G.R. No.

L-32052 July 25, 1975

PHILIPPINE VIRGINIA TOBACCO ADMINISTRATION, petitioner,
vs.
COURT OF INDUSTRIAL RELATIONS, REUEL ABRAHAM, MILAGROS ABUEG, AVELINO ACOSTA, CAROLINA
ACOSTA, MARTIN AGSALUD, JOSEFINA AGUINALDO, GLORIA ALBANO, ANTONIO ALUNING, COSME ALVAREZ,
ISABEL ALZATE, AURORA APUSEN, TOMAS ARCANGEL, LOURDES ARJONELLO, MANUEL AROMIN, DIONISIO
ASISTIN, JOSE AURE, NICASIO AZNAR, EUGENIO AZURIN, CLARITA BACUGAN, PIO BALAGOT, HEREDIO
BALMACEDA, ESTHER BANAAG, JOVENCIO BARBERO, MONICO BARBADILLO, HERNANDO BARROZO,
FILIPINA BARROZO, REMEDIO BARTOLOME, ANGELINA BASCOS, JOSE BATALLA, ALMARIO BAUTISTA,
EUGENIO BAUTISTA, JR., HERMALO BAUTISTA, JUANITO BAUTISTA, SEVERINO BARBANO, CAPPIA
BARGONIA, ESMERALDA BERNARDEZ, RUBEN BERNARDEZ, ALFREDO BONGER, TOMAS BOQUIREN,
ANGELINA BRAVO, VIRGINIA BRINGA, ALBERTO BUNEO, SIMEON CABANAYAN, LUCRECIA CACATIAN,
LEONIDES CADAY, ANGELINA CADOTTE, IGNACIO CALAYCAY, PACIFICO CALUB, RUFINO CALUZA, CALVIN
CAMBA, ALFREDO CAMPOSENO, BAGUILITA CANTO, ALFREDO CARRERA, PEDRO CASES, CRESCENTE CASIS,
ERNESTO CASTANEDA, HERMINIO CASTILLO, JOSE CASTRO, LEONOR CASTRO, MADEO CASTRO, MARIA
PINZON CASTRO, PABLO CATURA, RESTITUTO CESPADES, FLORA CHACON, EDMUNDO CORPUZ, ESTHER
CRUZ, CELIA CUARESMA, AQUILINO DACAYO, DIONISIA DASALLA, SOCORRO DELFIN, ABELARDO DIAZ,
ARTHUR DIAZ, CYNTHIA DIZON, MARCIA DIZON, ISABELO DOMINGO, HONORATA DOZA, CAROLINA DUAD,
JUSTINIANO EPISTOLA, ROMEO ENCARNACION, PRIMITIVO ESCANO, ELSA ESPEJO, JUAN ESPEJO, RIZALINA
ESQUILLO, YSMAEL FARINAS, LORNA FAVIS, DAN FERNANDEZ, JAIME FERNANDEZ, ALFREDO FERRER,
MODESTO FERRER, JR., EUGENIO FLANDEZ, GUILLERMO FLORENDO, ALFREDO FLORES, DOMINGA FLORES,
ROMEO FLORES, LIGAYA FONTANILLA, MELCHOR GASMEN, LEILA GASMENA, CONSUELO GAROLAGA,
ALFONSO GOROSPE, CESAR GOROSPE, RICARDO GOROSPE, JR., CARLITO GUZMAN, ERNESTO DE GUZMAN,
THELMA DE GUZMAN, FELIX HERNANDEZ, SOLIVEN HERNANDO, FRANCISCO HIDALGO, LEONILO INES,
SIXTO JAQUIES, TRINIDAD JAVIER, FERMIN LAGUA, GUALBERTO LAMBINO, ROMAN LANTING, OSCAR LAZO,
ROSARIO LAZO, JOSEFINA DE LARA, AMBROSIO LAZOL, NALIE LIBATIQUE, LAMBERTO LLAMAS, ANTONIO
LLANES, ROMULA LOPEZ, ADRIANO LORENZANA, ANTONIO MACARAEG, ILDEFONSO MAGAT, CECILIO
MAGHANOY, ALFONSO MAGSANOC, AVELINA MALLARE, AUGUSTO MANALO, DOMINADOR MANASAN, BENITO
MANECLANG, JR., TIRSO MANGUMAY, EVELIA MANZANO, HONORANTE MARIANO, DOMINGO MEDINA,
MARTIN MENDOZA, PERFECTO MILANA, EMILIO MILLAN, GREGORIO MONEGAS, CONSOLACION NAVALTA,
NOLI OCAMPO, VICENTE CLEGARIO, ELPIDIO PALMONES, ARACELI PANGALANGAN, ISIDORO PANLASIGUI,
JR., ARTEMIO PARIS, JR., FEDERICO PAYUMO, JR., NELIA PAYUMO, BITUEN PAZ, FRANCISCO PENGSON,
OSCAR PERALTA, PROCORRO PERALTA, RAMON PERALTA, MINDA PICHAY, MAURO PIMENTEL, PRUDENCIO
PIMENTEL, LEOPOLDO PUNO, REYNALDO RABE, ROLANDO REA, CONSTANTINO REA, CECILIA RICO, CECILIO
RILLORAZA, AURORA ROMAN, MERCEDES RUBIO, URSULA RUPISAN, OLIVIA SABADO, BERNARDO
SACRAMENTO, LUZ SALVADOR, JOSE SAMSON, JR., ROMULA DE LOS SANTOS, ANTONIO SAYSON, JR.,
FLORANTE SERIL, MARIO SISON, RUDY SISON, PROCEDIO TABIN, LUCENA TABISULA, HANNIBAL TAJANO,
ENRIQUE TIANGCO, JR., JUSTINIANO TOBIAS, NYMIA TOLENTINO, CONSTANTE TOLENTINO, TEODORO
TOREBIO, FEDERICO TRINIDAD, JOVENCINTO TRINIDAD, LAZARO VALDEZ, LUDRALINA VALDEZ, MAXIMINA
VALDEZ, FRANCISCO VELASCO, JR., ROSITA VELASCO, SEVERO VANTANILLA, VENANCIO VENTIGAN,
FELICITAS VENUS, NIEVES DE VERA, ELISEO VERSOZA, SILVESTRE VILA, GLORIA VILLAMOR, ALEJANDRO
VELLANUEVA, DAVID VILLANUEVA, CAROLINA VILLASENOR ORLANDO VILLASTIQUE, MAJELLA VILORIN,
ROSARIO VILORIA, MAY VIRATA, FEDERICO VIRAY, MELBA YAMBAO, MARIO ZAMORA, AUTENOR ABUEG,
SOTERO ACEDO, HONRADO ALBERTO, FELIPE ALIDO, VICENTE ANCHUELO, LIBERTAD APEROCHO, MARIANO
BALBAGO, MARIO BALMACEDA, DAISY BICENIO, SYLVIA BUSTAMANTE, RAYMUNDO GEMERINO, LAZARO
CAPURAS, ROGELIO CARUNGCONG, ZACARIAS CAYETANO, JR., LILY CHUA, ANDRES CRUZ, ARTURO CRUZ,
BIENVENIDO ESTEBAN, PABLO JARETA, MANUEL JOSE, NESTORIA KINTANAR, CLEOPATRIA LAZEM.
MELCHOR LAZO, JESUS LUNA, GASPAR MARINAS, CESAR MAULSON, MANUEL MEDINA, JESUS PLURAD,
LAKAMBINI RAZON, GLORIA IBANEZ, JOSE SANTOS, ELEAZAR SQUI, JOSE TAMAYO, FELIPE TENORIO,
SILVINO UMALI, VICENTE ZARA, SATURNINO GARCIA, WILLIAM GARCIA, NORMA GARINGARAO, ROSARIO
ANTONIO, RUBEN BAUTISTA, QUIRINO PUESTO, NELIA M. GOMERI, OSCAR R. LANUZA, AURORA M. LINDAYA,
GREGORIO MOGSINO, JACRM B. PAPA, GREGORIO R. RIEGO, TERESITA N. ROZUL, MAGTANGOL SAMALA,
PORFIRIO AGOCOLIS, LEONARDO MONTE, HERMELINO PATI, ALFREDO PAYOYO, PURIFICACION ROJAS,
ODANO TEANO, RICARDO SANTIAGO, and MARCELO MANGAHAS, respondents.

Gov't. Corp. Counsel Leopoldo M. Abellera, Trial Attorneys Manuel M. Lazaro and Vicente Constantine, Jr., for petitioner.

Renato B. Kare and Simeon C. Sato for private respondents.

FERNANDO, J.:

The principal issue that calls for resolution in this appeal by certiorari from an order of respondent Court of Industrial Relations is one
of constitutional significance. It is concerned with the expanded role of government necessitated by the increased responsibility to
provide for the general welfare. More specifically, it deals with the question of whether petitioner, the Philippine Virginia Tobacco
Administration, discharges governmental and not proprietary functions. The landmark opinion of the then Justice, row Chief Justice,
Makalintal in Agricultural Credit and Cooperative Financing Administration v. Confederation of Unions in Government
Corporations and offices, points the way to the right answer.1 It interpreted the then fundamental law as hostile to the view of a limited
or negative state. It is antithetical to the laissez faire concept. For as noted in an earlier decision, the welfare state concept "is not alien
to the philosophy of [the 1935] Constitution."2 It is much more so under the present Charter, which is impressed with an even more
explicit recognition of social and economic rights.3 There is manifest, to recall Laski, "a definite increase in the profundity of the social
conscience," resulting in "a state which seeks to realize more fully the common good of its members."4 It does not necessarily follow,
however, just because petitioner is engaged in governmental rather than proprietary functions, that the labor controversy was beyond
the jurisdiction of the now defunct respondent Court. Nor is the objection raised that petitioner does not come within the coverage of
the Eight-Hour Labor Law persuasive.5 We cannot then grant the reversal sought. We affirm.

The facts are undisputed. On December 20, 1966, claimants, now private respondents, filed with respondent Court a petition wherein
they alleged their employment relationship, the overtime services in excess of the regular eight hours a day rendered by them, and the
failure to pay them overtime compensation in accordance with Commonwealth Act No. 444. Their prayer was for the differential
between the amount actually paid to them and the amount allegedly due them.6 There was an answer filed by petitioner Philippine
Virginia Tobacco Administration denying the allegations and raising the special defenses of lack of a cause of action and lack of
jurisdiction.7 The issues were thereafter joined, and the case set for trial, with both parties presenting their evidence.8 After the parties
submitted the case for decision, the then Presiding Judge Arsenio T. Martinez of respondent Court issued an order sustaining the claims
of private respondents for overtime services from December 23, 1963 up to the date the decision was rendered on March 21, 1970, and
directing petitioner to pay the same, minus what it had already paid.9 There was a motion for reconsideration, but respondent Court en
banc denied the same. 10 Hence this petition for certiorari.

Petitioner Philippine Virginia Tobacco Administration, as had been noted, would predicate its plea for the reversal of the order
complained of on the basic proposition that it is beyond the jurisdiction of respondent Court as it is exercising governmental functions
and that it is exempt from the operation of Commonwealth Act No. 444. 11 While, to repeat, its submission as to the governmental
character of its operation is to be given credence, it is not a necessary consequence that respondent Court is devoid of jurisdiction. Nor
could the challenged order be set aside on the additional argument that the Eight-Hour Labor Law is not applicable to it. So it was, at
the outset, made clear.

1. A reference to the enactments creating petitioner corporation suffices to demonstrate the merit of petitioner's plea that it performs
governmental and not proprietary functions. As originally established by Republic Act No. 2265, 12 its purposes and objectives were set
forth thus: "(a) To promote the effective merchandising of Virginia tobacco in the domestic and foreign markets so that those engaged in
the industry will be placed on a basis of economic security; (b) To establish and maintain balanced production and consumption of
Virginia tobacco and its manufactured products, and such marketing conditions as will insure and stabilize the price of a level sufficient
to cover the cost of production plus reasonable profit both in the local as well as in the foreign market; (c) To create, establish, maintain,
and operate processing, warehousing and marketing facilities in suitable centers and supervise the selling and buying of Virginia
tobacco so that the farmers will enjoy reasonable prices that secure a fair return of their investments; (d) To prescribe rules and
regulations governing the grading, classifying, and inspecting of Virginia tobacco; and (e) To improve the living and economic
conditions of the people engaged in the tobacco industry." 13The amendatory statute, Republic Act No. 4155, 14 renders even more
evident its nature as a governmental agency. Its first section on the declaration of policy reads: "It is declared to be the national policy,
with respect to the local Virginia tobacco industry, to encourage the production of local Virginia tobacco of the qualities needed and in
quantities marketable in both domestic and foreign markets, to establish this industry on an efficient and economic basis, and, to create
a climate conducive to local cigarette manufacture of the qualities desired by the consuming public, blending imported and native
Virginia leaf tobacco to improve the quality of locally manufactured cigarettes." 15 The objectives are set forth thus: "To attain this
national policy the following objectives are hereby adopted: 1. Financing; 2. Marketing; 3. The disposal of stocks of the Agricultural
Credit Administration (ACA) and the Philippine Virginia Tobacco Administration (PVTA) at the best obtainable prices and conditions in
order that a reinvigorated Virginia tobacco industry may be established on a sound basis; and 4. Improving the quality of locally
manufactured cigarettes through blending of imported and native Virginia leaf tobacco; such importation with corresponding
exportation at a ratio of one kilo of imported to four kilos of exported Virginia tobacco, purchased by the importer-exporter from the
Philippine Virginia Tobacco Administration." 16

It is thus readily apparent from a cursory perusal of such statutory provisions why petitioner can rightfully invoke the doctrine
announced in the leading Agricultural Credit and Cooperative Financing Administration decision 17 and why the objection of private
respondents with its overtones of the distinction between constituent and ministrant functions of governments as set forth in Bacani v.
National Coconut Corporation 18 if futile. The irrelevance of such a distinction considering the needs of the times was clearly pointed out
by the present Chief Justice, who took note, speaking of the reconstituted Agricultural Credit Administration, that functions of that sort
"may not be strictly what President Wilson described as "constituent" (as distinguished from "ministrant"),such as those relating to the
maintenance of peace and the prevention of crime, those regulating property and property rights, those relating to the administration of
justice and the determination of political duties of citizens, and those relating to national defense and foreign relations. Under this
traditional classification, such constituent functions are exercised by the State as attributes of sovereignty, and not merely to promote
the welfare, progress and prosperity of the people — these latter functions being ministrant, the exercise of which is optional on the part
of the government." 19Nonetheless, as he explained so persuasively: "The growing complexities of modern society, however, have
rendered this traditional classification of the functions of government quite unrealistic, not to say obsolete. The areas which used to be
left to private enterprise and initiative and which the government was called upon to enter optionally, and only "because it was better
equipped to administer for the public welfare than is any private individual or group of individuals", continue to lose their well-defined
boundaries and to be absorbed within activities that the government must undertake in its sovereign capacity if it is to meet the
increasing social challenges of the times. Here as almost everywhere else the tendency is undoubtedly towards a greater socialization of
economic forces. Here of course this development was envisioned, indeed adopted as a national policy, by the Constitution itself in its
declaration of principle concerning the promotion of social justice." 20 Thus was laid to rest the doctrine in Bacani v. National Coconut
Corporation, 21 based on the Wilsonian classification of the tasks incumbent on government into constituent and ministrant in
accordance with the laissez faire principle. That concept, then dominant in economics, was carried into the governmental sphere, as
noted in a textbook on political science, 22 the first edition of which was published in 1898, its author being the then Professor, later
American President, Woodrow Wilson. He took pains to emphasize that what was categorized by him as constituent functions had its
basis in a recognition of what was demanded by the "strictest [concept of] laissez faire, [as they] are indeed the very bonds of
society." 23 The other functions he would minimize as ministrant or optional.

It is a matter of law that in the Philippines, the laissez faire principle hardly commanded the authoritative position which at one time it
held in the United States. As early as 1919, Justice Malcolm in Rubi v. Provincial Board 24 could affirm: "The doctrines of laissez
faire and of unrestricted freedom of the individual, as axioms of economic and political theory, are of the past. The modern period has
shown a widespread belief in the amplest possible demonstration of government activity." 25 The 1935 Constitution, as was indicated
earlier, continued that approach. As noted in Edu v. Ericta:26 "What is more, to erase any doubts, the Constitutional Convention saw to
it that the concept of laissez-faire was rejected. It entrusted to our government the responsibility of coping with social and economic
problems with the commensurate power of control over economic affairs. Thereby it could live up to its commitment to promote the
general welfare through state action." 27 Nor did the opinion in Edu stop there: "To repeat, our Constitution which took effect in 1935
erased whatever doubts there might be on that score. Its philosophy is a repudiation of laissez-faire. One of the leading members of the
Constitutional Convention, Manuel A. Roxas, later the first President of the Republic, made it clear when he disposed of the objection of
Delegate Jose Reyes of Sorsogon, who noted the "vast extensions in the sphere of governmental functions" and the "almost unlimited
power to interfere in the affairs of industry and agriculture as well as to compete with existing business" as "reflections of the fascination
exerted by [the then] current tendencies' in other jurisdictions. He spoke thus: "My answer is that this constitution has a definite and
well defined philosophy, not only political but social and economic.... If in this Constitution the gentlemen will find declarations of
economic policy they are there because they are necessary to safeguard the interest and welfare of the Filipino people because we believe
that the days have come when in self-defense, a nation may provide in its constitution those safeguards, the patrimony, the freedom to
grow, the freedom to develop national aspirations and national interests, not to be hampered by the artificial boundaries which a
constitutional provision automatically imposes." 28

It would be then to reject what was so emphatically stressed in the Agricultural Credit Administration decision about which the
observation was earlier made that it reflected the philosophy of the 1935 Constitution and is even more in consonance with the
expanded role of government accorded recognition in the present Charter if the plea of petitioner that it discharges governmental
function were not heeded. That path this Court is not prepared to take. That would be to go backward, to retreat rather than to advance.
Nothing can thus be clearer than that there is no constitutional obstacle to a government pursuing lines of endeavor, formerly reserved
for private enterprise. This is one way, in the language of Laski, by which through such activities, "the harsh contract which [does]
obtain between the levels of the rich and the poor" may be minimized. 29 It is a response to a trend noted by Justice Laurel in Calalang
v. Williams 30 for the humanization of laws and the promotion of the interest of all component elements of society so that man's innate
aspirations, in what was so felicitously termed by the First Lady as "a compassionate society" be attained. 31

2. The success that attended the efforts of petitioner to be adjudged as performing governmental rather than proprietary functions
cannot militate against respondent Court assuming jurisdiction over this labor dispute. So it was mentioned earlier. As far back
as Tabora v. Montelibano, 32 this Court, speaking through Justice Padilla, declared: The NARIC was established by the Government to
protect the people against excessive or unreasonable rise in the price of cereals by unscrupulous dealers. With that main objective there
is no reason why its function should not be deemed governmental. The Government owes its very existence to that aim and purpose —
to protect the people." 33 In a subsequent case, Naric Worker's Union v. Hon. Alvendia, 34 decided four years later, this Court, relying
on Philippine Association of Free Labor Unions v. Tan, 35 which specified the cases within the exclusive jurisdiction of the Court of
Industrial Relations, included among which is one that involves hours of employment under the Eight-Hour Labor Law, ruled that it is
precisely respondent Court and not ordinary courts that should pass upon that particular labor controversy. For Justice J. B. L. Reyes,
the ponente, the fact that there were judicial as well as administrative and executive pronouncements to the effect that the Naric was
performing governmental functions did not suffice to confer competence on the then respondent Judge to issue a preliminary injunction
and to entertain a complaint for damages, which as pointed out by the labor union, was connected with an unfair labor practice. This is
emphasized by the dispositive portion of the decision: "Wherefore, the restraining orders complained of, dated May 19, 1958 and May
27, 1958, are set aside, and the complaint is ordered dismissed, without prejudice to the National Rice and Corn Corporation's seeking
whatever remedy it is entitled to in the Court of Industrial Relations." 36 Then, too, in a case involving petitioner itself, Philippine
Virginia Tobacco Administration, 37 where the point in dispute was whether it was respondent Court or a court of first instance that is
possessed of competence in a declaratory relief petition for the interpretation of a collective bargaining agreement, one that could
readily be thought of as pertaining to the judiciary, the answer was that "unless the law speaks clearly and unequivocally, the choice
should fall on the Court of Industrial Relations." 38 Reference to a number of decisions which recognized in the then respondent Court
the jurisdiction to determine labor controversies by government-owned or controlled corporations lends to support to such an
approach. 39 Nor could it be explained only on the assumption that proprietary rather than governmental functions did call for such a
conclusion. It is to be admitted that such a view was not previously bereft of plausibility. With the aforecited Agricultural Credit and
Cooperative Financing Administration decision rendering obsolete the Bacani doctrine, it has, to use a Wilsonian phrase, now lapsed
into "innocuous desuetude." 40 Respondent Court clearly was vested with jurisdiction.

3. The contention of petitioner that the Eight-Hour Labor Law 41 does not apply to it hardly deserves any extended consideration. There
is an air of casualness in the way such an argument was advanced in its petition for review as well as in its brief. In both pleadings, it
devoted less than a full page to its discussion. There is much to be said for brevity, but not in this case. Such a terse and summary
treatment appears to be a reflection more of the inherent weakness of the plea rather than the possession of an advocate's enviable
talent for concision. It did cite Section 2 of the Act, but its very language leaves no doubt that "it shall apply to all persons employed in
any industry or occupation, whether public or private ... ." 42 Nor are private respondents included among the employees who are
thereby barred from enjoying the statutory benefits. It cited Marcelo v. Philippine National Red Cross 43 and Boy Scouts of the
Philippines v. Araos.44 Certainly, the activities to which the two above public corporations devote themselves can easily be distinguished
from that engaged in by petitioner. A reference to the pertinent sections of both Republic Acts 2265 and 2155 on which it relies to obtain
a ruling as to its governmental character should render clear the differentiation that exists. If as a result of the appealed order, financial
burden would have to be borne by petitioner, it has only itself to blame. It need not have required private respondents to render
overtime service. It can hardly be surmised that one of its chief problems is paucity of personnel. That would indeed be a cause for
astonishment. It would appear, therefore, that such an objection based on this ground certainly cannot suffice for a reversal. To repeat,
respondent Court must be sustained.

WHEREFORE, the appealed Order of March 21, 1970 and the Resolution of respondent Court en banc of May 8, 1970 denying a motion
for reconsideration are hereby affirmed. The last sentence of the Order of March 21, 1970 reads as follows: "To find how much each of
them [private respondents] is entitled under this judgment, the Chief of the Examining Division, or any of his authorized representative,
is hereby directed to make a reexamination of records, papers and documents in the possession of respondent PVTA pertinent and
proper under the premises and to submit his report of his findings to the Court for further disposition thereof." Accordingly, as provided
by the New Labor Code, this case is referred to the National Labor Relations Commission for further proceedings conformably to law.
No costs.

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

THE GOVERNMENT OF THE PHILIPPINE ISLANDS, represented by the Treasurer of the Philippine Islands,plaintiff-
appellee,
vs.
EL MONTE DE PIEDAD Y CAJA DE AHORRAS DE MANILA, defendant-appellant.

William A. Kincaid and Thomas L. Hartigan for appellant.

Attorney-General Avanceña for appellee.

TRENT, J.:

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

1. The court erred in not finding that the eighty thousand dollars ($80,000), give to the Monte de Piedad y Caja de Ahorros,
were so given as a donation subject to one condition, to wit: the return of such sum of money to the Spanish Government of
these Islands, within eight days following the day when claimed, in case the Supreme Government of Spain should not approve
the action taken by the former government.
 2. The court erred in not having decreed that this donation had been cleared; said eighty thousand dollars ($80,000) being at
present the exclusive property of the appellant the Monte de Piedad y Caja de Ahorros.

3. That the court erred in stating that the Government of the Philippine Islands has subrogated the Spanish Government in its
rights, as regards an important sum of money resulting from a national subscription opened by reason of the earthquake of
June 3, 1863, in these Island.

4. That the court erred in not declaring that Act Numbered 2109, passed by the Philippine Legislature on January 30, 1912, is
unconstitutional.

5. That the court erred in holding in its decision that there is no title for the prescription of this suit brought by the Insular
Government against the Monte de Piedad y Caja de Ahorros for the reimbursement of the eighty thousand dollars ($80,000)
given to it by the late Spanish Government of these Islands.

6. That the court erred in sentencing the Monte de Piedad y Caja de Ahorros to reimburse the Philippine Government in the
sum of eighty thousand dollars ($80,000) gold coin, or the equivalent thereof in the present legal tender currency in
circulation, with legal interest thereon from February 28th, 1912, and the costs of this suit.

In the royal order of June 29, 1879, the Governor-General of the Philippine Islands was directed to inform the home Government in
what manner the indemnity might be paid to which, by virtue of the resolutions of the relief board, the persons who suffered damage by
the earthquake might be entitled, in order to perform the sacred obligation which the Government of Spain had assumed toward the
donors.

The next pertinent document in order is the defendant's petition, dated February 1, 1883, addressed to the Governor-General of the
Philippine Islands, which reads:

Board of Directors of the Monte de Piedad of Manila Presidencia.

Excellency: The Board of Directors of the Monte de Piedad y Caja de Ahorros of Manila informs your Excellency, First: That
the funds which it has up to the present been able to dispose of have been exhausted in loans on jewelry, and there only
remains the sum of one thousand and odd pesos, which will be expended between to-day and day after tomorrow. Second:
That, to maintain the credit of the establishment, which would be greatly injured were its operations suspended, it is necessary
to procure money. Third: That your Excellency has proposed to His Majesty's Government to apply to the funds of the Monte
de Piedad a part of the funds held in the treasury derived form the national subscription for the relief of the distress caused by
the earthquake of 1863. Fourth: That in the public treasury there is held at the disposal of the central earthquake relief board
over $1090,000 which was deposited in the said treasury by order of your general Government, it having been transferred
thereto from the Spanish-Filipino Bank where it had been held. fifth: That in the straightened circumstances of the moment,
your Excellency can, to avert impending disaster to the Monte de Piedad, order that, out of that sum of one hundred thousand
pesos held in the Treasury at the disposal of the central relief board, there be transferred to the Monte de Piedad the sum of
$80,000, there to be held under the same conditions as at present in the Treasury, to wit, at the disposal of the Relief Board.
Sixth: That should this transfer not be approved for any reason, either because of the failure of His Majesty's Government to
approve the proposal made by your Excellency relative to the application to the needs of the Monte de Piedad of a pat of the
subscription intended to believe the distress caused by the earthquake of 1863, or for any other reason, the board of directors
of the Monte de Piedad obligates itself to return any sums which it may have received on account of the eighty thousand pesos,
or the whole thereof, should it have received the same, by securing a loan from whichever bank or banks may lend it the money
at the cheapest rate upon the security of pawned jewelry. — This is an urgent measure to save the Monte de Piedad in the
present crisis and the board of directors trusts to secure your Excellency's entire cooperation and that of the other officials who
have take part in the transaction.

The Governor-General's resolution on the foregoing petition is as follows:

GENERAL GOVERNMENT OF THE PHILIPPINES.

MANILA, February 1, 1883.

In view of the foregoing petition addressed to me by the board of directors of the Monte de Piedad of this city, in which it is
stated that the funds which the said institution counted upon are nearly all invested in loans on jewelry and that the small
account remaining will scarcely suffice to cover the transactions of the next two days, for which reason it entreats the general
Government that, in pursuance of its telegraphic advice to H. M. Government, the latter direct that there be turned over to
said Monte de Piedad $80,000 out of the funds in the public treasury obtained from the national subscription for the relief of
the distress caused by the earthquake of 1863, said board obligating itself to return this sum should H. M. Government, for any
reason, not approve the said proposal, and for this purpose it will procure funds by means of loans raised on pawned jewelry; it
stated further that if the aid so solicited is not furnished, it will be compelled to suspend operations, which would seriously
injure the credit of so beneficient an institution; and in view of the report upon the matter made by the Intendencia General de
Hacienda; and considering the fact that the public treasury has on hand a much greater sum from the source mentioned than
that solicited; and considering that this general Government has submitted for the determination of H. M. Government that
the balance which, after strictly applying the proceeds obtained from the subscription referred to, may remain as a surplus
should be delivered to the Monte de Piedad, either as a donation, or as a loan upon the security of the credit of the institution,
believing that in so doing the wishes of the donors would be faithfully interpreted inasmuch as those wishes were no other than
to relieve distress, an act of charity which is exercised in the highest degree by the Monte de Piedad, for it liberates needy
person from the pernicious effects of usury; and

Considering that the lofty purposes that brought about the creation of the pious institution referred to would be frustrated, and
that the great and laudable work of its establishment, and that the great and laudable and valuable if the aid it urgently seeks is
not granted, since the suspension of its operations would seriously and regrettably damage the ever-growing credit of
the Monte de Piedad; and

Considering that if such a thing would at any time cause deep distress in the public mind, it might be said that at the present
juncture it would assume the nature of a disturbance of public order because of the extreme poverty of the poorer classes
resulting from the late calamities, and because it is the only institution which can mitigate the effects of such poverty; and

Considering that no reasonable objection can be made to granting the request herein contained, for the funds in question are
sufficiently secured in the unlikely event that H> M. Government does not approve the recommendation mentioned, this
general Government, in the exercise of the extraordinary powers conferred upon it and in conformity with the report of the
Intendencia de Hacienda, resolves as follows:
 First. Authority is hereby given to deliver to the Monte de Piedad, out of the sum held in the public treasury of these Islands
obtained from the national subscription opened by reason of the earthquakes of 1863, amounts up to the sum $80,000, as its
needs may require, in installments of $20,000.

Second. The board of directors of the Monte de Piedad is solemnly bound to return, within eight days after demand, the sums
it may have so received, if H. M. Government does not approve this resolution.

Third. The Intendencia General de Hacienda shall forthwith, and in preference to all other work, proceed to prepare the
necessary papers so that with the least possible delay the payment referred to may be made and the danger that menaces
the Monte de Piedad of having to suspend its operations may be averted.

H. M. Government shall be advised hereof.lawphi1.net

(Signed) P. DE RIVERA.

By the royal order of December 3, 1892, the Governor-General of the Philippine Islands was ordered to "inform this ministerio what is
the total sum available at the present time, taking into consideration the sums delivered to the Monte de Piedad pursuant to the decree
issued by your general Government on February 1, 1883," and after the rights of the claimants, whose names were published in the
Official Gazette of Manila on April 7, 1870, and their heirs had been established, as therein provided, as such persons "have an
unquestionable right to be paid the donations assigned to them therein, your general Government shall convoke them all within a
reasonable period and shall pay their shares to such as shall identify themselves, without regard to their financial status," and finally
"that when all the proceedings and operations herein mentioned have been concluded and the Government can consider itself free from
all kinds of claims on the part of those interested in the distribution of the funds deposited in the vaults of the Treasury, such action may
be taken as the circumstances shall require, after first consulting the relief board and your general Government and taking account of
what sums have been delivered to the Monte de Piedad and those that were expended in 1888 to relieve public calamities," and "in
order that all the points in connection with the proceedings had as a result of the earthquake be clearly understood, it is indispensable
that the offices hereinbefore mentioned comply with the provisions contained in paragraphs 2 and 3 of the royal order of June 25,
1879." On receipt of this Finance order by the Governor-General, the Department of Finance was called upon for a report in reference to
the $80,000 turned over to the defendant, and that Department's report to the Governor-General dated June 28, 1893, reads:

Intendencia General de Hacienda de Filipinas (General Treasury of the Philippines) — Excellency. — By Royal Order No. 1044
of December 3, last, it is provided that the persons who sustained losses by the earthquakes that occurred in your capital in the
year 1863 shall be paid the amounts allotted to them out of the sums sent from Spain for this purpose, with observance of the
rules specified in the said royal order, one of them being that before making the payment to the interested parties the assets
shall be reduced to money. These assets, during the long period of time that has elapsed since they were turned over to the
Treasury of the Philippine Islands, were used to cover the general needs of the appropriation, a part besides being invested in
the relief of charitable institutions and another part to meet pressing needs occasioned by public calamities. On January 30,
last, your Excellency was please to order the fulfillment of that sovereign mandate and referred the same to
this Intendencia for its information and the purposes desired (that is, for compliance with its directions and, as aforesaid, one
of these being the liquidation, recovery, and deposit with the Treasury of the sums paid out of that fund and which were
expended in a different way from that intended by the donors) and this Intendencia believed the moment had arrived to claim
from the board of directors of the Monte de Piedad y Caja de Ahorros the sum of 80,000 pesos which, by decree of your
general Government of the date of February 1, 1883, was loaned to it out of the said funds, the (Monte de Piedad) obligating
itself to return the same within the period of eight days if H. M. Government did not approve the delivery. On this
Intendencia's demanding from the Monte de Piedad the eighty thousand pesos, thus complying with the provisions of the
Royal Order, it was to be supposed that no objection to its return would be made by the Monte de Piedad for, when it received
the loan, it formally engaged itself to return it; and, besides, it was indisputable that the moment to do so had arrived,
inasmuch as H. M. Government, in ordering that the assets of the earthquake relief fund should he collected, makes express
mention of the 80,000 pesos loaned to the Monte de Piedad, without doubt considering as sufficient the period of ten years
during which it has been using this large sum which lawfully belongs to their persons. This Intendencia also supposed that
the Monte de Piedad no longer needed the amount of that loan, inasmuch as, far from investing it in beneficient transactions,
it had turned the whole amount into the voluntary deposit funds bearing 5 per cent interests, the result of this operation being
that the debtor loaned to the creditor on interest what the former had gratuitously received. But the Monte de Piedad, instead
of fulfilling the promise it made on receiving the sum, after repeated demands refused to return the money on the ground that
only your Excellency, and not the Intendencia (Treasury), is entitled to order the reimbursement, taking no account of the fact
that this Intendencia was acting in the discharge of a sovereign command, the fulfillment of which your Excellency was pleased
to order; and on the further ground that the sum of 80,000 pesos which it received from the fund intended for the earthquake
victims was not received as a loan, but as a donation, this in the opinion of this Intendencia, erroneously interpreting both the
last royal order which directed the apportionment of the amount of the subscription raised in the year 1863 and the superior
decree which granted the loan, inasmuch as in this letter no donation is made to the Monte de Piedad of the 80,000 pesos, but
simply a loan; besides, no donation whatever could be made of funds derived from a private subscription raised for a specific
purpose, which funds are already distributed and the names of the beneficiaries have been published in the Gaceta, there being
lacking only the mere material act of the delivery, which has been unduly delayed. In view of the unexpected reply made by
the Monte de Piedad, and believing it useless to insist further in the matter of the claim for the aforementioned loan, or to
argue in support thereof, this Intendencia believes the intervention of your Excellency necessary in this matter, if the royal
Order No. 1044 of December 3, last, is to be complied with, and for this purpose I beg your Excellency kindly to order
the Monte de Piedad to reimburse within the period of eight days the 80,000 which it owes, and that you give this Intendencia
power to carry out the provisions of the said royal order. I must call to the attention of your Excellency that the said pious
establishment, during the last few days and after demand was made upon it, has endorsed to the Spanish-Filipino Bank nearly
the whole of the sum which it had on deposit in the general deposit funds.

The record in the case under consideration fails to disclose any further definite action taken by either the Philippine Government or the
Spanish Government in regard to the $80,000 turned over to the Monte de Piedad.

In the defendant's general ledger the following entries appear: "Public Treasury: February 15, 1883, $20,000; March 12, 1883, $20,000;
April 14, 1883, $20,000; June 2, 1883, $20,000, total $80,000." The book entry for this total is as follows: "To the public Treasury
derived from the subscription for the earthquake of 1863, $80,000 received from general Treasury as a returnable loan, and without
interest." The account was carried in this manner until January 1, 1899, when it was closed by transferring the amount to an account
called "Sagrada Mitra," which latter account was a loan of $15,000 made to the defendant by the Archbishop of Manila, without interest,
thereby placing the "Sagrada Mitra" account at $95,000 instead of $15,000. The above-mentioned journal entry for January 1, 1899,
reads: "Sagrada Mitra and subscription, balance of these two account which on this date are united in accordance with an order of
the Exmo. Sr. Presidente of the Council transmitted verbally to the Presidente Gerente of these institutions, $95,000."

On March 16, 1902, the Philippine government called upon the defendant for information concerning the status of the $80,000 and
received the following reply:

MANILA, March 31, 1902.

 To the Attorney-General of the Department of Justice of the Philippine Islands.

SIR: In reply to your courteous letter of the 16th inst., in which you request information from this office as to when and for
what purpose the Spanish Government delivered to the Monte de Piedad eighty thousand pesos obtained from the subscription
opened in connection with the earthquake of 1863, as well as any other information that might be useful for the report which
your office is called upon to furnish, I must state to your department that the books kept in these Pious Institutions, and which
have been consulted for the purpose, show that on the 15th of February, 1883, they received as a reimbursable loan and
without interest, twenty thousand pesos, which they deposited with their own funds. On the same account and on each of the
dates of March 12, April 14 and June 2 of the said year, 1883, they also received and turned into their funds a like sum of
twenty thousand pesos, making a total of eighty thousand pesos. — (Signed) Emilio Moreta.

I hereby certify that the foregoing is a literal copy of that found in the letter book No. 2 of those Pious Institutions.

Manila, November 19, 1913

(Sgd.) EMILIO LAZCANOTEGUI,
Secretary

(Sgd.) O. K. EMILIO MORETA,

Managing Director.

The foregoing documentary evidence shows the nature of the transactions which took place between the Government of Spain and the
Philippine Government on the one side and the Monte de Piedad on the other, concerning the $80,000. The Monte de Piedad, after
setting forth in its petition to the Governor-General its financial condition and its absolute necessity for more working capital, asked
that out of the sum of $100,000 held in the Treasury of the Philippine Islands, at the disposal of the central relief board, there be
transferred to it the sum of $80,000 to be held under the same conditions, to wit, "at the disposal of the relief board." The Monte de
Piedad agreed that if the transfer of these funds should not be approved by the Government of Spain, the same would be returned
forthwith. It did not ask that the $80,000 be given to it as a donation. The Governor-General, after reciting the substance of the
petition, stated that "this general Government has submitted for the determination of H. M. Government that the balance which, after
strictly applying the proceeds obtained from the subscription referred to, may remain as a surplus, should be delivered to the Monte de
Piedad, either as a donation, or as a loan upon the security of the credit of the institution," and "considering that no reasonable
objection can be made to granting the request herein contained," directed the transfer of the $80,000 to be made with the
understanding that "the Board of Directors of the Monte de Piedad is solemnly bound to return, within eight days after demand, the
sums it may have so received, if H. M. Government does not approve this resolution." It will be noted that the first and only time the
word "donation" was used in connection with the $80,000 appears in this resolution of the Governor-General. It may be inferred from
the royal orders that the Madrid Government did tacitly approve of the transfer of the $80,000 to the Monte de Piedad as a loan
without interest, but that Government certainly did not approve such transfer as a donation for the reason that the Governor-General
was directed by the royal order of December 3, 1892, to inform the Madrid Government of the total available sum of the earthquake
fund, "taking into consideration the sums delivered to the Monte de Piedad pursuant to the decree issued by your general Government
on February 1, 1883." This language, nothing else appearing, might admit of the interpretation that the Madrid Government did not
intend that the Governor-General of the Philippine Islands should include the $80,000 in the total available sum, but when considered
in connection with the report of the Department of Finance there can be no doubt that it was so intended. That report refers expressly to
the royal order of December 3d, and sets forth in detail the action taken in order to secure the return of the $80,000. The Department
of Finance, acting under the orders of the Governor-General, understood that the $80,000 was transferred to the Monte de Piedad well
knew that it received this sum as a loan interest." The amount was thus carried in its books until January, 1899, when it was transferred
to the account of the "Sagrada Mitra" and was thereafter known as the "Sagrada Mitra and subscription account." Furthermore,
the Monte de Piedad recognized and considered as late as March 31, 1902, that it received the $80,000 "as a returnable loan, and
without interest." Therefore, there cannot be the slightest doubt the fact that the Monte de Piedad received the $80,000 as a mere loan
or deposit and not as a donation. Consequently, the first alleged error is entirely without foundation.

Counsel for the defendant, in support of their third assignment of error, say in their principal brief that:

The Spanish nation was professedly Roman Catholic and its King enjoyed the distinction of being deputy ex officio of the Holy
See and Apostolic Vicar-General of the Indies, and as such it was his duty to protect all pious works and charitable institutions
in his kingdoms, especially those of the Indies; among the latter was the Monte de Piedad of the Philippines, of which said
King and his deputy the Governor-General of the Philippines, as royal vice-patron, were, in a special and peculiar manner, the
protectors; the latter, as a result of the cession of the Philippine Islands, Implicitly renounced this high office and tacitly
returned it to the Holy See, now represented by the Archbishop of Manila; the national subscription in question was a kind of
foundation or pious work, for a charitable purpose in these Islands; and the entire subscription not being needed for its
original purpose, the royal vice-patron, with the consent of the King, gave the surplus thereof to an analogous purpose; the
fulfillment of all these things involved, in the majority, if not in all cases, faithful compliance with the duty imposed upon him
by the Holy See, when it conferred upon him the royal patronage of the Indies, a thing that touched him very closely in his
conscience and religion; the cessionary Government though Christian, was not Roman Catholic and prided itself on its policy
of non-interference in religious matters, and inveterately maintained a complete separation between the ecclesiastical and civil
powers.

In view of these circumstances it must be quite clear that, even without the express provisions of the Treaty of Paris, which
apparently expressly exclude such an idea, it did not befit the honor of either of the contracting parties to subrogate to the
American Government in lieu of the Spanish Government anything respecting the disposition of the funds delivered by the
latter to the Monte de Piedad. The same reasons that induced the Spanish Government to take over such things would result in
great inconvenience to the American Government in attempting to do so. The question was such a delicate one, for the reason
that it affected the conscience, deeply religious, of the King of Spain, that it cannot be believed that it was ever his intention to
confide the exercise thereof to a Government like the American. (U. S. vs. Arredondo, 6 Pet. [U. S.], 711.)

It is thus seen that the American Government did not subrogate the Spanish Government or rather, the King of Spain, in this
regard; and as the condition annexed to the donation was lawful and possible of fulfillment at the time the contract was made,
but became impossible of fulfillment by the cession made by the Spanish Government in these Islands, compliance therewith is
excused and the contract has been cleared thereof.

The contention of counsel, as thus stated, in untenable for two reason, (1) because such contention is based upon the erroneous theory
that the sum in question was a donation to the Monte de Piedad and not a loan, and (2) because the charity founded by the donations
for the earthquake sufferers is not and never was intended to be an ecclesiastical pious work. The first proposition has already been
decided adversely to the defendant's contention. As to the second, the record shows clearly that the fund was given by the donors for a
specific and definite purpose — the relief of the earthquake sufferers — and for no other purpose. The money was turned over to the
Spanish Government to be devoted to that purpose. The Spanish Government remitted the money to the Philippine Government to be
distributed among the suffers. All officials, including the King of Spain and the Governor-General of the Philippine Islands, who took
part in the disposal of the fund, acted in their purely civil, official capacity, and the fact that they might have belonged to a certain
church had nothing to do with their acts in this matter. The church, as such, had nothing to do with the fund in any way whatever until
the $80,000 reached the coffers of the Monte de Piedad (an institution under the control of the church) as a loan or deposit. If the
charity in question had been founded as an ecclesiastical pious work, the King of Spain and the Governor-General, in their capacities as
vicar-general of the Indies and as royal vice-patron, respectively, would have disposed of the fund as such and not in their civil
capacities, and such functions could not have been transferred to the present Philippine Government, because the right to so act would
have arisen out of the special agreement between the Government of Spain and the Holy See, based on the union of the church and state
which was completely separated with the change of sovereignty.

And in their supplemental brief counsel say:

By the conceded facts the money in question is part of a charitable subscription. The donors were persons in Spain, the trustee
was the Spanish Government, the donees, the cestuis que trustent, were certain persons in the Philippine Islands. The whole
matter is one of trusteeship. This is undisputed and indisputable. It follows that the Spanish Government at no time was the
owner of the fund. Not being the owner of the fund it could not transfer the ownership. Whether or not it could transfer its
trusteeship it certainly never has expressly done so and the general terms of property transfer in the Treaty of Paris are wholly
insufficient for such a purpose even could Spain have transferred its trusteeship without the consent of the donors and even
could the United States, as a Government, have accepted such a trust under any power granted to it by the thirteen original
States in the Constitution, which is more than doubtful. It follows further that this Government is not a proper party to the
action. The only persons who could claim to be damaged by this payment to the Monte, if it was unlawful, are the donors or
the cestuis que trustent, and this Government is neither.

If "the whole matter is one of trusteeship," and it being true that the Spanish Government could not, as counsel say, transfer the
ownership of the fund to the Monte de Piedad, the question arises, who may sue to recover this loan? It needs no argument to show that
the Spanish or Philippine Government, as trustee, could maintain an action for this purpose had there been no change of sovereignty
and if the right of action has not prescribed. But those governments were something more than mere common law trustees of the fund.
In order to determine their exact status with reference to this fund, it is necessary to examine the law in force at the time there
transactions took place, which are the law of June 20, 1894, the royal decree of April 27. 1875, and the instructions promulgated on the
latter date. These legal provisions were applicable to the Philippine Islands (Benedicto vs. De la Rama, 3 Phil. Rep., 34)

The funds collected as a result of the national subscription opened in Spain by royal order of the Spanish Government and which were
remitted to the Philippine Government to be distributed among the earthquake sufferers by the Central Relief Board constituted, under
article 1 of the law of June 20, 1894, and article 2 of the instructions of April 27, 1875, a special charity of a temporary nature as
distinguished from a permanent public charitable institution. As the Spanish Government initiated the creation of the fund and as the
donors turned their contributions over to that Government, it became the duty of the latter, under article 7 of the instructions, to
exercise supervision and control over the moneys thus collected to the end that the will of the donors should be carried out. The relief
board had no power whatever to dispose of the funds confided to its charge for other purposes than to distribute them among the
sufferers, because paragraph 3 of article 11 of the instructions conferred the power upon the secretary of the interior of Spain, and no
other, to dispose of the surplus funds, should there be any, by assigning them to some other charitable purpose or institution. The
secretary could not dispose of any of the funds in this manner so long as they were necessary for the specific purpose for which they
were contributed. The secretary had the power, under the law above mentioned to appoint and totally or partially change the personnel
of the relief board and to authorize the board to defend the rights of the charity in the courts. The authority of the board consisted only
in carrying out the will of the donors as directed by the Government whose duty it was to watch over the acts of the board and to see that
the funds were applied to the purposes for which they were contributed .The secretary of the interior, as the representative of His
Majesty's Government, exercised these powers and duties through the Governor-General of the Philippine Islands. The Governments of
Spain and of the Philippine Islands in complying with their duties conferred upon them by law, acted in their governmental capacities in
attempting to carry out the intention of the contributors. It will this be seen that those governments were something more, as we have
said, than mere trustees of the fund.

It is further contended that the obligation on the part of the Monte de Piedad to return the $80,000 to the Government, even
considering it a loan, was wiped out on the change of sovereignty, or inn other words, the present Philippine Government cannot
maintain this action for that reason. This contention, if true, "must result from settled principles of rigid law," as it cannot rest upon any
title to the fund in the Monte de Piedad acquired prior to such change. While the obligation to return the $80,000 to the Spanish
Government was still pending, war between the United States and Spain ensued. Under the Treaty of Paris of December 10, 1898, the
Archipelago, known as the Philippine Islands, was ceded to the United States, the latter agreeing to pay Spain the sum of $20,000,000.
Under the first paragraph of the eighth article, Spain relinquished to the United States "all buildings, wharves, barracks, forts,
structures, public highways, and other immovable property which, in conformity with law, belonged to the public domain, and as such
belonged to the crown of Spain." As the $80,000 were not included therein, it is said that the right to recover this amount did not,
therefore, pass to the present sovereign. This, in our opinion, does not follow as a necessary consequence, as the right to recover does
not rest upon the proposition that the $80,000 must be "other immovable property" mentioned in article 8 of the treaty, but upon
contractual obligations incurred before the Philippine Islands were ceded to the United States. We will not inquire what effect his
cession had upon the law of June 20, 1849, the royal decree of April 27, 1875, and the instructions promulgated on the latter date. In
Vilas vs.Manila (220 U. S., 345), the court said:

That there is a total abrogation of the former political relations of the inhabitants of the ceded region is obvious. That all laws
theretofore in force which are in conflict with the political character, constitution, or institutions of the substituted sovereign,
lose their force, is also plain. (Alvarez y Sanchez vs. United States, 216 U. S., 167.) But it is equally settled in the same public
law that the great body of municipal law which regulates private and domestic rights continues in force until abrogated or
changed by the new ruler.

If the above-mentioned legal provisions are in conflict with the political character, constitution or institutions of the new sovereign, they
became inoperative or lost their force upon the cession of the Philippine Islands to the United States, but if they are among "that great
body of municipal law which regulates private and domestic rights," they continued in force and are still in force unless they have been
repealed by the present Government. That they fall within the latter class is clear from their very nature and character. They are laws
which are not political in any sense of the word. They conferred upon the Spanish Government the right and duty to supervise, regulate,
and to some extent control charities and charitable institutions. The present sovereign, in exempting "provident institutions, savings
banks, etc.," all of which are in the nature of charitable institutions, from taxation, placed such institutions, in so far as the investment
in securities are concerned, under the general supervision of the Insular Treasurer (paragraph 4 of section 111 of Act No. 1189; see also
Act No. 701).

Furthermore, upon the cession of the Philippine Islands the prerogatives of he crown of Spain devolved upon he United States. In
Magill vs. Brown (16 Fed. Cas., 408), quoted with approval in Mormon Charch vs. United States (136 U. S.,1, 57), the court said:

The Revolution devolved on the State all the transcendent power of Parliament, and the prerogative of the crown, and gave
their Acts the same force and effect.

In Fontain vs. Ravenel (17 Hw., 369, 384), Mr. Justice McLean, delivering the opinion of the court in a charity case, said:
 When this country achieved its independence, the prerogatives of the crown devolved upon the people of the States. And this
power still remains with them except so fact as they have delegated a portion of it to the Federal Government. The sovereign
will is made known to us by legislative enactment. The State as a sovereign, is the parens patriae.

Chancelor Kent says:

In this country, the legislature or government of the State, as parens patriae, has the right to enforce all charities of public
nature, by virtue of its general superintending authority over the public interests, where no other person is entrusted with it. (4
Kent Com., 508, note.)

The Supreme Court of the United States in Mormon Church vs. United States, supra, after approving also the last quotations, said:

This prerogative of parens patriae is inherent in the supreme power of every State, whether that power is lodged in a royal
person or in the legislature, and has no affinity to those arbitrary powers which are sometimes exerted by irresponsible
monarchs to the great detriment of the people and the destruction of their liberties. On the contrary, it is a most beneficient
functions, and often necessary to be exercised in the interest of humanity, and for the prevention of injury to those who cannot
protect themselves.

The court in the same case, after quoting from Sohier vs. Mass. General Hospital (3 Cush., 483, 497), wherein the latter court held that
it is deemed indispensible that there should be a power in the legislature to authorize the same of the estates of in facts, idiots, insane
persons, and persons not known, or not in being, who cannot act for themselves, said:

These remarks in reference to in facts, insane persons and person not known, or not in being, apply to the beneficiaries of
charities, who are often in capable of vindicating their rights, and justly look for protection to the sovereign authority, acting
as parens patriae. They show that this beneficient functions has not ceased t exist under the change of government from a
monarchy to a republic; but that it now resides in the legislative department, ready to be called into exercise whenever required
for the purposes of justice and right, and is a clearly capable of being exercised in cases of charities as in any other cases
whatever.

In People vs. Cogswell (113 Cal. 129, 130), it was urged that the plaintiff was not the real party in interest; that the Attorney-General had
no power to institute the action; and that there must be an allegation and proof of a distinct right of the people as a whole, as
distinguished from the rights of individuals, before an action could be brought by the Attorney-General in the name of the people. The
court, in overruling these contentions, held that it was not only the right but the duty of the Attorney-General to prosecute the action,
which related to charities, and approved the following quotation from Attorney-General vs. Compton (1 Younge & C. C., 417):

Where property affected by a trust for public purposes is in the hands of those who hold it devoted to that trust, it is the
privilege of the public that the crown should be entitled to intervene by its officers for the purpose of asserting, on behalf on the
public generally, the public interest and the public right, which, probably, no individual could be found effectually to assert,
even if the interest were such as to allow it. (2 Knet's Commentaries, 10th ed., 359; Lewin on Trusts, sec. 732.)

It is further urged, as above indicated, that "the only persons who could claim to be damaged by this payment to the Monte, if it was
unlawful, are the donors or the cestuis que trustent, and this Government is neither. Consequently, the plaintiff is not the proper party
to bring the action." The earthquake fund was the result or the accumulation of a great number of small contributions. The names of the
contributors do not appear in the record. Their whereabouts are unknown. They parted with the title to their respective contributions.
The beneficiaries, consisting of the original sufferers and their heirs, could have been ascertained. They are quite numerous also. And no
doubt a large number of the original sufferers have died, leaving various heirs. It would be impracticable for them to institute an action
or actions either individually or collectively to recover the $80,000. The only course that can be satisfactorily pursued is for the
Government to again assume control of the fund and devote it to the object for which it was originally destined.

The impracticability of pursuing a different course, however, is not the true ground upon which the right of the Government to maintain
the action rests. The true ground is that the money being given to a charity became, in a measure, public property, only applicable, it is
true, to the specific purposes to which it was intended to be devoted, but within those limits consecrated to the public use, and became
part of the public resources for promoting the happiness and welfare of the Philippine Government. (Mormon Church vs. U. S., supra.)
To deny the Government's right to maintain this action would be contrary to sound public policy, as tending to discourage the prompt
exercise of similar acts of humanity and Christian benevolence in like instances in the future.

As to the question raised in the fourth assignment of error relating to the constitutionality of Act No. 2109, little need be said for the
reason that we have just held that the present Philippine Government is the proper party to the action. The Act is only a manifestation
on the part of the Philippine Government to exercise the power or right which it undoubtedly had. The Act is not, as contended by
counsel, in conflict with the fifth section of the Act of Congress of July 1, 1902, because it does not take property without due process of
law. In fact, the defendant is not the owner of the $80,000, but holds it as a loan subject to the disposal of the central relief board.
Therefor, there can be nothing in the Act which transcends the power of the Philippine Legislature.

In Vilas vs. Manila, supra, the plaintiff was a creditor of the city of Manila as it existed before the cession of the Philippine Islands to
the United States by the Treaty of Paris of December 10, 1898. The action was brought upon the theory that the city, under its present
charter from the Government of the Philippine Islands, was the same juristic person, and liable upon the obligations of the old city. This
court held that the present municipality is a totally different corporate entity and in no way liable for the debts of the Spanish
municipality. The Supreme Court of the United States, in reversing this judgment and in holding the city liable for the old debt, said:

The juristic identity of the corporation has been in no wise affected, and, in law, the present city is, in every legal sense, the
successor of the old. As such it is entitled to the property and property rights of the predecessor corporation, and is, in law,
subject to all of its liabilities.

In support of the fifth assignment of error counsel for the defendant argue that as the Monte de Piedad declined to return the $80,000
when ordered to do so by the Department of Finance in June, 1893, the plaintiff's right of action had prescribed at the time this suit was
instituted on May 3, 1912, citing and relying upon article 1961, 1964 and 1969 of the Civil Code. While on the other hand, the Attorney-
General contends that the right of action had not prescribed (a) because the defense of prescription cannot be set up against the
Philippine Government, (b) because the right of action to recover a deposit or trust funds does not prescribe, and (c) even if the defense
of prescription could be interposed against the Government and if the action had, in fact, prescribed, the same was revived by Act No.
2109.

The material facts relating to this question are these: The Monte de Piedad received the $80,000 in 1883 "to be held under the same
conditions as at present in the treasury, to wit, at the disposal of the relief board." In compliance with the provisions of the royal order
of December 3, 1892, the Department of Finance called upon the Monte de Piedadin June, 1893, to return the $80,000. The Monte
declined to comply with this order upon the ground that only the Governor-General of the Philippine Islands and not the Department of
Finance had the right to order the reimbursement. The amount was carried on the books of the Monte as a returnable loan until January
1, 1899, when it was transferred to the account of the "Sagrada Mitra." On March 31, 1902, the Monte, through its legal representative,
stated in writing that the amount in question was received as a reimbursable loan, without interest. Act No. 2109 became effective
January 30, 1912, and the action was instituted on May 3rd of that year.

Counsel for the defendant treat the question of prescription as if the action was one between individuals or corporations wherein the
plaintiff is seeking to recover an ordinary loan. Upon this theory June, 1893, cannot be taken as the date when the statute of limitations
began to run, for the reason that the defendant acknowledged in writing on March 31, 1902, that the $80,000 were received as a loan,
thereby in effect admitting that it still owed the amount. (Section 50, Code of Civil Procedure.) But if counsels' theory is the correct one
the action may have prescribed on May 3, 1912, because more than ten full years had elapsed after March 31, 1902. (Sections 38 and 43,
Code of Civil Procedure.)

Is the Philippine Government bound by the statute of limitations? The Supreme Court of the United States in U. S. vs. Nashville,
Chattanooga & St. Louis Railway Co. (118 U. S., 120, 125), said:

It is settled beyond doubt or controversy — upon the foundation of the great principle of public policy, applicable to all
governments alike, which forbids that the public interests should be prejudiced by the negligence of the officers or agents to
whose care they are confided — that the United States, asserting rights vested in it as a sovereign government, is not bound by
any statute of limitations, unless Congress has clearly manifested its intention that it should be so bound. (Lindsey vs. Miller, 6
Pet. 666; U. S. vs. Knight, 14 Pet., 301; Gibson vs. Chouteau, 13 Wall., 92; U. S. vs. Thompson, 98 U. S., 486; Fink vs. O'Neil,
106 U. S., 272, 281.)

In Gibson vs. Choteau, supra, the court said:

It is a matter of common knowledge that statutes of limitation do not run against the State. That no laches can be imputed to
the King, and that no time can bar his rights, was the maxim of the common laws, and was founded on the principle of public
policy, that as he was occupied with the cares of government he ought not to suffer from the negligence of his officer and
servants. The principle is applicable to all governments, which must necessarily act through numerous agents, and is essential
to a preservation of the interests and property of the public. It is upon this principle that in this country the statutes of a State
prescribing periods within which rights must be prosecuted are not held to embrace the State itself, unless it is expressly
designated or the mischiefs to be remedied are of such a nature that it must necessarily be included. As legislation of a State
can only apply to persons and thing over which the State has jurisdiction, the United States are also necessarily excluded from
the operation of such statutes.

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

In the absence of express statutory provision to the contrary, statute of limitations do not as a general rule run against the
sovereign or government, whether state or federal. But the rule is otherwise where the mischiefs to be remedied are of such a
nature that the state must necessarily be included, where the state goes into business in concert or in competition with her
citizens, or where a party seeks to enforces his private rights by suit in the name of the state or government, so that the latter is
only a nominal party.

In the instant case the Philippine Government is not a mere nominal party because it, in bringing and prosecuting this action, is
exercising its sovereign functions or powers and is seeking to carry out a trust developed upon it when the Philippine Islands were ceded
to the United States. The United States having in 1852, purchased as trustee for the Chickasaw Indians under treaty with that tribe,
certain bonds of the State of Tennessee, the right of action of the Government on the coupons of such bonds could not be barred by the
statute of limitations of Tennessee, either while it held them in trust for the Indians, or since it became the owner of such coupons. (U.
S. vs. Nashville, etc., R. Co., supra.) So where lands are held in trust by the state and the beneficiaries have no right to sue, a statute
does not run against the State's right of action for trespass on the trust lands. (Greene Tp. vs. Campbell, 16 Ohio St., 11; see also Atty.-
Gen. vs. Midland R. Co., 3 Ont., 511 [following Reg. vs. Williams, 39 U. C. Q. B., 397].)

These principles being based "upon the foundation of the great principle of public policy" are, in the very nature of things, applicable to
the Philippine Government.

Counsel in their argument in support of the sixth and last assignments of error do not question the amount of the judgment nor do they
question the correctness of the judgment in so far as it allows interest, and directs its payment in gold coin or in the equivalent in
Philippine currency.

For the foregoing reasons the judgment appealed from is affirmed, with costs against the appellant. So ordered.

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

MELCHORA CABANAS, plaintiff-appellee,
vs.
FRANCISCO PILAPIL, defendant-appellant.

Seno, Mendoza & Associates for plaintiff-appellee.

Emilio Benitez, Jr. for defendant-appellant.

FERNANDO, J.:p

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

The appealed decision made clear: "There is no controversy as to the facts. "1 The insured, Florentino Pilapil had a child, Millian Pilapil,
with a married woman, the plaintiff, Melchora Cabanas. She was ten years old at the time the complaint was filed on October 10, 1964.
The defendant, Francisco Pilapil, is the brother of the deceased. The deceased insured himself and instituted as beneficiary, his child,
with his brother to act as trustee during her minority. Upon his death, the proceeds were paid to him. Hence this complaint by the
mother, with whom the child is living, seeking the delivery of such sum. She filed the bond required by the Civil Code. Defendant would
justify his claim to the retention of the amount in question by invoking the terms of the insurance policy.2

After trial duly had, the lower court in a decision of May 10, 1965, rendered judgment ordering the defendant to deliver the proceeds of
the policy in question to plaintiff. Its main reliance was on Articles 320 and 321 of the Civil Code. The former provides: "The father, or
in his absence the mother, is the legal administrator of the property pertaining to the child under parental authority. If the property is
worth more than two thousand pesos, the father or mother shall give a bond subject to the approval of the Court of First Instance."3 The
latter states: "The property which the unemancipated child has acquired or may acquire with his work or industry, or by any lucrative
title, belongs to the child in ownership, and in usufruct to the father or mother under whom he is under parental authority and whose
company he lives; ...4

Conformity to such explicit codal norm is apparent in this portion of the appealed decision: "The insurance proceeds belong to the
beneficiary. The beneficiary is a minor under the custody and parental authority of the plaintiff, her mother. The said minor lives with
plaintiff or lives in the company of the plaintiff. The said minor acquired this property by lucrative title. Said property, therefore,
belongs to the minor child in ownership, and in usufruct to the plaintiff, her mother. Since under our law the usufructuary is entitled to
possession, the plaintiff is entitled to possession of the insurance proceeds. The trust, insofar as it is in conflict with the above quoted
provision of law, is pro tanto null and void. In order, however, to protect the rights of the minor, Millian Pilapil, the plaintiff should file
an additional bond in the guardianship proceedings, Sp. Proc. No. 2418-R of this Court to raise her bond therein to the total amount of
P5,000.00."5

It is very clear, therefore, considering the above, that unless the applicability of the two cited Civil Code provisions can be disputed, the
decision must stand. There is no ambiguity in the language employed. The words are rather clear. Their meaning is unequivocal. Time
and time again, this Court has left no doubt that where codal or statutory norms are cast in categorical language, the task before it is not
one of interpretation but of application.6 So it must be in this case. So it was in the appealed decision.

1. It would take more than just two paragraphs as found in the brief for the defendant-appellant7 to blunt the force of legal commands
that speak so plainly and so unqualifiedly. Even if it were a question of policy, the conclusion will remain unaltered. What is paramount,
as mentioned at the outset, is the welfare of the child. It is in consonance with such primordial end that Articles 320 and 321 have been
worded. There is recognition in the law of the deep ties that bind parent and child. In the event that there is less than full measure of
concern for the offspring, the protection is supplied by the bond required. With the added circumstance that the child stays with the
mother, not the uncle, without any evidence of lack of maternal care, the decision arrived at can stand the test of the strictest scrutiny. It
is further fortified by the assumption, both logical and natural, that infidelity to the trust imposed by the deceased is much less in the
case of a mother than in the case of an uncle. Manresa, commenting on Article 159 of the Civil Code of Spain, the source of Article 320 of
the Civil Code, was of that view: Thus "El derecho y la obligacion de administrar el Patrimonio de los hijos es una consecuencia natural y
lógica de la patria potestad y de la presunción de que nadie cuidará de los bienes de acquéllos con mas cariño y solicitude que los
padres. En nuestro Derecho antiguo puede decirse que se hallaba reconocida de una manera indirecta aquelia doctrina, y asi se
desprende de la sentencia del Tribunal Supremeo de 30 de diciembre de 1864, que se refiere a la ley 24, tit. XIII de la Partida 5. De la
propia suerte aceptan en general dicho principio los Codigos extranjeros, con las limitaciones y requisitos de que trataremos mis
adelante."8

2. The appealed decision is supported by another cogent consideration. It is buttressed by its adherence to the concept that the
judiciary, as an agency of the State acting as parens patriae, is called upon whenever a pending suit of litigation affects one who is a
minor to accord priority to his best interest. It may happen, as it did occur here, that family relations may press their respective claims.
It would be more in consonance not only with the natural order of things but the tradition of the country for a parent to be preferred. it
could have been different if the conflict were between father and mother. Such is not the case at all. It is a mother asserting priority.
Certainly the judiciary as the instrumentality of the State in its role of parens patriae, cannot remain insensible to the validity of her
plea. In a recent case,9 there is this quotation from an opinion of the United States Supreme Court: "This prerogative of parens
patriae is inherent in the supreme power of every State, whether that power is lodged in a royal person or in the legislature, and has no
affinity to those arbitrary powers which are sometimes exerted by irresponsible monarchs to the great detriment of the people and the
destruction of their liberties." What is more, there is this constitutional provision vitalizing this concept. It reads: "The State shall
strengthen the family as a basic social institution." 10 If, as the Constitution so wisely dictates, it is the family as a unit that has to be
strengthened, it does not admit of doubt that even if a stronger case were presented for the uncle, still deference to a constitutional
mandate would have led the lower court to decide as it did.

WHEREFORE, the decision of May 10, 1965 is affirmed. Costs against defendant-appellant.

Zaldivar (Chairman), Antonio, Fernandez and Aquino, JJ., concur.

Barredo, J., took no part.

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 actual intent to further invasion or
insurrection:'" and "That judicial and legislative acts in the respective states composing the so-called Confederate States should be
respected by the courts if they were not hostile in their purpose or mode of enforcement to the authority of the National Government,
and did not impair the rights of citizens under the Constitution."

In view of the foregoing, it is evident that the Philippine Executive Commission, which was organized by Order No. 1, issued on January
23, 1942, by the Commander of the Japanese forces, was a civil government established by the military forces of occupation and
therefore a de facto government of the second kind. It was not different from the government established by the British in Castine,
Maine, or by the United States in Tampico, Mexico. As Halleck says, "The government established over an enemy's territory during the
military occupation may exercise all the powers given by the laws of war to the conqueror over the conquered, and is subject to all
restrictions which that code imposes. It is of little consequence whether such government be called a military or civil government. Its
character is the same and the source of its authority the same. In either case it is a government imposed by the laws of war, and so far it
concerns the inhabitants of such territory or the rest of the world, those laws alone determine the legality or illegality of its acts." (Vol. 2,
p. 466.) The fact that the Philippine Executive Commission was a civil and not a military government and was run by Filipinos and not
by Japanese nationals, is of no consequence. In 1806, when Napoleon occupied the greater part of Prussia, he retained the existing
administration under the general direction of a french official (Langfrey History of Napoleon, 1, IV, 25); and, in the same way, the Duke
of Willington, on invading France, authorized the local authorities to continue the exercise of their functions, apparently without
appointing an English superior. (Wellington Despatches, XI, 307.). The Germans, on the other hand, when they invaded France in 1870,
appointed their own officials, at least in Alsace and Lorraine, in every department of administration and of every rank. (Calvo, pars.
2186-93; Hall, International Law, 7th ed., p. 505, note 2.)

The so-called Republic of the Philippines, apparently established and organized as a sovereign state independent from any other
government by the Filipino people, was, in truth and reality, a government established by the belligerent occupant or the Japanese
forces of occupation. It was of the same character as the Philippine Executive Commission, and the ultimate source of its authority was
the same — the Japanese military authority and government. As General MacArthur stated in his proclamation of October 23, 1944, a
portion of which has been already quoted, "under enemy duress, a so-called government styled as the 'Republic of the Philippines' was
established on October 14, 1943, based upon neither the free expression of the people's will nor the sanction of the Government of the
United States." Japan had no legal power to grant independence to the Philippines or transfer the sovereignty of the United States to, or
recognize the latent sovereignty of, the Filipino people, before its military occupation and possession of the Islands had matured into an
absolute and permanent dominion or sovereignty by a treaty of peace or other means recognized in the law of nations. For it is a well-
established doctrine in International Law, recognized in Article 45 of the Hauge Conventions of 1907 (which prohibits compulsion of the
population of the occupied territory to swear allegiance to the hostile power), the belligerent occupation, being essentially provisional,
does not serve to transfer sovereignty over the territory controlled although the de jure government is during the period of occupancy
deprived of the power to exercise its rights as such. (Thirty Hogshead of Sugar vs. Boyle, 9 Cranch, 191; United States vs. Rice, 4 Wheat.,
246; Fleming vs. Page, 9 Howard, 603; Downes vs. Bidwell, 182 U. S., 345.) The formation of the Republic of the Philippines was a
scheme contrived by Japan to delude the Filipino people into believing in the apparent magnanimity of the Japanese gesture of
transferring or turning over the rights of government into the hands of Filipinos. It was established under the mistaken belief that by
doing so, Japan would secure the cooperation or at least the neutrality of the Filipino people in her war against the United States and
other allied nations.

Indeed, even if the Republic of the Philippines had been established by the free will of the Filipino who, taking advantage of the
withdrawal of the American forces from the Islands, and the occupation thereof by the Japanese forces of invasion, had organized an
independent government under the name with the support and backing of Japan, such government would have been considered as one
established by the Filipinos in insurrection or rebellion against the parent state or the Unite States. And as such, it would have been a de
facto government similar to that organized by the confederate states during the war of secession and recognized as such by the by the
Supreme Court of the United States in numerous cases, notably those of Thorington vs. Smith, Williams vs. Bruffy, and
Badly vs. Hunter, above quoted; and similar to the short-lived government established by the Filipino insurgents in the Island of Cebu
during the Spanish-American war, recognized as a de facto government by the Supreme Court of the United States in the case of
McCleod vs. United States (299 U. S., 416). According to the facts in the last-named case, the Spanish forces evacuated the Island of
Cebu on December 25, 1898, having first appointed a provisional government, and shortly afterwards, the Filipinos, formerly in
insurrection against Spain, took possession of the Islands and established a republic, governing the Islands until possession thereof was
surrendered to the United States on February 22, 1898. And the said Supreme Court held in that case that "such government was of the
class of de facto governments described in I Moore's International Law Digest, S 20, . . . 'called also by publicists a government de facto,
but which might, perhaps, be more aptly denominated a government of paramount force . . '." That is to say, that the government of a
country in possession of belligerent forces in insurrection or rebellion against the parent state, rests upon the same principles as that of
a territory occupied by the hostile army of an enemy at regular war with the legitimate power.

The governments by the Philippine Executive Commission and the Republic of the Philippines during the Japanese military occupation
being de facto governments, it necessarily follows that the judicial acts and proceedings of the courts of justice of those governments,
which are not of a political complexion, were good and valid, and, by virtue of the well-known principle of postliminy (postliminium) in
international law, remained good and valid after the liberation or reoccupation of the Philippines by the American and Filipino forces
under the leadership of General Douglas MacArthur. According to that well-known principle in international law, the fact that a
territory which has been occupied by an enemy comes again into the power of its legitimate government of sovereignty, "does not,
except in a very few cases, wipe out the effects of acts done by an invader, which for one reason or another it is within his competence to
do. Thus judicial acts done under his control, when they are not of a political complexion, administrative acts so done, to the extent that
they take effect during the continuance of his control, and the various acts done during the same time by private persons under the
sanction of municipal law, remain good. Were it otherwise, the whole social life of a community would be paralyzed by an invasion; and
as between the state and the individuals the evil would be scarcely less, — it would be hard for example that payment of taxes made
under duress should be ignored, and it would be contrary to the general interest that the sentences passed upon criminals should be
annulled by the disappearance of the intrusive government ." (Hall, International Law, 7th ed., p. 518.) And when the occupation and
the abandonment have been each an incident of the same war as in the present case, postliminy applies, even though the occupant has
acted as conqueror and for the time substituted his own sovereignty as the Japanese intended to do apparently in granting
independence to the Philippines and establishing the so-called Republic of the Philippines. (Taylor, International Law, p. 615.)

That not only judicial but also legislative acts of de facto governments, which are not of a political complexion, are and remain valid
after reoccupation of a territory occupied by a belligerent occupant, is confirmed by the Proclamation issued by General Douglas
MacArthur on October 23, 1944, which declares null and void all laws, regulations and processes of the governments established in the
Philippines during the Japanese occupation, for it would not have been necessary for said proclamation to abrogate them if they were
invalid ab initio.

2. The second question hinges upon the interpretation of the phrase "processes of any other government" as used in the above-quoted
proclamation of General Douglas MacArthur of October 23, 1944 — that is, whether it was the intention of the Commander in Chief of
the American Forces to annul and void thereby all judgments and judicial proceedings of the courts established in the Philippines
during the Japanese military occupation.

The phrase "processes of any other government" is broad and may refer not only to the judicial processes, but also to administrative or
legislative, as well as constitutional, processes of the Republic of the Philippines or other governmental agencies established in the
Islands during the Japanese occupation. Taking into consideration the fact that, as above indicated, according to the well-known
principles of international law all judgements and judicial proceedings, which are not of a political complexion, of the de
facto governments during the Japanese military occupation were good and valid before and remained so after the occupied territory had
come again into the power of the titular sovereign, it should be presumed that it was not, and could not have been, the intention of
General Douglas MacArthur, in using the phrase "processes of any other government" in said proclamation, to refer to judicial
processes, in violation of said principles of international law. The only reasonable construction of the said phrase is that it refers to
governmental processes other than judicial processes of court proceedings, for according to a well-known rule of statutory construction,
set forth in 25 R. C. L., p. 1028, "a statute ought never to be construed to violate the law of nations if any other possible construction
remains."
It is true that the commanding general of a belligerent army of occupation, as an agent of his government, may not unlawfully suspend
existing laws and promulgate new ones in the occupied territory, if and when the exigencies of the military occupation demand such
action. But even assuming that, under the law of nations, the legislative power of a commander in chief of military forces who liberates
or reoccupies his own territory which has been occupied by an enemy, during the military and before the restoration of the civil regime,
is as broad as that of the commander in chief of the military forces of invasion and occupation (although the exigencies of military
reoccupation are evidently less than those of occupation), it is to be presumed that General Douglas MacArthur, who was acting as an
agent or a representative of the Government and the President of the United States, constitutional commander in chief of the United
States Army, did not intend to act against the principles of the law of nations asserted by the Supreme Court of the United States from
the early period of its existence, applied by the Presidents of the United States, and later embodied in the Hague Conventions of 1907, as
above indicated. It is not to be presumed that General Douglas MacArthur, who enjoined in the same proclamation of October 23, 1944,
"upon the loyal citizens of the Philippines full respect and obedience to the Constitution of the Commonwealth of the Philippines,"
should not only reverse the international policy and practice of his own government, but also disregard in the same breath the
provisions of section 3, Article II, of our Constitution, which provides that "The Philippines renounces war as an instrument of national
policy, and adopts the generally accepted principles of international law as part of the law of the Nation."

Moreover, from a contrary construction great inconvenience and public hardship would result, and great public interests would be
endangered and sacrificed, for disputes or suits already adjudged would have to be again settled accrued or vested rights nullified,
sentences passed on criminals set aside, and criminals might easily become immune for evidence against them may have already
disappeared or be no longer available, especially now that almost all court records in the Philippines have been destroyed by fire as a
consequence of the war. And it is another well-established rule of statutory construction that where great inconvenience will result from
a particular construction, or great public interests would be endangered or sacrificed, or great mischief done, such construction is to be
avoided, or the court ought to presume that such construction was not intended by the makers of the law, unless required by clear and
unequivocal words. (25 R. C. L., pp. 1025, 1027.)

The mere conception or thought of possibility that the titular sovereign or his representatives who reoccupies a territory occupied by an
enemy, may set aside or annul all the judicial acts or proceedings of the tribunals which the belligerent occupant had the right and duty
to establish in order to insure public order and safety during military occupation, would be sufficient to paralyze the social life of the
country or occupied territory, for it would have to be expected that litigants would not willingly submit their litigation to courts whose
judgements or decisions may afterwards be annulled, and criminals would not be deterred from committing crimes or offenses in the
expectancy that they may escaped the penalty if judgments rendered against them may be afterwards set aside.

That the proclamation has not invalidated all the judgements and proceedings of the courts of justice during the Japanese regime, is
impliedly confirmed by Executive Order No. 37, which has the force of law, issued by the President of the Philippines on March 10,
1945, by virtue of the emergency legislative power vested in him by the Constitution and the laws of the Commonwealth of the
Philippines. Said Executive order abolished the Court of Appeals, and provided "that all case which have heretofore been duly appealed
to the Court of Appeals shall be transmitted to the Supreme Court final decision." This provision impliedly recognizes that the
judgments and proceedings of the courts during the Japanese military occupation have not been invalidated by the proclamation of
General MacArthur of October 23, because the said Order does not say or refer to cases which have been duly appealed to said court
prior to the Japanese occupation, but to cases which had therefore, that is, up to March 10, 1945, been duly appealed to the Court of
Appeals; and it is to be presumed that almost all, if not all, appealed cases pending in the Court of Appeals prior to the Japanese military
occupation of Manila on January 2, 1942, had been disposed of by the latter before the restoration of the Commonwealth Government
in 1945; while almost all, if not all, appealed cases pending on March 10, 1945, in the Court of Appeals were from judgments rendered
by the Court of First Instance during the Japanese regime.

The respondent judge quotes a portion of Wheaton's International Law which say: "Moreover when it is said that an occupier's acts are
valid and under international law should not be abrogated by the subsequent conqueror, it must be remembered that no crucial
instances exist to show that if his acts should be reversed, any international wrong would be committed. What does happen is that most
matters are allowed to stand by the restored government, but the matter can hardly be put further than this." (Wheaton, International
Law, War, 7th English edition of 1944, p. 245.) And from this quotion the respondent judge "draws the conclusion that whether the acts
of the occupant should be considered valid or not, is a question that is up to the restored government to decide; that there is no rule of
international law that denies to the restored government to decide; that there is no rule of international law that denies to the restored
government the right of exercise its discretion on the matter, imposing upon it in its stead the obligation of recognizing and enforcing
the acts of the overthrown government."

There is doubt that the subsequent conqueror has the right to abrogate most of the acts of the occupier, such as the laws, regulations
and processes other than judicial of the government established by the belligerent occupant. But in view of the fact that the
proclamation uses the words "processes of any other government" and not "judicial processes" prisely, it is not necessary to determine
whether or not General Douglas MacArthur had power to annul and set aside all judgments and proceedings of the courts during the
Japanese occupation. The question to be determined is whether or not it was his intention, as representative of the President of the
United States, to avoid or nullify them. If the proclamation had, expressly or by necessary implication, declared null and void the
judicial processes of any other government, it would be necessary for this court to decide in the present case whether or not General
Douglas MacArthur had authority to declare them null and void. But the proclamation did not so provide, undoubtedly because the
author thereof was fully aware of the limitations of his powers as Commander in Chief of Military Forces of liberation or subsequent
conqueror.

Not only the Hague Regulations, but also the principles of international law, as they result from the usages established between civilized
nations, the laws of humanity and the requirements of the public of conscience, constitute or from the law of nations. (Preamble of the
Hague Conventions; Westlake, International Law, 2d ed., Part II, p. 61.) Article 43, section III, of the Hague Regulations or Conventions
which we have already quoted in discussing the first question, imposes upon the occupant the obligation to establish courts; and Article
23 (h), section II, of the same Conventions, which prohibits the belligerent occupant "to declare . . . suspended . . . in a Court of Law the
rights and action of the nationals of the hostile party," forbids him to make any declaration preventing the inhabitants from using their
courts to assert or enforce their civil rights. (Decision of the Court of Appeals of England in the case of Porter vs. Fruedenburg, L.R.
[1915], 1 K.B., 857.) If a belligerent occupant is required to establish courts of justice in the territory occupied, and forbidden to prevent
the nationals thereof from asserting or enforcing therein their civil rights, by necessary implication, the military commander of the
forces of liberation or the restored government is restrained from nullifying or setting aside the judgments rendered by said courts in
their litigation during the period of occupation. Otherwise, the purpose of these precepts of the Hague Conventions would be thwarted,
for to declare them null and void would be tantamount to suspending in said courts the right and action of the nationals of the territory
during the military occupation thereof by the enemy. It goes without saying that a law that enjoins a person to do something will not at
the same time empower another to undo the same. Although the question whether the President or commanding officer of the United
States Army has violated restraints imposed by the constitution and laws of his country is obviously of a domestic nature, yet, in
construing and applying limitations imposed on the executive authority, the Supreme Court of the United States, in the case of
Ochoa, vs. Hernandez (230 U.S., 139), has declared that they "arise from general rules of international law and from fundamental
principles known wherever the American flag flies."

In the case of Raymond vs. Thomas (91 U.S., 712), a special order issued by the officer in command of the forces of the United States in
South Carolina after the end of the Civil War, wholly annulling a decree rendered by a court of chancery in that state in a case within its
jurisdiction, was declared void, and not warranted by the acts approved respectively March 2, 1867 (14 Stat., 428), and July 19 of the
same year (15 id., 14), which defined the powers and duties of military officers in command of the several states then lately in rebellion.
In the course of its decision the court said; "We have looked carefully through the acts of March 2, 1867 and July 19, 1867. They give
very large governmental powers to the military commanders designated, within the States committed respectively to their jurisdiction;
but we have found nothing to warrant the order here in question. . . . The clearest language would be necessary to satisfy us that
Congress intended that the power given by these acts should be so exercised. . . . It was an arbitrary stretch of authority, needful to no
good end that can be imagined. Whether Congress could have conferred the power to do such an act is a question we are not called upon
to consider. It is an unbending rule of law that the exercise of military power, where the rights of the citizen are concerned, shall never
be pushed beyond what the exigency requires. (Mithell vs. Harmony, 13 How., 115; Warden vs. Bailey, 4 Taunt., 67;
Fabrigas vs. Moysten, 1 Cowp., 161; s.c., 1 Smith's L.C., pt. 2, p. 934.) Viewing the subject before us from the standpoint indicated, we
hold that the order was void."

It is, therefore, evident that the proclamation of General MacArthur of October 23, 1944, which declared that "all laws, regulations and
processes of any other government in the Philippines than that of the said Commonwealth are null and void without legal effect in areas
of the Philippines free of enemy occupation and control," has not invalidated the judicial acts and proceedings, which are not a political
complexion, of the courts of justice in the Philippines that were continued by the Philippine Executive Commission and the Republic of
the Philippines during the Japanese military occupation, and that said judicial acts and proceedings were good and valid before and
now good and valid after the reoccupation of liberation of the Philippines by the American and Filipino forces.

3. The third and last question is whether or not the courts of the Commonwealth, which are the same as those existing prior to, and
continued during, the Japanese military occupation by the Philippine Executive Commission and by the so-called Republic of the
Philippines, have jurisdiction to continue now the proceedings in actions pending in said courts at the time the Philippine Islands were
reoccupied or liberated by the American and Filipino forces, and the Commonwealth Government was restored.

Although in theory the authority the authority of the local civil and judicial administration is suspended as a matter of course as soon as
military occupation takes place, in practice the invader does not usually take the administration of justice into his own hands, but
continues the ordinary courts or tribunals to administer the laws of the country which he is enjoined, unless absolutely prevented, to
respect. As stated in the above-quoted Executive Order of President McKinley to the Secretary of War on May 19, 1898, "in practice,
they (the municipal laws) are not usually abrogated but are allowed to remain in force and to be administered by the ordinary tribunals
substantially as they were before the occupation. This enlightened practice is, so far as possible, to be adhered to on the present
occasion." And Taylor in this connection says: "From a theoretical point of view it may be said that the conqueror is armed with the
right to substitute his arbitrary will for all preexisting forms of government, legislative, executive and judicial. From the stand-point of
actual practice such arbitrary will is restrained by the provision of the law of nations which compels the conqueror to continue local laws
and institution so far as military necessity will permit." (Taylor, International Public Law, p.596.) Undoubtedly, this practice has been
adopted in order that the ordinary pursuits and business of society may not be unnecessarily deranged, inasmuch as belligerent
occupation is essentially provisional, and the government established by the occupant of transient character.

Following these practice and precepts of the law of nations, Commander in Chief of the Japanese Forces proclaimed on January 3, 1942,
when Manila was occupied, the military administration under martial law over the territory occupied by the army, and ordered that "all
the laws now in force in the Commonwealth, as well as executive and judicial institutions, shall continue to be affective for the time
being as in the past," and "all public officials shall remain in their present post and carry on faithfully their duties as before." When the
Philippine Executive Commission was organized by Order No. 1 of the Japanese Commander in Chief, on January 23, 1942, the
Chairman of the Executive Commission, by Executive Orders Nos. 1 and 4 of January 30 and February 5, respectively, continued the
Supreme Court, Court of Appeals, Court of First Instance, and justices of the peace of courts, with the same jurisdiction in conformity
with the instructions given by the Commander in Chief of the Imperial Japanese Army in Order No. 3 of February 20, 1942. And on
October 14, 1943 when the so-called Republic of the Philippines was inaugurated, the same courts were continued with no substantial
change in organization and jurisdiction thereof.

If the proceedings pending in the different courts of the Islands prior to the Japanese military occupation had been continued during
the Japanese military administration, the Philippine Executive Commission, and the so-called Republic of the Philippines, it stands to
reason that the same courts, which had become reestablished and conceived of as having in continued existence upon the reoccupation
and liberation of the Philippines by virtue of the principle of postliminy (Hall, International Law, 7th ed., p. 516), may continue the
proceedings in cases then pending in said courts, without necessity of enacting a law conferring jurisdiction upon them to continue said
proceedings. As Taylor graphically points out in speaking of said principles "a state or other governmental entity, upon the removal of a
foreign military force, resumes its old place with its right and duties substantially unimpaired. . . . Such political resurrection is the
result of a law analogous to that which enables elastic bodies to regain their original shape upon removal of the external force, — and
subject to the same exception in case of absolute crushing of the whole fibre and content." (Taylor, International Public Law, p. 615.)

The argument advanced by the respondent judge in his resolution in support in his conclusion that the Court of First Instance of Manila
presided over by him "has no authority to take cognizance of, and continue said proceedings (of this case) to final judgment until and
unless the Government of the Commonwealth of the Philippines . . . shall have provided for the transfer of the jurisdiction of the courts
of the now defunct Republic of the Philippines, and the cases commenced and the left pending therein," is "that said courts were a
government alien to the Commonwealth Government. The laws they enforced were, true enough, laws of the Commonwealth prior to
Japanese occupation, but they had become the laws — and the courts had become the institutions — of Japan by adoption
(U.S. vs.Reiter. 27 F. Cases, No. 16146), as they became later on the laws and institutions of the Philippine Executive Commission and
the Republic of the Philippines."

The court in the said case of U.S. vs. Reiter did not and could not say that the laws and institutions of the country occupied if continued
by the conqueror or occupant, become the laws and the courts, by adoption, of the sovereign nation that is militarily occupying the
territory. Because, as already shown, belligerent or military occupation is essentially provisional and does not serve to transfer the
sovereignty over the occupied territory to the occupant. What the court said was that, if such laws and institutions are continued in use
by the occupant, they become his and derive their force from him, in the sense that he may continue or set them aside. The laws and
institution or courts so continued remain the laws and institutions or courts of the occupied territory. The laws and the courts of the
Philippines, therefore, did not become, by being continued as required by the law of nations, laws and courts of Japan. The provision of
Article 45, section III, of the Hague Conventions of 1907 which prohibits any compulsion of the population of occupied territory to
swear allegiance to the hostile power, "extends to prohibit everything which would assert or imply a change made by the invader in the
legitimate sovereignty. This duty is neither to innovate in the political life of the occupied districts, nor needlessly to break the
continuity of their legal life. Hence, so far as the courts of justice are allowed to continue administering the territorial laws, they must be
allowed to give their sentences in the name of the legitimate sovereign " (Westlake, Int. Law, Part II, second ed., p. 102). According to
Wheaton, however, the victor need not allow the use of that of the legitimate government. When in 1870, the Germans in France
attempted to violate that rule by ordering, after the fall of the Emperor Napoleon, the courts of Nancy to administer justice in the name
of the "High German Powers occupying Alsace and Lorraine," upon the ground that the exercise of their powers in the name of French
people and government was at least an implied recognition of the Republic, the courts refused to obey and suspended their sitting.
Germany originally ordered the use of the name of "High German Powers occupying Alsace and Lorraine," but later offered to allow use
of the name of the Emperor or a compromise. (Wheaton, International Law, War, 7th English ed. 1944, p. 244.)

Furthermore, it is a legal maxim, that excepting that of a political nature, "Law once established continues until changed by the some
competent legislative power. It is not change merely by change of sovereignty." (Joseph H. Beale, Cases on Conflict of Laws, III,
Summary Section 9, citing Commonwealth vs. Chapman, 13 Met., 68.) As the same author says, in his Treatise on the Conflict on Laws
(Cambridge, 1916, Section 131): "There can no break or interregnum in law. From the time the law comes into existence with the first-
felt corporateness of a primitive people it must last until the final disappearance of human society. Once created, it persists until a
change take place, and when changed it continues in such changed condition until the next change, and so forever. Conquest or
colonization is impotent to bring law to an end; in spite of change of constitution, the law continues unchanged until the new sovereign
by legislative acts creates a change."

As courts are creatures of statutes and their existence defends upon that of the laws which create and confer upon them their
jurisdiction, it is evident that such laws, not being a political nature, are not abrogated by a change of sovereignty, and continue in force
"ex proprio vigore" unless and until repealed by legislative acts. A proclamation that said laws and courts are expressly continued is not
necessary in order that they may continue in force. Such proclamation, if made, is but a declaration of the intention of respecting and
not repealing those laws. Therefore, even assuming that Japan had legally acquired sovereignty over these Islands, which she had
afterwards transferred to the 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.

(G.R. No. 73748 - May 22, 1986)

------------------------
(There is no "Full-Text" of this case. This is a Minute Resolution made by the SC.)

Minute Resolutions

EN BANC

[G.R. No. 73748, May 22, 1986]

LAWYERS LEAGUE FOR A BETTER PHILIPPINES AND/OR OLIVER A. LOZANO VS. PRESIDENT CORAZON C. AQUINO, ET AL.
SIRS/MESDAMES:

Quoted hereunder, for your information, is a resolution of this Court MAY 22, 1986.

In G.R. No. 73748, Lawyers League for a Better Philippines vs. President Corazon C. Aquino, et al.; G.R. No. 73972, People's Crusade for
Supremacy of the Constitution vs. Mrs. Cory Aquino, et al., and G.R. No. 73990, Councilor Clifton U. Ganay vs. Corazon C. Aquino, et
al., the legitimacy of the government of President Aquino is questioned. It is claimed that her government is illegal because it was not
established pursuant to the 1973 Constitution.

As early as April 10, 1986, this Court* had already voted to dismiss the petitions for the reasons to be stated below.
On April 17, 1986, Atty. Lozano as counsel for the petitioners in G.R. Nos. 73748 and 73972 withdrew the petitions
and manifested that they would pursue the question by extra-judicial methods. The withdrawal is functus oficio.
The three petitions obviously are not impressed with merit. Petitioners have no personality to sue and their petitions state no cause of
action. For the legitimacy of the Aquino government is not a justiciable matter. It belongs to the realm of politics where only the people
of the Philippines are the judge. And the people have made the judgment; they have accepted the government of President Corazon C.
Aquino which is in effective control of the entire country so that it is not merely a de factogovernment but is in fact and law a de jure
government. Moreover, the community of nations has recognized the legitimacy of the present government. All the eleven members of
this Court, as reorganized, have sworn to uphold the fundamental law of the Republic under her government.

In view of the foregoing, the petitions are hereby dismissed.

Very truly yours,

(Sgd.) GLORIA C. PARAS

Clerk of Court

G.R. No. 1051 May 19, 1903

THE UNITED STATES, complainant-appellee,
vs.
FRED L. DORR, ET AL., defendants-appellants.

F. G. Waite for appellants.

Solicitor-General Araneta for appellee.

LADD, J.:

The defendants have been convicted upon a complaint charging them with the offense of writing, publishing, and circulating a
scurrilous libel against the Government of the United States and the Insular Government of the Philippine Islands. The complaint is
based upon section 8 of Act No. 292 of the Commission, which is as follows:

Every person who shall utter seditious words or speeches, write, publish, or circulate scurrilous libels against the Government
of the United States or the Insular Government of the Philippine Islands, or which tend to disturb or obstruct any lawful officer
in executing his office, or which tend to instigate others to cabal or meet together for unlawful purposes, or which suggest or
incite rebellious conspiracies or riots, or which tend to stir up the people against the lawful authorities, or to disturb the peace
of the community, the safety and order of the Government, or who shall knowingly conceal such evil practices, shall be
punished by a fine not exceeding two thousand dollars or by imprisonment not exceeding two years, or both, in the discretion
of the court.

The alleged libel was published as an editorial in the issue of the "Manila Freedom" of April 6, 1902, under the caption of "A few hard
facts."

The Attorney-General in his brief indicates the following passages of the article as those upon which he relies to sustain the conviction:

Sidney Adamson, in a late letter in "Leslie's Weekly," has the following to say of the action of the Civil Commission in
appointing rascally natives to important Government positions:

"It is a strong thing to say, but nevertheless true, that the Civil Commission, through its ex-insurgent office holders,
and by its continual disregard for the records of natives obtained during the military rule of the Islands, has, in its
distribution of offices, constituted a protectorate over a set of men who should be in jail or deported. . . . [Reference is
then made to the appointment of one Tecson as justice of the peace.] This is the kind of foolish work that the
Commission is doing all over the Islands, reinstating insurgents and rogues and turning down the men who have
during the struggle, at the risk of their lives, aided the Americans."

xxx xxx xxx

There is no doubt but that the Filipino office holders of the Islands are in a good many instances rascals.

xxx xxx xxx

The commission has exalted to the highest positions in the Islands Filipinos who are alleged to be notoriously corrupt and
rascally, and men of no personal character.

xxx xxx xxx

Editor Valdez, of "Miau," made serious charges against two of the native Commissioners — charges against Trinidad H. Pardo de
Tavera, which, if true, would brand the man as a coward and a rascal, and with what result? . . . [Reference is then made to the
prosecution and conviction of Valdez for libel "under a law which specifies that the greater the truth the greater the libel."] Is it the
desire of the people of the United States that the natives against whom these charges have been made (which, if true, absolutely vilify
their personal characters) be permitted to retain their seats on the Civil Commission, the executive body of the Philippine Government,
without an investigation?

xxx xxx xxx

It is a notorious fact that many branches of the Government organized by the Civil Commission are rotten and corrupt. The
fiscal system, upon which life, liberty, and justice depends, is admitted by the Attorney-General himself to be most
unsatisfactory. It is a fact that the Philippine judiciary is far from being what it should. Neither fiscals nor judges can be
persuaded to convict insurgents when they wish to protect them.

xxx xxx xxx

 Now we hear all sorts of reports as to rottenness existing in the province [of Tayabas], and especially the northern end of it; it
is said that it is impossible to secure the conviction of lawbreakers and outlaws by the native justices, or a prosecution by the
native fiscals.

xxx xxx xxx

The long and short of it is that Americans will not stand for an arbitrary government, especially when evidences of
carpetbagging and rumors of graft are too thick to be pleasant.

We do not understand that it is claimed that the defendants succeeded in establishing at the trial the truth of any of the foregoing
statements. The only question which we have considered is whether their publication constitutes an offense under section 8 of Act No.
292, above cited.

Several allied offenses or modes of committing the same offense are defined in that section, viz: (1) The uttering of seditious words or
speeches; (2) the writing, publishing, or circulating of scurrilous libels against the Government of the United States or the Insular
Government of the Philippine Islands; (3) the writing, publishing, or circulating of libels which tend to disturb or obstruct any lawful
officer in executing his office; (4) or which tend to instigate others to cabal or meet together for unlawful purposes; (5) or which suggest
or incite rebellious conspiracies or riots; (6) or which tend to stir up the people against the lawful authorities or to disturb the peace of
the community, the safety and order of the Government; (7) knowingly concealing such evil practices.

The complaint appears to be framed upon the theory that a writing, in order to be punishable as a libel under this section, must be of a
scurrilous nature and directed against the Government of the United States or the Insular Government of the Philippine Islands, and
must, in addition, tend to some one of the results enumerated in the section. The article in question is described in the complaint as "a
scurrilous libel against the Government of the United States and the Insular Government of the Philippine Islands, which tends to
obstruct the lawful officers of the United States and the Insular Government of the Philippine Islands in the execution of their offices,
and which tends to instigate others to cabal and meet together for unlawful purposes, and which suggests and incites rebellious
conspiracies, and which tends to stir up the people against the lawful authorities, and which disturbs the safety and order of the
Government of the United States and the Insular Government of the Philippine Islands." But it is "a well-settled rule in considering
indictments that where an offense may be committed in any of several different modes, and the offense, in any particular instance, is
alleged to have been committed in two or more modes specified, it is sufficient to prove the offense committed in any one of them,
provided that it be such as to constitute the substantive offense" (Com. vs. Kneeland, 20 Pick., Mass., 206, 215), and the defendants
may, therefore, be convicted if any one of the substantive charges into which the complaint may be separated has been made out.

We are all, however, agreed upon the proposition that the article in question has no appreciable tendency to "disturb or obstruct any
lawful officer in executing his office," or to "instigate" any person or class of persons "to cabal or meet together for unlawful purposes,"
or to "suggest or incite rebellious conspiracies or riots," or to "stir up the people against the lawful authorities or to disturb the peace of
the community, the safety and order of the Government." All these various tendencies, which are described in section 8 of Act No. 292,
each one of which is made an element of a certain form of libel, may be characterized in general terms as seditious tendencies. This is
recognized in the description of the offenses punished by this section, which is found in the title of the act, where they are defined as the
crimes of the "seditious utterances, whether written or spoken."

Excluding from consideration the offense of publishing "scurrilous libels against the Government of the United States or the Insular
Government of the Philippine Islands," which may conceivably stand on a somewhat different footing, the offenses punished by this
section all consist in inciting, orally or in writing, to acts of disloyalty or disobedience to the lawfully constituted authorities in these
Islands. And while the article in question, which is, in the main, a virulent attack against the policy of the Civil Commission in
appointing natives to office, may have had the effect of exciting among certain classes dissatisfaction with the Commission and its
measures, we are unable to discover anything in it which can be regarded as having a tendency to produce anything like what may be
called disaffection, or, in other words, a state of feeling incompatible with a disposition to remain loyal to the Government and obedient
to the laws. There can be no conviction, therefore, for any of the offenses described in the section on which the complaint is based,
unless it is for the offense of publishing a scurrilous libel against the Government of the of the United States or the Insular Government
of the Philippine Islands.

Can the article be regarded as embraced within the description of "scurrilous libels against the Government of the United States or the
Insular Government of the Philippine Islands?" In the determination of this question we have encountered great difficulty, by reason of
the almost entire lack of American precedents which might serve as a guide in the construction of the law. There are, indeed, numerous
English decisions, most of them of the eighteenth century, on the subject of libelous attacks upon the "Government, the constitution, or
the law generally," attacks upon the Houses of Parliament, the Cabinet, the Established Church, and other governmental organisms, but
these decisions are not now accessible to us, and, if they were, they were made under such different conditions from those which prevail
at the present day, and are founded upon theories of government so foreign to those which have inspired the legislation of which the
enactment in question forms a part, that they would probably afford but little light in the present inquiry. In England, in the latter part
of the eighteenth century, any "written censure upon public men for their conduct as such," as well as any written censure "upon the
laws or upon the institutions of the country," would probably have been regarded as a libel upon the Government. (2 Stephen, History of
the Criminal Law of England, 348.) This has ceased to be the law in England, and it is doubtful whether it was ever the common law of
any American State. "It is true that there are ancient dicta to the effect that any publication tending to "possess the people with an ill
opinion of the Government" is a seditious libel ( per Holt, C. J., in R. vs. Tuchin, 1704, 5 St. Tr., 532, and Ellenborough, C. J., in
R. vs. Cobbett, 1804, 29 How. St. Tr., 49), but no one would accept that doctrine now. Unless the words used directly tend to foment riot
or rebellion or otherwise to disturb the peace and tranquility of the Kingdom, the utmost latitude is allowed in the discussion of all
public affairs." (11 Enc. of the Laws of England, 450.) Judge Cooley says (Const. Lim., 528): "The English common law rule which made
libels on the constitution or the government indictable, as it was administered by the courts, seems to us unsuited to the condition and
circumstances of the people of America, and therefore never to have been adopted in the several States."

We find no decisions construing the Tennessee statute (Code, sec. 6663), which is apparently the only existing American statute of a
similar character to that in question, and from which much of the phraseology of then latter appears to have been taken, though with
some essential modifications.

The important question is to determine what is meant in section 8 of Act No. 292 by the expression "the Insular Government of the
Philippine Islands." Does it mean in a general and abstract sense the existing laws and institutions of the Islands, or does it mean the
aggregate of the individuals by whom the government of the Islands is, for the time being, administered? Either sense would doubtless
be admissible.

We understand, in modern political science, . . . by the term government, that institution or aggregate of institutions by which an
independent society makes and carries out those rules of action which are unnecessary to enable men to live in a social state, or which
are imposed upon the people forming that society by those who possess the power or authority of prescribing them. Government is the
aggregate of authorities which rule a society. By "dministration, again, we understand in modern times, and especially in more or less
free countries, the aggregate of those persons in whose hands the reins of government are for the time being (the chief ministers or
heads of departments)." (Bouvier, Law Dictionary, 891.) But the writer adds that the terms "government" and "administration" are not
always used in their strictness, and that "government" is often used for "administration."
In the act of Congress of July 14, 1798, commonly known as the "Sedition Act," it is made an offense to "write, print, utter, or
published," or to "knowingly and willingly assist or aid in writing, printing, uttering, or publishing any false, scandalous, and malicious
writing or writings against the Government of the United States, or either House of the Congress of the United States, or the President
of the United States, with intent to defame the said Government, or either House of the said Congress, or the said President, or to bring
them, or either of them, into contempt or disrepute, or to excite against them or either or any of them the hatred of the good people of
the United States," etc. The term "government" would appear to be used here in the abstract sense of the existing political system, as
distinguished from the concrete organisms of the Government — the Houses of Congress and the Executive — which are also specially
mentioned.

Upon the whole, we are of the opinion that this is the sense in which the term is used in the enactment under consideration.

It may be said that there can be no such thing as a scurrilous libel, or any sort of a libel, upon an abstraction like the Government in the
sense of the laws and institutions of a country, but we think an answer to this suggestion is that the expression "scurrilous libel" is not
used in section 8 of Act No. 292 in the sense in which it is used in the general libel law (Act No. 277) — that is, in the sense of written
defamation of individuals — but in the wider sense, in which it is applied in the common law to blasphemous, obscene, or seditious
publications in which there may be no element of defamation whatever. "The word 'libel' as popularly used, seems to mean only
defamatory words; but words written, if obscene, blasphemous, or seditious, are technically called libels, and the publication of them is,
by the law of England, an indictable offense." (Bradlaugh vs. The Queen, 3 Q. B. D., 607, 627, per Bramwell L. J. See Com. vs. Kneeland,
20 Pick., 206, 211.)

While libels upon forms of government, unconnected with defamation of individuals, must in the nature of things be of uncommon
occurrence, the offense is by no means an imaginary one. An instance of a prosecution for an offense essentially of this nature is
Republica vs. Dennie, 4 Yeates (Pa.), 267, where the defendant was indicted "as a factious and seditious person of a wicked mind and
unquiet and turbulent disposition and conversation, seditiously, maliciously, and willfully intending, as much as in him lay, to bring
into contempt and hatred the independence of the United States, the constitution of this Commonwealth and of the United States, to
excite popular discontent and dissatisfaction against the scheme of polity instituted, and upon trial in the said United States and in the
said Commonwealth, to molest, disturb, and destroy the peace and tranquility of the said United States and of the said Commonwealth,
to condemn the principles of the Revolution, and revile, depreciate, and scandalize the characters of the Revolutionary patriots and
statesmen, to endanger, subvert, and totally destroy the republican constitutions and free governments of the said United States and
this Commonwealth, to involve the said United States and this Commonwealth in civil war, desolation, and anarchy, and to procure by
art and force a radical change and alteration in the principles and forms of the said constitutions and governments, without the free will,
wish, and concurrence of the people of the said United States and this Commonwealth, respectively," the charge being that "to fulfill,
perfect, and bring to effect his wicked, seditious, and detestable intentions aforesaid he . . . falsely, maliciously, factiously, and
seditiously did make, compose, write, and publish the following libel, to wit; 'A democracy is scarcely tolerable at any period of national
history. Its omens are always sinister and its powers are unpropitious. With all the lights or experience blazing before our eyes, it is
impossible not to discover the futility of this form of government. It was weak and wicked at Athens, it was bad in Sparta, and worse in
Rome. It has been tried in France and terminated in despotism. it was tried in England and rejected with the utmost loathing and
abhorrence. It is on its trial here and its issue will be civil war, desolation, and anarchy. No wise man but discerns its imperfections; no
good man but shudders at its miseries; no honest man but proclaims its fraud, and no brave man but draws his sword against its force.
The institution of a scheme of polity so radically contemptible and vicious is a memorable example of what the villainy of some men can
devise, the folly of others receive, and both establish, in despite of reason, reflection, and sensation.'"

An attack upon the lawfully established system of civil government in the Philippine Islands, like that which Dennie was accused of
making upon the republican form of government lawfully established in the United States and in the State of Pennsylvania would, we
think, if couched in scandalous language, constitute the precise offense described in section 8 of Act No. 292 as a scurrilous libel against
the Insular Government of the Philippine Islands.

Defamation of individuals, whether holding official positions or not, and whether directed to their public conduct or to their private life,
may always be adequately punished under the general libel law. Defamation of the Civil Commission as an aggregation, it being "a body
of persons definite and small enough for its individual members to be recognized as such" (Stephen, Digest of the Criminal Law, art.
277), as well as defamation of any of the individual members of the Commission or of the Civil Governor, either in his public capacity or
as a private individual, may be so punished. The general libel law enacted by the Commission was in force when Act No. 292, was
passed. There was no occasion for any further legislation on the subject of libels against the individuals by whom the Insular
Government is administered — against the Insular Government in the sense of the aggregate of such individuals. There was occasion for
stringent legislation against seditious words or libels, and that is the main if not the sole purpose of the section under consideration. It
is not unreasonable to suppose that the Commission, in enacting this section, may have conceived of attacks of a malignant or scurrilous
nature upon the existing political system of the United States, or the political system established in these Islands by the authority of the
United States, as necessarily of a seditious tendency, but it is not so reasonable to suppose that they conceived of attacks upon the
personnel of the government as necessarily tending to sedition. Had this been their view it seems probable that they would, like the
framers of the Sedition Act of 1798, have expressly and specifically mentioned the various public officials and collegiate governmental
bodies defamation of which they meant to punish as sedition.

The article in question contains no attack upon the governmental system of the United States, and it is quite apparent that, though
grossly abusive as respects both the Commission as a body and some of its individual members, it contains no attack upon the
governmental system by which the authority of the United States is enforced in these Islands. The form of government by a Civil
Commission and a Civil Governor is not assailed. It is the character of the men who are intrusted with the administration of the
government that the writer is seeking to bring into disrepute by impugning the purity of their motives, their public integrity, and their
private morals, and the wisdom of their policy. The publication of the article, therefore, no seditious tendency being apparent,
constitutes no offense under Act No. 292, section 8.

The judgment of conviction is reversed and the defendants are acquitted, with costs de oficio.

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.

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 Tañada 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 safety temporarily 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.

G.R. No. L-6 November 29, 1945

ANICETO ALCANTARA, petitioner,
vs.
DIRECTOR OF PRISONS, respondent.

Buenaventura B. Martinez for petitioner.

Office of the Solicitor General Tañada for respondent.

FERIA, J.:

This is a petition for the issuance of a writ of habeas corpus and for the release of the petitioner on the ground that the latter is
unlawfully imprisoned and restrained of his liberty by the respondent Director of Prison in the provincial jail at Vigan, Ilocos Sur.

Petitioner was convicted by the Court First Instance of Ilocos Sur (Criminal case No. 23) of the crime of illegal discharge of firearms
with less serious physical injuries. Upon appeal, the Court of Appeals of Northern Luzon at Baguio modified said sentence (CA- G.R. No.
790)and sentence the petitioner to an indeterminate penalty of from four months four months and twenty-one days of arresto mayor to
three years, nine months and three days of prison correccional. The sentence as modified became final on September 12, 1944, and
June 23, 1945, petitioner commenced serving his sentence.

Petitioner now questions the validity of the decision of the Court of Appeals of Northern Luzon, on the sole ground that said court was
only a creation of the so-called Republic of the Philippines during the Japanese military occupation of the Islands; that the Court of
Appeals was not authorized by Commonwealth Act No. 3 to hold sessions in Baguio, and that only the two Justices constituted the
majority which promulgated the decision in question. The petitioner does not question the validity of said decision on the strength of
the Proclamation of General Douglas McArthur of October 23, 1944, which according to our decision in the case of Co Kim Cham vs.
Valdez Tan Keh and Dizon, G.R. No. L-5 (p. 113, ante), does not refer to judicial processes.

In the said case of Co Kim Cham vs. Valdez Tan Keh and Dizon, this Court ruled that the so-called Republic of the Philippines and the
Philippine Executive Commission established in the Philippines during the Japanese regime were governments de facto organized by
the belligerent occupant by the judicial acts thereof were good and valid and remained good and valid after the restoration of the
Commonwealth Government, except those a political complexion. In that the same case this Court held that the Court of Appeals which
was continued throughout the Japanese occupation, was the same Court of Appeals existed prior to the Japanese occupation and was
lately abolished by Executive Order No. 37. The division of the Court of Appeals into several District Court of Appeals, and the reduction
of the number of Justices sitting in each division, the regime of the so-called Republic effected no substantial change in its nature and
jurisdiction.

Even assuming that the Court of Appeals of Northern Luzon was a new court created by the belligerent occupant or the de
facto governments established by him, the judgments of such court, like those of the court which were continued during the Japanese
occupation, were good and valid and remain good and valid, and therefore enforceable now after the liberation or occupation of the
Philippines, provided that such judgments do not have a political complexion, as this court held in its decision in the abovementioned
case of Co Kim Cham vs. Valdez Tan Keh and Dizon supra, in accordance with the authorities therein cited.

Obviously, the sentence which petitioner is now serving has no political complexion. He was charged with and convicted of an offense
punishable under the municipal law of the Commonwealth, the Revised Penal Code. Therefore, the sentence of the Court of First
Instance of Ilocos Sur, as modified by the Court of Appeals of Northern Luzon, is valid and enforceable.

A punitive or penal sentence is said to of a political complexion when it penalizes either a new act not defined in the municipal laws, or
acts already penalized by the latter as a crime against the legitimate government, but taken out of the territorial law and penalized as a
new offenses committed against belligerent occupant, incident to a state of a war and necessary for the control of the occupied territory
and the protection of the army of the occupier. They are acts penalized for public rather than private reasons, acts which tend, directly
or indirectly, to aid or favor the enemy and are directed against the
 G.R. No. L-533 August 20, 1946
RAMON RUFFY, ET AL., petitioners,
vs.
THE CHIEF OF STAFF, PHILIPPINE ARMY, ET AL., respondents.

Placido C. Ramos for petitioners.

Lt. Col. Fred Ruiz Castro and Capt. Ramon V. Diaz, JAGS, PA., for respondents.

TUASON, J.:

This was a petition for prohibition, praying that the respondents, the Chief of Staff and the General Court Martial of the Philippine
Army, be commanded to desist from further proceedings in the trial of petitioners before that body. Preliminary injunction having been
denied by us and the General Court Martial having gone ahead with the trial, which eventually resulted in the acquittal of one of the
defendants, Ramon Ruffy, the dismissal of the case as to another, Victoriano Dinglasan, and the conviction of Jose L. Garcia, Prudente
M. Francisco, Dominador Adeva and Andres Fortus, the last-named four petitioners now seek in their memorandum to convert the
petition into one for certiorari, with the prayer that the records of the proceedings before the General Court Martial be ordered certified
to this court for review.

The ground of the petition was that the petitioners were not subject to military law at the time the offense for which they had been
placed on trial was committed. In their memorandum they have raised an additional question of law — that the 93d Article of War is
unconstitutional.

An outline of the petitioner's previous connection with the Philippine Army, the Philippine Constabulary, and/or with guerrilla
organizations will presently be made. This outline is based on allegations in the petition and the answer, and on exhibits attached
thereto and to the parties' memoranda, exhibits which were offered in the course of the oral argument and admitted without objection.
The said exhibits are public documents certified by the officials who had them in custody in their official capacity. They are presumed to
be authentic, as we have no doubt they are.

It appears that at the outbreak of war on December 8, 1941, Ramon Ruffy was the Provincial Commander, Prudente M. Francisco, a
junior officer, and Andres Fortus, a corporal, all of the Philippine Constabulary garrison stationed in Mindoro. When, on February 27,
1942, the Japanese forces landed in Mindoro, Major Ruffy retreated to the mountains instead of surrendering to the enemy, disbanded
his company, and organized and led a guerrilla outfit known as Bolo Combat team of Bolo Area. Lieutenant Francisco, Corporal Fortus
and Jose L. Garcia, the last then a civilian joined Major Ruffy's organization towards the latter part of 1942, while Dominador Adeva
and Victoriano Dinglasan, then likewise civilians, became its members some time in 1943..

Meanwhile, Brigadier General Macario Peralta, Jr., then a lieutenant colonel of the Philippine Army, also took to the hills of Panay and
led the operation of the 6th Military District, one of the districts into which the Philippine Army had been divided before the war. About
November, 1942, Colonel Peralta succeeded in contacting the General Headquarters of General MacArthur in Australia as the result of
which on February 13, 1943, the 6th Military District was recognized by the Headquarters of the Southwest Pacific Area as a military
unit and part of its command.

Even before General MacArthur's recognition of the 6th Military District Colonel Peralta had extended its sphere of operation to
comprise Mindoro and Marinduque, and had, on January 2, 1943, named Major Ruffy as Acting Commander for those two provinces
and Commanding Officer of the 3rd Battalion, 66 Infantry 61st Division, Philippine Corps. After the recognition, 2d Lieut. Prudente M.
Francisco, by virtue of Special Orders No. 99, dated November 2, 1943, and signed by Enrique L. Jurado, Major, OSE, Commanding,
was assigned as S-3 in the Bolo Area. Major, later Lieut. Col., Jurado, it should be noted, had been dispatched by the 6th Military
District to Mindoro to assume operational control supervision over the Bolo Area unit and to make and direct the necessary report to
the Headquarters, 6th Military District, in Panay. On April 26, 1944, by General Orders No. 40 of the 6th Military District, 2d
Lieutenant Francisco was promoted to the rank of 1st Lieutenant (Brevet), effective April 15, 1944, subject to approval by the President
of the Philippines, and was re-assigned to the Bolo Area. As to Andres Fortus he was assigned to the same Bolo Area as probationary 3d
lieutenant for two-month probationary training, by the Headquarters of the 6th Military District, as per Special Orders No. 70, dated
May 15, 1944.

According to a memorandum of the Chief of Staff, 6th Military District, dated January 1943, and signed by L.R. Relunia, Lieut. Col., CE,
Chief of Staff, Jose L. Garcia and Dominador Adeva were appointed 3d lieutenants, infantry as of December 31, 1942. Garcia later was
promoted to the rank of captain, effective March 15, 1943, as per Special Orders No. 82, issued in the field, 6th Military District, and
dated August 28, 1943. On May 24, 1943, Jose L. Garcia took his oath before Captain Esteban P. Beloncio, then Acting Commanding
Officer, 3d Battalion, 66th Infantry Regiment, 61st Division, 6th Military District.

As has been said, the 6th Military District sent Lieut. Col. Enrique L. Jurado to be Commanding Officer of the Bolo Combat Team in
Mindoro and to undertake other missions of Military character. Pursuant to instructions, Colonel Jurado on November 2, 1943,
assigned Major Ruffy as Commanding Officer of the Bolo Area with 3d Lieut. Dominador Adeva and 2d Lieut. Prudente M. Francisco as
members of his staff and Victoriano Dinglasan as Finance Officer, as per Special Orders No. 99 dated November 2, 1943. In a
memorandum of Colonel Jurado for Major Ruffy bearing date 25 June, 1944, it was stated that Captain Garcia had been given P5,000
for palay and Lieut. Francisco P9,000, P5,000 for palay and P4,000 for salary of the personnel B. Company.

A change in the command of the Bolo Area was effected by Colonel Jurado on June 8, 1944: Major Ruffy was relieved of his assignment
as Commanding Officer, Bolo Battalion, and Capt. Esteban P. Beloncio was put in Ruffy's place. On October 19, 1944, Lieut. Col. Jurado
was slain allegedly by the petitioners. After the commission of this crime, the petitioners, it is alleged, seceded from the 6th Military
District. It was this murder which gave rise to petitioner's trial, the legality of which is now being contested.

On July 26, 1941, the President of the Untied States issued a military order the pertinent paragraph of which stated: ". . . as Commander
in Chief of the Army and Navy of the United States, I hereby call and order into the service of the armed forces of the United States
Army, for the period of the existing emergency, and place under the command of the general officer, United States Army, to be
designated by the Secretary of War, from time to time, all of the organized military forces of the Government of the Commonwealth."
Following the issuance of President Roosevelt's order General Douglas MacArthur was appointed Commanding General of the United
States Armed Forces in the Far East.

It is contended, in behalf of Captain Francisco and Lieutenant Fortus, that "by the enemy occupation of the Philippines, the National
Defense Act and all laws and regulations creating and governing the existence of the Philippine Army including the Articles of War, were
suspended and in abeyance during such belligerent occupation."
The paragraph quoted in the petitioner's memorandum from Winthrop's Military Law and Precedents and the subsequent paragraph
which has been omitted furnish a complete answer to petitioner's contention of the Philippines by Japanese forces, the officers and men
of the Philippine Army did not cease to be fully in the service, though in a measure,' only in a measure, they were not subject to the
military jurisdiction, if they were not active duty. In the latter case, like officers and soldiers on leave of absence or held as prisoners of
war, they could not be held guilty of a breach of the discipline of the command or of a neglect of duty, or disobedience of orders, or
mutiny, or subject to a military trial therefor; but for an act unbecoming an officer and a gentleman, or an act which constitutes an
offense of the class specified in the 95th Article of War, they may in general be legally held subject to military jurisdiction and trial. "So a
prisoner of war, though not subject, while held by the enemy, to the discipline of his own army, would, when exchanged of paroled, be
not exempt from liability for such offenses as criminal acts or injuriuos conduct committed during his captivity against other officers or
soldiers in the same status." (Winthrop's Military Law and Precedents, 2d Edition, pp. 91, 92.)

The rule invoked by counsel, namely, that laws of political nature or affecting political relations are considered superseded or in
abeyance during the military occupation, is intended for the governing of the civil inhabitants of the occupied territory. It is not
intended for and does not bind the enemies in arms. This is self-evident from the very nature of things. The paradox of a contrary ruling
should readily manifest itself. Under the petitioner's theory the forces of resistance operating in an occupied territory would have to
abide by the outlawing of their own existence. They would be stripped of the very life-blood of an army, the right and the ability to
maintain order and discipline within the organization and to try the men guilty of breach thereof.

The surrender by General Wainright of the Fil-American Forces does not profit the petitioner's who were former members of the
Philippine Constabulary any more than does the rule of war or international law they cite. The fall of Bataan and Corregidor did not end
the war. It did not, legally or otherwise, keep the United States and the Commonwealth of the Philippines from organizing a new army,
regular or irregular, out of new men and men in the old service who had refused to surrender or who having surrendered, had decided
to carry on the fight through other diverse means and methods. The fall of Corregidor and Bataan just marked the beginning of the
gigantic preparation for the gigantic drive that was to fight its way to and beyond the Philippines in fulfillment of General MacArthur's
classic promise, "I shall return." The heroic role which the guerrillas played in that preparation and in the subsequent liberation of the
Philippines is now history.

Independently of their previous connection with the Philippine Army and the Philippine Constabulary, Captain Francisco and
Lieutenant Fortus as well as Major Garcia and Lieutenant Adeva were subject to military jurisdiction.

The 2d Article of War defines and enumerates the persons subject to military law as follows:

Art. 2. Persons Subject to Military Law. — The following persons are subject to these articles and shall be understood as
included in the term "any person subject to military law" or "persons subject to military law," whenever used in these articles:

(a) All officers, members of the Nurse Corps and soldiers belonging to the Regular Force of the Philippine Army; all reservists,
from the dates of their call to active duty and while on such active duty; all trainees undergoing military instructions; and all
other persons lawfully called, drafted, or order to obey the same;

(b) Cadets, flying cadets, and probationary third lieutenants;

(c) All retainers to the camp and all persons accompanying or serving with the Army of the Philippines in the field in time of
war or when martial law is declared though not otherwise subject to these articles;

(d) All persons under sentences adjudged by courts-martial.

It is our opinion that the petitioners come within the general application of the clause in sub-paragraph (a); "and all other persons
lawfully called, drafted, or ordered into, or to duty for training in, the said service, from the dates they are required by the terms of the
call, draft, or order to obey the same." By their acceptance of appointments as officers in the Bolo Area from the General Headquarters
of the 6th Military District, they became members of the Philippine Army amendable to the Articles of War. The Bolo Area, as has been
seen, was a contigent of the 6th Military District which, as has also been pointed out, had been recognized by and placed under the
operational control of the United States Army in the Southwest Pacific. The Bolo Area received supplies and funds for the salaries of its
officers and men from the Southwest Pacific Command. As officers in the Bolo Area and the 6th Military District, the petitioners
operated under the orders of duly established and duly appointed commanders of the United States Army.

The attitude of the enemy toward underground movements did not affect the military status of guerrillas who had been called into the
service of the Philippine Army. If the invaders refused to look upon guerrillas, without distinctions, as legitimate troops, that did not
stop the guerillas who had been inducted into the service of the Philippine Army from being component parts thereof, bound to obey
military status of guerrillas was to be judged not by the concept of the army of the country for which they fought.

The constitutionality of the 93d Article of War is assailed. This article ordains "that any person subject to military law who commits
murder in time of was shall suffer death or imprisonment for life, as the court martial may direct." It is argued that since "no review is
provided by that law to be made by the Supreme Court, irrespective of whether the punishment is for life imprisonment or death", it
violates Article VIII, section 2, paragraph 4, of the Constitution of the Philippines which provides that "the National Assembly may not
deprive the Supreme Court of its original jurisdiction over all criminal cases in which the penalty imposed is death or life
imprisonment."

We think the petitioners are in error. This error arose from failure to perceive the nature of courts martial and the sources of the
authority for their creation.

Courts martial are agencies of executive character, and one of the authorities "for the ordering of courts martial has been held to be
attached to the constitutional functions of the President as Commander in Chief, independently of legislation." (Winthrop's Military
Law and Precedents, 2d Edition, p. 49.) Unlike courts of law, they are not a portion of the judiciary. "The Supreme Court of the United
States referring to the provisions of the Constitution authorizing Congress to provide for the government of the army, excepting military
offenses from the civil jurisdiction, and making the President Commander in Chief, observes as follows: "These provisions show that
Congress has the power to provide for the trial and punishment of military and naval offenses in the manner then and now practiced by
civilized nations, and that the power to do so is given without any connection between it and the 3d Article of the United States; indeed
that the two powers are entirely independent of each other."

"Not belonging to the judicial branch of the government, it follows that courts-martial must pertain to the executive department; and
they are in fact simply instrumentalities of the executive power, provided by Congress for the President as Commander in Chief, to aid
him in properly commanding the army and navy and enforcing discipline therein, and utilized under his orders or those of his
authorized military representatives." (Winthrop's Military Law and Precedents, 2d Edition, p. 49.) Of equal interest Clode, 2 M. F., 361,
says of these courts in the British law: "It must never be lost sight of that the only legitimate object of military tribunals is to aid the
Crown to maintain the discipline and government of the Army." (Footnote No. 24, p. 49, Winthrop's Military Law and Precedents, 2d
Edition.)

Our conclusion, therefore, is that the petition has no merit and that it should be dismissed with costs. It is so ordered.

Moran, C.J., Paras, Feria, Pablo, Hilado, Bengzon, Briones and Padilla, JJ., concur.

welfare, safety and security, of the belligerent occupant. As example, the crimes against national security , such as treason, espionage,
etc., and against public order, such as rebellion, sedition, etc., were crimes against the Commonwealth or United States Government
under the Revised Penal Code, which were made crimes against the belligerent occupant.

In view of the foregoing, the petitioner for the writ of habeas corpus is denied.

Moran, C.J., Ozaeta, Paras, Jaranilla, Pablo and Bengzon, JJ., concur.

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 any Minister 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.

A.M. No. 133-J May 31, 1982

BERNARDITA R. MACARIOLA, complainant,
vs.
HONORABLE ELIAS B. ASUNCION, Judge of the Court of First Instance of Leyte, respondent.

MAKASIAR, J:

In a verified complaint dated August 6, 1968 Bernardita R. Macariola charged respondent Judge Elias B. Asuncion of the Court of First
Instance of Leyte, now Associate Justice of the Court of Appeals, with "acts unbecoming a judge."

The factual setting of the case is stated in the report dated May 27, 1971 of then Associate Justice Cecilia Muñoz Palma of the Court of
Appeals now retired Associate Justice of the Supreme Court, to whom this case was referred on October 28, 1968 for investigation, thus:

Civil Case No. 3010 of the Court of First Instance of Leyte was a complaint for partition filed by Sinforosa R. Bales,
Luz R. Bakunawa, Anacorita Reyes, Ruperto Reyes, Adela Reyes, and Priscilla Reyes, plaintiffs, against Bernardita R.
Macariola, defendant, concerning the properties left by the deceased Francisco Reyes, the common father of the
plaintiff and defendant.

In her defenses to the complaint for partition, Mrs. Macariola alleged among other things that; a) plaintiff Sinforosa
R. Bales was not a daughter of the deceased Francisco Reyes; b) the only legal heirs of the deceased were defendant
Macariola, she being the only offspring of the first marriage of Francisco Reyes with Felisa Espiras, and the remaining
plaintiffs who were the children of the deceased by his second marriage with Irene Ondez; c) the properties left by the
deceased were all the conjugal properties of the latter and his first wife, Felisa Espiras, and no properties were
acquired by the deceased during his second marriage; d) if there was any partition to be made, those conjugal
properties should first be partitioned into two parts, and one part is to be adjudicated solely to defendant it being the
share of the latter's deceased mother, Felisa Espiras, and the other half which is the share of the deceased Francisco
Reyes was to be divided equally among his children by his two marriages.

On June 8, 1963, a decision was rendered by respondent Judge Asuncion in Civil Case 3010, the dispositive portion of
which reads:

IN VIEW OF THE FOREGOING CONSIDERATIONS, the Court, upon a preponderance of

evidence, finds and so holds, and hereby renders judgment (1) Declaring the plaintiffs Luz R.
Bakunawa, Anacorita Reyes, Ruperto Reyes, Adela Reyes and Priscilla Reyes as the only children
 legitimated by the subsequent marriage of Francisco Reyes Diaz to Irene Ondez; (2) Declaring the
plaintiff Sinforosa R. Bales to have been an illegitimate child of Francisco Reyes Diaz; (3) Declaring
Lots Nos. 4474, 4475, 4892, 5265, 4803, 4581, 4506 and 1/4 of Lot 1145 as belonging to the
conjugal partnership of the spouses Francisco Reyes Diaz and Felisa Espiras; (4) Declaring Lot No.
2304 and 1/4 of Lot No. 3416 as belonging to the spouses Francisco Reyes Diaz and Irene Ondez in
common partnership; (5) Declaring that 1/2 of Lot No. 1184 as belonging exclusively to the
deceased Francisco Reyes Diaz; (6) Declaring the defendant Bernardita R. Macariola, being the only
legal and forced heir of her mother Felisa Espiras, as the exclusive owner of one-half of each of Lots
Nos. 4474, 4475, 4892, 5265, 4803, 4581, 4506; and the remaining one-half (1/2) of each of said
Lots Nos. 4474, 4475, 4892, 5265, 4803, 4581, 4506 and one-half (1/2) of one-fourth (1/4) of Lot
No. 1154 as belonging to the estate of Francisco Reyes Diaz; (7) Declaring Irene Ondez to be the
exclusive owner of one-half (1/2) of Lot No. 2304 and one-half (1/2) of one-fourth (1/4) of Lot No.
3416; the remaining one-half (1/2) of Lot 2304 and the remaining one-half (1/2) of one-fourth (1/4)
of Lot No. 3416 as belonging to the estate of Francisco Reyes Diaz; (8) Directing the division or
partition of the estate of Francisco Reyes Diaz in such a manner as to give or grant to Irene Ondez,
as surviving widow of Francisco Reyes Diaz, a hereditary share of. one-twelfth (1/12) of the whole
estate of Francisco Reyes Diaz (Art. 996 in relation to Art. 892, par 2, New Civil Code), and the
remaining portion of the estate to be divided among the plaintiffs Sinforosa R. Bales, Luz R.
Bakunawa, Anacorita Reyes, Ruperto Reyes, Adela Reyes, Priscilla Reyes and defendant Bernardita
R. Macariola, in such a way that the extent of the total share of plaintiff Sinforosa R. Bales in the
hereditary estate shall not exceed the equivalent of two-fifth (2/5) of the total share of any or each
of the other plaintiffs and the defendant (Art. 983, New Civil Code), each of the latter to receive
equal shares from the hereditary estate, (Ramirez vs. Bautista, 14 Phil. 528; Diancin vs. Bishop of
Jaro, O.G. [3rd Ed.] p. 33); (9) Directing the parties, within thirty days after this judgment shall
have become final to submit to this court, for approval a project of partition of the hereditary estate
in the proportion above indicated, and in such manner as the parties may, by agreement, deemed
convenient and equitable to them taking into consideration the location, kind, quality, nature and
value of the properties involved; (10) Directing the plaintiff Sinforosa R. Bales and defendant
Bernardita R. Macariola to pay the costs of this suit, in the proportion of one-third (1/3) by the first
named and two-thirds (2/3) by the second named; and (I 1) Dismissing all other claims of the
parties [pp 27-29 of Exh. C].

The decision in civil case 3010 became final for lack of an appeal, and on October 16, 1963, a project of partition was
submitted to Judge Asuncion which is marked Exh. A. Notwithstanding the fact that the project of partition was not
signed by the parties themselves but only by the respective counsel of plaintiffs and defendant, Judge Asuncion
approved it in his Order dated October 23, 1963, which for convenience is quoted hereunder in full:

The parties, through their respective counsels, presented to this Court for approval the following
project of partition:

COMES NOW, the plaintiffs and the defendant in the above-entitled case, to this Honorable Court
respectfully submit the following Project of Partition:

l. The whole of Lots Nos. 1154, 2304 and 4506 shall belong exclusively to Bernardita Reyes
Macariola;

2. A portion of Lot No. 3416 consisting of 2,373.49 square meters along the eastern part of the lot
shall be awarded likewise to Bernardita R. Macariola;

3. Lots Nos. 4803, 4892 and 5265 shall be awarded to Sinforosa Reyes Bales;

4. A portion of Lot No. 3416 consisting of 1,834.55 square meters along the western part of the lot
shall likewise be awarded to Sinforosa Reyes-Bales;

5. Lots Nos. 4474 and 4475 shall be divided equally among Luz Reyes Bakunawa, Anacorita Reyes,
Ruperto Reyes, Adela Reyes and Priscilla Reyes in equal shares;

6. Lot No. 1184 and the remaining portion of Lot No. 3416 after taking the portions awarded under
item (2) and (4) above shall be awarded to Luz Reyes Bakunawa, Anacorita Reyes, Ruperto Reyes,
Adela Reyes and Priscilla Reyes in equal shares, provided, however that the remaining portion of
Lot No. 3416 shall belong exclusively to Priscilla Reyes.

WHEREFORE, it is respectfully prayed that the Project of Partition indicated above which is made
in accordance with the decision of the Honorable Court be approved.

Tacloban City, October 16, 1963.

(SGD) BONIFACIO RAMO Atty. for the Defendant Tacloban City

(SGD) ZOTICO A. TOLETE Atty. for the Plaintiff Tacloban City

While the Court thought it more desirable for all the parties to have signed this Project of Partition,
nevertheless, upon assurance of both counsels of the respective parties to this Court that the Project
of Partition, as above- quoted, had been made after a conference and agreement of the plaintiffs
and the defendant approving the above Project of Partition, and that both lawyers had represented
to the Court that they are given full authority to sign by themselves the Project of Partition, the
Court, therefore, finding the above-quoted Project of Partition to be in accordance with law, hereby
approves the same. The parties, therefore, are directed to execute such papers, documents or
instrument sufficient in form and substance for the vesting of the rights, interests and
participations which were adjudicated to the respective parties, as outlined in the Project of
Partition and the delivery of the respective properties adjudicated to each one in view of said
Project of Partition, and to perform such other acts as are legal and necessary to effectuate the said
Project of Partition.

SO ORDERED.
 Given in Tacloban City, this 23rd day of October, 1963.

(SGD) ELIAS B. ASUNCION Judge

EXH. B.

The above Order of October 23, 1963, was amended on November 11, 1963, only for the purpose of giving authority to
the Register of Deeds of the Province of Leyte to issue the corresponding transfer certificates of title to the respective
adjudicatees in conformity with the project of partition (see Exh. U).

One of the properties mentioned in the project of partition was Lot 1184 or rather one-half thereof with an area of
15,162.5 sq. meters. This lot, which according to the decision was the exclusive property of the deceased Francisco
Reyes, was adjudicated in said project of partition to the plaintiffs Luz, Anacorita Ruperto, Adela, and Priscilla all
surnamed Reyes in equal shares, and when the project of partition was approved by the trial court the adjudicatees
caused Lot 1184 to be subdivided into five lots denominated as Lot 1184-A to 1184-E inclusive (Exh. V).

Lot 1184-D was conveyed to Enriqueta D. Anota, a stenographer in Judge Asuncion's court (Exhs. F, F-1 and V-1),
while Lot 1184-E which had an area of 2,172.5556 sq. meters was sold on July 31, 1964 to Dr. Arcadio Galapon (Exh.
2) who was issued transfer certificate of title No. 2338 of the Register of Deeds of the city of Tacloban (Exh. 12).

On March 6, 1965, Dr. Arcadio Galapon and his wife Sold a portion of Lot 1184-E with an area of around 1,306 sq.
meters to Judge Asuncion and his wife, Victoria S. Asuncion (Exh. 11), which particular portion was declared by the
latter for taxation purposes (Exh. F).

On August 31, 1966, spouses Asuncion and spouses Galapon conveyed their respective shares and interest in Lot 1184-
E to "The Traders Manufacturing and Fishing Industries Inc." (Exit 15 & 16). At the time of said sale the stockholders
of the corporation were Dominador Arigpa Tan, Humilia Jalandoni Tan, Jaime Arigpa Tan, Judge Asuncion, and the
latter's wife, Victoria S. Asuncion, with Judge Asuncion as the President and Mrs. Asuncion as the secretary (Exhs. E-
4 to E-7). The Articles of Incorporation of "The Traders Manufacturing and Fishing Industries, Inc." which we shall
henceforth refer to as "TRADERS" were registered with the Securities and Exchange Commission only on January 9,
1967 (Exh. E) [pp. 378-385, rec.].

Complainant Bernardita R. Macariola filed on August 9, 1968 the instant complaint dated August 6, 1968 alleging four causes of action,
to wit: [1] that respondent Judge Asuncion violated Article 1491, paragraph 5, of the New Civil Code in acquiring by purchase a portion
of Lot No. 1184-E which was one of those properties involved in Civil Case No. 3010 decided by him; [2] that he likewise violated Article
14, paragraphs I and 5 of the Code of Commerce, Section 3, paragraph H, of R.A. 3019, otherwise known as the Anti-Graft and Corrupt
Practices Act, Section 12, Rule XVIII of the Civil Service Rules, and Canon 25 of the Canons of Judicial Ethics, by associating himself
with the Traders Manufacturing and Fishing Industries, Inc., as a stockholder and a ranking officer while he was a judge of the Court of
First Instance of Leyte; [3] that respondent was guilty of coddling an impostor and acted in disregard of judicial decorum by closely
fraternizing with a certain Dominador Arigpa Tan who openly and publicly advertised himself as a practising attorney when in truth and
in fact his name does not appear in the Rolls of Attorneys and is not a member of the Philippine Bar; and [4] that there was a culpable
defiance of the law and utter disregard for ethics by respondent Judge (pp. 1-7, rec.).

Respondent Judge Asuncion filed on September 24, 1968 his answer to which a reply was filed on October 16, 1968 by herein
complainant. In Our resolution of October 28, 1968, We referred this case to then Justice Cecilia Muñoz Palma of the Court of Appeals,
for investigation, report and recommendation. After hearing, the said Investigating Justice submitted her report dated May 27, 1971
recommending that respondent Judge should be reprimanded or warned in connection with the first cause of action alleged in the
complaint, and for the second cause of action, respondent should be warned in case of a finding that he is prohibited under the law to
engage in business. On the third and fourth causes of action, Justice Palma recommended that respondent Judge be exonerated.

The records also reveal that on or about November 9 or 11, 1968 (pp. 481, 477, rec.), complainant herein instituted an action before the
Court of First Instance of Leyte, entitled "Bernardita R. Macariola, plaintiff, versus Sinforosa R. Bales, et al., defendants," which was
docketed as Civil Case No. 4235, seeking the annulment of the project of partition made pursuant to the decision in Civil Case No. 3010
and the two orders issued by respondent Judge approving the same, as well as the partition of the estate and the subsequent
conveyances with damages. It appears, however, that some defendants were dropped from the civil case. For one, the case against Dr.
Arcadio Galapon was dismissed because he was no longer a real party in interest when Civil Case No. 4234 was filed, having already
conveyed on March 6, 1965 a portion of lot 1184-E to respondent Judge and on August 31, 1966 the remainder was sold to the Traders
Manufacturing and Fishing Industries, Inc. Similarly, the case against defendant Victoria Asuncion was dismissed on the ground that
she was no longer a real party in interest at the time the aforesaid Civil Case No. 4234 was filed as the portion of Lot 1184 acquired by
her and respondent Judge from Dr. Arcadio Galapon was already sold on August 31, 1966 to the Traders Manufacturing and Fishing
industries, Inc. Likewise, the cases against defendants Serafin P. Ramento, Catalina Cabus, Ben Barraza Go, Jesus Perez, Traders
Manufacturing and Fishing Industries, Inc., Alfredo R. Celestial and Pilar P. Celestial, Leopoldo Petilla and Remedios Petilla, Salvador
Anota and Enriqueta Anota and Atty. Zotico A. Tolete were dismissed with the conformity of complainant herein, plaintiff therein, and
her counsel.

On November 2, 1970, Judge Jose D. Nepomuceno of the Court of First Instance of Leyte, who was directed and authorized on June 2,
1969 by the then Secretary (now Minister) of Justice and now Minister of National Defense Juan Ponce Enrile to hear and decide Civil
Case No. 4234, rendered a decision, the dispositive portion of which reads as follows:

A. IN THE CASE AGAINST JUDGE ELIAS B. ASUNCION

(1) declaring that only Branch IV of the Court of First Instance of Leyte has jurisdiction to take cognizance of the issue
of the legality and validity of the Project of Partition [Exhibit "B"] and the two Orders [Exhibits "C" and "C- 3"]
approving the partition;

(2) dismissing the complaint against Judge Elias B. Asuncion;

(3) adjudging the plaintiff, Mrs. Bernardita R. Macariola to pay defendant Judge Elias B. Asuncion,

(a) the sum of FOUR HUNDRED THOUSAND PESOS [P400,000.00] for moral damages;

(b) the sum of TWO HUNDRED THOUSAND PESOS [P200,000.001 for exemplary damages;

(c) the sum of FIFTY THOUSAND PESOS [P50,000.00] for nominal damages; and
 (d) he sum of TEN THOUSAND PESOS [PI0,000.00] for Attorney's Fees.

B. IN THE CASE AGAINST THE DEFENDANT MARIQUITA VILLASIN, FOR HERSELF AND FOR
THE HEIRS OF THE DECEASED GERARDO VILLASIN —

(1) Dismissing the complaint against the defendants Mariquita Villasin and the heirs of the deceased Gerardo Villasin;

(2) Directing the plaintiff to pay the defendants Mariquita Villasin and the heirs of Gerardo Villasin the cost of the
suit.

C. IN THE CASE AGAINST THE DEFENDANT SINFOROSA R. BALES, ET AL., WHO WERE
PLAINTIFFS IN CIVIL CASE NO. 3010 —

(1) Dismissing the complaint against defendants Sinforosa R. Bales, Adela R. Herrer, Priscilla R. Solis, Luz R.
Bakunawa, Anacorita R. Eng and Ruperto O. Reyes.

D. IN THE CASE AGAINST DEFENDANT BONIFACIO RAMO —

(1) Dismissing the complaint against Bonifacio Ramo;

(2) Directing the plaintiff to pay the defendant Bonifacio Ramo the cost of the suit.

SO ORDERED [pp. 531-533, rec.]

It is further disclosed by the record that the aforesaid decision was elevated to the Court of Appeals upon perfection of the appeal on
February 22, 1971.

WE find that there is no merit in the contention of complainant Bernardita R. Macariola, under her first cause of action, that
respondent Judge Elias B. Asuncion violated Article 1491, paragraph 5, of the New Civil Code in acquiring by purchase a portion of Lot
No. 1184-E which was one of those properties involved in Civil Case No. 3010. 'That Article provides:

Article 1491. The following persons cannot acquire by purchase, even at a public or judicial action, either in person or
through the mediation of another:

xxx xxx xxx

(5) Justices, judges, prosecuting attorneys, clerks of superior and inferior courts, and other officers and employees
connected with the administration of justice, the property and rights in litigation or levied upon an execution before
the court within whose jurisdiction or territory they exercise their respective functions; this prohibition includes the
act of acquiring by assignment and shall apply to lawyers, with respect to the property and rights which may be the
object of any litigation in which they may take part by virtue of their profession [emphasis supplied].

The prohibition in the aforesaid Article applies only to the sale or assignment of the property which is the subject of litigation to the
persons disqualified therein. WE have already ruled that "... for the prohibition to operate, the sale or assignment of the property must
take place during the pendency of the litigation involving the property" (The Director of Lands vs. Ababa et al., 88 SCRA 513, 519
[1979], Rosario vda. de Laig vs. Court of Appeals, 86 SCRA 641, 646 [1978]).

In the case at bar, when the respondent Judge purchased on March 6, 1965 a portion of Lot 1184-E, the decision in Civil Case No. 3010
which he rendered on June 8, 1963 was already final because none of the parties therein filed an appeal within the reglementary period;
hence, the lot in question was no longer subject of the litigation. Moreover, at the time of the sale on March 6, 1965, respondent's order
dated October 23, 1963 and the amended order dated November 11, 1963 approving the October 16, 1963 project of partition made
pursuant to the June 8, 1963 decision, had long become final for there was no appeal from said orders.

Furthermore, respondent Judge did not buy the lot in question on March 6, 1965 directly from the plaintiffs in Civil Case No. 3010 but
from Dr. Arcadio Galapon who earlier purchased on July 31, 1964 Lot 1184-E from three of the plaintiffs, namely, Priscilla Reyes, Adela
Reyes, and Luz R. Bakunawa after the finality of the decision in Civil Case No. 3010. It may be recalled that Lot 1184 or more specifically
one-half thereof was adjudicated in equal shares to Priscilla Reyes, Adela Reyes, Luz Bakunawa, Ruperto Reyes and Anacorita Reyes in
the project of partition, and the same was subdivided into five lots denominated as Lot 1184-A to 1184-E. As aforestated, Lot 1184-E was
sold on July 31, 1964 to Dr. Galapon for which he was issued TCT No. 2338 by the Register of Deeds of Tacloban City, and on March 6,
1965 he sold a portion of said lot to respondent Judge and his wife who declared the same for taxation purposes only. The subsequent
sale on August 31, 1966 by spouses Asuncion and spouses Galapon of their respective shares and interest in said Lot 1184-E to the
Traders Manufacturing and Fishing Industries, Inc., in which respondent was the president and his wife was the secretary, took place
long after the finality of the decision in Civil Case No. 3010 and of the subsequent two aforesaid orders therein approving the project of
partition.

While it appears that complainant herein filed on or about November 9 or 11, 1968 an action before the Court of First Instance of Leyte
docketed as Civil Case No. 4234, seeking to annul the project of partition and the two orders approving the same, as well as the partition
of the estate and the subsequent conveyances, the same, however, is of no moment.

The fact remains that respondent Judge purchased on March 6, 1965 a portion of Lot 1184-E from Dr. Arcadio Galapon; hence, after the
finality of the decision which he rendered on June 8, 1963 in Civil Case No. 3010 and his two questioned orders dated October 23, 1963
and November 11, 1963. Therefore, the property was no longer subject of litigation.

The subsequent filing on November 9, or 11, 1968 of Civil Case No. 4234 can no longer alter, change or affect the aforesaid facts — that
the questioned sale to respondent Judge, now Court of Appeals Justice, was effected and consummated long after the finality of the
aforesaid decision or orders.

Consequently, the sale of a portion of Lot 1184-E to respondent Judge having taken place over one year after the finality of the decision
in Civil Case No. 3010 as well as the two orders approving the project of partition, and not during the pendency of the litigation, there
was no violation of paragraph 5, Article 1491 of the New Civil Code.
It is also argued by complainant herein that the sale on July 31, 1964 of Lot 1184-E to Dr. Arcadio Galapon by Priscilla Reyes, Adela
Reyes and Luz R. Bakunawa was only a mere scheme to conceal the illegal and unethical transfer of said lot to respondent Judge as a
consideration for the approval of the project of partition. In this connection, We agree with the findings of the Investigating Justice
thus:

And so we are now confronted with this all-important question whether or not the acquisition by respondent of a
portion of Lot 1184-E and the subsequent transfer of the whole lot to "TRADERS" of which respondent was the
President and his wife the Secretary, was intimately related to the Order of respondent approving the project of
partition, Exh. A.

Respondent vehemently denies any interest or participation in the transactions between the Reyeses and the
Galapons concerning Lot 1184-E, and he insists that there is no evidence whatsoever to show that Dr. Galapon had
acted, in the purchase of Lot 1184-E, in mediation for him and his wife. (See p. 14 of Respondent's Memorandum).

xxx xxx xxx

On this point, I agree with respondent that there is no evidence in the record showing that Dr. Arcadio Galapon acted
as a mere "dummy" of respondent in acquiring Lot 1184-E from the Reyeses. Dr. Galapon appeared to this
investigator as a respectable citizen, credible and sincere, and I believe him when he testified that he bought Lot 1184-
E in good faith and for valuable consideration from the Reyeses without any intervention of, or previous
understanding with Judge Asuncion (pp. 391- 394, rec.).

On the contention of complainant herein that respondent Judge acted illegally in approving the project of partition although it was not
signed by the parties, We quote with approval the findings of the Investigating Justice, as follows:

1. I agree with complainant that respondent should have required the signature of the parties more particularly that of
Mrs. Macariola on the project of partition submitted to him for approval; however, whatever error was committed by
respondent in that respect was done in good faith as according to Judge Asuncion he was assured by Atty. Bonifacio
Ramo, the counsel of record of Mrs. Macariola, That he was authorized by his client to submit said project of
partition, (See Exh. B and tsn p. 24, January 20, 1969). While it is true that such written authority if there was any,
was not presented by respondent in evidence, nor did Atty. Ramo appear to corroborate the statement of respondent,
his affidavit being the only one that was presented as respondent's Exh. 10, certain actuations of Mrs. Macariola lead
this investigator to believe that she knew the contents of the project of partition, Exh. A, and that she gave her
conformity thereto. I refer to the following documents:

1) Exh. 9 — Certified true copy of OCT No. 19520 covering Lot 1154 of the Tacloban Cadastral Survey in which the
deceased Francisco Reyes holds a "1/4 share" (Exh. 9-a). On tills certificate of title the Order dated November 11,
1963, (Exh. U) approving the project of partition was duly entered and registered on November 26, 1963 (Exh. 9-D);

2) Exh. 7 — Certified copy of a deed of absolute sale executed by Bernardita Reyes Macariola on October 22, 1963,
conveying to Dr. Hector Decena the one-fourth share of the late Francisco Reyes-Diaz in Lot 1154. In this deed of sale
the vendee stated that she was the absolute owner of said one-fourth share, the same having been adjudicated to her
as her share in the estate of her father Francisco Reyes Diaz as per decision of the Court of First Instance of Leyte
under case No. 3010 (Exh. 7-A). The deed of sale was duly registered and annotated at the back of OCT 19520 on
December 3, 1963 (see Exh. 9-e).

In connection with the abovementioned documents it is to be noted that in the project of partition dated October 16,
1963, which was approved by respondent on October 23, 1963, followed by an amending Order on November 11, 1963,
Lot 1154 or rather 1/4 thereof was adjudicated to Mrs. Macariola. It is this 1/4 share in Lot 1154 which complainant
sold to Dr. Decena on October 22, 1963, several days after the preparation of the project of partition.

Counsel for complainant stresses the view, however, that the latter sold her one-fourth share in Lot 1154 by virtue of
the decision in Civil Case 3010 and not because of the project of partition, Exh. A. Such contention is absurd because
from the decision, Exh. C, it is clear that one-half of one- fourth of Lot 1154 belonged to the estate of Francisco Reyes
Diaz while the other half of said one-fourth was the share of complainant's mother, Felisa Espiras; in other words, the
decision did not adjudicate the whole of the one-fourth of Lot 1154 to the herein complainant (see Exhs. C-3 & C-4).
Complainant became the owner of the entire one-fourth of Lot 1154 only by means of the project of partition, Exh. A.
Therefore, if Mrs. Macariola sold Lot 1154 on October 22, 1963, it was for no other reason than that she was wen
aware of the distribution of the properties of her deceased father as per Exhs. A and B. It is also significant at this
point to state that Mrs. Macariola admitted during the cross-examination that she went to Tacloban City in
connection with the sale of Lot 1154 to Dr. Decena (tsn p. 92, November 28, 1968) from which we can deduce that she
could not have been kept ignorant of the proceedings in civil case 3010 relative to the project of partition.

Complainant also assails the project of partition because according to her the properties adjudicated to her were
insignificant lots and the least valuable. Complainant, however, did not present any direct and positive evidence to
prove the alleged gross inequalities in the choice and distribution of the real properties when she could have easily
done so by presenting evidence on the area, location, kind, the assessed and market value of said properties. Without
such evidence there is nothing in the record to show that there were inequalities in the distribution of the properties
of complainant's father (pp. 386389, rec.).

Finally, while it is. true that respondent Judge did not violate paragraph 5, Article 1491 of the New Civil Code in acquiring by purchase a
portion of Lot 1184-E which was in litigation in his court, it was, however, improper for him to have acquired the same. He should be
reminded of Canon 3 of the Canons of Judicial Ethics which requires that: "A judge's official conduct should be free from the
appearance of impropriety, and his personal behavior, not only upon the bench and in the performance of judicial duties, but also in his
everyday life, should be beyond reproach." And as aptly observed by the Investigating Justice: "... it was unwise and indiscreet on the
part of respondent to have purchased or acquired a portion of a piece of property that was or had been in litigation in his court and
caused it to be transferred to a corporation of which he and his wife were ranking officers at the time of such transfer. One who occupies
an exalted position in the judiciary has the duty and responsibility of maintaining the faith and trust of the citizenry in the courts of
justice, so that not only must he be truly honest and just, but his actuations must be such as not give cause for doubt and mistrust in the
uprightness of his administration of justice. In this particular case of respondent, he cannot deny that the transactions over Lot 1184-E
are damaging and render his actuations open to suspicion and distrust. Even if respondent honestly believed that Lot 1184-E was no
longer in litigation in his court and that he was purchasing it from a third person and not from the parties to the litigation, he should
nonetheless have refrained from buying it for himself and transferring it to a corporation in which he and his wife were financially
involved, to avoid possible suspicion that his acquisition was related in one way or another to his official actuations in civil case 3010.
The conduct of respondent gave cause for the litigants in civil case 3010, the lawyers practising in his court, and the public in general to
doubt the honesty and fairness of his actuations and the integrity of our courts of justice" (pp. 395396, rec.).
II

With respect to the second cause of action, the complainant alleged that respondent Judge violated paragraphs 1 and 5, Article 14 of the
Code of Commerce when he associated himself with the Traders Manufacturing and Fishing Industries, Inc. as a stockholder and a
ranking officer, said corporation having been organized to engage in business. Said Article provides that:

Article 14 — The following cannot engage in commerce, either in person or by proxy, nor can they hold any office or
have any direct, administrative, or financial intervention in commercial or industrial companies within the limits of
the districts, provinces, or towns in which they discharge their duties:

1. Justices of the Supreme Court, judges and officials of the department of public prosecution in active service. This
provision shall not be applicable to mayors, municipal judges, and municipal prosecuting attorneys nor to those who
by chance are temporarily discharging the functions of judge or prosecuting attorney.

xxx xxx xxx

5. Those who by virtue of laws or special provisions may not engage in commerce in a determinate territory.

It is Our considered view that although the aforestated provision is incorporated in the Code of Commerce which is part of the
commercial laws of the Philippines, it, however, partakes of the nature of a political law as it regulates the relationship between the
government and certain public officers and employees, like justices and judges.

Political Law has been defined as that branch of public law which deals with the organization and operation of the governmental organs
of the State and define the relations of the state with the inhabitants of its territory (People vs. Perfecto, 43 Phil. 887, 897 [1922]). It
may be recalled that political law embraces constitutional law, law of public corporations, administrative law including the law on public
officers and elections. Specifically, Article 14 of the Code of Commerce partakes more of the nature of an administrative law because it
regulates the conduct of certain public officers and employees with respect to engaging in business: hence, political in essence.

It is significant to note that the present Code of Commerce is the Spanish Code of Commerce of 1885, with some modifications made by
the "Commission de Codificacion de las Provincias de Ultramar," which was extended to the Philippines by the Royal Decree of August
6, 1888, and took effect as law in this jurisdiction on December 1, 1888.

Upon the transfer of sovereignty from Spain to the United States and later on from the United States to the Republic of the Philippines,
Article 14 of this Code of Commerce must be deemed to have been abrogated because where there is change of sovereignty, the political
laws of the former sovereign, whether compatible or not with those of the new sovereign, are automatically abrogated, unless they are
expressly re-enacted by affirmative act of the new sovereign.

Thus, We held in Roa vs. Collector of Customs (23 Phil. 315, 330, 311 [1912]) that:

By well-settled public law, upon the cession of territory by one nation to another, either following a conquest or
otherwise, ... those laws which are political in their nature and pertain to the prerogatives of the former government
immediately cease upon the transfer of sovereignty. (Opinion, Atty. Gen., July 10, 1899).

While municipal laws of the newly acquired territory not in conflict with the, laws of the new sovereign continue in
force without the express assent or affirmative act of the conqueror, the political laws do not. (Halleck's Int. Law,
chap. 34, par. 14). However, such political laws of the prior sovereignty as are not in conflict with the constitution or
institutions of the new sovereign, may be continued in force if the conqueror shall so declare by affirmative act of the
commander-in-chief during the war, or by Congress in time of peace. (Ely's Administrator vs. United States, 171 U.S.
220, 43 L. Ed. 142). In the case of American and Ocean Ins. Cos. vs. 356 Bales of Cotton (1 Pet. [26 U.S.] 511, 542, 7 L.
Ed. 242), Chief Justice Marshall said:

On such transfer (by cession) of territory, it has never been held that the relations of the inhabitants
with each other undergo any change. Their relations with their former sovereign are dissolved, and
new relations are created between them and the government which has acquired their territory. The
same act which transfers their country, transfers the allegiance of those who remain in it; and the
law which may be denominated political, is necessarily changed, although that which regulates the
intercourse and general conduct of individuals, remains in force, until altered by the newly- created
power of the State.

Likewise, in People vs. Perfecto (43 Phil. 887, 897 [1922]), this Court stated that: "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. "

There appears no enabling or affirmative act that continued the effectivity of the aforestated provision of the Code of Commerce after
the change of sovereignty from Spain to the United States and then to the Republic of the Philippines. Consequently, Article 14 of the
Code of Commerce has no legal and binding effect and cannot apply to the respondent, then Judge of the Court of First Instance, now
Associate Justice of the Court of Appeals.

It is also argued by complainant herein that respondent Judge violated paragraph H, Section 3 of Republic Act No. 3019, otherwise
known as the Anti-Graft and Corrupt Practices Act, which provides that:

Sec. 3. Corrupt practices of public officers. — In addition to acts or omissions of public officers already penalized by
existing law, the following shall constitute corrupt practices of any public officer and are hereby declared to be
unlawful:

xxx xxx xxx

(h) Directly or indirectly having financial or pecuniary interest in any business, contract or
transaction in connection with which he intervenes or takes part in his official capacity, or in which
he is prohibited by the Constitution or by any Iaw from having any interest.

Respondent Judge cannot be held liable under the aforestated paragraph because there is no showing that respondent participated or
intervened in his official capacity in the business or transactions of the Traders Manufacturing and Fishing Industries, Inc. In the case
at bar, the business of the corporation in which respondent participated has obviously no relation or connection with his judicial office.
The business of said corporation is not that kind where respondent intervenes or takes part in his capacity as Judge of the Court of First
Instance. As was held in one case involving the application of Article 216 of the Revised Penal Code which has a similar prohibition on
public officers against directly or indirectly becoming interested in any contract or business in which it is his official duty to intervene,
"(I)t is not enough to be a public official to be subject to this crime; it is necessary that by reason of his office, he has to intervene in said
contracts or transactions; and, hence, the official who intervenes in contracts or transactions which have no relation to his office cannot
commit this crime.' (People vs. Meneses, C.A. 40 O.G. 11th Supp. 134, cited by Justice Ramon C. Aquino; Revised Penal Code, p. 1174,
Vol. 11 [1976]).

It does not appear also from the records that the aforesaid corporation gained any undue advantage in its business operations by reason
of respondent's financial involvement in it, or that the corporation benefited in one way or another in any case filed by or against it in
court. It is undisputed that there was no case filed in the different branches of the Court of First Instance of Leyte in which the
corporation was either party plaintiff or defendant except Civil Case No. 4234 entitled "Bernardita R. Macariola, plaintiff, versus
Sinforosa O. Bales, et al.," wherein the complainant herein sought to recover Lot 1184-E from the aforesaid corporation. It must be
noted, however, that Civil Case No. 4234 was filed only on November 9 or 11, 1968 and decided on November 2, 1970 by CFI Judge Jose
D. Nepomuceno when respondent Judge was no longer connected with the corporation, having disposed of his interest therein on
January 31, 1967.

Furthermore, respondent is not liable under the same paragraph because there is no provision in both the 1935 and 1973 Constitutions
of the Philippines, nor is there an existing law expressly prohibiting members of the Judiciary from engaging or having interest in any
lawful business.

It may be pointed out that Republic Act No. 296, as amended, also known as the Judiciary Act of 1948, does not contain any prohibition
to that effect. As a matter of fact, under Section 77 of said law, municipal judges may engage in teaching or other vocation not involving
the practice of law after office hours but with the permission of the district judge concerned.

Likewise, Article 14 of the Code of Commerce which prohibits judges from engaging in commerce is, as heretofore stated, deemed
abrogated automatically upon the transfer of sovereignty from Spain to America, because it is political in nature.

Moreover, the prohibition in paragraph 5, Article 1491 of the New Civil Code against the purchase by judges of a property in litigation
before the court within whose jurisdiction they perform their duties, cannot apply to respondent Judge because the sale of the lot in
question to him took place after the finality of his decision in Civil Case No. 3010 as well as his two orders approving the project of
partition; hence, the property was no longer subject of litigation.

In addition, although Section 12, Rule XVIII of the Civil Service Rules made pursuant to the Civil Service Act of 1959 prohibits an officer
or employee in the civil service from engaging in any private business, vocation, or profession or be connected with any commercial,
credit, agricultural or industrial undertaking without a written permission from the head of department, the same, however, may not
fall within the purview of paragraph h, Section 3 of the Anti-Graft and Corrupt Practices Act because the last portion of said paragraph
speaks of a prohibition by the Constitution or law on any public officer from having any interest in any business and not by a mere
administrative rule or regulation. Thus, a violation of the aforesaid rule by any officer or employee in the civil service, that is, engaging
in private business without a written permission from the Department Head may not constitute graft and corrupt practice as defined by
law.

On the contention of complainant that respondent Judge violated Section 12, Rule XVIII of the Civil Service Rules, We hold that the
Civil Service Act of 1959 (R.A. No. 2260) and the Civil Service Rules promulgated thereunder, particularly Section 12 of Rule XVIII, do
not apply to the members of the Judiciary. Under said Section 12: "No officer or employee shall engage directly in any private business,
vocation, or profession or be connected with any commercial, credit, agricultural or industrial undertaking without a written permission
from the Head of Department ..."

It must be emphasized at the outset that respondent, being a member of the Judiciary, is covered by Republic Act No. 296, as amended,
otherwise known as the Judiciary Act of 1948 and by Section 7, Article X, 1973 Constitution.

Under Section 67 of said law, the power to remove or dismiss judges was then vested in the President of the Philippines, not in the
Commissioner of Civil Service, and only on two grounds, namely, serious misconduct and inefficiency, and upon the recommendation of
the Supreme Court, which alone is authorized, upon its own motion, or upon information of the Secretary (now Minister) of Justice to
conduct the corresponding investigation. Clearly, the aforesaid section defines the grounds and prescribes the special procedure for the
discipline of judges.

And under Sections 5, 6 and 7, Article X of the 1973 Constitution, only the Supreme Court can discipline judges of inferior courts as well
as other personnel of the Judiciary.

It is true that under Section 33 of the Civil Service Act of 1959: "The Commissioner may, for ... violation of the existing Civil Service Law
and rules or of reasonable office regulations, or in the interest of the service, remove any subordinate officer or employee from the
service, demote him in rank, suspend him for not more than one year without pay or fine him in an amount not exceeding six months'
salary." Thus, a violation of Section 12 of Rule XVIII is a ground for disciplinary action against civil service officers and employees.

However, judges cannot be considered as subordinate civil service officers or employees subject to the disciplinary authority of the
Commissioner of Civil Service; for, certainly, the Commissioner is not the head of the Judicial Department to which they belong. The
Revised Administrative Code (Section 89) and the Civil Service Law itself state that the Chief Justice is the department head of the
Supreme Court (Sec. 20, R.A. No. 2260) [1959]); and under the 1973 Constitution, the Judiciary is the only other or second branch of
the government (Sec. 1, Art. X, 1973 Constitution). Besides, a violation of Section 12, Rule XVIII cannot be considered as a ground for
disciplinary action against judges because to recognize the same as applicable to them, would be adding another ground for the
discipline of judges and, as aforestated, Section 67 of the Judiciary Act recognizes only two grounds for their removal, namely, serious
misconduct and inefficiency.

Moreover, under Section 16(i) of the Civil Service Act of 1959, it is the Commissioner of Civil Service who has original and exclusive
jurisdiction "(T)o decide, within one hundred twenty days, after submission to it, all administrative cases against permanent officers
and employees in the competitive service, and, except as provided by law, to have final authority to pass upon their removal, separation,
and suspension and upon all matters relating to the conduct, discipline, and efficiency of such officers and employees; and prescribe
standards, guidelines and regulations governing the administration of discipline" (emphasis supplied). There is no question that a judge
belong to the non-competitive or unclassified service of the government as a Presidential appointee and is therefore not covered by the
aforesaid provision. WE have already ruled that "... in interpreting Section 16(i) of Republic Act No. 2260, we emphasized that only
permanent officers and employees who belong to the classified service come under the exclusive jurisdiction of the Commissioner of
Civil Service" (Villaluz vs. Zaldivar, 15 SCRA 710,713 [1965], Ang-Angco vs. Castillo, 9 SCRA 619 [1963]).

Although the actuation of respondent Judge in engaging in private business by joining the Traders Manufacturing and Fishing
Industries, Inc. as a stockholder and a ranking officer, is not violative of the provissions of Article 14 of the Code of Commerce and
Section 3(h) of the Anti-Graft and Corrupt Practices Act as well as Section 12, Rule XVIII of the Civil Service Rules promulgated
pursuant to the Civil Service Act of 1959, the impropriety of the same is clearly unquestionable because Canon 25 of the Canons of
Judicial Ethics expressly declares that:

A judge should abstain from making personal investments in enterprises which are apt to be involved in litigation in
his court; and, after his accession to the bench, he should not retain such investments previously made, longer than a
period sufficient to enable him to dispose of them without serious loss. It is desirable that he should, so far as
reasonably possible, refrain from all relations which would normally tend to arouse the suspicion that such relations
warp or bias his judgment, or prevent his impartial attitude of mind in the administration of his judicial duties. ...

WE are not, however, unmindful of the fact that respondent Judge and his wife had withdrawn on January 31, 1967 from the aforesaid
corporation and sold their respective shares to third parties, and it appears also that the aforesaid corporation did not in anyway benefit
in any case filed by or against it in court as there was no case filed in the different branches of the Court of First Instance of Leyte from
the time of the drafting of the Articles of Incorporation of the corporation on March 12, 1966, up to its incorporation on January 9, 1967,
and the eventual withdrawal of respondent on January 31, 1967 from said corporation. Such disposal or sale by respondent and his wife
of their shares in the corporation only 22 days after the incorporation of the corporation, indicates that respondent realized that early
that their interest in the corporation contravenes the aforesaid Canon 25. Respondent Judge and his wife therefore deserve the
commendation for their immediate withdrawal from the firm after its incorporation and before it became involved in any court
litigation

III

With respect to the third and fourth causes of action, complainant alleged that respondent was guilty of coddling an impostor and acted
in disregard of judicial decorum, and that there was culpable defiance of the law and utter disregard for ethics. WE agree, however, with
the recommendation of the Investigating Justice that respondent Judge be exonerated because the aforesaid causes of action are
groundless, and WE quote the pertinent portion of her report which reads as follows:

The basis for complainant's third cause of action is the claim that respondent associated and closely fraternized with
Dominador Arigpa Tan who openly and publicly advertised himself as a practising attorney (see Exhs. I, I-1 and J)
when in truth and in fact said Dominador Arigpa Tan does not appear in the Roll of Attorneys and is not a member of
the Philippine Bar as certified to in Exh. K.

The "respondent denies knowing that Dominador Arigpa Tan was an "impostor" and claims that all the time he
believed that the latter was a bona fide member of the bar. I see no reason for disbelieving this assertion of
respondent. It has been shown by complainant that Dominador Arigpa Tan represented himself publicly as an
attorney-at-law to the extent of putting up a signboard with his name and the words "Attorney-at Law" (Exh. I and 1-
1) to indicate his office, and it was but natural for respondent and any person for that matter to have accepted that
statement on its face value. "Now with respect to the allegation of complainant that respondent is guilty of
fraternizing with Dominador Arigpa Tan to the extent of permitting his wife to be a godmother of Mr. Tan's child at
baptism (Exh. M & M-1), that fact even if true did not render respondent guilty of violating any canon of judicial
ethics as long as his friendly relations with Dominador A. Tan and family did not influence his official actuations as a
judge where said persons were concerned. There is no tangible convincing proof that herein respondent gave any
undue privileges in his court to Dominador Arigpa Tan or that the latter benefitted in his practice of law from his
personal relations with respondent, or that he used his influence, if he had any, on the Judges of the other branches of
the Court to favor said Dominador Tan.

Of course it is highly desirable for a member of the judiciary to refrain as much as possible from maintaining close
friendly relations with practising attorneys and litigants in his court so as to avoid suspicion 'that his social or
business relations or friendship constitute an element in determining his judicial course" (par. 30, Canons of Judicial
Ethics), but if a Judge does have social relations, that in itself would not constitute a ground for disciplinary action
unless it be clearly shown that his social relations be clouded his official actuations with bias and partiality in favor of
his friends (pp. 403-405, rec.).

In conclusion, while respondent Judge Asuncion, now Associate Justice of the Court of Appeals, did not violate any law in acquiring by
purchase a parcel of land which was in litigation in his court and in engaging in business by joining a private corporation during his
incumbency as judge of the Court of First Instance of Leyte, he should be reminded to be more discreet in his private and business
activities, because his conduct as a member of the Judiciary must not only be characterized with propriety but must always be above
suspicion.

WHEREFORE, THE RESPONDENT ASSOCIATE JUSTICE OF THE COURT OF APPEALS IS HEREBY REMINDED TO BE MORE
DISCREET IN HIS PRIVATE AND BUSINESS ACTIVITIES.

SO ORDERED.

Teehankee, Guerrero, De Castro, Melencio-Herrera, Plana, Vasquez, Relova and Gutierrez, JJ., concur.

Concepcion Jr., J., is on leave.

Fernando, C.J., Abad Santos and Esolin JJ., took no part.

Vilas v. Manila, 220 U.S. 345 (1911)

Vilas v. Manila

No. 53, 54, 207

Argued February 24, 27, 1911

Decided April 3, 1911

220 U.S. 345

ERROR TO AND APPEALS FROM THE SUPREME COURT

OF THE PHILIPPINE ISLANDS

Syllabus

Even if there is no remedy adequate to the collection of a claim against a governmental subdivision when reduced to judgment, a
plaintiff having a valid claim is entitled to maintain an action thereon and reduce it to judgment.

Where the case turned below on the consequence of a change in sovereignty by reason of the cession of the Philippine Islands, the
construction of the Treaty with Spain of 1898 is involved, and this Court has jurisdiction of an appeal from the Supreme Court of the
Philippine

Page 220 U. S. 346

Islands under § 10 of the Act of July 1, 1902, c. 1369, 32 Stat. 691, 695.

While military occupation or territorial cession may work a suspension of the governmental functions of municipal corporations, such
occupation or cession does not result in their dissolution.

While there is a total abrogation of the former political relations of inhabitants of ceded territory, and an abrogation of laws in conflict
with the political character of the substituted sovereign, the great body of municipal law regulating private and domestic rights
continues in force until abrogated or changed by the new ruler.

Although the United States might have extinguished every municipality in the territory ceded by Spain under the Treaty of 1898, it will
not, in view of the practice of nations to the contrary, be presumed to have done so.

The legal entity of the City of Manila survived both its military occupation by, and its cession to, the United States, and, as in law, the
present city, as the successor of the former city, is entitled to the property rights of its predecessor, it is also subject to its liabilities.

The cession in the Treaty of 1898 of all the public property of Spain in the Philippine Islands did not include property belonging to
municipalities, and the agreement against impairment of property and private property rights in that treaty applied to the property of
municipalities and claims against municipalities.

One supplying goods to a municipality does so, in the absence of specific provision, on its general faith and credit, and not as against
special funds in its possession, and even if such goods are supplied for a purpose for which the special funds are held, no specific lien is
created thereon.

The facts, which involve the liability of the present City of Manila in the Philippine Islands for claims against the City of Manila as it
existed prior to the cession under the Treaty of 1898, are stated in the opinion.

Page 220 U. S. 351

MR. JUSTICE LURTON delivered the opinion of the Court.

The plaintiffs in error, who were plaintiffs below, are creditors of the City of Manila as it existed before the cession of the Philippine
Islands to the United States by the Treaty of Paris, December 10, 1898. Upon the theory that the city, under its present charter from the
government of the Philippine Islands, is the same juristic person and liable upon the obligations of the old city, these actions were
brought against it. The Supreme Court of the Philippine Islands denied relief, holding that the present municipality is a totally different
corporate entity, and in no way liable for the debts of the Spanish municipality.

Page 220 U. S. 352

The fundamental question is whether, notwithstanding the cession of the Philippine Islands to the United States, followed by a
reincorporation of the city, the present municipality is liable for the obligations of the city incurred prior to the cession to the United
States.

We shall confine ourselves to the question whether the plaintiffs in error are entitled to judgments against the city upon their several
claims. Whether there is a remedy adequate to the collection when reduced to judgment is not presented by the record. But whether
there is or is not a remedy affords no reason why the plaintiffs in error may not reduce their claims to judgment. Mt. Pleasant v.
Beckwith, 100 U. S. 514, 100 U. S. 530. The city confessedly may be sued under its existing charter, and that implies at least a right to
judgment if they establish their demands.

The city as now incorporated has succeeded to all of the property rights of the old city and to the right to enforce all of its causes of
action. There is identity of purpose between the Spanish and American charters and substantial identity of municipal powers. The area
and the inhabitants incorporated are substantially the same. But for the change of sovereignty which has occurred under the Treaty of
Paris, the question of the liability of the city under its new charter for the debts of the old city would seem to be of easy solution. The
principal question would therefore seem to be the legal consequence of the cession referred to upon the property rights and civil
obligations of the city incurred before the cession. And so the question was made to turn in the court below upon the consequence of a
change in sovereignty and a reincorporation of the city by the substituted sovereignty.

This disposes of the question of the jurisdiction of this Court, grounded upon the absence from the petition of the plaintiffs of any
distinct claim under the Treaty of Paris, since, under § 10 of the Philippine Organic Act

Page 220 U. S. 353

of July 1, 1902, this Court is given jurisdiction to review any final decree or judgment of the Supreme Court of the Philippine Islands
where any Treaty of the United States "is involved." That treaty was necessarily "involved," since neither the court below nor this Court
can determine the continuity of the municipality nor the liability of the city as it now exists for the obligation of the old city without
considering the effect of the change of sovereignty resulting from that treaty. See Reavis v. Fianza, 215 U. S. 16, 215 U. S. 22.

The historical continuity of a municipality embracing the inhabitants of the territory now occupied by the City of Manila is impressive.
Before the conquest of the Philippine Islands by Spain, Manila existed. The Spaniards found on the spot now occupied a populous and
fortified community of Moros. In 1571, they occupied what was then and is now known as Manila, and established it as a municipal
corporation. In 1574, there was conferred upon it the title of "Illustrious and ever loyal City of Manila." From time to time, there
occurred amendments, and, on January 19, 1894, there was a reorganization of the city government under a royal decree of that date.
Under that charter, there was power to incur debts for municipal purposes and power to sue and be sued. The obligations here in suit
were incurred under the charter referred to, and are obviously obligations strictly within the provision of the municipal power. To pay
judgments upon such debts, it was the duty of the ayuntamiento of Manila, which was the corporate name of the old city, to make
provision in its budget.

The contention that the liability of the city upon such obligations was destroyed by a mere change of sovereignty is obviously one which
is without a shadow of moral force, and, if true, must result from settled principles of rigid law. While the contracts from which the
claims in suit resulted were in progress, war between the United

Page 220 U. S. 354

States and Spain ensued. On August 13, 1898, the city was occupied by the forces of this government, and its affairs conducted by
military authority. On July 31, 1901, the present incorporating act was passed, and the city since that time has been an autonomous
municipality. The charter in force is Act 183 of the Philippine Commission, and now may be found as chapters 68 to 75 of the Compiled
Acts of the Philippine Commission. The first section of the charter of 1901 reads as follows:

"The inhabitants of the City of Manila, residing within the territory described in section 2 of this act, are hereby constituted a
municipality, which shall be known as the City of Manila, and by that name shall have perpetual succession, and shall possess all the
rights of property herein granted or heretofore enjoyed and possessed by the City of Manila as organized under Spanish sovereignty."

The boundaries described in § 2 include substantially the area and inhabitants which had theretofore constituted the old city.

By § 4 of the same act, the government of the city was invested in a municipal board.

Section 16 grants certain legislative powers to the board, and provides that it shall

"take possession of all lands, buildings, offices, books, papers, records, moneys, credits, securities, assets, accounts, or other property or
rights belonging to the former City of Manila, or pertaining to the business or interests thereof, and, subject to the provisions herein set
forth, shall have control of all its property except the building known as the ayuntamiento, provision for the occupation and control of
which is made in § 15 of this act; shall collect taxes and other revenues, and apply the same in accordance with appropriations, as
hereinbefore provided, to the payment of the municipal expenses; shall supervise and control the discharge of official duties by
subordinates; shall institute judicial proceedings to recover property and

Page 220 U. S. 355

funds of the city wherever found, or otherwise to protect the interests of the city, and shall defend all suits against the city,"

etc.

Section 69 of the charter expressly preserved "all city ordinances and orders in force at the time of the passage of this act, and not
inconsistent herewith," until modified or repealed by ordinances passed under this act.

Section 72 is the repealing clause, and provides for the repeal of "all acts, orders, and regulations" which are inconsistent with the
provisions of the act.

The charter contains no reference to the obligations or contracts of the old city.

If we understand the argument against the liability here asserted, it proceeds mainly upon the theory that, inasmuch as the predecessor
of the present city, the ayuntamiento of Manila, was a corporate entity created by the Spanish government, when the sovereignty of
Spain in the islands was terminated by the treaty of cession, if not by the capitulation of August 13, 1898, the municipality ipso
facto disappeared for all purposes. This conclusion is reached upon the supposed analogy to the doctrine of principal and agent, the
death of the principal ending the agency. So complete is the supposed death and annihilation of a municipal entity by extinction of
sovereignty of the creating state that it was said in one of the opinions below that all of the public property of Manila passed to the
United States, "for a consideration, which was paid," and that the United States was therefore justified in creating an absolutely new
municipality, and endowing it with all of the assets of the defunct city, free from any obligation to the creditors of that city. And so the
matter was dismissed in the Trigas case by the Court of First Instance, by the suggestion that

"the plaintiff may have a claim against the Crown of Spain, which has received from the United States payment for that done by the
plaintiff. "

Page 220 U. S. 356

We are unable to agree with the argument. It loses sight of the dual character of municipal corporations. They exercise powers which are
governmental and powers which are of a private or business character. In the one character, a municipal corporation is a governmental
subdivision, and for that purpose exercises by delegation a part of the sovereignty of the state. In the other character, it is a mere legal
entity or juristic person. In the latter character, it stands for the community in the administration of local affairs wholly beyond the
sphere of the public purposes for which its governmental powers are conferred.

The distinction is observed in South Carolina v. United States, 199 U. S. 437, 199 U. S. 461, where Lloyd v. New York, 5 N.Y. 369, 374,
and Western Sav. Fund Soc. v. Philadelphia, 31 Pa. 175, are cited and approved. In Lloyd v. New York, supra, it is said:

"The corporation of the City of New York possesses two kinds of powers: one governmental and public, and to the extent they are held
and exercised, is clothed with sovereignty; the other private, and to the extent they are held and exercised, is a legal individual. The
former are given and used for public purposes, the latter for private purposes. While in the exercise of the former, the corporation is a
municipal government, and while in the exercise of the latter, is a corporate legal individual."
See also Dillon, Mun.Corp., 4th ed. 66; City of Petersburg v. Applegarth's Administrator, 28 Gratt. 321, 343, and Oliver v.
Worcester, 102 Mass. 489.

In view of the dual character of municipal corporations, there is no public reason for presuming their total dissolution as a mere
consequence of military occupation or territorial cession. The suspension of such governmental functions as are obviously incompatible
with the new political relations thus brought about may be presumed.

Page 220 U. S. 357

But no such implication may be reasonably indulged beyond that result.

Such a conclusion is in harmony with the settled principles of public law as declared by this and other courts and expounded by the
textbooks upon the laws of war and international law. Taylor, International Public Law, § 578.

That there is a total abrogation of the former political relations of the inhabitants of the ceded region is obvious. That all laws
theretofore in force which are in conflict with the political character, constitution, or institutions of the substituted sovereign lose their
force is also plain. Alvarez y Sanchez v. United States, 216 U. S. 167. But it is equally settled in the same public law that that great body
of municipal law which regulates private and domestic rights continues in force until abrogated or changed by the new ruler.
In Chicago, Rock Island & Pacific Railway Co. v. McGlinn, 114 U. S. 542, 114 U. S. 546, it was said:

"It is a general rule of public law, recognized and acted upon by the United States, that whenever political jurisdiction and legislative
power over any territory are transferred from one nation or sovereign to another, the municipal laws of the country -- that is, laws which
are intended for the protection of private rights -- continue in force until abrogated or changed by the new government or sovereign. By
the cession, public property passes from one government to the other, but private property remains as before, and with it those
municipal laws which are designed to secure its peaceful use and enjoyment. 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

Page 220 U. S. 358

press, or authorizing cruel and unusual punishments, and the like, would at once cease to be of obligatory force without any declaration
to that effect, and the laws of the country on other subjects would necessarily be superseded by existing laws of the new government
upon the same matters. But with respect to other laws affecting the possession, use, and transfer of property, and designed to secure
good order and peace in the community and promote its health and prosperity, which are strictly of a municipal character, the rule is
general that a change of government leaves them in force until, by direct action of the new government, they are altered or repealed."

The above language was quoted with approval in Downes v. Bidwell, 182 U. S. 244, 182 U. S. 298.

That the United States might, by virtue of its situation under a treaty ceding full title, have utterly extinguished every municipality
which it found in existence in the Philippine Islands may be conceded. That it did so, in view of the practice of nations to the contrary, is
not to be presumed, and can only be established by cogent evidence.

That during military occupation the affairs of the city were in a large part administered by officials put in place by military order did not
operate to dissolve the corporation, or relieve it from liability upon obligations incurred before the occupation, nor those created for
municipal purposes by the administrators of its affairs while its old officials were displaced. New Orleans v. Steamship Co., 20 Wall.
387, 87 U. S. 394. During that occupation and military administration, the business of the city was carried on as usual. Taxes were
assessed and taxes collected and expended for local purposes, and many of the officials carrying on the government were those found in
office when the city was occupied. The continuity of the corporate city was not inconsistent with military occupation or the constitution
or institutions of the occupying power. This

Page 220 U. S. 359

is made evident by the occurrences at the time of capitulation. Thus, the articles of capitulation concluded in these words:

"This city, its inhabitants, . . . and its private property of all descriptions, are placed under the special safeguard of the faith and honor of
the American Army."

This was quoted in President McKinley's instructions of April 7, 1900, to the Philippine Commission, and touching this he said: "I
believe that this pledge has been faithfully kept." And the commission was directed to labor for the full performance of this obligation.
This instruction was in line with and in fulfillment of the eighth article of the Treaty of Paris of December 10, 1898. Under the third
article of that treaty, the archipelago known as the Philippine Islands was ceded to the United States, the latter agreeing to pay to Spain
the sum of $20,000,000. Under the first paragraph of the eighth article, Spain relinquished to the United States

"all the buildings, wharves, barracks, forts, structures, public highways, and other immovable property which, in conformity with law,
belong to the public domain, and as such belong to the Crown of Spain."

It is under this clause, in connection with the clause agreeing to pay to Spain $20,000,000 for the cession of the Philippine group, that
the contention that all of the public rights of the City of Manila were acquired by the United States, which country was therefore
justified, as absolute owner, in granting the property rights so acquired to what is called the "absolutely new corporation" created
thereafter. But the qualifying words touching property rights relinquished by Spain limit the relinquishment to "property which, in
conformity with law, belonging to the public domain, and as such belong to the Crown of Spain." It did not affect property which did
not, in "conformity with law, belong to the Crown of Spain." That it was not intended to apply to property which, "in conformity with
law," belonged to the City of Manila as a municipal corporation,

Page 220 U. S. 360

is clear. This is demonstrated by the second paragraph of the same article, which reads:

"And it is hereby declared that the relinquishment or cession, as the case may be, to which the preceding paragraph refers, cannot in any
respect impair the property or rights which by law belong to the peaceful possession of property of all kinds, of provinces,
municipalities, public or private establishments . . . having legal capacity to acquire and possess property in the aforesaid territories
renounced or ceded, or of private individuals."
Thus, the property and property rights of municipal corporations were protected and safeguarded precisely as were the property and
property rights of individuals.

That the cession did not operate as an extinction or dissolution of corporations is herein recognized, for the stipulation against
impairment of their property rights has this plain significance.

The conclusion we reach, that the legal entity survived both the military occupation and the cession which followed, finds support in the
cases which hold that the Pueblos of San Francisco and Los Angeles, which existed as municipal organizations prior to the cession of
California by Mexico, continued to exist with their community and property rights intact. Cohas v. Raisin, 3 Cal. 443; Hart v.
Burnett, 15 Cal. 530; Townsend v. Greeley, 5 Wall. 326; Merryman v. Bourne, 9 Wall. 592, 76 U. S. 602; Moore v. Steinbach, 127 U. S.
70; Los Angeles Farming & Mill. Co. v. Los Angeles, 217 U. S. 217.

Were corporate identity and corporate liability extinguished as a necessary legal result of the new charter granted in 1901 by the
Philippine Commission? The inhabitants of the old city are the incorporators of the new. There is substantially identity of area. There
are some changes in the form of government and some changes in corporate powers and methods of administration. The new
corporation is endowed with all of the property and

Page 220 U. S. 361

property rights of the old. It has the same power to sue and be sued which the former corporation had. There is not the slightest
suggestion that the new corporation shall not succeed to the contracts and obligations of the old corporation. Laying out of view any
question of the constitutional guaranty against impairment of the obligation of contracts, there is, in the absence of express legislative
declaration of a contrary purpose, no reason for supposing that the reincorporation of an old municipality is intended to permit an
escape from the obligations of the old, to whose property and rights it has succeeded. The juristic identity of the corporation has been in
no wise affected, and, in law, the present city is, in every legal sense, the successor of the old. As such, it is entitled to the property and
property rights of the predecessor corporation, and is, in law, subject to all of its liabilities. Broughton v. Pensacola, 93 U. S. 266; Mt.
Pleasant v. Beckwith, 100 U. S. 520; Mobile v. Watson, 116 U. S. 289; Shapleigh v. San Angelo, 167 U. S. 646, 167 U. S. 655; O'Connor
v. Memphis, 6 Lea, 730; Colchester v. Seaber, 3 Burr. 1866, 1870, in which case, when a municipality became disabled to act and
obtained a new charter, in an action upon an obligation of the old corporation, there was judgment for the creditor, Lord Mansfield
saying:

"Many corporations, for want of legal magistrates, have lost their activity, and obtained new charters. Maidstone, Radnor, Carmarthen,
and many more are in the same case with Colchester. And yet it has never been disputed but that the new charters revive and give
activity to the old corporation; except, perhaps, in that case in Levinz, where the corporation had a new name, and even there the court
made no doubt. Where the question has arisen upon any remarkable metamorphosis, it has always been determined that they remain
the same as to debts and 'rights.'"

Morris v. State, 62 Tex. 728, 730.

Page 220 U. S. 362

In Shapleigh v. San Angelo, supra, this Court said in a similar case:

"The state's plenary power over its municipal corporations to change their organization, to modify their method of internal government,
or to abolish them altogether, is not restricted by contracts entered into by the municipality with its creditors or with private parties. An
absolute repeal of a municipal charter is therefor effectual so far as it abolishes the old corporate organization; but when the same or
substantially the same inhabitants are erected into a new corporation, whether with extended or restricted territorial limits, such new
corporation is treated as in law the successor of the old one, entitled to its property rights, and subject to its liabilities."

The cases of Trigas and Vilas went off upon demurrers, and no question of remedy arises here.

The appeal of Aguado is from a decree upon a final hearing denying him all relief.

That all three of the plaintiffs in error are entitled to proceed to judgment when they shall establish their several claims is obvious from
what we have said. But in the Aguado case, it is sought to establish his claim as a charge against certain property and funds held by the
city as trustee, known as the Carriedo fund. In 1734, one Don Francisco Carriedo y Perodo bequeathed to the city a fund for the
establishment of waterworks, to be kept as a separate fund and devoted to the erection and maintenance of the works. This fund was
loyally kept and greatly increased, and was enlarged by a special tax upon meat devoted to that purpose. The works were finally
completed in 1878, and have been since operated by the city, the income and special tax going to maintenance. Certain securities
belonging to the fund are now held by the city, the income being applied to the operation of the works. Aguado took a contract to supply
coal for the use of the

Page 220 U. S. 363

Carriedo works, and made a deposit to guarantee the contract. When the city was occupied by the American Army, it was indebted to
him for coal so supplied, as well as for the deposit so made. That the coal was bought for and used in the operation of the Carriedo
works is not denied. But there is no evidence that the credit was given to the Carriedo fund so held in trust under the will of Carriedo.
The contract was made with the ayuntamiento of Manila, just as all other contracts for city supplies or works were made. The contract
not having been made with special reference to the liability of the fund held in trust by the city, but apparently upon the general credit of
the city, we are not disposed to reverse the judgment of the court below, holding that the claim of Aguado did not constitute a charge
upon the Carriedo fund.

Aguado is nevertheless entitled to a judgment. The designation of the city in the petition as trustee may be regarded as descriptive. The
debt having been incurred by the city, it must be regarded as a city liability. Taylor v. Davis, 110 U. S. 330, 110 U. S. 336.

Our conclusion is that the decree in the Aguado case must be reversed and the case remanded, with direction to render judgment and
such other relief as may seem in conformity with law. The judgments in the Trigas and Vilas cases will be reversed, and the cases
remanded with direction to overrule the respective demurrers, and for such other action as may be consistent with law, and consistent
with this opinion.