Jurisdiction
against the petitioner, imposing upon him the penalty of life imprisonment, was good and valid, since it was within
the admitted power or competence of the belligerent occupant to promulgate the law penalizing the crime of which
petitioner was convicted.

(3) The last question is the legal effect of the reoccupation of the Philippines and restoration of the Commonwealth
Government; that is whether or not, by the principle of postliminy, the punitive sentence which petitioner is now
serving fell through or ceased to be valid from that time.

In order to resolve this last question, it is not necessary to enter into an elaborate discussion on the matter. It is
sufficient to quote the opinion on the subject of several international jurists and our recent decision in the case of Co
Kim Cham vs. Valdez Tan Keh and Dizon, supra.

Hall, commenting on the effect of the principle of postliminy upon sentences of the tribunals continued or created by
the belligerent occupant, opines "that judicial acts done under this 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. . .
. Political acts on the other hand fall through as of course, whether they introduce any positive change into the
organization of the country, or whether they only suspend the working of that already in existence. The execution
also of punitive sentences ceases as of course when they have had reference to acts not criminal by the municipal
law of the state, such for example as acts directed against the security or control of the invader." (Hall's International
Law, seventh edition, p. 518.)

Westlake, speaking of the duration of the validity of punitive sentences for offenses such as the one in question,
which is within the admitted power or competence of the belligerent occupant to punish, says that: "To the extent to
which the legal power of the occupant is admitted he can make law for the duration of his occupation. Like any other
legislator he is morally subject to the duty of giving sufficient notice of his enactments or regulations, not indeed so
as to be debarred from carrying out his will without notice, when required by military necessity and so far as
practically carrying out his will can be distinguished from punishment, but always remembering that to punish for
breach of a regulation a person who was justifiably ignorant of it would be outrageous. But the law made by the
occupant within his admitted power, whether morally justifiable or not, will bind any member of the occupied
population as against any other member of it, and will bind as between them all and their national government, so
far as it produces an effect during the occupation. When the occupation comes to an end the authority of the
national government is restored, either by the progress of operations during the war or by the conclusion of a peace,
no redress can be had for what has been actually carried out but nothing further can follow from the occupant's
legislation. A prisoner detained under it must be released, and no civil right conferred by it can be further enforced.
The enemy's law depends on him for enforcement as well as for enactment. The invaded state is not subject to the
indignity of being obliged to execute his commands. (Westlake, International Law, Part II, War, pp. 97, 98.)

And Wheaton, who, as above stated, considers as war crimes such offenses as those penalized in Ordinance No. 7
and Act No. 65, says: "In general, the cast of the occupant possess legal validity, and under international law should
not be abrogated by the subsequent government. But this rule does not necessarily apply to acts that exceed the
occupant's power (e.g., alienation of the domains of the State or the sovereign), to sentences for 'war
treason' and'war crimes,' to acts of a political character, and to those that beyond the period of occupation. When
occupation ceases, no reparation is legally due for what has already been carried out." (Wheaton's International
Law, supra, p. 245.)

We have already held in our recent decision in the case of Co Kim Cham vs. Valdez Tan Keh and Dizon, supra, that
all judgments of political complexion of the courts during the Japanese regime, ceased to be valid upon the
reoccupation of the islands by virtue of the principle or right of postliminium. Applying that doctrine to the present
case, the sentence which convicted the petitioner of a crime of a political complexion must be considered as having
ceased to be valid ipso facto upon the reoccupation or liberation of the Philippines by General Douglas MacArthur.

It may not be amiss to say in this connection that it is not necessary and proper to invoke the proclamation of
General Douglas MacArthur declaring null and void all laws, among them Act No. 65, of the so-called Republic of
the Philippines under which petitioner was convicted, in order to give retroactive effect to the nullification of said
penal act and invalidate sentence rendered against petitioner under said law, a sentence which, before the
proclamation, had already become null and of no effect.

We therefore hold that the punitive sentence under consideration, although good and valid during the military
occupation of the Philippines by the Japanese forces, ceased to be good and valid ipso facto upon the reoccupation
of these Island and the restoration therein of the Commonwealth Government.

In view of all the foregoing, the writ of habeas corpus prayed for is hereby granted and it is ordered that the
petitioner be released forthwith, without pronouncement as to costs. So ordered.

Jaranilla, Pablo and Bengzon, JJ., concur.

Moran, C.J., concurs in the result.

MAXIMO CALALANG vs A. D. WILLIAMS, ET AL.,

G.R. No. 47800 December 2, 1940
Doctrine: Social Justice
LAUREL, J.:

Facts:

The National Traffic Commission, in its resolution of July 17, 1940, resolved to recommend to the Director of
the Public Works and to the Secretary of Public Works and Communications that animal-
drawn vehicles be prohibited from passing along the following for a period of one year from the date of the
opening of the Colgante Bridge to traffic:

1) Rosario Street extending from Plaza Calderon de la Barca to Dasmarias

Street from 7:30Am to 12:30 pm and from 1:30 pm to 530 pm; and

2) along Rizal Avenue extending from the railroad crossing at Antipolo Street to

Echague Street from 7 am to 11pm

The Chairman of the National Traffic Commission on July 18, 1940 recommended to the Director of Public
Works with the approval of the Secretary of Public Works the adoption of
thethemeasure proposed in the resolution aforementioned in pursuance of the provisions of theCommonwealth
Act No. 548 which authorizes said Director with the approval from the
Secretary of the Public Works and Communication to promulgate rules and regulations to regulate and control
the use of and traffic on national roads.

On August 2, 1940, the Director recommended to the Secretary the approval of the recommendations made by
the Chairman of the National Traffic Commission with modifications. The Secretary of Public Works approved
the recommendations on August 10,1940. The Mayor of Manila and the Acting Chief of Police of Manila have
enforced and caused to be enforced the rules and regulation. As a consequence, all animal-drawn vehicles are
not allowed to pass and pick up passengers in the places above mentioned to the detriment not only of their
owners but of the riding public as well.

Issues:
1) Whether the rules and regulations promulgated by the respondents pursuant to the provisions of
Commonwealth Act NO. 548 constitute an unlawful inference with legitimate business or trade and abridged
the right to personal liberty and freedom of locomotion?

2) Whether the rules and regulations complained of infringe upon the constitutional precept regarding
the promotion of social justice to insure the well-being and economic security of all the people?

Held:
1) No. The promulgation of the Act aims to promote safe transit upon and avoid obstructions on national roads
in the interest and convenience of the public. In enacting said law, the National Assembly was prompted by
considerations of public convenience and welfare. It was inspired by the desire to relieve congestion of traffic,
which is a menace to the public safety. Public welfare lies at the bottom of the promulgation of the said law and
the state in order to promote the general welfare may interfere with personal liberty, with property, and with
business and occupations. Persons and property may be subject to all kinds of restraints and burdens in order to
secure the general comfort, health, and prosperity of the State. To this fundamental aims of the government, the
rights of the individual are subordinated. Liberty is a blessing which should not be made to prevail over
authority because society will fall into anarchy. Neither should authority be made to prevail over liberty because
then the individual will fall into slavery. The paradox lies in the fact that the apparent curtailment of liberty is
precisely the very means of insuring its preserving.
2) No. Social justice is neither communism, nor despotism, nor atomism, nor anarchy, but the humanization
of laws and the equalization of social and economic forces by the State so that justice in its rational and
objectively secular conception may at least be approximated. Social justice means the promotion of the welfare
of all the people, the adoption by the Government of measures calculated to insure economic stability of all the
competent elements of society, through the maintenance of a proper economic and social equilibrium in the
interrelations of the members of the community, constitutionally, through the adoption of measures legally
justifiable, or extra-constitutionally, through the exercise of powers underlying the existence of all governments
on the time-honored principles of salus populi estsuprema lex.

Social justice must be founded on the recognition of the necessity of interdependence among divers and diverse
units of a society and of the protection that should be equally and evenly extended to all groups as a combined
force in our social and economic life, consistent with the fundamental and paramount objective of the state of
promoting health, comfort and quiet of all persons, and of bringing about the greatest good to the greatest
number.

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-409 January 30, 1947

ANASTACIO LAUREL, petitioner,

vs.
ERIBERTO MISA, respondent.

Claro M. Recto and Querube C. Makalintal for petitioner.

First Assistant Solicitor General Reyes and Solicitor Hernandez, Jr., for respondent.

RESOLUTION

In G.R. No. L-409, Anastacio Laurel vs. Eriberto Misa, etc., the Court, acting on the petition for habeas
corpusfiled by Anastacio Laurel and based on a theory that a Filipino citizen who adhered to the enemy
giving the latter aid and comfort during the Japanese occupation cannot be prosecuted for the crime of
treason defined and penalized by article 114 of the Revised Penal Code, for the reason (1) that the
sovereignty of the legitimate government in the Philippines and, consequently, the correlative allegiance of
Filipino citizens thereto was then suspended; and (2) that there was a change of sovereignty over these
Islands upon the proclamation of the Philippine Republic:

(1) Considering that a citizen or subject owes, not a qualified and temporary, but an absolute and permanent
allegiance, which consists in the obligation of fidelity and obedience to his government or sovereign; and
that this absolute and permanent allegiance should not be confused with the qualified and temporary
allegiance which a foreigner owes to the government or sovereign of the territory wherein he resides, so
long as he remains there, in return for the protection he receives, and which consists in the obedience to the
laws of the government or sovereign. (Carlisle vs. Unite States, 21 Law. ed., 429; Secretary of State
Webster Report to the President of the United States in the case of Thraser, 6 Web. Works, 526);

Considering that the absolute and permanent allegiance of the inhabitants of a territory occupied by the
enemy of their legitimate government or sovereign is not abrogated or severed by the enemy occupation,
because the sovereignty of the government or sovereign de jure is not transferred thereby to the occupier,
as we have held in the cases of Co Kim Cham vs. Valdez Tan Keh and Dizon (75 Phil., 113) and of Peralta
vs. Director of Prisons (75 Phil., 285), and if it is not transferred to the occupant it must necessarily remain
vested in the legitimate government; that the sovereignty vested in the titular government (which is the
supreme power which governs a body politic or society which constitute the state) must be distinguished
from the exercise of the rights inherent thereto, and may be destroyed, or severed and transferred to
another, but it cannot be suspended because the existence of sovereignty cannot be suspended without
putting it out of existence or divesting the possessor thereof at least during the so-called period of
suspension; that what may be suspended is the exercise of the rights of sovereignty with the control and
government of the territory occupied by the enemy passes temporarily to the occupant; that the subsistence
of the sovereignty of the legitimate government in a territory occupied by the military forces of the enemy
during the war, "although the former is in fact prevented from exercising the supremacy over them" is one of
the "rules of international law of our times"; (II Oppenheim, 6th Lauterpacht ed., 1944, p. 482), recognized,
by necessary implication, in articles 23, 44, 45, and 52 of Hague Regulation; and that, as a corollary of the
conclusion that the sovereignty itself is not suspended and subsists during the enemy occupation, the
allegiance of the inhabitants to their legitimate government or sovereign subsists, and therefore there is no
such thing as suspended allegiance, the basic theory on which the whole fabric of the petitioner's contention
rests;

Considering that the conclusion that the sovereignty of the United State was suspended in Castine, set forth
in the decision in the case of United States vs. Rice, 4 Wheaton, 246, 253, decided in 1819, and quoted in
our decision in the cases of Co Kim Cham vs. Valdez Tan Keh and Dizon and Peralta vs. Director of
Prisons, supra, in connection with the question, not of sovereignty, but of the existence of a government de
factotherein and its power to promulgate rules and laws in the occupied territory, must have been based,
either on the theory adopted subsequently in the Hague Convention of 1907, that the military occupation of
an enemy territory does not transfer the sovereignty to the occupant; that, in the first case, the word
"sovereignty" used therein should be construed to mean the exercise of the rights of sovereignty, because
as this remains vested in the legitimate government and is not transferred to the occupier, it cannot be
suspended without putting it out of existence or divesting said government thereof; and that in the second
case, that is, if the said conclusion or doctrine refers to the suspension of the sovereignty itself, it has
become obsolete after the adoption of the Hague Regulations in 1907, and therefore it can not be applied to
the present case;

Considering that even adopting the words "temporarily allegiance," repudiated by Oppenheim and other
publicists, as descriptive of the relations borne by the inhabitants of the territory occupied by the enemy
toward the military government established over them, such allegiance may, at most, be considered similar
to the temporary allegiance which a foreigner owes to the government or sovereign of the territory wherein
he resides in return for the protection he receives as above described, and does not do away with the
absolute and permanent allegiance which the citizen residing in a foreign country owes to his own
government or sovereign; that just as a citizen or subject of a government or sovereign may be prosecuted
for and convicted of treason committed in a foreign country, in the same way an inhabitant of a territory
occupied by the military forces of the enemy may commit treason against his own legitimate government or
sovereign if he adheres to the enemies of the latter by giving them aid and comfort; and that if the allegiance
of a citizen or subject to his government or sovereign is nothing more than obedience to its laws in return for
the protection he receives, it would necessarily follow that a citizen who resides in a foreign country or state
would, on one hand, ipso factoacquire the citizenship thereof since he has enforce public order and regulate
the social and commercial life, in return for the protection he receives, and would, on the other hand, lose his
original citizenship, because he would not be bound to obey most of the laws of his own government or
sovereign, and would not receive, while in a foreign country, the protection he is entitled to in his own;

Considering that, as a corollary of the suspension of the exercise of the rights of sovereignty by the
legitimate government in the territory occupied by the enemy military forces, because the authority of the
legitimate power to govern has passed into the hands of the occupant (Article 43, Hague Regulations), the
political laws which prescribe the reciprocal rights, duties and obligation of government and citizens, are
suspended or in abeyance during military occupation (Co Kim cham vs. Valdez Tan Keh and dizon, supra),
for the only reason that as they exclusively bear relation to the ousted legitimate government, they are
inoperative or not applicable to the government established by the occupant; that the crimes against national
security, such as treason and espionage; inciting to war, correspondence with hostile country, flight to
enemy's country, as well as those against public order, such as rebellion, sedition, and disloyalty, illegal
possession of firearms, which are of political complexion because they bear relation to, and are penalized by
our Revised Penal Code as crimes against the legitimate government, are also suspended or become
inapplicable as against the occupant, because they can not be committed against the latter
(Peralta vs. Director of Prisons, supra); and that, while the offenses against public order to be preserved by
the legitimate government were inapplicable as offenses against the invader for the reason above stated,
unless adopted by him, were also inoperative as against the ousted government for the latter was not
responsible for the preservation of the public order in the occupied territory, yet article 114 of the said
Revised Penal Code, was applicable to treason committed against the national security of the legitimate
government, because the inhabitants of the occupied territory were still bound by their allegiance to the latter
during the enemy occupation;

Considering that, although the military occupant is enjoined to respect or continue in force, unless absolutely
prevented by the circumstances, those laws that enforce public order and regulate the social and
commercial life of the country, he has, nevertheless, all the powers of de facto government and may, at his
pleasure, either change the existing laws or make new ones when the exigencies of the military service
demand such action, that is, when it is necessary for the occupier to do so for the control of the country and
the protection of his army, subject to the restrictions or limitations imposed by the Hague Regulations, the
usages established by civilized nations, the laws of humanity and the requirements of public conscience
(Peralta vs.Director of Prisons, supra; 1940 United States Rules of Land Warfare 76, 77); and that,
consequently, all acts of the military occupant dictated within these limitations are obligatory upon the
inhabitants of the territory, who are bound to obey them, and the laws of the legitimate government which
have not been adopted, as well and those which, though continued in force, are in conflict with such laws
and orders of the occupier, shall be considered as suspended or not in force and binding upon said
inhabitants;

Considering that, since the preservation of the allegiance or the obligation of fidelity and obedience of a
citizen or subject to his government or sovereign does not demand from him a positive action, but only
passive attitude or forbearance from adhering to the enemy by giving the latter aid and comfort, the
occupant has no power, as a corollary of the preceding consideration, to repeal or suspend the operation of
the law of treason, essential for the preservation of the allegiance owed by the inhabitants to their legitimate
government, or compel them to adhere and give aid and comfort to him; because it is evident that such
action is not demanded by the exigencies of the military service or not necessary for the control of the
inhabitants and the safety and protection of his army, and because it is tantamount to practically transfer
temporarily to the occupant their allegiance to the titular government or sovereign; and that, therefore, if an
inhabitant of the occupied territory were compelled illegally by the military occupant, through force, threat or
intimidation, to give him aid and comfort, the former may lawfully resist and die if necessary as a hero, or
submit thereto without becoming a traitor;

Considering that adoption of the petitioner's theory of suspended allegiance would lead to disastrous
consequences for small and weak nations or states, and would be repugnant to the laws of humanity and
requirements of public conscience, for it would allow invaders to legally recruit or enlist the Quisling
inhabitants of the occupied territory to fight against their own government without the latter incurring the risk
of being prosecuted for treason, and even compel those who are not aid them in their military operation
against the resisting enemy forces in order to completely subdue and conquer the whole nation, and thus
deprive them all of their own independence or sovereignty such theory would sanction the action of
invaders in forcing the people of a free and sovereign country to be a party in the nefarious task of depriving
themselves of their own freedom and independence and repressing the exercise by them of their own
sovereignty; in other words, to commit a political suicide;

(2) Considering that the crime of treason against the government of the Philippines defined and penalized in
article 114 of the Penal Code, though originally intended to be a crime against said government as then
organized by authority of the sovereign people of the United States, exercised through their authorized
representative, the Congress and the President of the United States, was made, upon the establishment of
the Commonwealth Government in 1935, a crime against the Government of the Philippines established by
authority of the people of the Philippines, in whom the sovereignty resides according to section 1, Article II,
of the Constitution of the Philippines, by virtue of the provision of section 2, Article XVI thereof, which
provides that "All laws of the Philippine Islands . . . shall remain operative, unless inconsistent with this
Constitution . . . and all references in such laws to the Government or officials of the Philippine Islands, shall
 be construed, in so far as applicable, to refer to the Government and corresponding officials under this
constitution;

Considering that the Commonwealth of the Philippines was a sovereign government, though not absolute
but subject to certain limitations imposed in the Independence Act and incorporated as Ordinance appended
to our Constitution, was recognized not only by the Legislative Department or Congress of the United States
in approving the Independence Law above quoted and the Constitution of the Philippines, which contains
the declaration that "Sovereignty resides in the people and all government authority emanates from them"
(section 1, Article II), but also by the Executive Department of the United States; that the late President
Roosevelt in one of his messages to Congress said, among others, "As I stated on August 12, 1943, the
United States in practice regards the Philippines as having now the status as a government of other
independent nations in fact all the attributes of complete and respected nationhood" (Congressional
Record, Vol. 29, part 6, page 8173); and that it is a principle upheld by the Supreme Court of the United
States in many cases, among them in the case of Jones vs. United States (137 U.S., 202; 34 Law. ed., 691,
696) that the question of sovereignty is "a purely political question, the determination of which by the
legislative and executive departments of any government conclusively binds the judges, as well as all other
officers, citizens and subjects of the country.

Considering that section I (1) of the Ordinance appended to the Constitution which provides that pending the
final and complete withdrawal of the sovereignty of the United States "All citizens of the Philippines shall
owe allegiance to the United States", was one of the few limitations of the sovereignty of the Filipino people
retained by the United States, but these limitations do not away or are not inconsistent with said sovereignty,
in the same way that the people of each State of the Union preserves its own sovereignty although limited
by that of the United States conferred upon the latter by the States; that just as to reason may be committed
against the Federal as well as against the State Government, in the same way treason may have been
committed during the Japanese occupation against the sovereignty of the United States as well as against
the sovereignty of the Philippine Commonwealth; and that the change of our form of government from
Commonwealth to Republic does not affect the prosecution of those charged with the crime of treason
committed during the Commonwealth, because it is an offense against the same government and the same
sovereign people, for Article XVIII of our Constitution provides that "The government established by this
constitution shall be known as the Commonwealth of the Philippines. Upon the final and complete
withdrawal of the sovereignty of the United States and the proclamation of Philippine independence, the
Commonwealth of the Philippines shall thenceforth be known as the Republic of the Philippines";

This Court resolves, without prejudice to write later on a more extended opinion, to deny the petitioner's
petition, as it is hereby denied, for the reasons above set forth and for others to be stated in the said opinion,
without prejudice to concurring opinion therein, if any. Messrs. Justices Paras and Hontiveros dissent in a
separate opinion. Mr. justice Perfecto concurs in a separate opinion.

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-1648 August 17, 1949

PEDRO SYQUIA, GONZALO SYQUIA, and LEOPOLDO SYQUIA, petitioners,

vs.
NATIVIDAD ALMEDA LOPEZ, Judge of Municipal Court of Manila, CONRADO V. SANCHEZ, Judge of Court
of First Instance of Manila, GEORGE F. MOORE, ET AL., respondents.

Gibbs, Gibbs, Chuidian and Quasha for petitioner.

J. A. Wolfson for respondent.

MONTEMAYOR, J.:
For the purposes of this decision, the following facts gathered from and based on the pleadings, may be stated. The
plaintiffs named Pedro, Gonzalo, and Leopoldo, all surnamed Syquia, are the undivided joint owners of three
apartment buildings situated in the City of Manila known as the North Syquia Apartments, South Syquia Apartments
and Michel Apartments located at 1131 M. H. del Pilar, 1151 M. H. del Pilar and 1188 A. Mabini Streets,
respectively.

About the middle of the year 1945, said plaintiffs executed three lease contracts, one for each of the three
apartments, in favor of the United States of America at a monthly rental of P1,775 for the North Syquia Apartments,
P1,890 for the South Syquia Apartment, and P3,335 for the Michel Apartments. The term or period for the three
leases was to be "for the duration of the war and six months thereafter, unless sooner terminated by the United
States of America." The apartment buildings were used for billeting and quartering officers of the U. S. armed forces
stationed in the Manila area.

In March 1947, when these court proceedings were commenced, George F. Moore was the Commanding General,
United States Army, Philippine Ryukus Command, Manila, and as Commanding General of the U. S. Army in the
Manila Theatre, was said to control the occupancy of the said apartment houses and had authority in the name of
the United States Government to assign officers of the U. S. Army to said apartments or to order said officers to
vacate the same. Erland A. Tillman was the Chief, Real Estate Division, Office of the District Engineers, U. S. Army,
Manila, who, under the command of defendant Moore was in direct charge and control of the lease and occupancy
of said three apartment buildings. Defendant Moore and Tillman themselves did not occupy any part of the premises
in question.

Under the theory that said leases terminated six months after September 2, 1945, when Japan surrendered,
plaintiffs sometime in March, 1946, approached the predecessors in office of defendants Moore and Tillman and
requested the return of the apartment buildings to them, but were advised that the U. S. Army wanted to continue
occupying the premises. On May 11, 1946, said plaintiffs requested the predecessors in office of Moore and Tillman
to renegotiate said leases, execute lease contract for a period of three years and to pay a reasonable rental higher
than those payable under the old contracts. The predecessors in office of Moore in a letter dated June 6, 1946,
refused to execute new leases but advised that "it is contemplated that the United States Army will vacate subject
properties prior to 1 February 1947." Not being in conformity with the continuance of the old leases because of the
alleged comparatively low rentals being paid thereunder, plaintiffs formally requested Tillman to cancel said three
leases and to release the apartment buildings on June 28, 1946. Tillman refused to comply with the request.
Because of the alleged representation and assurance that the U.S. Government would vacate the premises before
February 1, 1947, the plaintiffs took no further steps to secure possession of the buildings and accepted the monthly
rentals tendered by the predecessors in office of Moore and Tillman on the basis of a month to month lease subject
to cancellation upon thirty days notice. Because of the failure to comply with the alleged representation and
assurance that the three apartment buildings will be vacated prior to February 1, 1947, plaintiffs on February 17,
1947, served formal notice upon defendants Moore and Tillman and 64 other army officers or members of the
United States Armed Forces who were then occupying apartments in said three buildings, demanding (a)
cancellation of said leases; (b) increase in rentals to P300 per month per apartment effective thirty days from notice;
(c) execution of new leases for the three or any one or two of the said apartment buildings for a definite term,
otherwise, (d) release of said apartment buildings within thirty days of said notice in the event of the failure to
comply with the foregoing demands. The thirty-day period having expired without any of the defendants having
complied with plaintiffs' demands, the plaintiffs commenced the present action in the Municipal Court of Manila in
the form of an action for unlawful detainer (desahucio) against Moore and Tillman and the 64 persons occupying
apartments in the three buildings for the purpose of having them vacate the apartments, each occupants to pay
P300 a month for his particular apartment from January 1, 1947 until each of said particular defendant had vacated
said apartment; to permit plaintiffs access to said apartment buildings for the purpose of appraising the damages
sustained as the result of the occupancy by defendants; that defendants be ordered to pay plaintiffs whatever
damages may have been actually caused on said property; and that in the event said occupants are unable to pay
said P300 a month and/or the damages sustained by said property, the defendants Moore and Tillman jointly and
severally be made to pay said monthly rentals of P300 per month per apartment from January 1, 1947 to March 19,
1947, inclusive, and/or the damages sustained by said apartments, and that defendants Moore and Tillman be
permanently enjoined against ordering any additional parties in the future from entering and occupying said
premises.

Acting upon a motion to dismiss filed through the Special Assistant of the Judge Advocate, Philippine Ryukus
Command on the ground that the court had no jurisdiction over the defendants and over the subject matter of the
action, because the real party in interest was the U.S. Government and not the individual defendants named in the
complaint, and that the complaint did not state a cause of action, the municipal court of Manila in an order dated
April 29, 1947, found that the war between the United States of America and her allies on one side and Germany
and Japan on the other, had not yet terminated and, consequently, the period or term of the three leases had not yet
expired; that under the well settled rule of International Law, a foreign government like the United States
Government cannot be sued in the courts of another state without its consent; that it was clear from the allegations
of the complaint that although the United States of America has not been named therein as defendant, it is
nevertheless the real defendant in this case, as the parties named as defendants are officers of the United States
Army and were occupying the buildings in question as such and pursuant to orders received from that Government.
The municipal court dismissed the action with costs against the plaintiffs with the suggestion or opinion that a citizen
of the Philippines, who feels aggrieved by the acts of the Government of a foreign country has the right to demand
that the Philippine Government study his claim and if found meritorious, take such diplomatic steps as may be
necessary for the vindication of rights of that citizen, and that the matter included or involved in the action should be
a proper subject matter of representations between the Government of the Government of the United States of
America and the Philippines. Not being satisfied with the order, plaintiffs appealed to the Court of Manila, where the
motion to dismiss was renewed.

The Court of First Instance of Manila in an order dated July 12, 1947, affirmed the order of the municipal court
dismissing plaintiffs' complaint. It conceded that under the doctrine laid down in the case of U. S. vs. Lee, 106 U. S.,
196 and affirmed in the case of Tindal vs. Wesley, 167 U. S., 204 ordinarily, courts have jurisdiction over cases
where private parties sue to recover possession of property being held by officers or agents acting in the name of
the U. S. Government even though no suit can be brought against the Government itself, but inasmuch as the
plaintiffs in the present case are bringing this action against officers and agents of the U. S. Government not only to
recover the possession of the three apartment houses supposedly being held illegally by them in the name of their
government, but also to collect back rents, not only at the rate agreed upon in the lease contracts entered into by
the United States of America but in excess of said rate, to say nothing of the damages claimed, as a result of which,
a judgment in these proceedings may become a charge against the U. S. Treasury, then under the rule laid down in
the case of Land vs. Dollar, 91 Law. ed., 1209, the present suit must be regarded as one against the United States
Government itself, which cannot be sued without its consent, specially by citizens of another country.

The plaintiffs as petitioners have brought this case before us on a petition for a writ of mandamus seeking to order
the Municipal Court of Manila to take jurisdiction over the case. On October 30, 1947, counsel for respondents
Almeda Lopez, Sanchez, Moore and Tillman filed a motion to dismiss on several grounds. The case was orally
argued on November 26, 1947. On March 4, 1948, petitioners filed a petition which, among other things, informed
this Court that the North Syquia Apartments, the South Syquia Apartments and Michel Apartments would be
vacated by their occupants on February 29, March 31, and May 31, 1948, respectively. As a matter of fact, said
apartments were actually vacated on the dates already mentioned and were received by the plaintiff-owners.

On the basis of this petition and because of the return of the three apartment houses to the owners, counsel for
respondents Almeda Lopez, Sanchez, Moore and Tillman filed a petition to dismiss the present case on the ground
that it is moot. Counsel for the petitioners answering the motion, claimed that the plaintiffs and petitioners
possession of the three apartment houses, reserving all of their rights against respondents including the right to
collect rents and damages; that they have not been paid rents since January 1, 1947; that respondents admitted
that there is a total of P109,895 in rentals due and owing to petitioners; that should this case be now dismissed, the
petitioners will be unable to enforce collection; that the question of law involved in this case may again come up
before the courts when conflicts arise between Filipino civilian property owners and the U.S. Army authorities
concerning contracts entered into in the Philippines between said Filipinos and the U.S. Government. Consequently,
this Court, according to the petitioners, far from dismissing the case, should decide it, particularly the question of
jurisdiction.

On June 18, 1949, through a "petition to amend complaint" counsel for the petitioners informed this court that
petitioners had already received the U. S. Army Forces in the Western Pacific the sum of P109,895 as rentals for
the three apartments, but with the reservation that said acceptance should not be construed as jeopardizing the
rights of the petitioners in the case now pending in the courts of the Philippines or their rights against the U. S.
Government with respect to the three apartment houses. In view of this last petition, counsel for respondents
alleging that both respondent Moore and Tillman had long left the Islands for other Army assignments, and now that
both the possession of the three apartments in question as well as the rentals for their occupation have already
been received by the petitioners renew their motion for dismissal on the ground that this case has now become
moot.

The main purpose of the original action in the municipal court was to recover the possession of the three apartment
houses in question. The recovery of rentals as submitted by the very counsel for the petitioner was merely incidental
to the main action. Because the prime purpose of the action had been achieved, namely, the recovery of the
possession of the premises, apart from the fact that the rentals amounting to P109,895 had been paid to the
petitioners and accepted by them though under reservations, this Court may now well dismiss the present
proceedings on the ground that the questions involved therein have become academic and moot. Counsel for the
petitioners however, insists that a decision be rendered on the merits, particularly on the question of jurisdiction of
the municipal court over the original action, not only for the satisfaction of the parties involved but also to serve as a
guide in future cases involving cases of similar nature such as contracts of lease entered into between the
Government of the United States of America on one side and Filipino citizens on the other regarding properties of
the latter. We accept the suggestion of petitioners and shall proceed to discuss the facts and law involved and rule
upon them.

We shall concede as correctly did the Court of First Instance, that following the doctrine laid down in the cases of U.
S. vs. Lee and U. S. vs. Tindal, supra, a private citizen claiming title and right of possession of a certain property
may, to recover possession of said property, sue as individuals, officers and agents of the Government who are said
to be illegally witholding the same from him, though in doing so, said officers and agents claim that they are acting
for the Government, and the court may entertain such a suit altho the Government itself is not included as a party-
defendant. Of course, the Government is not bound or concluded by the decision. The philosophy of this ruling is
that unless the courts are permitted to take cognizance and to assume jurisdiction over such a case, a private
citizen would be helpless and without redress and protection of his rights which may have been invaded by the
officers of the government professing to act in its name. In such a case the officials or agents asserting rightful
possession must prove and justify their claim before the courts, when it is made to appear in the suit against them
that the title and right of possession is in the private citizen. However, and this is important, where the judgment in
such a case would result not only in the recovery of possession of the property in favor of said citizen but also in a
charge against or financial liability to the Government, then the suit should be regarded as one against the
government itself, and, consequently, it cannot prosper or be validly entertained by the courts except with the
consent of said Government. (See case of Land vs. Dollar, 91 Law. ed., 1209.)

From a careful study of this case, considering the facts involved therein as well as those of public knowledge of
which we take judicial cognizance, we are convinced that the real party in interest as defendant in the original case
is the United States of America. The lessee in each of the three lease agreements was the United States of America
and the lease agreement themselves were executed in her name by her officials acting as her agents. The
considerations or rentals was always paid by the U. S. Government. The original action in the municipal court was
brought on the basis of these three lease contracts and it is obvious in the opinion of this court that any back rentals
or increased rentals will have to be paid by the U. S. Government not only because, as already stated, the contracts
of lease were entered into by such Government but also because the premises were used by officers of her armed
forces during the war and immediately after the terminations of hostilities.

We cannot see how the defendants and respondents Moore and Tillman could be held individually responsible for
the payments of rentals or damages in relation to the occupancy of the apartment houses in question. Both of these
army officials had no intervention whatsoever in the execution of the lease agreements nor in the initial occupancy
of the premises both of which were effected thru the intervention of and at the instance of their predecessors in
office. The original request made by the petitioners for the return of the apartment buildings after the supposed
termination of the leases, was made to, and denied not by Moore and Tillman but by their predecessors in office.
The notice and decision that the U. S. Army wanted and in fact continued to occupy the premises was made not by
Moore and Tillman but by predecessors in office. The refusal to renegotiate the leases as requested by the
petitioners was made not by Moore but by his predecessors in office according to the very complaint filed in the
municipal court. The assurance that the U. S. Army will vacate the premises prior to February 29, 1947, was also
made by the predecessors in office of Moore.

As to the defendant Tillman, according to the complaint he was Chief, Real State Division, Office of the District
Engineer, U. S. Army, and was in direct charge and control of the leases and occupancy of the apartment buildings,
but he was under the command of defendant Moore, his superior officer. We cannot see how said defendant Tillman
in assigning new officers to occupy apartments in the three buildings, in obedience to order or direction from his
superior, defendant Moore, could be held personally liable for the payment of rentals or increase thereof, or
damages said to have been suffered by the plaintiffs.

With respect to defendant General Moore, when he assumed his command in Manila, these lease agreement had
already been negotiated and executed and were in actual operation. The three apartment buildings were occupied
by army officers assigned thereto by his predecessors in office. All that he must have done was to assign or billet
incoming army officers to apartments as they were vacated by outgoing officers due to changes in station. He found
these apartment buildings occupied by his government and devoted to the use and occupancy of army officers
stationed in Manila under his command, and he had reasons to believe that he could continue holding and using the
premises theretofore assigned for that purpose and under contracts previously entered into by his government, as
long as and until orders to the contrary were received by him. It is even to be presumed that when demand was
made by the plaintiffs for the payment of increased rentals or for vacating the three apartment buildings, defendant
Moore, not a lawyer by profession but a soldier, must have consulted and sought the advise of his legal department,
and that his action in declining to pay the increased rentals or to eject all his army officers from the three buildings
must have been in pursuance to the advice and counsel of his legal division. At least, he was not in a position to pay
increased rentals above those set and stipulated in the lease agreements, without the approval of his government,
unless he personally assumed financial responsibility therefor. Under these circumstances, neither do we believe
nor find that defendant Moore can be held personally liable for the payment of back or increased rentals and alleged
damages.

As to the army officers who actually occupied the apartments involved, there is less reason for holding them
personally liable for rentals and supposed damages as sought by the plaintiffs. It must be remembered that these
army officers when coming to their station in Manila were not given the choice of their dwellings. They were merely
assigned quarters in the apartment buildings in question. Said assignments or billets may well be regarded as
orders, and all that those officers did was to obey them, and, accordingly, occupied the rooms assigned to them.
Under such circumstances, can it be supposed or conceived that such army officers would first inquire whether the
rental being paid by the government for the rooms or apartments assigned to them by order of their superior officer
was fair and reasonable or not, and whether the period of lease between their government and the owners of the
premises had expired, and whether their occupancy of their rooms or apartments was legal or illegal? And if they
dismissed these seemingly idle speculations, assuming that they ever entered their minds, and continued to live in
their apartments unless and until orders to the contrary were received by them, could they later be held personally
liable for any back rentals which their government may have failed to pay to the owners of the building, or for any
damages to the premises incident to all leases of property, specially in the absence of proof that such damages to
property had been caused by them and not by the previous occupants, also army officers who are not now parties
defendant to this suit? Incidentally it may be stated that both defendants Moore and Tillman have long left these
Islands to assume other commands or assignments and in all probability none of their 64 co-defendants is still within
this jurisdiction.

On the basis of the foregoing considerations we are of the belief and we hold that the real party defendant in interest
is the Government of the United States of America; that any judgment for back or increased rentals or damages will
have to be paid not by defendants Moore and Tillman and their 64 co-defendants but by the said U. S. Government.
On the basis of the ruling in the case of Land vs. Dollar already cited, and on what we have already stated, the
present action must be considered as one against the U. S. Government. It is clear that the courts of the Philippines
including the Municipal Court of Manila have no jurisdiction over the present case for unlawful detainer. The
question of lack of jurisdiction was raised and interposed at the very beginning of the action. The U. S. Government
has not given its consent to the filing of this suit which is essentially against her, though not in name. Moreover, this
is not only a case of a citizen filing a suit against his own Government without the latter's consent but it is of citizen
filing an action against a foreign government without said government's consent, which renders more obvious the
lack of jurisdiction of the courts of his country. The principles of the law behind this rule are so elementary and of
such general acceptance that we deem it unnecessary to cite authorities in support thereof.

In conclusion we find that the Municipal Court of Manila committed no error in dismissing the case for lack of
jurisdiction and that the Court of First Instance acted correctly in affirming the municipal court's order of dismissal.
Case dismissed, without pronouncement as to costs.

Moran, C.J., Paras, Feria, Bengzon, Tuason and Reyes, JJ., concur.
 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. 101949 December 1, 1994

THE HOLY SEE, petitioner,

vs.
THE HON. ERIBERTO U. ROSARIO, JR., as Presiding Judge of the Regional Trial Court of Makati, Branch 61
and STARBRIGHT SALES ENTERPRISES, INC., respondents.

Padilla Law Office for petitioner.

Siguion Reyna, Montecillo & Ongsiako for private respondent.

QUIASON, J.:

This is a petition for certiorari under Rule 65 of the Revised Rules of Court to reverse and set aside the Orders
dated June 20, 1991 and September 19, 1991 of the Regional Trial Court, Branch 61, Makati, Metro Manila in Civil
Case No. 90-183.

The Order dated June 20, 1991 denied the motion of petitioner to dismiss the complaint in Civil Case No. 90-183,
while the Order dated September 19, 1991 denied the motion for reconsideration of the June 20,1991 Order.

Petitioner is the Holy See who exercises sovereignty over the Vatican City in Rome, Italy, and is represented in the
Philippines by the Papal Nuncio.

Private respondent, Starbright Sales Enterprises, Inc., is a domestic corporation engaged in the real estate
business.

This petition arose from a controversy over a parcel of land consisting of 6,000 square meters (Lot 5-A, Transfer
Certificate of Title No. 390440) located in the Municipality of Paraaque, Metro Manila and registered in the name of
petitioner.

Said Lot 5-A is contiguous to Lots 5-B and 5-D which are covered by Transfer Certificates of Title Nos. 271108 and
265388 respectively and registered in the name of the Philippine Realty Corporation (PRC).

The three lots were sold to Ramon Licup, through Msgr. Domingo A. Cirilos, Jr., acting as agent to the sellers. Later,
Licup assigned his rights to the sale to private respondent.

In view of the refusal of the squatters to vacate the lots sold to private respondent, a dispute arose as to who of the
parties has the responsibility of evicting and clearing the land of squatters. Complicating the relations of the parties
was the sale by petitioner of Lot 5-A to Tropicana Properties and Development Corporation (Tropicana).

On January 23, 1990, private respondent filed a complaint with the Regional Trial Court, Branch 61, Makati, Metro
Manila for annulment of the sale of the three parcels of land, and specific performance and damages against
petitioner, represented by the Papal Nuncio, and three other defendants: namely, Msgr. Domingo A. Cirilos, Jr., the
PRC and Tropicana (Civil Case No.
90-183).

The complaint alleged that: (1) on April 17, 1988, Msgr. Cirilos, Jr., on behalf of petitioner and the PRC, agreed to
sell to Ramon Licup Lots 5-A, 5-B and 5-D at the price of P1,240.00 per square meters; (2) the agreement to sell
was made on the condition that earnest money of P100,000.00 be paid by Licup to the sellers, and that the sellers
clear the said lots of squatters who were then occupying the same; (3) Licup paid the earnest money to Msgr.
Cirilos; (4) in the same month, Licup assigned his rights over the property to private respondent and informed the
sellers of the said assignment; (5) thereafter, private respondent demanded from Msgr. Cirilos that the sellers fulfill
their undertaking and clear the property of squatters; however, Msgr. Cirilos informed private respondent of the
squatters' refusal to vacate the lots, proposing instead either that private respondent undertake the eviction or that
the earnest money be returned to the latter; (6) private respondent counterproposed that if it would undertake the
eviction of the squatters, the purchase price of the lots should be reduced from P1,240.00 to P1,150.00 per square
meter; (7) Msgr. Cirilos returned the earnest money of P100,000.00 and wrote private respondent giving it seven
days from receipt of the letter to pay the original purchase price in cash; (8) private respondent sent the earnest
money back to the sellers, but later discovered that on March 30, 1989, petitioner and the PRC, without notice to
private respondent, sold the lots to Tropicana, as evidenced by two separate Deeds of Sale, one over Lot 5-A, and
another over Lots 5-B and 5-D; and that the sellers' transfer certificate of title over the lots were cancelled,
transferred and registered in the name of Tropicana; (9) Tropicana induced petitioner and the PRC to sell the lots to
it and thus enriched itself at the expense of private respondent; (10) private respondent demanded the rescission of
the sale to Tropicana and the reconveyance of the lots, to no avail; and (11) private respondent is willing and able to
comply with the terms of the contract to sell and has actually made plans to develop the lots into a townhouse
project, but in view of the sellers' breach, it lost profits of not less than P30,000.000.00.

Private respondent thus prayed for: (1) the annulment of the Deeds of Sale between petitioner and the PRC on the
one hand, and Tropicana on the other; (2) the reconveyance of the lots in question; (3) specific performance of the
agreement to sell between it and the owners of the lots; and (4) damages.

On June 8, 1990, petitioner and Msgr. Cirilos separately moved to dismiss the complaint petitioner for lack of
jurisdiction based on sovereign immunity from suit, and Msgr. Cirilos for being an improper party. An opposition to
the motion was filed by private respondent.

On June 20, 1991, the trial court issued an order denying, among others, petitioner's motion to dismiss after finding
that petitioner "shed off [its] sovereign immunity by entering into the business contract in question" (Rollo, pp. 20-
21).

On July 12, 1991, petitioner moved for reconsideration of the order. On August 30, 1991, petitioner filed a "Motion
for a Hearing for the Sole Purpose of Establishing Factual Allegation for claim of Immunity as a Jurisdictional
Defense." So as to facilitate the determination of its defense of sovereign immunity, petitioner prayed that a hearing
be conducted to allow it to establish certain facts upon which the said defense is based. Private respondent
opposed this motion as well as the motion for reconsideration.

On October 1, 1991, the trial court issued an order deferring the resolution on the motion for reconsideration until
after trial on the merits and directing petitioner to file its answer (Rollo, p. 22).

Petitioner forthwith elevated the matter to us. In its petition, petitioner invokes the privilege of sovereign immunity
only on its own behalf and on behalf of its official representative, the Papal Nuncio.

On December 9, 1991, a Motion for Intervention was filed before us by the Department of Foreign Affairs, claiming
that it has a legal interest in the outcome of the case as regards the diplomatic immunity of petitioner, and that it
"adopts by reference, the allegations contained in the petition of the Holy See insofar as they refer to arguments
relative to its claim of sovereign immunity from suit" (Rollo, p. 87).

Private respondent opposed the intervention of the Department of Foreign Affairs. In compliance with the resolution
of this Court, both parties and the Department of Foreign Affairs submitted their respective memoranda.

II
A preliminary matter to be threshed out is the procedural issue of whether the petition for certiorari under Rule 65 of
the Revised Rules of Court can be availed of to question the order denying petitioner's motion to dismiss. The
general rule is that an order denying a motion to dismiss is not reviewable by the appellate courts, the remedy of the
movant being to file his answer and to proceed with the hearing before the trial court. But the general rule admits of
exceptions, and one of these is when it is very clear in the records that the trial court has no alternative but to
dismiss the complaint (Philippine National Bank v. Florendo, 206 SCRA 582 [1992]; Zagada v. Civil Service
Commission, 216 SCRA 114 [1992]. In such a case, it would be a sheer waste of time and energy to require the
parties to undergo the rigors of a trial.

The other procedural question raised by private respondent is the personality or legal interest of the Department of
Foreign Affairs to intervene in the case in behalf of the Holy See (Rollo, pp. 186-190).

In Public International Law, when a state or international agency wishes to plead sovereign or diplomatic immunity in
a foreign court, it requests the Foreign Office of the state where it is sued to convey to the court that said defendant
is entitled to immunity.

In the United States, the procedure followed is the process of "suggestion," where the foreign state or the
international organization sued in an American court requests the Secretary of State to make a determination as to
whether it is entitled to immunity. If the Secretary of State finds that the defendant is immune from suit, he, in turn,
asks the Attorney General to submit to the court a "suggestion" that the defendant is entitled to immunity. In
England, a similar procedure is followed, only the Foreign Office issues a certification to that effect instead of
submitting a "suggestion" (O'Connell, I International Law 130 [1965]; Note: Immunity from Suit of Foreign Sovereign
Instrumentalities and Obligations, 50 Yale Law Journal 1088 [1941]).

In the Philippines, the practice is for the foreign government or the international organization to first secure an
executive endorsement of its claim of sovereign or diplomatic immunity. But how the Philippine Foreign Office
conveys its endorsement to the courts varies. In International Catholic Migration Commission v. Calleja, 190 SCRA
130 (1990), the Secretary of Foreign Affairs just sent a letter directly to the Secretary of Labor and Employment,
informing the latter that the respondent-employer could not be sued because it enjoyed diplomatic immunity.
InWorld Health Organization v. Aquino, 48 SCRA 242 (1972), the Secretary of Foreign Affairs sent the trial court a
telegram to that effect. In Baer v. Tizon, 57 SCRA 1 (1974), the U.S. Embassy asked the Secretary of Foreign
Affairs to request the Solicitor General to make, in behalf of the Commander of the United States Naval Base at
Olongapo City, Zambales, a "suggestion" to respondent Judge. The Solicitor General embodied the "suggestion" in
a Manifestation and Memorandum as amicus curiae.

In the case at bench, the Department of Foreign Affairs, through the Office of Legal Affairs moved with this Court to
be allowed to intervene on the side of petitioner. The Court allowed the said Department to file its memorandum in
support of petitioner's claim of sovereign immunity.

In some cases, the defense of sovereign immunity was submitted directly to the local courts by the respondents
through their private counsels (Raquiza v. Bradford, 75 Phil. 50 [1945]; Miquiabas v. Philippine-Ryukyus Command,
80 Phil. 262 [1948]; United States of America v. Guinto, 182 SCRA 644 [1990] and companion cases). In cases
where the foreign states bypass the Foreign Office, the courts can inquire into the facts and make their own
determination as to the nature of the acts and transactions involved.

III

The burden of the petition is that respondent trial court has no jurisdiction over petitioner, being a foreign state
enjoying sovereign immunity. On the other hand, private respondent insists that the doctrine of non-suability is not
anymore absolute and that petitioner has divested itself of such a cloak when, of its own free will, it entered into a
commercial transaction for the sale of a parcel of land located in the Philippines.

A. The Holy See

Before we determine the issue of petitioner's non-suability, a brief look into its status as a sovereign state is in order.
Before the annexation of the Papal States by Italy in 1870, the Pope was the monarch and he, as the Holy See, was
considered a subject of International Law. With the loss of the Papal States and the limitation of the territory under
the Holy See to an area of 108.7 acres, the position of the Holy See in International Law became controversial
(Salonga and Yap, Public International Law 36-37 [1992]).

In 1929, Italy and the Holy See entered into the Lateran Treaty, where Italy recognized the exclusive dominion and
sovereign jurisdiction of the Holy See over the Vatican City. It also recognized the right of the Holy See to receive
foreign diplomats, to send its own diplomats to foreign countries, and to enter into treaties according to International
Law (Garcia, Questions and Problems In International Law, Public and Private 81 [1948]).

The Lateran Treaty established the statehood of the Vatican City "for the purpose of assuring to the Holy See
absolute and visible independence and of guaranteeing to it indisputable sovereignty also in the field of international
relations" (O'Connell, I International Law 311 [1965]).

In view of the wordings of the Lateran Treaty, it is difficult to determine whether the statehood is vested in the Holy
See or in the Vatican City. Some writers even suggested that the treaty created two international persons the
Holy See and Vatican City (Salonga and Yap, supra, 37).

The Vatican City fits into none of the established categories of states, and the attribution to it of "sovereignty" must
be made in a sense different from that in which it is applied to other states (Fenwick, International Law 124-125
[1948]; Cruz, International Law 37 [1991]). In a community of national states, the Vatican City represents an entity
organized not for political but for ecclesiastical purposes and international objects. Despite its size and object, the
Vatican City has an independent government of its own, with the Pope, who is also head of the Roman Catholic
Church, as the Holy See or Head of State, in conformity with its traditions, and the demands of its mission in the
world. Indeed, the world-wide interests and activities of the Vatican City are such as to make it in a sense an
"international state" (Fenwick, supra., 125; Kelsen, Principles of International Law 160 [1956]).

One authority wrote that the recognition of the Vatican City as a state has significant implication that it is possible
for any entity pursuing objects essentially different from those pursued by states to be invested with international
personality (Kunz, The Status of the Holy See in International Law, 46 The American Journal of International Law
308 [1952]).

Inasmuch as the Pope prefers to conduct foreign relations and enter into transactions as the Holy See and not in the
name of the Vatican City, one can conclude that in the Pope's own view, it is the Holy See that is the international
person.

The Republic of the Philippines has accorded the Holy See the status of a foreign sovereign. The Holy See, through
its Ambassador, the Papal Nuncio, has had diplomatic representations with the Philippine government since 1957
(Rollo, p. 87). This appears to be the universal practice in international relations.

B. Sovereign Immunity

As expressed in Section 2 of Article II of the 1987 Constitution, we have adopted the generally accepted principles
of International Law. Even without this affirmation, such principles of International Law are deemed incorporated as
part of the law of the land as a condition and consequence of our admission in the society of nations (United States
of America v. Guinto, 182 SCRA 644 [1990]).

There are two conflicting concepts of sovereign immunity, each widely held and firmly established. According to the
classical or absolute theory, a sovereign cannot, without its consent, be made a respondent in the courts of another
sovereign. According to the newer or restrictive theory, the immunity of the sovereign is recognized only with regard
to public acts or acts jure imperii of a state, but not with regard to private acts or acts jure gestionis
(United States of America v. Ruiz, 136 SCRA 487 [1987]; Coquia and Defensor-Santiago, Public International Law
194 [1984]).

Some states passed legislation to serve as guidelines for the executive or judicial determination when an act may be
considered as jure gestionis. The United States passed the Foreign Sovereign Immunities Act of 1976, which
defines a commercial activity as "either a regular course of commercial conduct or a particular commercial
transaction or act." Furthermore, the law declared that the "commercial character of the activity shall be determined
by reference to the nature of the course of conduct or particular transaction or act, rather than by reference to its
purpose." The Canadian Parliament enacted in 1982 an Act to Provide For State Immunity in Canadian Courts. The
Act defines a "commercial activity" as any particular transaction, act or conduct or any regular course of conduct that
by reason of its nature, is of a "commercial character."

The restrictive theory, which is intended to be a solution to the host of problems involving the issue of sovereign
immunity, has created problems of its own. Legal treatises and the decisions in countries which follow the restrictive
theory have difficulty in characterizing whether a contract of a sovereign state with a private party is an act jure
gestionis or an act jure imperii.

The restrictive theory came about because of the entry of sovereign states into purely commercial activities remotely
connected with the discharge of governmental functions. This is particularly true with respect to the Communist
states which took control of nationalized business activities and international trading.

This Court has considered the following transactions by a foreign state with private parties as acts jure imperii: (1)
the lease by a foreign government of apartment buildings for use of its military officers (Syquia v. Lopez, 84 Phil.
312 [1949]; (2) the conduct of public bidding for the repair of a wharf at a United States Naval Station (United States
of America v. Ruiz, supra.); and (3) the change of employment status of base employees (Sanders v. Veridiano, 162
SCRA 88 [1988]).

On the other hand, this Court has considered the following transactions by a foreign state with private parties as
acts jure gestionis: (1) the hiring of a cook in the recreation center, consisting of three restaurants, a cafeteria, a
bakery, a store, and a coffee and pastry shop at the John Hay Air Station in Baguio City, to cater to American
servicemen and the general public (United States of America v. Rodrigo, 182 SCRA 644 [1990]); and (2) the bidding
for the operation of barber shops in Clark Air Base in Angeles City (United States of America v. Guinto, 182 SCRA
644 [1990]). The operation of the restaurants and other facilities open to the general public is undoubtedly for profit
as a commercial and not a governmental activity. By entering into the employment contract with the cook in the
discharge of its proprietary function, the United States government impliedly divested itself of its sovereign immunity
from suit.

In the absence of legislation defining what activities and transactions shall be considered "commercial" and as
constituting acts jure gestionis, we have to come out with our own guidelines, tentative they may be.

Certainly, the mere entering into a contract by a foreign state with a private party cannot be the ultimate test. Such
an act can only be the start of the inquiry. The logical question is whether the foreign state is engaged in the activity
in the regular course of business. If the foreign state is not engaged regularly in a business or trade, the particular
act or transaction must then be tested by its nature. If the act is in pursuit of a sovereign activity, or an incident
thereof, then it is an act jure imperii, especially when it is not undertaken for gain or profit.

As held in United States of America v. Guinto, (supra):

There is no question that the United States of America, like any other state, will be deemed to have
impliedly waived its non-suability if it has entered into a contract in its proprietary or private capacity.
It is only when the contract involves its sovereign or governmental capacity that no such waiver may
be implied.

In the case at bench, if petitioner has bought and sold lands in the ordinary course of a real estate business, surely
the said transaction can be categorized as an act jure gestionis. However, petitioner has denied that the acquisition
and subsequent disposal of Lot 5-A were made for profit but claimed that it acquired said property for the site of its
mission or the Apostolic Nunciature in the Philippines. Private respondent failed to dispute said claim.

Lot 5-A was acquired by petitioner as a donation from the Archdiocese of Manila. The donation was made not for
commercial purpose, but for the use of petitioner to construct thereon the official place of residence of the Papal
Nuncio. The right of a foreign sovereign to acquire property, real or personal, in a receiving state, necessary for the
creation and maintenance of its diplomatic mission, is recognized in the 1961 Vienna Convention on Diplomatic
Relations (Arts. 20-22). This treaty was concurred in by the Philippine Senate and entered into force in the
Philippines on November 15, 1965.
In Article 31(a) of the Convention, a diplomatic envoy is granted immunity from the civil and administrative
jurisdiction of the receiving state over any real action relating to private immovable property situated in the territory
of the receiving state which the envoy holds on behalf of the sending state for the purposes of the mission. If this
immunity is provided for a diplomatic envoy, with all the more reason should immunity be recognized as regards the
sovereign itself, which in this case is the Holy See.

The decision to transfer the property and the subsequent disposal thereof are likewise clothed with a governmental
character. Petitioner did not sell Lot
5-A for profit or gain. It merely wanted to dispose off the same because the squatters living thereon made it almost
impossible for petitioner to use it for the purpose of the donation. The fact that squatters have occupied and are still
occupying the lot, and that they stubbornly refuse to leave the premises, has been admitted by private respondent in
its complaint (Rollo, pp. 26, 27).

The issue of petitioner's non-suability can be determined by the trial court without going to trial in the light of the
pleadings, particularly the admission of private respondent. Besides, the privilege of sovereign immunity in this case
was sufficiently established by the Memorandum and Certification of the Department of Foreign Affairs. As the
department tasked with the conduct of the Philippines' foreign relations (Administrative Code of 1987, Book IV, Title
I, Sec. 3), the Department of Foreign Affairs has formally intervened in this case and officially certified that the
Embassy of the Holy See is a duly accredited diplomatic mission to the Republic of the Philippines exempt from
local jurisdiction and entitled to all the rights, privileges and immunities of a diplomatic mission or embassy in this
country (Rollo, pp. 156-157). The determination of the executive arm of government that a state or instrumentality is
entitled to sovereign or diplomatic immunity is a political question that is conclusive upon the courts (International
Catholic Migration Commission v. Calleja, 190 SCRA 130 [1990]). Where the plea of immunity is recognized and
affirmed by the executive branch, it is the duty of the courts to accept this claim so as not to embarrass the
executive arm of the government in conducting the country's foreign relations (World Health Organization v. Aquino,
48 SCRA 242 [1972]). As in International Catholic Migration Commission and in World Health Organization, we
abide by the certification of the Department of Foreign Affairs.

Ordinarily, the procedure would be to remand the case and order the trial court to conduct a hearing to establish the
facts alleged by petitioner in its motion. In view of said certification, such procedure would however be pointless and
unduly circuitous (Ortigas & Co. Ltd. Partnership v. Judge Tirso Velasco, G.R. No. 109645, July 25, 1994).

IV

Private respondent is not left without any legal remedy for the redress of its grievances. Under both Public
International Law and Transnational Law, a person who feels aggrieved by the acts of a foreign sovereign can ask
his own government to espouse his cause through diplomatic channels.

Private respondent can ask the Philippine government, through the Foreign Office, to espouse its claims against the
Holy See. Its first task is to persuade the Philippine government to take up with the Holy See the validity of its
claims. Of course, the Foreign Office shall first make a determination of the impact of its espousal on the relations
between the Philippine government and the Holy See (Young, Remedies of Private Claimants Against Foreign
States, Selected Readings on Protection by Law of Private Foreign Investments 905, 919 [1964]). Once the
Philippine government decides to espouse the claim, the latter ceases to be a private cause.

According to the Permanent Court of International Justice, the forerunner of the International Court of Justice:

By taking up the case of one of its subjects and by reporting to diplomatic action or international
judicial proceedings on his behalf, a State is in reality asserting its own rights its right to ensure, in
the person of its subjects, respect for the rules of international law (The Mavrommatis Palestine
Concessions, 1 Hudson, World Court Reports 293, 302 [1924]).

WHEREFORE, the petition for certiorari is GRANTED and the complaint in Civil Case No. 90-183 against petitioner
is DISMISSED.

SO ORDERED.
Narvasa, C.J., Bidin, Regalado, Davide, Jr., Romero, Bellosillo, Melo, Puno, Vitug, Kapunan and Mendoza, JJ.,
concur.

Padilla, J., took no part.

Feliciano, J., is on leave.

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. 183591 - THE PROVINCE OF NORTH COTABATO, ET AL. v. THE GOVERNMENT OF THE REPUBLIC
OF THE PHILIPPINES PEACE PANEL ON ANCESTRAL DOMAIN (GRP), ET AL.

G.R. No. 183752 - CITY GOVERNMENT OF ZAMBOANGA, ET AL. v. THE GOVERNMENT OF THE REPUBLIC
OF THE PHILIPPINES PEACE PANEL ON ANCESTRAL DOMAIN (GRP), ET AL.

G.R. No. 183893 - THE CITY OF ILIGAN, duly represented by CITY MAYOR LAURENCE LLUCH CRUZ v. THE
GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES PEACE PANEL ON ANCESTRAL DOMAIN (GRP),
ET AL.

G.R. No. 183951 - THE PROVINCIAL GOVERNMENT OF ZAMBOANGA DEL NORTE, as represented by HON.
ROLANDO E. YEBES, ET AL. v. THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES PEACE
PANEL ON ANCESTRAL DOMAIN (GRP), ET AL.

x----------------------------------x

FRANKLIN M. DRILON and ADEL ABBAS TAMANO, petitioners-in-intervention.

x----------------------------------x

MUNICIPALITY OF LINAMON duly represented by its Municipal Mayor NOEL N. DEANO, petitioner-in-
intervention.

x----------------------------------x

THE CITY OF ISABELA, BASILAN PROVINCE, represented by MAYOR CHERRYLYN P. SANTOS-

AKBAR,petitioner-in-intervention.

x----------------------------------x

THE PROVINCE OF SULTAN KUDARAT, represented by HON. SUHARTO T. MANGUDDATU, in his capacity
as Provincial Governor and a resident of the Province of Sultan Kudarat, petitioner-in-intervention.

x----------------------------------x

RUY ELIAS LOPEZ, petitioner-in-intervention.

x----------------------------------x

CARLO B. GOMEZ, ET AL., petitioner-in-intervention.

x--------------------------------------------------x
 SEPARATE OPINION

CHICO-NAZARIO, J.:

The piece of writing being assailed in these consolidated Petitions is a peace negotiation document, namely
theMemorandum of Agreement on the Ancestral Domain Aspect of the GRP-MILF Tripoli Agreement of
Peace of 2001 (MOA). The Solicitor General explained that this document, prepared by the joint efforts of the
Government of the Republic of the Philippines (GRP) Peace Panel and the Moro Islamic Liberation Front (MILF)
Peace Panel, was merely a codification of consensus points reached between both parties and the aspirations of
the MILF to have a Bangsamoro homeland.1 Subsequently, the Solicitor General moved for the dismissal of the
consolidated cases at bar based on changed circumstances as well as developments which have rendered them
moot, particularly the Executive Department's statement that it would no longer sign the questioned peace
negotiation document.2Nonetheless, several parties to the case, as well as other sectors, continue to push for what
they call a "complete determination" of the constitutional issues raised in the present Petitions.

I believe that in light of the pronouncement of the Executive Department to already abandon the MOA, the issue of
its constitutionality has obviously become moot.

The rule is settled that no question involving the constitutionality or validity of a law or governmental act may be
heard and decided by the court unless there is compliance with the legal requisites for judicial inquiry, namely: that
the question must be raised by the proper party; that there must be an actual case or controversy; that the question
must be raised at the earliest possible opportunity; and, that the decision on the constitutional or legal question must
be necessary to the determination of the case itself. But the most important are the first two requisites.3

For a court to exercise its power of adjudication, there must be an actual case or controversy one which involves
a conflict of legal rights, an assertion of opposite legal claims susceptible of judicial resolution; the case must not
be moot or academic or based on extra-legal or other similar considerations not cognizable by a court of
justice. A case becomes moot and academic when its purpose has become stale.4 An action is considered "moot"
when it no longer presents a justiciable controversy because the issues involved have become academic or
dead or when the matter in dispute has already been resolved and hence, one is not entitled to judicial intervention
unless the issue is likely to be raised again between the parties. Simply stated, there is nothing for the court to
resolve as the determination thereof has been overtaken by subsequent events.5

Such is the case here.

The MOA has not even been signed, and will never be. Its provisions will not at all come into effect. The MOA will
forever remain a draft that has never been finalized. It is now nothing more than a piece of paper, with no legal force
or binding effect. It cannot be the source of, nor be capable of violating, any right. The instant Petitions, therefore,
and all other oppositions to the MOA, have no more leg to stand on. They no longer present an actual case or a
justiciable controversy for resolution by this Court.

An actual case or controversy exists when there is a conflict of legal rights or an assertion of opposite legal claims,
which can be resolved on the basis of existing law and jurisprudence. A justiciable controversy is distinguished from
a hypothetical or abstract difference or dispute, in that the former involves a definite and concrete dispute touching
on the legal relations of parties having adverse legal interests. A justiciable controversy admits of specific relief
through a decree that is conclusive in character, whereas an opinion only advises what the law would be upon a
hypothetical state of facts.6

For the Court to still rule upon the supposed unconstitutionality of the MOA will merely be an academic exercise. It
would, in effect, only be delivering an opinion or advice on what are now hypothetical or abstract violations of
constitutional rights.

In Abbas v. Commission on Elections,7 the 1976 Tripoli Agreement and Republic Act No. 6734 (the Organic Act for
the Autonomous Region in Muslim Mindanao) were challenged for purported violations of the provisions of the
Constitution on freedom of religion. The Court held therein that it should not inquire into the constitutionality of a
peace agreement which was already consummated (the 1976 Tripoli Agreement) and an Organic Act which was
already passed into law (R.A. No. 6734) just because of potential conflicts with the Constitution. Then, with more
reason should this Court desist from ruling on the constitutionality of the MOA which is unsigned, and now entirely
abandoned, and as such, cannot even have any potential conflict with the Constitution.

The Court should not feel constrained to rule on the Petitions at bar just because of the great public interest these
cases have generated. We are, after all, a court of law, and not of public opinion. The power of judicial review of this
Court is for settling real and existent dispute, it is not for allaying fears or addressing public clamor. In acting on
supposed abuses by other branches of government, the Court must be careful that it is not committing abuse itself
by ignoring the fundamental principles of constitutional law.

The Executive Department has already manifested to this Court, through the Solicitor General, that it will not sign
the MOA in its present form or in any other form. It has declared the same intent to the public. For this Court to
insist that the issues raised in the instant Petitions cannot be moot for they are still capable of repetition is to totally
ignore the assurance given by the Executive Department that it will not enter into any other form of the MOA in the
future. The Court cannot doubt the sincerity of the Executive Department on this matter. The Court must accord a
co-equal branch of the government nothing less than trust and the presumption of good faith.

Moreover, I deem it beyond the power of this Court to enjoin the Executive Department from entering into
agreements similar to the MOA in the future, as what petitioners and other opponents of the MOA pray for. Such
prayer once again requires this Court to make a definitive ruling on what are mere hypothetical facts. A decree
granting the same, without the Court having seen or considered the actual agreement and its terms, would not only
be premature, but also too general to make at this point. It will perilously tie the hands of the Executive Department
and limit its options in negotiating peace for Mindanao.

Upon the Executive Department falls the indisputably difficult responsibility of diffusing the highly volatile situation in
Mindanao resulting from the continued clashes between the Philippine military and Muslim rebel groups. In
negotiating for peace, the Executive Department should be given enough leeway and should not be prevented from
offering solutions which may be beyond what the present Constitution allows, as long as such solutions are agreed
upon subject to the amendment of the Constitution by completely legal means.

Peace negotiations are never simple. If neither party in such negotiations thinks outside the box, all they would
arrive at is a constant impasse. Thus, a counsel for one of the intervenors who assert the unconstitutionality of the
MOA8 had no choice but to agree as follows:

ASSOCIATE JUSTICE QUISUMBING: Well, we realize the constitutional constraints of sovereignty, integrity
and the like, but isn't there a time that surely will come and the life of our people when they have to
transcend even these limitations?

DEAN AGABIN: Yes, we have seen it happen in several instances, Your Honor.

xxx

ASSOCIATE JUSTICE QUISUMBING: And in pursuit of that purpose, the Supreme Court cannot look
beyond the horizon and look for more satisfying result?

DEAN AGABIN: Well, if you mean by looking beyond the horizon, it would mean a violation of the provisions
of the Constitution, then it should not be, Your Honor.

ASSOCIATE JUSTICE QUISUMBING: In some part, we have gone to Malaysia. We have gone to the OIC,
and we have even gone to Libya.

DEAN AGABIN: Yes, Your Honor. But in all these, we have always insisted on preserving the territorial
integrity of the country.

ASSOCIATE JUSTICE QUISUMBING: And this dicta or [dogma] is unassailable forever. There cannot be an
exception.

DEAN AGABIN: It is unassailable under the present Constitution, Your Honor.

 ASSOCIATE JUSTICE QUISUMBING: But, at least, you can also agree that the Constitution ought to be
changed in order for a country to fulfill its internal obligation as a matter of necessity.

DEAN AGABIN: Yes, if the people so will it, your Honor.

ASSOCIATE JUSTICE QUISUMBING: You remember how the emperor of Japan lost his divinity? They just
changed their Constitution, isn't it?

DEAN AGABIN: Yes, it was enforced upon him by Mr. McArthur, and they have no choice.

ASSOCIATE JUSTICE QUISUMBING: Isn't that a very good example of thinking outside the box? That one
day even those who are underground may have to think. But frankly now Dean, before I end, may I ask, is it
possible to meld or modify our Constitutional Order in order to have some room for the newly developing
international notions on Associative Governance Regulation Movement and Human Rights?

DEAN AGABIN: Yes. It is possible, Your Honor, with the consent of the people.

ASSOCIATE JUSTICE QUISUMBING: And, therefore, we vote it to a referendum or any consultation

beforehand?

DEAN AGABIN: If there is such a proposal for or amendment or revision of the Constitution, yes, Your
Honor.

ASSOCIATE JUSTICE QUISUMBING: So, either initiative or CHA-CHA or CON-AS?

DEAN AGABIN: Yes, Your Honor.9

It must be noted that the Constitution has been in force for three decades now, yet, peace in Mindanao still
remained to be elusive under its present terms. There is the possibility that the solution to the peace problem in the
Southern Philippines lies beyond the present Constitution. Exploring this possibility and considering the necessary
amendment of the Constitution are not per se unconstitutional. The Constitution itself implicitly allows for its own
amendment by describing, under Article XVII, the means and requirements therefor. In Tan v. Macapagal,10 where
petitioners claim that the Constitutional Convention was without power to consider, discuss, or adopt proposals
which seek to revise the Constitution through the adoption of a form of government other than the form outlined in
the then governing Constitution, the Court ruled that:

[A]s long as any proposed amendment is still unacted on by [the Convention], there is no room for the
interposition of judicial oversight. Only after it has made concrete what it intends to submit for ratification
may the appropriate case be instituted. Until then, the Courts are devoid of jurisdiction. x x x.

At this point, there is far from a concrete proposed amendment to the Constitution which the Court can take
cognizance of, much less render a pronouncement upon.

At most, the Court can only exhort the Executive Department to keep in mind that it must negotiate and secure
peace in Mindanao under terms which are most beneficial for the country as a whole, and not just one group of
Muslim insurgents. Transparency and consultation with all major players, which necessarily include affected local
government units and their constituents, are essential to arrive at a more viable and acceptable peace plan. The
nature and extent of any future written agreements should be clearly established from the very beginning, and the
terms thereof carefully drafted and clearly worded, to avoid misunderstandings or misconstructions by the parties
and the public. If a document is meant to be a list of consensus points still subject to further negotiations, then it
should just simply state so.

As a final note, I find it necessary to stress that the Court must not allow itself to be mired in controversies affecting
each step of the peace process in Mindanao. It is not within the province or even the competence of the Judiciary to
tell the Executive Department exactly what and what not, how and how not, to negotiate for peace with insurgents.
Given this kind of situation where war and peace hang in the balance, where people's lives are at stake, and the
Executive Department, under its residual powers, is tasked to make political decisions in order to find solutions to
the insurgency problem, the Court should respect the political nature of the issues at bar and exercise judicial
restraint until an actual controversy is brought before it.

In view of the foregoing, I vote for the GRANT of the Motion to Dismiss filed by the Solicitor General and,
accordingly, for the DISMISSAL of the Petitions at bar for being MOOT and ACADEMIC.

MINITA V. CHICO-NAZARIO
Associate Justice

Republic of the Philippines

Supreme Court
Manila

EN BANC

CHINA NATIONAL MACHINERY & G.R. No. 185572

EQUIPMENT CORP. (GROUP),
Petitioner,
Present:

versus CORONA, C.J.,

CARPIO,
VELASCO, JR.,
HON. CESAR D. SANTAMARIA, in his LEONARDO-DE CASTRO,
official capacity as Presiding Judge of BRION,
Branch 145, Regional Trial Court of PERALTA,
Makati City, HERMINIO HARRY L. BERSAMIN,
ROQUE, JR., JOEL R. BUTUYAN, DEL CASTILLO,
ROGER R. RAYEL, ROMEL R. ABAD,
BAGARES, CHRISTOPHER VILLARAMA, JR.,
FRANCISCO C. BOLASTIG, LEAGUE PEREZ,
OF URBAN POOR FOR ACTION MENDOZA,
(LUPA), KILUSAN NG MARALITA SA SERENO,
MEYCAUAYAN (KMM-LUPA REYES, and
CHAPTER), DANILO M. CALDERON, PERLAS-BERNABE, JJ.
VICENTE C. ALBAN, MERLYN M.
VAAL, LOLITA S. QUINONES,
RICARDO D. LANOZO, JR.,
CONCHITA G. GOZO, MA. TERESA D.
ZEPEDA, JOSEFINA A. LANOZO, and
SERGIO C. LEGASPI, JR.,
KALIPUNAN NG DAMAYANG
MAHIHIRAP (KADAMAY), EDY
CLERIGO, RAMMIL DINGAL, Promulgated:
NELSON B. TERRADO, CARMEN
DEUNIDA, and EDUARDO LEGSON, February 7, 2012
Respondents.

x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

DECISION
SERENO, J.:

This is a Petition for Review on Certiorari with Prayer for the Issuance of a Temporary
Restraining Order (TRO) and/or Preliminary Injunction assailing the 30 September 2008
Decision and 5 December 2008 Resolution of the Court of Appeals (CA) in CAG.R. SP No.
103351.[1]

On 14 September 2002, petitioner China National Machinery & Equipment Corp. (Group)
(CNMEG), represented by its chairperson, Ren Hongbin, entered into a Memorandum of
Understanding with the North Luzon Railways Corporation (Northrail), represented by its
president, Jose L. Cortes, Jr. for the conduct of a feasibility study on a possible railway line
from Manila to San Fernando, La Union (the Northrail Project).[2]

On 30 August 2003, the Export Import Bank of China (EXIM Bank) and the Department
of Finance of the Philippines (DOF) entered into a Memorandum of Understanding (Aug 30
MOU), wherein China agreed to extend Preferential Buyers Credit to the Philippine government
to finance the Northrail Project.[3] The Chinese government designated EXIM Bank as the
lender, while the Philippine government named the DOF as the borrower.[4] Under the Aug 30
MOU, EXIM Bank agreed to extend an amount not exceeding USD 400,000,000 in favor of the
DOF, payable in 20 years, with a 5-year grace period, and at the rate of 3% per annum.[5]

On 1 October 2003, the Chinese Ambassador to the Philippines, Wang Chungui (Amb. Wang),
wrote a letter to DOF Secretary Jose Isidro Camacho (Sec. Camacho) informing him of
CNMEGs designation as the Prime Contractor for the Northrail Project.[6]

On 30 December 2003, Northrail and CNMEG executed a Contract Agreement for the
construction of Section I, Phase I of the North Luzon Railway System from Caloocan to
Malolos on a turnkey basis (the Contract Agreement).[7] The contract price for the Northrail
Project was pegged at USD 421,050,000.[8]

On 26 February 2004, the Philippine government and EXIM Bank entered into a
counterpart financial agreement Buyer Credit Loan Agreement No. BLA 04055 (the Loan
Agreement).[9] In the Loan Agreement, EXIM Bank agreed to extend Preferential Buyers Credit
in the amount of USD 400,000,000 in favor of the Philippine government in order to finance the
construction of Phase I of the Northrail Project.[10]
 On 13 February 2006, respondents filed a Complaint for Annulment of Contract and
Injunction with Urgent Motion for Summary Hearing to Determine the Existence of Facts and
Circumstances Justifying the Issuance of Writs of Preliminary Prohibitory and Mandatory
Injunction and/or TRO against CNMEG, the Office of the Executive Secretary, the DOF, the
Department of Budget and Management, the National Economic Development Authority and
Northrail.[11] The case was docketed as Civil Case No. 06-203 before the Regional Trial Court,
National Capital Judicial Region, Makati City, Branch 145 (RTC Br. 145). In the Complaint,
respondents alleged that the Contract Agreement and the Loan Agreement were void for being
contrary to (a) the Constitution; (b) Republic Act No. 9184 (R.A. No. 9184), otherwise known
as the Government Procurement Reform Act; (c) Presidential Decree No. 1445, otherwise
known as the Government Auditing Code; and (d) Executive Order No. 292, otherwise known
as the Administrative Code.[12]

RTC Br. 145 issued an Order dated 17 March 2006 setting the case for hearing on the
issuance of injunctive reliefs.[13] On 29 March 2006, CNMEG filed an Urgent Motion for
Reconsideration of this Order.[14] Before RTC Br. 145 could rule thereon, CNMEG filed a
Motion to Dismiss dated 12 April 2006, arguing that the trial court did not have jurisdiction
over (a) its person, as it was an agent of the Chinese government, making it immune from suit,
and (b) the subject matter, as the Northrail Project was a product of an executive agreement.[15]

On 15 May 2007, RTC Br. 145 issued an Omnibus Order denying CNMEGs Motion to
Dismiss and setting the case for summary hearing to determine whether the injunctive reliefs
prayed for should be issued.[16] CNMEG then filed a Motion for Reconsideration,[17] which was
denied by the trial court in an Order dated 10 March 2008.[18] Thus, CNMEG filed before the
CA a Petition for Certiorari with Prayer for the Issuance of TRO and/or Writ of Preliminary
Injunction dated 4 April 2008.[19]

In the assailed Decision dated 30 September 2008, the appellate court dismissed the
Petition for Certiorari.[20] Subsequently, CNMEG filed a Motion for Reconsideration,[21]which
was denied by the CA in a Resolution dated 5 December 2008.[22] Thus, CNMEG filed the
instant Petition for Review on Certiorari dated 21 January 2009, raising the following issues: [23]
Whether or not petitioner CNMEG is an agent of the sovereign Peoples
Republic of China.

Whether or not the Northrail contracts are products of an executive agreement

between two sovereign states.

Whether or not the certification from the Department of Foreign Affairs is

necessary under the foregoing circumstances.

Whether or not the act being undertaken by petitioner CNMEG is an act jure
imperii.
 Whether or not the Court of Appeals failed to avoid a procedural limbo in the
lower court.

Whether or not the Northrail Project is subject to competitive public bidding.

Whether or not the Court of Appeals ignored the ruling of this Honorable Court
in the Neri case.

CNMEG prays for the dismissal of Civil Case No. 06-203 before RTC Br. 145 for lack of
jurisdiction. It likewise requests this Court for the issuance of a TRO and, later on, a writ of
preliminary injunction to restrain public respondent from proceeding with the disposition of Civil
Case No. 06-203.

The crux of this case boils down to two main issues, namely:

1. Whether CNMEG is entitled to immunity, precluding it from being sued before a

local court.
2. Whether the Contract Agreement is an executive agreement, such that it cannot be
questioned by or before a local court.

First issue: Whether CNMEG is entitled to immunity

This Court explained the doctrine of sovereign immunity in Holy See v. Rosario,[24] to wit:
There are two conflicting concepts of sovereign immunity, each widely held and firmly
established. According to the classical or absolute theory, a sovereign cannot, without its
consent, be made a respondent in the courts of another sovereign. According to the newer or
restrictive theory, the immunity of the sovereign is recognized only with regard to public
acts or acts jure imperii of a state, but not with regard to private acts or acts jure
gestionis. (Emphasis supplied; citations omitted.)

xxx xxx xxx

The restrictive theory came about because of the entry of sovereign states into purely
commercial activities remotely connected with the discharge of governmental functions. This is
particularly true with respect to the Communist states which took control of nationalized
business activities and international trading.

In JUSMAG v. National Labor Relations Commission,[25] this Court affirmed the

Philippines adherence to the restrictive theory as follows:
 The doctrine of state immunity from suit has undergone further metamorphosis. The view
evolved that the existence of a contract does not, per se, mean that sovereign states may, at all
times, be sued in local courts. The complexity of relationships between sovereign states, brought
about by their increasing commercial activities, mothered a more restrictive application of the
doctrine.

xxx xxx xxx

As it stands now, the application of the doctrine of immunity from suit has
been restricted to sovereign or governmental activities (jure imperii). The mantle of state
immunity cannot be extended to commercial, private and proprietary acts (jure
gestionis).[26] (Emphasis supplied.)

Since the Philippines adheres to the restrictive theory, it is crucial to ascertain the legal
nature of the act involved whether the entity claiming immunity performs governmental, as
opposed to proprietary, functions. As held in United States of America v. Ruiz [27]
The restrictive application of State immunity is proper only when the proceedings arise
out of commercial transactions of the foreign sovereign, its commercial activities or economic
affairs. Stated differently, a State may be said to have descended to the level of an individual and
can thus be deemed to have tacitly given its consent to be sued only when it enters into business
contracts. It does not apply where the contract relates to the exercise of its sovereign
functions.[28]

A. CNMEG is engaged in a proprietary activity.

A threshold question that must be answered is whether CNMEG performs governmental or

proprietary functions. A thorough examination of the basic facts of the case would show that
CNMEG is engaged in a proprietary activity.

The parties executed the Contract Agreement for the purpose of constructing the Luzon
Railways, viz:[29]
WHEREAS the Employer (Northrail) desired to construct the railways form
Caloocan to Malolos, section I, Phase I of Philippine North Luzon Railways Project
(hereinafter referred to as THE PROJECT);

AND WHEREAS the Contractor has offered to provide the Project on Turnkey
basis, including design, manufacturing, supply, construction, commissioning, and training
of the Employers personnel;

AND WHEREAS the Loan Agreement of the Preferential Buyers Credit between
Export-Import Bank of China and Department of Finance of Republic of the Philippines;

NOW, THEREFORE, the parties agree to sign this Contract for the Implementation
of the Project.
 The above-cited portion of the Contract Agreement, however, does not on its own reveal
whether the construction of the Luzon railways was meant to be a proprietary endeavor. In
order to fully understand the intention behind and the purpose of the entire undertaking, the
Contract Agreement must not be read in isolation. Instead, it must be construed in conjunction
with three other documents executed in relation to the Northrail Project, namely: (a) the
Memorandum of Understanding dated 14 September 2002 between Northrail and
CNMEG;[30](b) the letter of Amb. Wang dated 1 October 2003 addressed to Sec.
Camacho;[31] and (c) the Loan Agreement.[32]

1. Memorandum of Understanding dated 14 September

2002

The Memorandum of Understanding dated 14 September 2002 shows that CNMEG

sought the construction of the Luzon Railways as a proprietary venture. The relevant parts
thereof read:
WHEREAS, CNMEG has the financial capability, professional competence and
technical expertise to assess the state of the [Main Line North (MLN)] and recommend
implementation plans as well as undertake its rehabilitation and/or modernization;

WHEREAS, CNMEG has expressed interest in the rehabilitation and/or

modernization of the MLN from Metro Manila to San Fernando, La Union passing through
the provinces of Bulacan, Pampanga, Tarlac, Pangasinan and La Union (the Project);

WHEREAS, the NORTHRAIL CORP. welcomes CNMEGs proposal to undertake a

Feasibility Study (the Study) at no cost to NORTHRAIL CORP.;

WHEREAS, the NORTHRAIL CORP. also welcomes CNMEGs interest in

undertaking the Project with Suppliers Credit and intends to employ CNMEG as the
Contractor for the Project subject to compliance with Philippine and Chinese laws, rules
and regulations for the selection of a contractor;

WHEREAS, the NORTHRAIL CORP. considers CNMEGs proposal advantageous to

the Government of the Republic of the Philippines and has therefore agreed to assist CNMEG
in the conduct of the aforesaid Study;

xxx xxx xxx

II. APPROVAL PROCESS

2.1 As soon as possible after completion and presentation of the Study in accordance with
Paragraphs 1.3 and 1.4 above and in compliance with necessary governmental laws,
rules, regulations and procedures required from both parties, the parties shall
commence the preparation and negotiation of the terms and conditions of the Contract
(the Contract) to be entered into between them on the implementation of the
 Project. The parties shall use their best endeavors to formulate and finalize a
Contract with a view to signing the Contract within one hundred twenty (120)
[33]
days from CNMEGs presentation of the Study. (Emphasis supplied)

Clearly, it was CNMEG that initiated the undertaking, and not the Chinese government.
The Feasibility Study was conducted not because of any diplomatic gratuity from or exercise of
sovereign functions by the Chinese government, but was plainly a business strategy employed
by CNMEG with a view to securing this commercial enterprise.

2. Letter dated 1 October 2003

That CNMEG, and not the Chinese government, initiated the Northrail Project was
confirmed by Amb. Wang in his letter dated 1 October 2003, thus:
1. CNMEG has the proven competence and capability to undertake the Project
as evidenced by the ranking of 42 given by the ENR among 225 global construction
companies.

2. CNMEG already signed an MOU with the North Luzon Railways Corporation
last September 14, 2000 during the visit of Chairman Li Peng. Such being the case, they have
already established an initial working relationship with your North Luzon Railways
Corporation. This would categorize CNMEG as the state corporation within the Peoples
Republic of China which initiated our Governments involvement in the Project.

3. Among the various state corporations of the Peoples Republic of China, only
CNMEG has the advantage of being fully familiar with the current requirements of the
Northrail Project having already accomplished a Feasibility Study which was used as inputs
by the North Luzon Railways Corporation in the approvals (sic) process required by the
[34]
Republic of the Philippines. (Emphasis supplied.)

Thus, the desire of CNMEG to secure the Northrail Project was in the ordinary or regular
course of its business as a global construction company. The implementation of the Northrail
Project was intended to generate profit for CNMEG, with the Contract Agreement placing a
contract price of USD 421,050,000 for the venture.[35] The use of the term state corporation to
refer to CNMEG was only descriptive of its nature as a government-owned and/or -controlled
corporation, and its assignment as the Primary Contractor did not imply that it was acting on
behalf of China in the performance of the latters sovereign functions. To imply otherwise would
result in an absurd situation, in which all Chinese corporations owned by the state would be
automatically considered as performing governmental activities, even if they are clearly
engaged in commercial or proprietary pursuits.
3. The Loan Agreement

CNMEG claims immunity on the ground that the Aug 30 MOU on the financing of the
Northrail Project was signed by the Philippine and Chinese governments, and its assignment as
the Primary Contractor meant that it was bound to perform a governmental function on behalf
of China. However, the Loan Agreement, which originated from the same Aug 30 MOU, belies
this reasoning, viz:
Article 11. xxx (j) Commercial Activity The execution and delivery of this Agreement by
the Borrower constitute, and the Borrowers performance of and compliance with its obligations
under this Agreement will constitute, private and commercial acts done and performed for
commercial purposes under the laws of the Republic of the Philippines and neither the
Borrower nor any of its assets is entitled to any immunity or privilege (sovereign or
otherwise) from suit, execution or any other legal process with respect to its obligations
under this Agreement, as the case may be, in any jurisdiction. Notwithstanding the foregoing,
the Borrower does not waive any immunity with respect of its assets which are (i) used by a
diplomatic or consular mission of the Borrower and (ii) assets of a military character and under
control of a military authority or defense agency and (iii) located in the Philippines and dedicated
to public or governmental use (as distinguished from patrimonial assets or assets dedicated to
commercial use). (Emphasis supplied.)

(k) Proceedings to Enforce Agreement In any proceeding in the Republic of

the Philippines to enforce this Agreement, the choice of the laws of the Peoples Republic
of China as the governing law hereof will be recognized and such law will be applied. The waiver
of immunity by the Borrower, the irrevocable submissions of the Borrower to the non-exclusive
jurisdiction of the courts of the Peoples Republic of China and the appointment of the Borrowers
Chinese Process Agent is legal, valid, binding and enforceable and any judgment obtained in the
Peoples Republic of China will be if introduced, evidence for enforcement in any proceedings
against the Borrower and its assets in the Republic of the Philippines provided that (a) the court
rendering judgment had jurisdiction over the subject matter of the action in accordance with its
jurisdictional rules, (b) the Republic had notice of the proceedings, (c) the judgment of the court
was not obtained through collusion or fraud, and (d) such judgment was not based on a clear
[36]
mistake of fact or law.

Further, the Loan Agreement likewise contains this express waiver of immunity:
15.5 Waiver of Immunity The Borrower irrevocably and unconditionally waives, any
immunity to which it or its property may at any time be or become entitled, whether characterized
as sovereign immunity or otherwise, from any suit, judgment, service of process upon it or any
agent, execution on judgment, set-off, attachment prior to judgment, attachment in aid of execution
to which it or its assets may be entitled in any legal action or proceedings with respect to this
Agreement or any of the transactions contemplated hereby or hereunder. Notwithstanding the
foregoing, the Borrower does not waive any immunity in respect of its assets which are (i) used by
a diplomatic or consular mission of the Borrower, (ii) assets of a military character and under
control of a military authority or defense agency and (iii) located in the Philippines and dedicated
to a public or governmental use (as distinguished from patrimonial assets or assets dedicated to
[37]
commercial use).
 Thus, despite petitioners claim that the EXIM Bank extended financial assistance to
Northrail because the bank was mandated by the Chinese government, and not because of any
motivation to do business in the Philippines,[38] it is clear from the foregoing provisions that the
Northrail Project was a purely commercial transaction.

Admittedly, the Loan Agreement was entered into between EXIM Bank and the Philippine
government, while the Contract Agreement was between Northrail and CNMEG. Although the
Contract Agreement is silent on the classification of the legal nature of the transaction, the
foregoing provisions of the Loan Agreement, which is an inextricable part of the entire
undertaking, nonetheless reveal the intention of the parties to the Northrail Project to classify the
whole venture as commercial or proprietary in character.

Thus, piecing together the content and tenor of the Contract Agreement, the
Memorandum of Understanding dated 14 September 2002, Amb. Wangs letter dated 1 October
2003, and the Loan Agreement would reveal the desire of CNMEG to construct the Luzon
Railways in pursuit of a purely commercial activity performed in the ordinary course of its
business.

B. CNMEG failed to adduce evidence that it is

immune from suit under Chinese law.

Even assuming arguendo that CNMEG performs governmental functions, such claim does
not automatically vest it with immunity. This view finds support in Malong v. Philippine
National Railways, in which this Court held that (i)mmunity from suit is determined by the
character of the objects for which the entity was organized.[39]
In this regard, this Courts ruling in Deutsche Gesellschaft Fr Technische Zusammenarbeit
(GTZ) v. CA[40] must be examined. In Deutsche Gesellschaft, Germany and the Philippinesentered
into a Technical Cooperation Agreement, pursuant to which both signed an arrangement
promoting the Social Health InsuranceNetworking and Empowerment (SHINE) project. The two
governments named their respective implementing organizations: the Department of Health
(DOH) and the Philippine Health Insurance Corporation (PHIC) for the Philippines, and GTZ for
the implementation of Germanys contributions. In ruling that GTZ was not immune from suit,
this Court held:
The arguments raised by GTZ and the [Office of the Solicitor General (OSG)] are rooted
in several indisputable facts. The SHINE project was implemented pursuant to the bilateral
agreements between the Philippine and German governments. GTZ was tasked, under the
1991 agreement, with the implementation of the contributions of the German government. The
activities performed by GTZ pertaining to the SHINE project are governmental in nature,
related as they are to the promotion of health insurance in the Philippines. The fact that GTZ
entered into employment contracts with the private respondents did not disqualify it from
invoking immunity from suit, as held in cases such as Holy See v. Rosario, Jr., which set forth
what remains valid doctrine:

Certainly, the mere entering into a contract by a foreign state with a

private party cannot be the ultimate test. Such an act can only be the start of the
inquiry. The logical question is whether the foreign state is engaged in the activity
in the regular course of business. If the foreign state is not engaged regularly in a
business or trade, the particular act or transaction must then be tested by its
nature. If the act is in pursuit of a sovereign activity, or an incident thereof, then it
is an act jure imperii, especially when it is not undertaken for gain or profit.

Beyond dispute is the tenability of the comment points (sic) raised by GTZ and the OSG
that GTZ was not performing proprietary functions notwithstanding its entry into the particular
employment contracts. Yet there is an equally fundamental premise which GTZ and the OSG fail
to address, namely: Is GTZ, by conception, able to enjoy the Federal Republics immunity from
suit?

The principle of state immunity from suit, whether a local state or a foreign state, is
reflected in Section 9, Article XVI of the Constitution, which states that the State may not be
sued without its consent. Who or what consists of the State? For one, the doctrine is available to
foreign States insofar as they are sought to be sued in the courts of the local State, necessary as it
is to avoid unduly vexing the peace of nations.

If the instant suit had been brought directly against the Federal Republic of Germany,
there would be no doubt that it is a suit brought against a State, and the only necessary inquiry is
whether said State had consented to be sued. However, the present suit was brought against GTZ.
It is necessary for us to understand what precisely are the parameters of the legal personality of
GTZ.

Counsel for GTZ characterizes GTZ as the implementing agency of the Government
of the Federal Republic of Germany, a depiction similarly adopted by the OSG. Assuming that
the characterization is correct, it does not automatically invest GTZ with the ability to invoke
State immunity from suit. The distinction lies in whether the agency is incorporated or
unincorporated.

xxx xxx xxx

State immunity from suit may be waived by general or special law. The special law can
take the form of the original charter of the incorporated government agency. Jurisprudence is
replete with examples of incorporated government agencies which were ruled not entitled to
invoke immunity from suit, owing to provisions in their charters manifesting their consent to be
sued.

xxx xxx xxx

It is useful to note that on the part of the Philippine government, it had designated two
entities, the Department of Health and the Philippine Health Insurance Corporation (PHIC), as the
implementing agencies in behalf of the Philippines. The PHIC was established under Republic Act
No. 7875, Section 16 (g) of which grants the corporation the power to sue and be sued in court.
Applying the previously cited jurisprudence, PHIC would not enjoy immunity from suit even in the
performance of its functions connected with SHINE, however, (sic) governmental in nature as (sic)
they may be.

Is GTZ an incorporated agency of the German government? There is some mystery

surrounding that question. Neither GTZ nor the OSG go beyond the claim that petitioner
is the implementing agency of the Government of the Federal Republic of Germany. On
the other hand, private respondents asserted before the Labor Arbiter that GTZ was a private
corporation engaged in the implementation of development projects. The Labor Arbiter
accepted that claim in his Order denying the Motion to Dismiss, though he was silent on that
point in his Decision. Nevertheless, private respondents argue in their Comment that the finding
that GTZ was a private corporation was never controverted, and is therefore deemed
admitted. In its Reply, GTZ controverts that finding, saying that it is a matter of public
knowledge that the status of petitioner GTZ is that of the implementing agency, and not that of a
private corporation.

In truth, private respondents were unable to adduce any evidence to substantiate their
claim that GTZ was a private corporation, and the Labor Arbiter acted rashly in accepting such
claim without explanation. But neither has GTZ supplied any evidence defining its legal
nature beyond that of the bare descriptive implementing agency. There is no doubt that the
1991 Agreement designated GTZ as the implementing agency in behalf of the German
government. Yet the catch is that such term has no precise definition that is responsive to
our concerns. Inherently, an agent acts in behalf of a principal, and the GTZ can be said to
act in behalf of the German state. But that is as far as implementing agency could take us.
The term by itself does not supply whether GTZ is incorporated or unincorporated,
whether it is owned by the German state or by private interests, whether it has juridical
personality independent of the German government or none at all.

xxx xxx xxx

Again, we are uncertain of the corresponding legal implications under German law
surrounding a private company owned by the Federal Republic of Germany. Yet taking the
description on face value, the apparent equivalent under Philippine law is that of a
corporation organized under the Corporation Code but owned by the Philippine
government, or a government-owned or controlled corporation without original charter.
And it bears notice that Section 36 of the Corporate Code states that [e]very corporation
incorporated under this Code has the power and capacity x x x to sue and be sued in its
corporate name.

It is entirely possible that under German law, an entity such as GTZ or particularly GTZ
itself has not been vested or has been specifically deprived the power and capacity to sue and/or
be sued. Yet in the proceedings below and before this Court, GTZ has failed to establish that
under German law, it has not consented to be sued despite it being owned by the Federal
Republic of Germany. We adhere to the rule that in the absence of evidence to the contrary,
foreign laws on a particular subject are presumed to be the same as those of the
Philippines, and following the most intelligent assumption we can gather, GTZ is akin to a
governmental owned or controlled corporation without original charter which, by virtue of
the Corporation Code, has expressly consented to be sued. At the very least, like the Labor
Arbiter and the Court of Appeals, this Court has no basis in fact to conclude or presume that GTZ
enjoys immunity from suit.[41] (Emphasis supplied.)
 Applying the foregoing ruling to the case at bar, it is readily apparent that CNMEG cannot
claim immunity from suit, even if it contends that it performs governmental functions. Its
designation as the Primary Contractor does not automatically grant it immunity, just as the term
implementing agency has no precise definition for purposes of ascertaining whether GTZ was
immune from suit. Although CNMEG claims to be a government-owned corporation, it failed to
adduce evidence that it has not consented to be sued under Chinese law. Thus, following this
Courts ruling in Deutsche Gesellschaft, in the absence of evidence to the contrary, CNMEG is to
be presumed to be a government-owned and -controlled corporation without an original charter.
As a result, it has the capacity to sue and be sued under Section 36 of the Corporation Code.

C. CNMEG failed to present a certification from the

Department of Foreign Affairs.

In Holy See,[42] this Court reiterated the oft-cited doctrine that the determination by the
Executive that an entity is entitled to sovereign or diplomatic immunity is a political question
conclusive upon the courts, to wit:
In Public International Law, when a state or international agency wishes to plead sovereign
or diplomatic immunity in a foreign court, it requests the Foreign Office of the state where it is
sued to convey to the court that said defendant is entitled to immunity.

xxx xxx xxx

In the Philippines, the practice is for the foreign government or the international
organization to first secure an executive endorsement of its claim of sovereign or
diplomatic immunity. But how the Philippine Foreign Office conveys its endorsement to the
courts varies. In International Catholic Migration Commission v. Calleja, 190 SCRA 130
(1990), the Secretary of Foreign Affairs just sent a letter directly to the Secretary of Labor and
Employment, informing the latter that the respondent-employer could not be sued because it
enjoyed diplomatic immunity. In World Health Organization v. Aquino, 48 SCRA 242 (1972),
the Secretary of Foreign Affairs sent the trial court a telegram to that effect. In Baer v. Tizon, 57
SCRA 1 (1974), the U.S. Embassy asked the Secretary of Foreign Affairs to request the Solicitor
General to make, in behalf of the Commander of the United States Naval Base at Olongapo City,
Zambales, a suggestion to respondent Judge. The Solicitor General embodied the suggestion in a
Manifestation and Memorandum as amicus curiae.

In the case at bench, the Department of Foreign Affairs, through the Office of Legal
Affairs moved with this Court to be allowed to intervene on the side of petitioner. The Court
allowed the said Department to file its memorandum in support of petitioners claim of sovereign
immunity.

In some cases, the defense of sovereign immunity was submitted directly to the local
courts by the respondents through their private counsels (Raquiza v. Bradford, 75 Phil. 50
[1945]; Miquiabas v. Philippine-Ryukyus Command, 80 Phil. 262 [1948]; United States of
America v. Guinto, 182 SCRA 644 [1990] and companion cases). In cases where the foreign
 states bypass the Foreign Office, the courts can inquire into the facts and make their own
determination as to the nature of the acts and transactions involved.[43] (Emphasis supplied.)

The question now is whether any agency of the Executive Branch can make a determination
of immunity from suit, which may be considered as conclusive upon the courts. This Court,
inDepartment of Foreign Affairs (DFA) v. National Labor Relations Commission
(NLRC),[44] emphasized the DFAs competence and authority to provide such necessary
determination, to wit:
The DFAs function includes, among its other mandates, the determination of
persons and institutions covered by diplomatic immunities, a determination which, when
challenge, (sic) entitles it to seek relief from the court so as not to seriously impair the
conduct of the country's foreign relations. The DFA must be allowed to plead its case
whenever necessary or advisable to enable it to help keep the credibility of the Philippine
government before the international community. When international agreements are
concluded, the parties thereto are deemed to have likewise accepted the responsibility of
seeing to it that their agreements are duly regarded. In our country, this task falls
principally of (sic) the DFA as being the highest executive department with the competence
and authority to so act in this aspect of the international arena.[45] (Emphasis supplied.)

Further, the fact that this authority is exclusive to the DFA was also emphasized in this
Courts ruling in Deutsche Gesellschaft:
It is to be recalled that the Labor Arbiter, in both of his rulings, noted that it was
imperative for petitioners to secure from the Department of Foreign Affairs a certification of
respondents diplomatic status and entitlement to diplomatic privileges including immunity from
suits. The requirement might not necessarily be imperative. However, had GTZ obtained such
certification from the DFA, it would have provided factual basis for its claim of immunity
that would, at the very least, establish a disputable evidentiary presumption that the foreign
party is indeed immune which the opposing party will have to overcome with its own factual
evidence. We do not see why GTZ could not have secured such certification or endorsement
from the DFA for purposes of this case.Certainly, it would have been highly prudential for GTZ
to obtain the same after the Labor Arbiter had denied the motion to dismiss. Still, even at this
juncture, we do not see any evidence that the DFA, the office of the executive branch in
charge of our diplomatic relations, has indeed endorsed GTZs claim of immunity. It may be
possible that GTZ tried, but failed to secure such certification, due to the same concerns that we
have discussed herein.

Would the fact that the Solicitor General has endorsed GTZs claim of States
immunity from suit before this Court sufficiently substitute for the DFA certification?
Note that the rule in public international law quoted in Holy See referred to endorsement
by the Foreign Office of the State where the suit is filed, such foreign office in the
Philippines being the Department of Foreign Affairs. Nowhere in the Comment of the
OSG is it manifested that the DFA has endorsed GTZs claim, or that the OSG had
solicited the DFAs views on the issue. The arguments raised by the OSG are virtually the same
as the arguments raised by GTZ without any indication of any special and distinct perspective
maintained by the Philippine government on the issue. The Comment filed by the OSG does
 not inspire the same degree of confidence as a certification from the DFA would have
elicited.[46] (Emphasis supplied.)

In the case at bar, CNMEG offers the Certification executed by the Economic and
Commercial Office of the Embassy of the Peoples Republic of China, stating that the Northrail
Project is in pursuit of a sovereign activity.[47] Surely, this is not the kind of certification that can
establish CNMEGs entitlement to immunity from suit, as Holy See unequivocally refers to the
determination of the Foreign Office of the state where it is sued.
Further, CNMEG also claims that its immunity from suit has the executive endorsement of
both the OSG and the Office of the Government Corporate Counsel (OGCC), which must be
respected by the courts. However, as expressly enunciated in Deutsche Gesellschaft, this
determination by the OSG, or by the OGCC for that matter, does not inspire the same degree of
confidence as a DFA certification. Even with a DFA certification, however, it must be
remembered that this Court is not precluded from making an inquiry into the intrinsic correctness
of such certification.

D. An agreement to submit any dispute to

arbitration may be construed as an implicit waiver of
immunity from suit.

In the United States, the Foreign Sovereign Immunities Act of 1976 provides for a waiver
by implication of state immunity. In the said law, the agreement to submit disputes to arbitration
in a foreign country is construed as an implicit waiver of immunity from suit. Although there is
no similar law in the Philippines, there is reason to apply the legal reasoning behind the waiver in
this case.

The Conditions of Contract,[48] which is an integral part of the Contract

Agreement,[49] states:
33. SETTLEMENT OF DISPUTES AND ARBITRATION

33.1. Amicable Settlement

Both parties shall attempt to amicably settle all disputes or controversies arising from this
Contract before the commencement of arbitration.

33.2. Arbitration

All disputes or controversies arising from this Contract which cannot be settled between the
Employer and the Contractor shall be submitted to arbitration in accordance with the UNCITRAL
Arbitration Rules at present in force and as may be amended by the rest of this Clause. The
 appointing authority shall be Hong Kong International Arbitration Center. The place of arbitration
shall be in Hong Kong at Hong Kong International Arbitration Center (HKIAC).

Under the above provisions, if any dispute arises between Northrail and CNMEG, both
parties are bound to submit the matter to the HKIAC for arbitration. In case the HKIAC makes an
arbitral award in favor of Northrail, its enforcement in the Philippines would be subject to the
Special Rules on Alternative Dispute Resolution (Special Rules). Rule 13 thereof provides for the
Recognition and Enforcement of a Foreign Arbitral Award. Under Rules 13.2 and 13.3 of the
Special Rules, the party to arbitration wishing to have an arbitral award recognized and enforced
in the Philippines must petition the proper regional trial court (a) where the assets to be attached
or levied upon is located; (b) where the acts to be enjoined are being performed; (c) in the
principal place of business in the Philippines of any of the parties; (d) if any of the parties is an
individual, where any of those individuals resides; or (e) in the National Capital Judicial Region.

From all the foregoing, it is clear that CNMEG has agreed that it will not be afforded
immunity from suit. Thus, the courts have the competence and jurisdiction to ascertain the
validity of the Contract Agreement.

Second issue: Whether the Contract Agreement is an

executive agreement

Article 2(1) of the Vienna Convention on the Law of Treaties (Vienna Convention) defines
a treaty as follows:
[A]n international agreement concluded between States in written form and governed by
international law, whether embodied in a single instrument or in two or more related instruments
and whatever its particular designation.

In Bayan Muna v. Romulo, this Court held that an executive agreement is similar to a
treaty, except that the former (a) does not require legislative concurrence; (b) is usually less
formal; and (c) deals with a narrower range of subject matters.[50]

Despite these differences, to be considered an executive agreement, the following three

requisites provided under the Vienna Convention must nevertheless concur: (a) the agreement
must be between states; (b) it must be written; and (c) it must governed by international law. The
first and the third requisites do not obtain in the case at bar.

A. CNMEG is neither a government nor a government

agency.
 The Contract Agreement was not concluded between the Philippines and China, but
between Northrail and CNMEG.[51] By the terms of the Contract Agreement, Northrail is a
government-owned or -controlled corporation, while CNMEG is a corporation duly organized
and created under the laws of the Peoples Republic of China.[52] Thus, both Northrail and
CNMEG entered into the Contract Agreement as entities with personalities distinct and separate
from the Philippine and Chinese governments, respectively.

Neither can it be said that CNMEG acted as agent of the Chinese government. As
previously discussed, the fact that Amb. Wang, in his letter dated 1 October 2003,[53] described
CNMEG as a state corporation and declared its designation as the Primary Contractor in the
Northrail Project did not mean it was to perform sovereign functions on behalf of China. That
label was only descriptive of its nature as a state-owned corporation, and did not preclude it
from engaging in purely commercial or proprietary ventures.

B. The Contract Agreement is to be governed by

Philippine law.

Article 2 of the Conditions of Contract,[54] which under Article 1.1 of the Contract
Agreement is an integral part of the latter, states:
APPLICABLE LAW AND GOVERNING LANGUAGE

The contract shall in all respects be read and construed in accordance with the laws of
the Philippines.

The contract shall be written in English language. All correspondence and other documents
pertaining to the Contract which are exchanged by the parties shall be written in English language.

Since the Contract Agreement explicitly provides that Philippine law shall be applicable,
the parties have effectively conceded that their rights and obligations thereunder are not governed
by international law.

It is therefore clear from the foregoing reasons that the Contract Agreement does not
partake of the nature of an executive agreement. It is merely an ordinary commercial contract that
can be questioned before the local courts.

WHEREFORE, the instant Petition is DENIED. Petitioner China National Machinery &
Equipment Corp. (Group) is not entitled to immunity from suit, and the Contract Agreement is not
an executive agreement. CNMEGs prayer for the issuance of a TRO and/or Writ of Preliminary
Injunction is DENIED for being moot and academic. This case is REMANDED to theRegional
Trial Court of Makati, Branch 145, for further proceedings as regards the validity of the
contracts subject of Civil Case No. 06-203.

No pronouncement on costs of suit.

SO ORDERED.

MARIA LOURDES P. A. SERENO

Associate Justice

WE CONCUR:

RENATO C. CORONA
Chief Justice

ANTONIO T. CARPIO PRESBITERO J. VELASCO, JR.

Associate Justice Associate Justice

TERESITA J. LEONARDO-DE CASTRO ARTURO D. BRION

Associate Justice Associate Justice

DIOSDADO M. PERALTA LUCAS P. BERSAMIN

Associate Justice Associate Justice

(ON LEAVE)
MARIANO C. DEL CASTILLO ROBERTO A. ABAD
Associate Justice Associate Justice

MARTIN S. VILLARAMA, JR. JOSE PORTUGAL PEREZ

Associate Justice Associate Justice

JOSE C. MENDOZA BIENVENIDO L. REYES

Associate Justice Associate Justice

ESTELA M. PERLAS-BERNABE
Associate Justice
CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in the
above Decision had been reached in consultation before the case was assigned to the writer of
the opinion of the Court.

RENATO C. CORONA
Chief Justice

EN BANC

PROF. MERLIN M. MAGALLONA, G.R No. 187167

AKBAYAN PARTY-LIST REP. RISA

HONTIVEROS, PROF. HARRY C. Present:

ROQUE, JR., AND UNIVERSITY OF

THE PHILIPPINES COLLEGE OF CORONA, C.J.,

LAW STUDENTS, ALITHEA CARPIO,

BARBARA ACAS, VOLTAIRE VELASCO, JR.,

ALFERES, CZARINA MAY LEONARDO-DE CASTRO,

ALTEZ, FRANCIS ALVIN ASILO, BRION,

SHERYL BALOT, RUBY AMOR PERALTA,

BARRACA, JOSE JAVIER BAUTISTA, BERSAMIN,

ROMINA BERNARDO, VALERIE DEL CASTILLO,

PAGASA BUENAVENTURA, EDAN ABAD,

MARRI CAETE, VANN ALLEN VILLARAMA, JR.,

DELA CRUZ, RENE DELORINO, PEREZ,

PAULYN MAY DUMAN, SHARON MENDOZA, and

ESCOTO, RODRIGO FAJARDO III, SERENO, JJ.

GIRLIE FERRER, RAOULLE OSEN

FERRER, CARLA REGINA GREPO,

ANNA MARIE CECILIA GO, IRISH

KAY KALAW, MARY ANN JOY LEE,

MARIA LUISA MANALAYSAY,

MIGUEL RAFAEL MUSNGI,

MICHAEL OCAMPO, JAKLYN HANNA

PINEDA, WILLIAM RAGAMAT,

MARICAR RAMOS, ENRIK FORT

REVILLAS, JAMES MARK TERRY

RIDON, JOHANN FRANTZ RIVERA IV,

CHRISTIAN RIVERO, DIANNE MARIE

ROA, NICHOLAS SANTIZO, MELISSA

CHRISTINA SANTOS, CRISTINE MAE

TABING, VANESSA ANNE TORNO,

MARIA ESTER VANGUARDIA, and

MARCELINO VELOSO III,

Petitioners,

- versus -

HON. EDUARDO ERMITA, IN HIS

CAPACITY AS EXECUTIVE

SECRETARY, HON. ALBERTO

ROMULO, IN HIS CAPACITY AS

SECRETARY OF THE DEPARTMENT

OF FOREIGN AFFAIRS, HON.

ROLANDO ANDAYA, IN HIS CAPACITY

AS SECRETARY OF THE DEPARTMENT

OF BUDGET AND MANAGEMENT,

HON. DIONY VENTURA, IN HIS

CAPACITY AS ADMINISTRATOR OF

THE NATIONAL MAPPING &

RESOURCE INFORMATION

AUTHORITY, and HON. HILARIO

DAVIDE, JR., IN HIS CAPACITY AS

REPRESENTATIVE OF THE

PERMANENT MISSION OF THE

REPUBLIC OF THE PHILIPPINES Promulgated:

TO THE UNITED NATIONS,

Respondents. July 16, 2011

x -----------------------------------------------------------------------------------------x

DECISION

CARPIO, J.:

The Case

This original action for the writs of certiorari and prohibition assails the constitutionality of
Republic Act No. 9522 (RA 9522) adjusting the countrys archipelagic baselines and classifying the
1

baseline regime of nearby territories.

The Antecedents

In 1961, Congress passed Republic Act No. 3046 (RA 3046) demarcating the maritime baselines
2

of the Philippines as an archipelagic State. This law followed the framing of the Convention on the
3
Territorial Sea and the Contiguous Zone in 1958 (UNCLOS I), codifying, among others, the
4

sovereign right of States parties over their territorial sea, the breadth of which, however, was left
undetermined. Attempts to fill this void during the second round of negotiations in Geneva in 1960
(UNCLOS II) proved futile. Thus, domestically, RA 3046 remained unchanged for nearly five
decades, save for legislation passed in 1968 (Republic Act No. 5446 [RA 5446]) correcting
typographical errors and reserving the drawing of baselines around Sabah in North Borneo.

In March 2009, Congress amended RA 3046 by enacting RA 9522, the statute now under scrutiny.
The change was prompted by the need to make RA 3046 compliant with the terms of the United
Nations Convention on the Law of the Sea (UNCLOS III), which the Philippines ratified on 27
5

February 1984. Among others, UNCLOS III prescribes the water-land ratio, length, and contour of
6

baselines of archipelagic States like the Philippines and sets the deadline for the filing of
7

application for the extended continental shelf. Complying with these requirements, RA 9522
8

shortened one baseline, optimized the location of some basepoints around the Philippine
archipelago and classified adjacent territories, namely, the Kalayaan Island Group (KIG) and the
Scarborough Shoal, as regimes of islands whose islands generate their own applicable maritime
zones.

Petitioners, professors of law, law students and a legislator, in their respective capacities as citizens,
taxpayers or x x x legislators, as the case may be, assail the constitutionality of RA 9522 on two
9

principal grounds, namely: (1) RA 9522 reduces Philippine maritime territory, and logically, the
reach of the Philippine states sovereign power, in violation of Article 1 of the 1987
Constitution, embodying the terms of the Treaty of Paris and ancillary treaties, and (2) RA 9522
10 11 12

opens the countrys waters landward of the baselines to maritime passage by all vessels and
aircrafts, undermining Philippine sovereignty and national security, contravening the countrys
nuclear-free policy, and damaging marine resources, in violation of relevant constitutional
provisions.13

In addition, petitioners contend that RA 9522s treatment of the KIG as regime of islands not
only results in the loss of a large maritime area but also prejudices the livelihood of subsistence
fishermen. To buttress their argument of territorial diminution, petitioners facially attack RA 9522
14

for what it excluded and included its failure to reference either the Treaty of Paris or Sabah and its
use of UNCLOS IIIs framework of regime of islands to determine the maritime zones of the KIG
and the Scarborough Shoal.
Commenting on the petition, respondent officials raised threshold issues questioning (1) the
petitions compliance with the case or controversy requirement for judicial review grounded on
petitioners alleged lack of locus standi and (2) the propriety of the writs of certiorari and
prohibition to assail the constitutionality of RA 9522. On the merits, respondents defended RA
9522 as the countrys compliance with the terms of UNCLOS III, preserving Philippine territory
over the KIG or Scarborough Shoal. Respondents add that RA 9522 does not undermine the
countrys security, environment and economic interests or relinquish the Philippines claim over
Sabah.

Respondents also question the normative force, under international law, of petitioners
assertion that what Spain ceded to the United States under the Treaty of Paris were the islands
andall the waters found within the boundaries of the rectangular area drawn under the Treaty of
Paris.

We left unacted petitioners prayer for an injunctive writ.

The Issues

The petition raises the following issues:

1. Preliminarily

1. Whether petitioners possess locus standi to bring this suit; and

2. Whether the writs of certiorari and prohibition are the proper remedies to assail the
constitutionality of RA 9522.

2. On the merits, whether RA 9522 is unconstitutional.

The Ruling of the Court

On the threshold issues, we hold that (1) petitioners possess locus standi to bring this suit as
citizens and (2) the writs of certiorari and prohibition are proper remedies to test the
constitutionality of RA 9522. On the merits, we find no basis to declare RA 9522 unconstitutional.

On the Threshold Issues

Petitioners Possess Locus

Standi as Citizens

Petitioners themselves undermine their assertion of locus standi as legislators and taxpayers
because the petition alleges neither infringement of legislative prerogative nor misuse of public
15

funds, occasioned by the passage and implementation of RA 9522. Nonetheless, we recognize

16

petitioners locus standi as citizens with constitutionally sufficient interest in the resolution of the
merits of the case which undoubtedly raises issues of national significance necessitating urgent
resolution. Indeed, owing to the peculiar nature of RA 9522, it is understandably difficult to find
other litigants possessing a more direct and specific interest to bring the suit, thus satisfying one of
the requirements for granting citizenship standing. 17

The Writs of Certiorari and Prohibition

Are Proper Remedies to Test

the Constitutionality of Statutes

In praying for the dismissal of the petition on preliminary grounds, respondents seek a strict
observance of the offices of the writs of certiorari and prohibition, noting that the writs cannot issue
absent any showing of grave abuse of discretion in the exercise of judicial, quasi-judicial or
ministerial powers on the part of respondents and resulting prejudice on the part of petitioners. 18

Respondents submission holds true in ordinary civil proceedings. When this Court exercises its
constitutional power of judicial review, however, we have, by tradition, viewed the writs of
certiorari and prohibition as proper remedial vehicles to test the constitutionality of statutes, and
19

indeed, of acts of other branches of government. Issues of constitutional import are sometimes
20

crafted out of statutes which, while having no bearing on the personal interests of the petitioners,
carry such relevance in the life of this nation that the Court inevitably finds itself constrained to
take cognizance of the case and pass upon the issues raised, non-compliance with the letter of
procedural rules notwithstanding. The statute sought to be reviewed here is one such law.

RA 9522 is Not Unconstitutional

RA 9522 is a Statutory Tool

to Demarcate the Countrys

Maritime Zones and Continental

Shelf Under UNCLOS III, not to

Delineate Philippine Territory

Petitioners submit that RA 9522 dismembers a large portion of the national territory because it
21

discards the pre-UNCLOS III demarcation of Philippine territory under the Treaty of Paris and
related treaties, successively encoded in the definition of national territory under the 1935, 1973
and 1987 Constitutions. Petitioners theorize that this constitutional definition trumps any treaty or
statutory provision denying the Philippines sovereign control over waters, beyond the territorial sea
recognized at the time of the Treaty of Paris, that Spain supposedly ceded to the United States.
Petitioners argue that from the Treaty of Paris technical description, Philippine sovereignty over
territorial waters extends hundreds of nautical miles around the Philippine archipelago, embracing
the rectangular area delineated in the Treaty of Paris.
22

Petitioners theory fails to persuade us.

UNCLOS III has nothing to do with the acquisition (or loss) of territory. It is a multilateral
treaty regulating, among others, sea-use rights over maritime zones (i.e., the territorial waters [12
nautical miles from the baselines], contiguous zone [24 nautical miles from the baselines],
exclusive economic zone [200 nautical miles from the baselines]), and continental shelves that
UNCLOS III delimits. UNCLOS III was the culmination of decades-long negotiations among
23

United Nations members to codify norms regulating the conduct of States in the worlds oceans and
submarine areas, recognizing coastal and archipelagic States graduated authority over a limited
span of waters and submarine lands along their coasts.

On the other hand, baselines laws such as RA 9522 are enacted by UNCLOS III States
parties to mark-out specific basepoints along their coasts from which baselines are drawn, either
straight or contoured, to serve as geographic starting points to measure the breadth of the maritime
zones and continental shelf. Article 48 of UNCLOS III on archipelagic States like ours could not be
any clearer:

Article 48. Measurement of the breadth of the territorial sea, the contiguous
zone, the exclusive economic zone and the continental shelf. The breadth of the
territorial sea, the contiguous zone, the exclusive economic zone and the continental
shelf shall be measured from archipelagic baselines drawn in accordance with
article 47. (Emphasis supplied)

Thus, baselines laws are nothing but statutory mechanisms for UNCLOS III States parties to
delimit with precision the extent of their maritime zones and continental shelves. In turn, this gives
notice to the rest of the international community of the scope of the maritime space and submarine
areas within which States parties exercise treaty-based rights, namely, the exercise of sovereignty
over territorial waters (Article 2), the jurisdiction to enforce customs, fiscal, immigration, and
sanitation laws in the contiguous zone (Article 33), and the right to exploit the living and non-living
resources in the exclusive economic zone (Article 56) and continental shelf (Article 77).
 Even under petitioners theory that the Philippine territory embraces the islands and all the
waters within the rectangular area delimited in the Treaty of Paris, the baselines of the Philippines
would still have to be drawn in accordance with RA 9522 because this is the only way to draw the
baselines in conformity with UNCLOS III. The baselines cannot be drawn from the boundaries or
other portions of the rectangular area delineated in the Treaty of Paris, but from the outermost
islands and drying reefs of the archipelago.24

UNCLOS III and its ancillary baselines laws play no role in the acquisition, enlargement or,
as petitioners claim, diminution of territory. Under traditional international law typology, States
acquire (or conversely, lose) territory through occupation, accretion, cession and prescription, not
25

by executing multilateral treaties on the regulations of sea-use rights or enacting statutes to comply
with the treatys terms to delimit maritime zones and continental shelves. Territorial claims to land
features are outside UNCLOS III, and are instead governed by the rules on general international
law.26

RA 9522s Use of the Framework

of Regime of Islands to Determine the

Maritime Zones of the KIG and the

Scarborough Shoal, not Inconsistent

with the Philippines Claim of Sovereignty

Over these Areas

Petitioners next submit that RA 9522s use of UNCLOS IIIs regime of islands framework to draw
the baselines, and to measure the breadth of the applicable maritime zones of the KIG, weakens our
territorial claim over that area. Petitioners add that the KIGs (and Scarborough Shoals) exclusion
27

from the Philippine archipelagic baselines results in the loss of about 15,000 square nautical miles
of territorial waters, prejudicing the livelihood of subsistence fishermen. A comparison of the
28

configuration of the baselines drawn under RA 3046 and RA 9522 and the extent of maritime space
encompassed by each law, coupled with a reading of the text of RA 9522 and its congressional
deliberations, vis--vis the Philippines obligations under UNCLOS III, belie this view.
The configuration of the baselines drawn under RA 3046 and RA 9522 shows that RA 9522 merely
followed the basepoints mapped by RA 3046, save for at least nine basepoints that RA 9522
skipped to optimize the location of basepoints and adjust the length of one baseline (and thus
comply with UNCLOS IIIs limitation on the maximum length of baselines). Under RA 3046, as
under RA 9522, the KIG and the Scarborough Shoal lie outside of the baselines drawn around the
Philippine archipelago. This undeniable cartographic fact takes the wind out of petitioners
argument branding RA 9522 as a statutory renunciation of the Philippines claim over the KIG,
assuming that baselines are relevant for this purpose.

Petitioners assertion of loss of about 15,000 square nautical miles of territorial waters under RA
9522 is similarly unfounded both in fact and law. On the contrary, RA 9522, by optimizing the
location of basepoints, increased the Philippines total maritime space (covering its internal waters,
territorial sea and exclusive economic zone) by 145,216 square nautical miles, as shown in the table
below:29

Extent of maritime area Extent of maritime

using RA 3046, as
amended, taking into
account the Treaty of Paris
delimitation (in square
nautical miles)
area using RA 9522,
taking into account
UNCLOS III (in
square nautical
miles)

Internal or
archipelagic
166,858 171,435
waters

Territorial 274,136 32,106

Sea
 Exclusive

Economic
382,669
Zone

TOTAL 440,994 586,210

Thus, as the map below shows, the reach of the exclusive economic zone drawn under RA 9522
even extends way beyond the waters covered by the rectangular demarcation under the Treaty of
Paris. Of course, where there are overlapping exclusive economic zones of opposite or adjacent
States, there will have to be a delineation of maritime boundaries in accordance with UNCLOS III. 30

Further, petitioners argument that the KIG now lies outside Philippine territory because the
baselines that RA 9522 draws do not enclose the KIG is negated by RA 9522 itself. Section 2 of the
law commits to text the Philippines continued claim of sovereignty and jurisdiction over the KIG
and the Scarborough Shoal:

SEC. 2. The baselines in the following areas over which the Philippines
likewise exercises sovereignty and jurisdiction shall be determined as Regime of
Islands under the Republic of the Philippines consistent with Article 121 of the United
Nations Convention on the Law of the Sea (UNCLOS):
a) The Kalayaan Island Group as constituted under Presidential Decree No.
1596 and

b) Bajo de Masinloc, also known as Scarborough Shoal. (Emphasis supplied)

Had Congress in RA 9522 enclosed the KIG and the Scarborough Shoal as part of the
Philippine archipelago, adverse legal effects would have ensued. The Philippines would have
committed a breach of two provisions of UNCLOS III. First, Article 47 (3) of UNCLOS III
requires that [t]he drawing of such baselines shall not depart to any appreciable extent from the
general configuration of the archipelago. Second, Article 47 (2) of UNCLOS III requires that the
length of the baselines shall not exceed 100 nautical miles, save for three per cent (3%) of the total
number of baselines which can reach up to 125 nautical miles. 31

Although the Philippines has consistently claimed sovereignty over the KIG and the
32

Scarborough Shoal for several decades, these outlying areas are located at an appreciable distance
from the nearest shoreline of the Philippine archipelago, such that any straight baseline loped
33

around them from the nearest basepoint will inevitably depart to an appreciable extent from the
general configuration of the archipelago.

The principal sponsor of RA 9522 in the Senate, Senator Miriam Defensor-Santiago, took
pains to emphasize the foregoing during the Senate deliberations:

What we call the Kalayaan Island Group or what the rest of the world call[] the
Spratlys and the Scarborough Shoal are outside our archipelagic baseline because if
we put them inside our baselines we might be accused of violating the provision of
international law which states: The drawing of such baseline shall not depart to any
appreciable extent from the general configuration of the archipelago. So sa loob ng
ating baseline, dapat magkalapit ang mga islands. Dahil malayo ang Scarborough
Shoal, hindi natin masasabing malapit sila sa atin although we are still allowed by
international law to claim them as our own.

This is called contested islands outside our configuration. We see that our archipelago
is defined by the orange line which [we] call[] archipelagic baseline. Ngayon, tingnan
ninyo ang maliit na circle doon sa itaas, that is Scarborough Shoal, itong malaking
circle sa ibaba, that is Kalayaan Group or the Spratlys. Malayo na sila sa ating
archipelago kaya kung ilihis pa natin ang dating archipelagic baselines para lamang
masama itong dalawang circles, hindi na sila magkalapit at baka hindi na
tatanggapin ng United Nations because of the rule that it should follow the natural
configuration of the archipelago. (Emphasis supplied)
34

Similarly, the length of one baseline that RA 3046 drew exceeded UNCLOS IIIs limits. The
need to shorten this baseline, and in addition, to optimize the location of basepoints using current
maps, became imperative as discussed by respondents:
 [T]he amendment of the baselines law was necessary to enable the Philippines
to draw the outer limits of its maritime zones including the extended continental shelf
in the manner provided by Article 47 of [UNCLOS III]. As defined by R.A. 3046, as
amended by R.A. 5446, the baselines suffer from some technical deficiencies, to wit:

1. The length of the baseline across Moro Gulf (from Middle of 3 Rock Awash to
Tongquil Point) is 140.06 nautical miles x x x. This exceeds the maximum length
allowed under Article 47(2) of the [UNCLOS III], which states that The length of
such baselines shall not exceed 100 nautical miles, except that up to 3 per cent of the
total number of baselines enclosing any archipelago may exceed that length, up to a
maximum length of 125 nautical miles.
2. The selection of basepoints is not optimal. At least 9 basepoints can be skipped or
deleted from the baselines system. This will enclose an additional 2,195 nautical miles
of water.
3. Finally, the basepoints were drawn from maps existing in 1968, and not established by
geodetic survey methods. Accordingly, some of the points, particularly along the west
coasts of Luzon down to Palawan were later found to be located either inland or on
water, not on low-water line and drying reefs as prescribed by Article 47. 35

Hence, far from surrendering the Philippines claim over the KIG and the Scarborough Shoal,
Congress decision to classify the KIG and the Scarborough Shoal as Regime[s] of Islands under the
Republic of the Philippines consistent with Article 121 of UNCLOS III manifests the Philippine
36

States responsible observance of its pacta sunt servanda obligation under UNCLOS III. Under
Article 121 of UNCLOS III, any naturally formed area of land, surrounded by water, which is
above water at high tide, such as portions of the KIG, qualifies under the category of regime of
islands, whose islands generate their own applicable maritime zones. 37

Statutory Claim Over Sabah under

RA 5446 Retained

Petitioners argument for the invalidity of RA 9522 for its failure to textualize the Philippines claim
over Sabah in North Borneo is also untenable. Section 2 of RA 5446, which RA 9522 did not
repeal, keeps open the door for drawing the baselines of Sabah:

Section 2. The definition of the baselines of the territorial sea of the Philippine
Archipelago as provided in this Act is without prejudice to the delineation of the
baselines of the territorial sea around the territory of Sabah, situated in North
Borneo, over which the Republic of the Philippines has acquired dominion and
sovereignty. (Emphasis supplied)

UNCLOS III and RA 9522 not

Incompatible with the Constitutions

Delineation of Internal Waters

As their final argument against the validity of RA 9522, petitioners contend that the law
unconstitutionally converts internal waters into archipelagic waters, hence subjecting these waters
to the right of innocent and sea lanes passage under UNCLOS III, including overflight. Petitioners
extrapolate that these passage rights indubitably expose Philippine internal waters to nuclear and
maritime pollution hazards, in violation of the Constitution.38

Whether referred to as Philippine internal waters under Article I of the Constitution or as

39

archipelagic waters under UNCLOS III (Article 49 [1]), the Philippines exercises sovereignty over
the body of water lying landward of the baselines, including the air space over it and the submarine
areas underneath. UNCLOS III affirms this:
 Article 49. Legal status of archipelagic waters, of the air space over
archipelagic waters and of their bed and subsoil.

1. The sovereignty of an archipelagic State extends to the waters

enclosed by the archipelagic baselines drawn in accordance with
article 47, described as archipelagic waters, regardless of their depth or
distance from the coast.
2. This sovereignty extends to the air space over the archipelagic
waters, as well as to their bed and subsoil, and the resources
contained therein.
xxxx

4. The regime of archipelagic sea lanes passage established in this Part shall
not in other respects affect the status of the archipelagic waters, including the sea
lanes, or the exercise by the archipelagic State of its sovereignty over such waters
and their air space, bed and subsoil, and the resources contained therein.
(Emphasis supplied)

The fact of sovereignty, however, does not preclude the operation of municipal and international
law norms subjecting the territorial sea or archipelagic waters to necessary, if not marginal, burdens
in the interest of maintaining unimpeded, expeditious international navigation, consistent with the
international law principle of freedom of navigation. Thus, domestically, the political branches of
the Philippine government, in the competent discharge of their constitutional powers, may pass
legislation designating routes within the archipelagic waters to regulate innocent and sea lanes
passage. Indeed, bills drawing nautical highways for sea lanes passage are now pending in
40

Congress. 41

In the absence of municipal legislation, international law norms, now codified in UNCLOS
III, operate to grant innocent passage rights over the territorial sea or archipelagic waters, subject to
the treatys limitations and conditions for their exercise. Significantly, the right of innocent passage
42

is a customary international law, thus automatically incorporated in the corpus of Philippine

43

law. No modern State can validly invoke its sovereignty to absolutely forbid innocent passage that
44

is exercised in accordance with customary international law without risking retaliatory measures
from the international community.

The fact that for archipelagic States, their archipelagic waters are subject to both the right of
innocent passage and sea lanes passage does not place them in lesser footing vis--viscontinental
45
coastal States which are subject, in their territorial sea, to the right of innocent passage and the right
of transit passage through international straits. The imposition of these passage rights through
archipelagic waters under UNCLOS III was a concession by archipelagic States, in exchange for
their right to claim all the waters landward of their baselines, regardless of their depth or distance
from the coast, as archipelagic waters subject to their territorial sovereignty. More importantly, the
recognition of archipelagic States archipelago and the waters enclosed by their baselines as one
cohesive entity prevents the treatment of their islands as separate islands under UNCLOS
III. Separate islands generate their own maritime zones, placing the waters between islands
46

separated by more than 24 nautical miles beyond the States territorial sovereignty, subjecting these
waters to the rights of other States under UNCLOS III. 47

Petitioners invocation of non-executory constitutional provisions in Article II (Declaration of

Principles and State Policies) must also fail. Our present state of jurisprudence considers the
48

provisions in Article II as mere legislative guides, which, absent enabling legislation, do not
embody judicially enforceable constitutional rights x x x. Article II provisions serve as guides in
49

formulating and interpreting implementing legislation, as well as in interpreting executory

provisions of the Constitution. Although Oposa v. Factoran treated the right to a healthful and
50

balanced ecology under Section 16 of Article II as an exception, the present petition lacks factual
basis to substantiate the claimed constitutional violation. The other provisions petitioners cite,
relating to the protection of marine wealth (Article XII, Section 2, paragraph 2 ) and subsistence
51

fishermen (Article XIII, Section 7 ), are not violated by RA 9522.

52

In fact, the demarcation of the baselines enables the Philippines to delimit its exclusive
economic zone, reserving solely to the Philippines the exploitation of all living and non-living
resources within such zone. Such a maritime delineation binds the international community since
the delineation is in strict observance of UNCLOS III. If the maritime delineation is contrary to
UNCLOS III, the international community will of course reject it and will refuse to be bound by it.

UNCLOS III favors States with a long coastline like the Philippines. UNCLOS III creates
a sui generis maritime space the exclusive economic zone in waters previously part of the high
seas. UNCLOS III grants new rights to coastal States to exclusively exploit the resources found
within this zone up to 200 nautical miles. UNCLOS III, however, preserves the traditional freedom
53
of navigation of other States that attached to this zone beyond the territorial sea before UNCLOS
III.

RA 9522 and the Philippines Maritime Zones

Petitioners hold the view that, based on the permissive text of UNCLOS III, Congress was
not bound to pass RA 9522. We have looked at the relevant provision of UNCLOS III and we
54 55

find petitioners reading plausible. Nevertheless, the prerogative of choosing this option belongs to
Congress, not to this Court. Moreover, the luxury of choosing this option comes at a very steep
price. Absent an UNCLOS III compliant baselines law, an archipelagic State like the Philippines
will find itself devoid of internationally acceptable baselines from where the breadth of its maritime
zones and continental shelf is measured. This is recipe for a two-fronted disaster: first, it sends an
open invitation to the seafaring powers to freely enter and exploit the resources in the waters and
submarine areas around our archipelago; and second, it weakens the countrys case in any
international dispute over Philippine maritime space. These are consequences Congress wisely
avoided.

The enactment of UNCLOS III compliant baselines law for the Philippine archipelago and
adjacent areas, as embodied in RA 9522, allows an internationally-recognized delimitation of the
breadth of the Philippines maritime zones and continental shelf. RA 9522 is therefore a most vital
step on the part of the Philippines in safeguarding its maritime zones, consistent with the
Constitution and our national interest.

WHEREFORE, we DISMISS the petition.

SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila
 EN BANC

G.R. No. L-18463 October 4, 1922

THE PEOPLE OF THE PHILIPPINE ISLANDS, plaintiff-appellee,

vs.
GREGORIO PERFECTOR, defendant-appellant.

Alfonso E. Mendoza and the appellant in behalf of the latter.

Attorney-General Villa-Real for appellee.

MALCOLM, J.:

The important question is here squarely presented of whether article 256 of the Spanish Penal Code, punishing
"Any person who, by . . . writing, shall defame, abuse, or insult any Minister of the Crown or other person in authority
. . .," is still in force.

About August 20, 1920, the Secretary of the Philippine Senate, Fernando M. Guerrero, discovered that certain
documents which constituted the records of testimony given by witnesses in the investigation of oil companies, had
disappeared from his office. Shortly thereafter, the Philippine Senate, having been called into special session by the
Governor-General, the Secretary for the Senate informed that body of the loss of the documents and of the steps
taken by him to discover the guilty party. The day following the convening of the Senate, September 7, 1920, the
newspaper La Nacion, edited by Mr. Gregorio Perfecto, published an article reading as follows:

Half a month has elapsed since the discovery, for the first time, of the scandalous robbery of records which
were kept and preserved in the iron safe of the Senate, yet up to this time there is not the slightest indication
that the author or authors of the crime will ever be discovered.

To find them, it would not, perhaps, be necessary to go out of the Sente itself, and the persons in charge of
the investigation of the case would not have to display great skill in order to succeed in their undertaking,
unless they should encounter the insuperable obstacle of offical concealment.

In that case, every investigation to be made would be but a mere comedy and nothing more.

After all, the perpetration of the robbery, especially under the circumstances that have surrounded it, does
not surprise us at all.

The execution of the crime was but the natural effect of the environment of the place in which it was
committed.

How many of the present Senators can say without remorse in their conscience and with serenity of mind,
that they do not owe their victory to electoral robbery? How may?

The author or authors of the robbery of the records from the said iron safe of the Senate have, perhaps, but
followed the example of certain Senators who secured their election through fraud and robbery.

The Philippine Senate, in its session of September 9, 1920, adopted a resolution authorizing its committee on
elections and privileges to report as to the action which should be taken with reference to the article published in La
Nacion. On September 15, 1920, the Senate adopted a resolution authorizing the President of the Senate to indorse
to the Attorney-General, for his study and corresponding action, all the papers referring to the case of the
newspaper La Nacion and its editor, Mr. Gregorio Perfecto. As a result, an information was filed in the municipal
court of the City of Manila by an assistant city fiscal, in which the editorial in question was set out and in which it was
alleged that the same constituted a violation of article 256 of the Penal Code. The defendant Gregorio Perfecto was
found guilty in the municipal court and again in the Court of First Instance of Manila.
During the course of the trial in the Court of First Instance, after the prosecution had rested, the defense moved for
the dismissal of the case. On the subject of whether or not article 256 of the Penal Code, under which the
information was presented, is in force, the trial judge, the Honorable George R. Harvey, said:

This antiquated provision was doubtless incorporated into the Penal Code of Spain for the protection of the
Ministers of the Crown and other representatives of the King against free speech and action by Spanish
subjects. A severe punishment was prescribed because it was doubtless considered a much more serious
offense to insult the King's representative than to insult an ordinary individual. This provision, with almost all
the other articles of that Code, was extended to the Philippine Islands when under the dominion of Spain
because the King's subject in the Philippines might defame, abuse or insult the Ministers of the Crown or
other representatives of His Majesty. We now have no Ministers of the Crown or other persons in authority in
the Philippines representing the King of Spain, and said provision, with other articles of the Penal Code, had
apparently passed into "innocuous desuetude," but the Supreme Corut of the Philippine Islands has, by a
majority decision, held that said article 256 is the law of the land to-day. . . .

The Helbig case is a precedent which, by the rule of stare decisis, is binding upon this court until otherwise
determined by proper authority.

In the decision rendered by the same judge, he concluded with the following language:

In the United States such publications are usually not punishable as criminal offense, and little importance is
attached to them, because they are generally the result of political controversy and are usually regarded as
more or less colored or exaggerated. Attacks of this character upon a legislative body are not punishable,
under the Libel Law. Although such publications are reprehensible, yet this court feels some aversion to the
application of the provision of law under which this case was filed. Our Penal Code has come to us from the
Spanish regime. Article 256 of that Code prescribes punishment for persons who use insulting language
about Ministers of the Crown or other "authority." The King of Spain doubtless left the need of such
protection to his ministers and others in authority in the Philippines as well as in Spain. Hence, the article
referred to was made applicable here. Notwithstanding the change of sovereignty, our Supreme Court, in a
majority decision, has held that this provision is still in force, and that one who made an insulting remark
about the President of the United States was punishable under it. (U.S. vs. Helbig, supra.) If it applicable in
that case, it would appear to be applicable in this case. Hence, said article 256 must be enforced, without
fear or favor, until it shall be repealed or superseded by other legislation, or until the Supreme Court shall
otherwise determine.

In view of the foregoing considerations, the court finds the defendant guilty as charged in the information
and under article 256 of their Penal Code sentences him to suffer two months and one day of arresto
mayor and the accessory penalties prescribed by law, and to pay the costs of both instances.

The fifteen errors assigned by the defendant and appellant, reenforced by an extensive brief, and eloquent oral
argument made in his own behalf and by his learned counsel, all reduce themselves to the pertinent and decisive
question which was announced in the beginning of this decision.

It will be noted in the first place that the trial judge considered himself bound to follow the rule announced in the
case of United States vs. Helbig (R. G. No. 14705, 1 not published). In that case, the accused was charged with
having said, "To hell with the President and his proclamations, or words to that effect," in violation of article 256 of
the Penal Code. He was found guilty in a judgment rendered by the Court of First Instance of Manila and again on
appeal to the Supreme Court, with the writer of the instant decision dissenting on two principal grounds: (1) That the
accused was deprived of the constitutional right of cross-examination, and (2) that article 256 of the Spanish Penal
Code is no longer in force. Subsequently, on a motion of reconsideration, the court, being of the opinion that the
Court of First Instance had committed a prejudicial error in depriving the accused of his right to cross-examine a
principal witness, set aside the judgment affirming the judgment appealed from and ordered the return of the record
to the court of origin for the celebration of a new trial. Whether such a trial was actually had, is not known, but at
least, the record in the Helbig case has never again been elevated to this court.

There may perchance exist some doubt as to the authority of the decision in the Helbig case, in view of the
circumstances above described. This much, however, is certain: The facts of the Helbig case and the case before
us, which we may term the Perfecto case, are different, for in the first case there was an oral defamation, while in
the second there is a written defamation. Not only this, but a new point which, under the facts, could not have been
considered in the Helbig case, is, in the Perfecto case, urged upon the court. And, finally, as is apparent to all, the
appellate court is not restrained, as was the trial court, by strict adherence to a former decision. We much prefer to
resolve the question before us unhindered by references to the Helbig decision.

This is one of those cases on which a variety of opinions all leading to the same result can be had. A majority of the
court are of the opinion that the Philippine Libel Law, Act No. 277, has had the effect of repealing so much of article
256 of the Penal Code as relates to written defamation, abuse, or insult, and that under the information and the
facts, the defendant is neither guilty of a violation of article 256 of the Penal Code, nor of the Libel Law. The view of
the Chief Justice is that the accused should be acquitted for the reason that the facts alleged in the information do
not constitute a violation of article 156 of the Penal Code. Three members of the court believe that article 256 was
abrogated completely by the change from Spanish to American sovereignty over the Philippines and is inconsistent
with democratic principles of government.

Without prejudice to the right of any member of the court to explain his position, we will discuss the two main points
just mentioned.

1. Effect of the Philippine Libel Law, Act No. 277, on article 256 of the Spanish Penal Code. The Libel
Law, Act No. 277, was enacted by the Philippine Commission shortly after organization of this legislative
body. Section 1 defines libel as a "malicious defamation, expressed either in writing, printing, or by signs or
pictures, or the like, or public theatrical exhibitions, tending to blacken the memory of one who is dead or to
impeach the honesty, virtue, or reputation, or publish the alleged or natural deffects of one who is alive, and
thereby expose him to public hatred, contempt or ridicule." Section 13 provides that "All laws and parts of
laws now in force, so far as the same may be in conflict herewith, are hereby repealed. . . ."

That parts of laws in force in 1901 when the Libel Law took effect, were in conflict therewith, and that the Libel Law
abrogated certain portion of the Spanish Penal Code, cannot be gainsaid. Title X of Book II of the Penal Code,
covering the subjects of calumny and insults, must have been particularly affected by the Libel Law. Indeed, in the
early case of Pardo de Tavera vs. Garcia Valdez ([1902], 1. Phil., 468), the Supreme Court spoke of the Libel Law
as "reforming the preexisting Spanish law on the subject of calumnia and injuria." Recently, specific attention was
given to the effect of the Libel Law on the provisions of the Penal Code, dealing with calumny and insults, and it was
found that those provisions of the Penal Code on the subject of calumny and insults in which the elements of writing
an publicity entered, were abrogated by the Libel Law. (People vs. Castro [1922], p. 842, ante.)

The Libel Law must have had the same result on other provisions of the Penal Code, as for instance article 256.

The facts here are that the editor of a newspaper published an article, naturally in writing, which may have had the
tendency to impeach the honesty, virtue, or reputation of members of the Philippine Senate, thereby possibly
exposing them to public hatred, contempt, or ridicule, which is exactly libel, as defined by the Libel Law. Sir J. F.
Stephen is authority for the statement that a libel is indictable when defaming a "body of persons definite and small
enough for individual members to be recognized as such, in or by means of anything capable of being a libel."
(Digest of Criminal Law, art. 267.) But in the United States, while it may be proper to prosecute criminally the author
of a libel charging a legislator with corruption, criticisms, no matter how severe, on a legislature, are within the range
of the liberty of the press, unless the intention and effect be seditious. (3 Wharton's Criminal Law, p. 2131.) With
these facts and legal principles in mind, recall that article 256 begins: Any person who, by . . . writing, shall defame,
abuse, or insult any Minister of the Crown or other person in authority," etc.

The Libel Law is a complete and comprehensive law on the subject of libel. The well-known rule of statutory
construction is, that where the later statute clearly covers the old subject-matter of antecedent acts, and it plainly
appears to have been the purpose of the legislature to give expression in it to the whole law on the subject, previous
laws are held to be repealed by necessary implication. (1 Lewis' Sutherland Statutory Construction, p. 465.) For
identical reasons, it is evident that Act No. 277 had the effect so much of this article as punishes defamation, abuse,
or insults by writing.

Act No. 292 of the Philippine Commission, the Treason and Sedition Law, may also have affected article 256, but as
to this point, it is not necessary to make a pronouncement.
 2. Effect of the change from Spanish to Amercian sevoreignty over the Philippine son article 256 of the
Spanish Penal Code. Appellant's main proposition in the lower court and again energetically pressed in
the appellate court was that article 256 of the Spanish Penal Code is not now in force because abrogated by
the change from Spanish to American sovereignty over the Philippines and because inconsistent with
democratic principles of government. This view was indirectly favored by the trial judge, and, as before
stated, is the opinion of three members of this court.

Article 256 is found in Chapter V of title III of Book II of the Spanish Penal Code. Title I of Book II punishes the
crimes of treason, crimes that endanger the peace or independence of the state, crimes against international law,
and the crime of piracy. Title II of the same book punishes the crimes of lese majeste, crimes against the Cortes and
its members and against the council of ministers, crimes against the form of government, and crimes committed on
the occasion of the exercise of rights guaranteed by the fundamental laws of the state, including crime against
religion and worship. Title III of the same Book, in which article 256 is found, punishes the crimes of rebellion,
sedition, assaults upon persons in authority, and their agents, and contempts, insults, injurias, and threats against
persons in authority, and insults, injurias, and threats against their agents and other public officers, the last being the
title to Chapter V. The first two articles in Chapter V define and punish the offense of contempt committed by any
one who shall be word or deed defame, abuse, insult, or threathen a minister of the crown, or any person in
authority. The with an article condemning challenges to fight duels intervening, comes article 256, now being
weighed in the balance. It reads as follows: "Any person who, by word, deed, or writing, shall defame, abuse, or
insult any Minister of the Crown or other person in authority, while engaged in the performance of official duties, or
by reason of such performance, provided that the offensive minister or person, or the offensive writing be not
addressed to him, shall suffer the penalty of arresto mayor," that is, the defamation, abuse, or insult of
anyMinister of the Crown of the Monarchy of Spain (for there could not be a Minister of the Crown in the United
States of America), or other person in authority in the Monarchy of Spain.

It cannot admit of doubt that all those provisions of the Spanish Penal Code having to do with such subjects as
treason, lese majeste, religion and worship, rebellion, sedition, and contempts of ministers of the crown, are not
longer in force. Our present task, therefore, is a determination of whether article 256 has met the same fate, or,
more specifically stated, whether it is in the nature of a municipal law or political law, and is consistent with the
Constitution and laws of the United States and the characteristics and institutions of the American Government.

It is a general principle of the public law that on acquisition of territory the previous political relations of the ceded
region are totally abrogated. "Political" is here used to denominate the laws regulating the relations sustained by the
inhabitants to the sovereign. (American Insurance Co. vs. Canter [1828], 1 Pet., 511; Chicago, Rock Island and
Pacific Railway Co. vs. McGlinn [1885], 114 U.S., 542; Roa vs. Collector of Customs [1912], 23 Phil., 315.) Mr.
Justice Field of the United States Supreme Court stated the obvious when in the course of his opinion in the case of
Chicago, Rock Island and Pacific Railway Co. vs. McGlinn, supra, he said: "As a matter of course, all laws,
ordinances and regulations in conflict with the political character, institutions and Constitution of the new
government are at once displaced. Thus, upon a cession of political jurisdiction and legislative power and the
latter is involved in the former to the United States, the laws of the country in support of an established religion
or abridging the freedom of the press, or authorizing cruel and unusual punishments, and he like, would at once
cease to be of obligatory force without any declaration to that effect." To quote again from the United States
Supreme Court: "It cannot be admitted that the King of Spain could, by treaty or otherwise, impart to the United
States any of his royal prerogatives; and much less can it be admitted that they have capacity to receive or power to
exercise them. Every nation acquiring territory, by treaty or otherwise, must hold it subject to the Constitution and
laws of its own government, and not according to those of the government ceding it." (Pollard vs. Hagan [1845], 3
Hos., 210.)

On American occupation of the Philippines, by instructions of the President to the Military Commander dated May
28, 1898, and by proclamation of the latter, the municipal laws of the conquered territory affecting private rights of
person and property and providing for the punishment of crime were nominally continued in force in so far as they
were compatible with the new order of things. But President McKinley, in his instructions to General Merritt, was
careful to say: "The first effect of the military occupation of the enemy's territory is the severance of the former
political relation of the inhabitants and the establishment of a new political power." From that day to this, the
ordinarily it has been taken for granted that the provisions under consideration were still effective. To paraphrase the
language of the United States Supreme Court in Weems vs. United States ([1910], 217 U. S., 349), there was not
and could not be, except as precise questions were presented, a careful consideration of the codal provisions and a
determination of the extent to which they accorded with or were repugnant to the "'great principles of liberty and law'
which had been 'made the basis of our governmental system.' " But when the question has been squarely raised,
the appellate court has been forced on occasion to hold certain portions of the Spanish codes repugnant t
democratic institutions and American constitutional principles. (U.S. vs. Sweet [1901], 1 Phil., 18; U.S. vs. Balcorta
[1913], 25 Phil., 273; U.S. vs. Balcorta [1913], 25 Phil., 533; Weems vs. U.S., supra.)

The nature of the government which has been set up in the Philippines under American sovereignty was outlined by
President McKinley in that Magna Charta of Philippine liberty, his instructions to the Commission, of April 7, 1900. In
part, the President said:

In all the forms of government and administrative provisions which they are authorized to prescribe, the
Commission should bear in mind that he government which they are establishing is designed not for our
satisfaction or for the expression of our theoretical views, but for the happiness, peace, and prosperity of the
people of the Philippine Islands, and the measures adopted should be made to conform to their customs,
their habits, and even their prejudices, to the fullest extent consistent with the accomplishment of the
indispensable requisites of just and effective government. At the same time the Commission should bear in
mind, and the people of the Islands should be made plainly to understand, that there are certain great
principles of government which have been made the basis of our governmental system, which we deem
essential to the rule of law and the maintenance of individual freedom, and of which they have,
unfortunately, been denied the experience possessed by us; that there are also certain practical rules of
government which we have found to be essential to the preservation of these great principles of liberty and
law, and that these principles and these rules of government must be established and maintained in their
islands for the sake of their liberty and happiness, however much they may conflict with the customs or laws
of procedure with which they are familiar. It is evident that the most enligthened thought of the Philippine
Islands fully appreciates the importance of these principles and rules, and they will inevitably within a short
time command universal assent.

The courts have naturally taken the same view. Mr. Justice Elliott, speaking for our Supreme Court, in the case of
United States vs. Bull ([1910], 15 Phil., 7), said: "The President and Congress framed the government on the model
with which American are familiar, and which has proven best adapted for the advancement of the public interests
and the protection of individual rights and privileges."

Therefore, it has come with somewhat of a shock to hear the statement made that the happiness, peace, and
prosperity of the people of the Philippine Islands and their customs, habits, and prejudices, to follow the language of
President McKinley, demand obeisance to authority, and royal protection for that authority.

According to our view, article 256 of the Spanish Penal Code was enacted by the Government of Spain to protect
Spanish officials who were the representatives of the King. With the change of sovereignty, a new government, and
a new theory of government, as set up in the Philippines. It was in no sense a continuation of the old, although
merely for convenience certain of the existing institutions and laws were continued. The demands which the new
government made, and makes, on the individual citizen are likewise different. No longer is there a Minister of the
Crown or a person in authority of such exalted position that the citizen must speak of him only with bated breath. "In
the eye of our Constitution and laws, every man is a sovereign, a ruler and a freeman, and has equal rights with
every other man. We have no rank or station, except that of respectability and intelligence as opposed to indecency
and ignorance, and the door to this rank stands open to every man to freely enter and abide therein, if he is
qualified, and whether he is qualified or not depends upon the life and character and attainments and conduct of
each person for himself. Every man may lawfully do what he will, so long as it is not malum in se or malum
prohibitum or does not infringe upon the qually sacred rights of others." (State vs. Shepherd [1903], 177 Mo., 205;
99 A. S. R., 624.)

It is true that in England, from which so many of the laws and institutions of the United States are derived, there
were once statutes of scandalum magnatum, under which words which would not be actionable if spoken of an
ordinary subject were made actionable if spoken of a peer of the realm or of any of the great officers of the Crown,
without proof of any special damage. The Crown of England, unfortunately, took a view less tolerant that that of
other sovereigns, as for instance, the Emperors Augustus, Caesar, and Tiberius. These English statutes have,
however, long since, become obsolete, while in the United States, the offense of scandalum magnatum is not
known. In the early days of the American Republic, a sedition law was enacted, making it an offense to libel the
Government, the Congress, or the President of the United States, but the law met with so much popular disapproval,
that it was soon repealed. "In this country no distinction as to persons is recognized, and in practice a person
holding a high office is regarded as a target at whom any person may let fly his poisonous words. High official
position, instead of affording immunity from slanderous and libelous charges, seems rather to be regarded as
making his character free plunder for any one who desires to create a senation by attacking it." (Newell, Slander and
Libel, 3d ed., p. 245; Sillars vs. Collier [1890], 151 Mass., 50; 6 L.R.A., 680.)

Article 256 of the Penal Code is contrary to the genius and fundamental principles of the American character and
system of government. The gulf which separates this article from the spirit which inspires all penal legislation of
American origin, is as wide as that which separates a monarchy from a democratic Republic like that of the United
States. This article was crowded out by implication as soon as the United States established its authority in the
Philippine Islands. Penalties out of all proportion to the gravity of the offense, grounded in a distorted monarchical
conception of the nature of political authority, as opposed to the American conception of the protection of the
interests of the public, have been obliterated by the present system of government in the Islands. 1awph!l.net

From an entirely different point of view, it must be noted that this article punishes contempts against executive
officials, although its terms are broad enough to cover the entire official class. Punishment for contempt of non-
judicial officers has no place in a government based upon American principles. Our official class is not, as in
monarchies, an agent of some authority greater than the people but it is an agent and servant of the people
themselves. These officials are only entitled to respect and obedience when they are acting within the scope of their
authority and jurisdiction. The American system of government is calculated to enforce respect and obedience
where such respect and obedience is due, but never does it place around the individual who happens to occupy an
official position by mandate of the people any official halo, which calls for drastic punishment for contemptuous
remarks.

The crime of lese majeste disappeared in the Philippines with the ratification of the Treaty of Paris. Ministers of the
Crown have no place under the American flag.

To summarize, the result is, that all the members of the court are of the opinion, although for different reasons, that
the judgment should be reversed and the defendant and appellant acquitted, with costs de officio. So ordered.

Ostrand and Johns, JJ., concur.

Separate Opinions

ARAULLO, C.J., concurring:

I concur with the dispositive part of the foregoing decision, that is, with the acquittal of the accused, for the sole
reason that the facts alleged in the information do not constitute a violation of article 256 of the Penal Code; for
although that article is in force with respect to calumny, injuria, or insult, by deed or word, against an authority in the
performance of his duties or by reason thereof, outside of his presence, it is repealed by the Libel Law in so far as it
refers to calumny, injuria, or insult committed against an authority by writing or printing, as was that inserted in the
said information.

ROMUALDEZ, J., concurring:

I concur with the result. I believe that the responsibility of the accused has not been shown either under article 256
of the Penal Code or under the Libel Law.

I am of the opinion that article 256 of the Penal Code is still in force, except as it refers to "Ministers of the Crown,"
whom we do not have in our Government, and to calumny, injuria, or insult, by writing or printing, committed against
an authority in the performance of his duties or by reason thereof, which portion was repealed by the Libel Law.

Johnson, Street, Avancea and Villamor, JJ., concur.