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Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. 74930 February 13, 1989 RICARDO VALMONTE, OSWALDO CARBONELL, DOY DEL CASTILLO, ROLANDO BARTOLOME, LEO OBLIGAR, JUN GUTIERREZ, REYNALDO BAGATSING, JUN "NINOY" ALBA, PERCY LAPID, ROMMEL CORRO and ROLANDO FADUL, petitioners, vs. FELICIANO BELMONTE, JR., respondent. Ricardo C. Valmonte for and in his own behalf and his co-petitioners. The Solicitor General for respondent. CORTES, J.: Petitioners in this special civil action for mandamus with preliminary injunction invoke their right to information and pray that respondent be directed: (a) to furnish petitioners the list of the names of the Batasang Pambansa members belonging to the UNIDO and PDP-Laban who were able to secure clean loans immediately before the February 7 election thru the intercession/marginal note of the then First Lady Imelda Marcos; and/or (b) to furnish petitioners with certified true copies of the documents evidencing their respective loans; and/or (c) to allow petitioners access to the public records for the subject information. (Petition, pp. 4-5; paragraphing supplied.] The controversy arose when petitioner Valmonte wrote respondent Belmonte the following letter:

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Republic of the PhilippinesSUPREME COURTManilaEN BANCG.R. No. 74930 February 13, 1989RICARDO VALMONTE, OSWALDO CARBONELL, DOY DEL CASTILLO, ROLANDO BARTOLOME, LEO OBLIGAR, JUN GUTIERREZ, REYNALDO BAGATSING, JUN "NINOY" ALBA, PERCY LAPID, ROMMEL CORRO and ROLANDO FADUL, petitioners, vs.FELICIANO BELMONTE, JR., respondent.Ricardo C. Valmonte for and in his own behalf and his co-petitioners.The Solicitor General for respondent.CORTES, J.:Petitioners in this special civil action for mandamus with preliminary injunction invoke their right to information and pray that respondent be directed:(a) to furnish petitioners the list of the names of the Batasang Pambansa members belonging to the UNIDO and PDP-Laban who were able to secure clean loans immediately before the February 7 election thru the intercession/marginal note of the then First Lady Imelda Marcos; and/or(b) to furnish petitioners with certified true copies of the documents evidencing their respective loans; and/or(c) to allow petitioners access to the public records for the subject information. (Petition, pp. 4-5; paragraphing supplied.]The controversy arose when petitioner Valmonte wrote respondent Belmonte the following letter:June 4, 1986Hon. Feliciano BelmonteGSIS General ManagerArroceros, ManilaSir:As a lawyer, member of the media and plain citizen of our Republic, I am requesting that I be furnished with the list of names of the opposition members of (the) Batasang Pambansa who were able to secure a clean loan of P2 million each on guarranty (sic) of Mrs. Imelda Marcos. We understand that OIC Mel Lopez of Manila was one of those aforesaid MPs. Likewise, may we be furnished with the certified true copies of the documents evidencing their loan. Expenses in connection herewith shall be borne by us.If we could not secure the above documents could we have access to them?We are premising the above request on the following provision of the Freedom Constitution of the present regime.The right of the people to information on matters of public concern shall be recognized. Access to official records, and to documents and papers pertaining to official acts, transactions or decisions, shall be afforded the citizen subject to such limitation as may be provided by law. (Art. IV, Sec. 6).We trust that within five (5) days from receipt hereof we will receive your favorable response on the matter.[Rollo, p. 7.]To the aforesaid letter, the Deputy General Counsel of the GSIS replied:June 17, 1986Atty. Ricardo C. Valmonte108 E. Benin StreetCaloocan CityDear Compaero:Possibly because he must have thought that it contained serious legal implications, President & General Manager Feliciano Belmonte, Jr. referred to me for study and reply your letter to him of June 4, 1986 requesting a list of the opposition members of Batasang Pambansa who were able to secure a clean loan of P2 million each on guaranty of Mrs. Imelda Marcos.My opinion in this regard is that a confidential relationship exists between the GSIS and all those who borrow from it, whoever they may be; that the GSIS has a duty to its customers to preserve this confidentiality; and that it would not be proper for the GSIS to breach this confidentiality unless so ordered by the courts.As a violation of this confidentiality may mar the image of the GSIS as a reputable financial institution, I regret very much that at this time we cannot respond positively to your request.Very truly yours,(Sgd.) MEYNARDO A. TIRODeputy General Counsel[Rollo, p. 40.]On June 20, 1986, apparently not having yet received the reply of the Government Service and Insurance System (GSIS) Deputy General Counsel, petitioner Valmonte wrote respondent another letter, saying that for failure to receive a reply, "(W)e are now considering ourselves free to do whatever action necessary within the premises to pursue our desired objective in pursuance of public interest." [Rollo, p. 8.]On June 26, 1986, Valmonte, joined by the other petitioners, filed the instant suit.On July 19, 1986, the Daily Express carried a news item reporting that 137 former members of the defunct interim and regular Batasang Pambansa, including ten (10) opposition members, were granted housing loans by the GSIS [Rollo, p. 41.]Separate comments were filed by respondent Belmonte and the Solicitor General. After petitioners filed a consolidated reply, the petition was given due course and the parties were required to file their memoranda. The parties having complied, the case was deemed submitted for decision.In his comment respondent raises procedural objections to the issuance of a writ of mandamus, among which is that petitioners have failed to exhaust administrative remedies.Respondent claims that actions of the GSIS General Manager are reviewable by the Board of Trustees of the GSIS. Petitioners, however, did not seek relief from the GSIS Board of Trustees. It is therefore asserted that since administrative remedies were not exhausted, then petitioners have no cause of action.To this objection, petitioners claim that they have raised a purely legal issue, viz., whether or not they are entitled to the documents sought, by virtue of their constitutional right to information. Hence, it is argued that this case falls under one of the exceptions to the principle of exhaustion of administrative remedies.Among the settled principles in administrative law is that before a party can be allowed to resort to the courts, he is expected to have exhausted all means of administrative redress available under the law. The courts for reasons of law, comity and convenience will not entertain a case unless the available administrative remedies have been resorted to and the appropriate authorities have been given opportunity to act and correct the errors committed in the administrative forum. However, the principle of exhaustion of administrative remedies is subject to settled exceptions, among which is when only a question of law is involved [Pascual v. Provincial Board, 106 Phil. 466 (1959); Aguilar v. Valencia, et al., G.R. No. L-30396, July 30, 1971, 40 SCRA 210; Malabanan v. Ramento, G.R. No. L-2270, May 21, 1984, 129 SCRA 359.] The issue raised by petitioners, which requires the interpretation of the scope of the constitutional right to information, is one which can be passed upon by the regular courts more competently than the GSIS or its Board of Trustees, involving as it does a purely legal question. Thus, the exception of this case from the application of the general rule on exhaustion of administrative remedies is warranted. Having disposed of this procedural issue, We now address ourselves to the issue of whether or not mandamus hes to compel respondent to perform the acts sought by petitioners to be done, in pursuance of their right to information.We shall deal first with the second and third alternative acts sought to be done, both of which involve the issue of whether or not petitioners are entitled to access to the documents evidencing loans granted by the GSIS.This is not the first time that the Court is confronted with a controversy directly involving the constitutional right to information. In Taada v. Tuvera, G.R. No. 63915, April 24,1985, 136 SCRA 27 and in the recent case of Legaspi v. Civil Service Commission, G.R. No. 72119, May 29, 1987,150 SCRA 530, the Court upheld the people's constitutional right to be informed of matters of public interest and ordered the government agencies concerned to act as prayed for by the petitioners.The pertinent provision under the 1987 Constitution is Art. 111, Sec. 7 which states:The right of the people to information on matters of public concern shall be recognized. Access to official records, and to documents, and papers pertaining to official acts, transactions, or decisions, as well as to government research data used as basis for policy development, shall be afforded the citizen, subject to such limitations as may be provided by law.The right of access to information was also recognized in the 1973 Constitution, Art. IV Sec. 6 of which provided:The right of the people to information on 'matters of public concern shall be recognized. Access to official records, and to documents and papers pertaining to official acts, transactions, or decisions, shall be afforded the citizen subject to such limitations as may be provided by law.An informed citizenry with access to the diverse currents in political, moral and artistic thought and data relative to them, and the free exchange of ideas and discussion of issues thereon, is vital to the democratic government envisioned under our Constitution. The cornerstone of this republican system of government is delegation of power by the people to the State. In this system, governmental agencies and institutions operate within the limits of the authority conferred by the people. Denied access to information on the inner workings of government, the citizenry can become prey to the whims and caprices of those to whom the power had been delegated. The postulate of public office as a public trust, institutionalized in the Constitution (in Art. XI, Sec. 1) to protect the people from abuse of governmental power, would certainly be were empty words if access to such information of public concern is denied, except under limitations prescribed by implementing legislation adopted pursuant to the Constitution.Petitioners are practitioners in media. As such, they have both the right to gather and the obligation to check the accuracy of information the disseminate. For them, the freedom of the press and of speech is not only critical, but vital to the exercise of their professions. The right of access to information ensures that these freedoms are not rendered nugatory by the government's monopolizing pertinent information. For an essential element of these freedoms is to keep open a continuing dialogue or process of communication between the government and the people. It is in the interest of the State that the channels for free political discussion be maintained to the end that the government may perceive and be responsive to the people's will. Yet, this open dialogue can be effective only to the extent that the citizenry is informed and thus able to formulate its will intelligently. Only when the participants in the discussion are aware of the issues and have access to information relating thereto can such bear fruit.The right to information is an essential premise of a meaningful right to speech and expression. But this is not to say that the right to information is merely an adjunct of and therefore restricted in application by the exercise of the freedoms of speech and of the press. Far from it. The right to information goes hand-in-hand with the constitutional policies of full public disclosure * and honesty in the public service. ** It is meant to enhance the widening role of the citizenry in governmental decision-making as well as in checking abuse in government.Yet, like all the constitutional guarantees, the right to information is not absolute. As stated in Legaspi, the people's right to information is limited to "matters of public concern," and is further "subject to such limitations as may be provided by law." Similarly, the State's policy of full disclosure is limited to "transactions involving public interest," and is "subject to reasonable conditions prescribed by law."Hence, before mandamus may issue, it must be clear that the information sought is of "public interest" or "public concern," and is not exempted by law from the operation of the constitutional guarantee [Legazpi v. Civil Service Commission, supra, at p. 542.]The Court has always grappled with the meanings of the terms "public interest" and "public concern". As observed in Legazpi:In determining whether or not a particular information is of public concern there is no rigid test which can be applied. "Public concern" like "public interest" is a term that eludes exact definition. Both terms embrace a broad spectrum of subjects which the public may want to know, either because these directly affect their lives, or simply because such matters naturally arouse the interest of an ordinary citezen. In the final analysis, it is for the courts to determine on a case by case basis whether the matter at issue is of interest or importance, as it relates to or affects the public. [Ibid. at p. 541]In the Taada case the public concern deemed covered by the constitutional right to information was the need for adequate notice to the public of the various laws which are to regulate the actions and conduct of citezens. In Legaspi, it was the "legitimate concern of citezensof ensure that government positions requiring civil service eligibility are occupied only by persons who are eligibles" [Supra at p. 539.]The information sought by petitioners in this case is the truth of reports that certain Members of the Batasang Pambansa belonging to the opposition were able to secure "clean" loans from the GSIS immediately before the February 7, 1986 election through the intercession of th eformer First Lady, Mrs. Imelda Marcos.The GSIS is a trustee of contributions from the government and its employees and the administrator of various insurance programs for the benefit of the latter. Undeniably, its funds assume a public character. More particularly, Secs. 5(b) and 46 of P.D. 1146, as amended (the Revised Government Service Insurance Act of 1977), provide for annual appropriations to pay the contributions, premiums, interest and other amounts payable to GSIS by the government, as employer, as well as the obligations which the Republic of the Philippines assumes or guarantees to pay. Considering the nature of its funds, the GSIS is expected to manage its resources with utmost prudence and in strict compliance with the pertinent laws or rules and regulations. Thus, one of the reasons that prompted the revision of the old GSIS law (C.A. No. 186, as amended) was the necessity "to preserve at all times the actuarial solvency of the funds administered by the System" [Second Whereas Clause, P.D. No. 1146.] Consequently, as respondent himself admits, the GSIS "is not supposed to grant 'clean loans.'" [Comment, p. 8.] It is therefore the legitimate concern of the public to ensure that these funds are managed properly with the end in view of maximizing the benefits that accrue to the insured government employees. Moreover, the supposed borrowers were Members of the defunct Batasang Pambansa who themselves appropriated funds for the GSIS and were therefore expected to be the first to see to it that the GSIS performed its tasks with the greatest degree of fidelity and that an its transactions were above board.In sum, the public nature of the loanable funds of the GSIS and the public office held by the alleged borrowers make the information sought clearly a matter of public interest and concern.A second requisite must be met before the right to information may be enforced through mandamus proceedings, viz., that the information sought must not be among those excluded by law.Respondent maintains that a confidential relationship exists between the GSIS and its borrowers. It is argued that a policy of confidentiality restricts the indiscriminate dissemination of information.Yet, respondent has failed to cite any law granting the GSIS the privilege of confidentiality as regards the documents subject of this petition. His position is apparently based merely on considerations of policy. The judiciary does not settle policy issues. The Court can only declare what the law is, and not what the law should be. Under our system of government, policy issues are within the domain of the political branches of the government, and of the people themselves as the repository of all State power.Respondent however contends that in view of the right to privacy which is equally protected by the Constitution and by existing laws, the documents evidencing loan transactions of the GSIS must be deemed outside the ambit of the right to information.There can be no doubt that right to privacy is constitutionally protected. In the landmark case of Morfe v. Mutuc [130 Phil. 415 (1968), 22 SCRA 424], this Court, speaking through then Mr. Justice Fernando, stated:... The right to privacy as such is accorded recognition independently of its identification with liberty; in itself, it is fully deserving of constitutional protection. The language of Prof. Emerson is particularly apt: "The concept of limited government has always included the idea that governmental powers stop short of certain intrusions into the personal life of the citizen. This is indeed one of the basic distinctions between absolute and limited government. UItimate and pervasive control of the individual, in all aspects of his life, is the hallmark of the absolute. state, In contrast, a system of limited government safeguards a private sector, which belongs to the individual, firmly distinguishing it from the public sector, which the state can control. Protection of this private sector protection, in other words, of the dignity and integrity of the individual has become increasingly important as modem society has developed. All the forces of technological age industrialization, urbanization, and organization operate to narrow the area of privacy and facilitate intrusion into it. In modern terms, the capacity to maintain and support this enclave of private life marks the difference between a democratic and a totalitarian society." [at pp. 444-445.]When the information requested from the government intrudes into the privacy of a citizen, a potential conflict between the rights to information and to privacy may arise. However, the competing interests of these rights need not be resolved in this case. Apparent from the above-quoted statement of the Court in Morfe is that the right to privacy belongs to the individual in his private capacity, and not to public and governmental agencies like the GSIS. Moreover, the right cannot be invoked by juridical entities like the GSIS. As held in the case of Vassar College v. Loose Wills Biscuit Co. [197 F. 982 (1912)], a corporation has no right of privacy in its name since the entire basis of the right to privacy is an injury to the feelings and sensibilities of the party and a corporation would have no such ground for relief.Neither can the GSIS through its General Manager, the respondent, invoke the right to privacy of its borrowers. The right is purely personal in nature [Cf. Atkinson v. John Doherty & Co., 121 Mich 372, 80 N.W. 285, 46 L.RA. 219 (1899); Schuyler v. Curtis, 147 N.Y. 434, 42 N.E. 22, 31 L.R.A. 286 (1895)), and hence may be invoked only by the person whose privacy is claimed to be violated.It may be observed, however, that in the instant case, the concerned borrowers themselves may not succeed if they choose to invoke their right to privacy, considering the public offices they were holding at the time the loans were alleged to have been granted. It cannot be denied that because of the interest they generate and their newsworthiness, public figures, most especially those holding responsible positions in government, enjoy a more limited right to privacy as compared to ordinary individuals, their actions being subject to closer public scrutiny [Cf. Ayer Productions Pty. Ltd. v. Capulong, G.R. Nos. 82380 and 82398, April 29, 1988; See also Cohen v. Marx, 211 P. 2d 321 (1949).]Respondent next asserts that the documents evidencing the loan transactions of the GSIS are private in nature and hence, are not covered by the Constitutional right to information on matters of public concern which guarantees "(a)ccess to official records, and to documents, and papers pertaining to official acts, transactions, or decisions" only.It is argued that the records of the GSIS, a government corporation performing proprietary functions, are outside the coverage of the people's right of access to official records.It is further contended that since the loan function of the GSIS is merely incidental to its insurance function, then its loan transactions are not covered by the constitutional policy of full public disclosure and the right to information which is applicable only to "official" transactions.First of all, the "constituent ministrant" dichotomy characterizing government function has long been repudiated. In ACCFA v. Confederation of Unions and Government Corporations and Offices (G.R. Nos. L-21484 and L-23605, November 29, 1969, 30 SCRA 6441, the Court said that the government, whether carrying out its sovereign attributes or running some business, discharges the same function of service to the people.Consequently, that the GSIS, in granting the loans, was exercising a proprietary function would not justify the exclusion of the transactions from the coverage and scope of the right to information.Moreover, the intent of the members of the Constitutional Commission of 1986, to include government-owned and controlled corporations and transactions entered into by them within the coverage of the State policy of fun public disclosure is manifest from the records of the proceedings:xxx xxx xxxTHE PRESIDING OFFICER (Mr. Colayco).Commissioner Suarez is recognized.MR. SUAREZ. Thank you. May I ask the Gentleman a few question?MR. OPLE. Very gladly.MR. SUAREZ. Thank you.When we declare a "policy of full public disclosure of all its transactions" referring to the transactions of the State and when we say the "State" which I suppose would include all of the various agencies, departments, ministries and instrumentalities of the government....MR. OPLE. Yes, and individual public officers, Mr. Presiding Officer.MR. SUAREZ. Including government-owned and controlled corporations.MR. OPLE. That is correct, Mr. Presiding Officer.MR. SUAREZ. And when we say "transactions" which should be distinguished from contracts, agreements, or treaties or whatever, does the Gentleman refer to the steps leading to the consummation of the contract, or does he refer to the contract itself?MR. OPLE. The "transactions" used here I suppose is generic and, therefore, it can cover both steps leading to a contract, and already a consummated contract, Mr. Presiding Officer.MR. SUAREZ. This contemplates inclusion of negotiations leading to the consummation of the transaction.MR. OPLE. Yes, subject only to reasonable safeguards on the national interest.MR. SUAREZ. Thank you. [V Record of the Constitutional Commission 24-25.] (Emphasis supplied.)Considering the intent of the framers of the Constitution which, though not binding upon the Court, are nevertheless persuasive, and considering further that government-owned and controlled corporations, whether performing proprietary or governmental functions are accountable to the people, the Court is convinced that transactions entered into by the GSIS, a government-controlled corporation created by special legislation are within the ambit of the people's right to be informed pursuant to the constitutional policy of transparency in government dealings.In fine, petitioners are entitled to access to the documents evidencing loans granted by the GSIS, subject to reasonable regulations that the latter may promulgate relating to the manner and hours of examination, to the end that damage to or loss of the records may be avoided, that undue interference with the duties of the custodian of the records may be prevented and that the right of other persons entitled to inspect the records may be insured [Legaspi v. Civil Service Commission, supra at p. 538, quoting Subido v. Ozaeta, 80 Phil. 383, 387.] The petition, as to the second and third alternative acts sought to be done by petitioners, is meritorious.However, the same cannot be said with regard to the first act sought by petitioners, i.e., "to furnish petitioners the list of the names of the Batasang Pambansa members belonging to the UNIDO and PDP-Laban who were able to secure clean loans immediately before the February 7 election thru the intercession/marginal note of the then First Lady Imelda Marcos."Although citizens are afforded the right to information and, pursuant thereto, are entitled to "access to official records," the Constitution does not accord them a right to compel custodians of official records to prepare lists, abstracts, summaries and the like in their desire to acquire information on matters of public concern.It must be stressed that it is essential for a writ of mandamus to issue that the applicant has a well-defined, clear and certain legal right to the thing demanded and that it is the imperative duty of defendant to perform the act required. The corresponding duty of the respondent to perform the required act must be clear and specific [Lemi v. Valencia, G.R. No. L-20768, November 29,1968,126 SCRA 203; Ocampo v. Subido, G.R. No. L-28344, August 27, 1976, 72 SCRA 443.] The request of the petitioners fails to meet this standard, there being no duty on the part of respondent to prepare the list requested.WHEREFORE, the instant petition is hereby granted and respondent General Manager of the Government Service Insurance System is ORDERED to allow petitioners access to documents and records evidencing loans granted to Members of the former Batasang Pambansa, as petitioners may specify, subject to reasonable regulations as to the time and manner of inspection, not incompatible with this decision, as the GSIS may deem necessary.SO ORDERED.

Republic of the PhilippinesSUPREME COURTManilaEN BANCG.R. No. L-9959 December 13, 1916THE GOVERNMENT OF THE PHILIPPINE ISLANDS, represented by the Treasurer of the Philippine Islands, plaintiff-appellee, vs.EL MONTE DE PIEDAD Y CAJA DE AHORRAS DE MANILA, defendant-appellant.William A. Kincaid and Thomas L. Hartigan for appellant. Attorney-General Avancea for appellee.TRENT, J.:About $400,000, were subscribed and paid into the treasury of the Philippine Islands by the inhabitants of the Spanish Dominions of the relief of those damaged by the earthquake which took place in the Philippine Islands on June 3, 1863. Subsequent thereto and on October 6 of that year, a central relief board was appointed, by authority of the King of Spain, to distribute the moneys thus voluntarily contributed. After a thorough investigation and consideration, the relief board allotted $365,703.50 to the various sufferers named in its resolution, dated September 22, 1866, and, by order of the Governor-General of the Philippine Islands, a list of these allotments, together with the names of those entitled thereto, was published in the Official Gazette of Manila dated April 7, 1870. There was later distributed, inaccordance with the above-mentioned allotments, the sum of $30,299.65, leaving a balance of S365,403.85 for distribution. Upon the petition of the governing body of the Monte de Piedad, dated February 1, 1833, the Philippine Government, by order dated the 1st of that month, directed its treasurer to turn over to the Monte de Piedad the sum of $80,000 of the relief fund in installments of $20,000 each. These amounts were received on the following dates: February 15, March 12, April 14, and June 2, 1883, and are still in the possession of the Monte de Piedad. On account of various petitions of the persons, and heirs of others to whom the above-mentioned allotments were made by the central relief board for the payment of those amounts, the Philippine Islands to bring suit against the Monte de Piedad a recover, "through the Attorney-General and in representation of the Government of the Philippine Islands," the $80.000, together with interest, for the benefit of those persons or their heirs appearing in the list of names published in the Official Gazette instituted on May 3, 1912, by the Government of the Philippine Islands, represented by the Insular Treasurer, and after due trial, judgment was entered in favor of the plaintiff for the sum of $80,000 gold or its equivalent in Philippine currency, together with legal interest from February 28, 1912, and the costs of the cause. The defendant appealed and makes the following assignment of errors:1. The court erred in not finding that the eighty thousand dollars ($80,000), give to the Monte de Piedad y Caja de Ahorros, were so given as a donation subject to one condition, to wit: the return of such sum of money to the Spanish Government of these Islands, within eight days following the day when claimed, in case the Supreme Government of Spain should not approve the action taken by the former government.2. The court erred in not having decreed that this donation had been cleared; said eighty thousand dollars ($80,000) being at present the exclusive property of the appellant the Monte de Piedad y Caja de Ahorros.3. That the court erred in stating that the Government of the Philippine Islands has subrogated the Spanish Government in its rights, as regards an important sum of money resulting from a national subscription opened by reason of the earthquake of June 3, 1863, in these Island.4. That the court erred in not declaring that Act Numbered 2109, passed by the Philippine Legislature on January 30, 1912, is unconstitutional.5. That the court erred in holding in its decision that there is no title for the prescription of this suit brought by the Insular Government against the Monte de Piedad y Caja de Ahorros for the reimbursement of the eighty thousand dollars ($80,000) given to it by the late Spanish Government of these Islands.6. That the court erred in sentencing the Monte de Piedad y Caja de Ahorros to reimburse the Philippine Government in the sum of eighty thousand dollars ($80,000) gold coin, or the equivalent thereof in the present legal tender currency in circulation, with legal interest thereon from February 28th, 1912, and the costs of this suit.In the royal order of June 29, 1879, the Governor-General of the Philippine Islands was directed to inform the home Government in what manner the indemnity might be paid to which, by virtue of the resolutions of the relief board, the persons who suffered damage by the earthquake might be entitled, in order to perform the sacred obligation which the Government of Spain had assumed toward the donors.The next pertinent document in order is the defendant's petition, dated February 1, 1883, addressed to the Governor-General of the Philippine Islands, which reads:Board of Directors of the Monte de Piedad of Manila Presidencia.Excellency: The Board of Directors of the Monte de Piedad y Caja de Ahorros of Manila informs your Excellency, First: That the funds which it has up to the present been able to dispose of have been exhausted in loans on jewelry, and there only remains the sum of one thousand and odd pesos, which will be expended between to-day and day after tomorrow. Second: That, to maintain the credit of the establishment, which would be greatly injured were its operations suspended, it is necessary to procure money. Third: That your Excellency has proposed to His Majesty's Government to apply to the funds of the Monte de Piedad a part of the funds held in the treasury derived form the national subscription for the relief of the distress caused by the earthquake of 1863. Fourth: That in the public treasury there is held at the disposal of the central earthquake relief board over $1090,000 which was deposited in the said treasury by order of your general Government, it having been transferred thereto from the Spanish-Filipino Bank where it had been held. fifth: That in the straightened circumstances of the moment, your Excellency can, to avert impending disaster to the Monte de Piedad, order that, out of that sum of one hundred thousand pesos held in the Treasury at the disposal of the central relief board, there be transferred to the Monte de Piedad the sum of $80,000, there to be held under the same conditions as at present in the Treasury, to wit, at the disposal of the Relief Board. Sixth: That should this transfer not be approved for any reason, either because of the failure of His Majesty's Government to approve the proposal made by your Excellency relative to the application to the needs of the Monte de Piedad of a pat of the subscription intended to believe the distress caused by the earthquake of 1863, or for any other reason, the board of directors of the Monte de Piedad obligates itself to return any sums which it may have received on account of the eighty thousand pesos, or the whole thereof, should it have received the same, by securing a loan from whichever bank or banks may lend it the money at the cheapest rate upon the security of pawned jewelry. This is an urgent measure to save the Monte de Piedad in the present crisis and the board of directors trusts to secure your Excellency's entire cooperation and that of the other officials who have take part in the transaction.The Governor-General's resolution on the foregoing petition is as follows:GENERAL GOVERNMENT OF THE PHILIPPINES. MANILA, February 1, 1883.In view of the foregoing petition addressed to me by the board of directors of the Monte de Piedad of this city, in which it is stated that the funds which the said institution counted upon are nearly all invested in loans on jewelry and that the small account remaining will scarcely suffice to cover the transactions of the next two days, for which reason it entreats the general Government that, in pursuance of its telegraphic advice to H. M. Government, the latter direct that there be turned over to said Monte de Piedad $80,000 out of the funds in the public treasury obtained from the national subscription for the relief of the distress caused by the earthquake of 1863, said board obligating itself to return this sum should H. M. Government, for any reason, not approve the said proposal, and for this purpose it will procure funds by means of loans raised on pawned jewelry; it stated further that if the aid so solicited is not furnished, it will be compelled to suspend operations, which would seriously injure the credit of so beneficient an institution; and in view of the report upon the matter made by the Intendencia General de Hacienda; and considering the fact that the public treasury has on hand a much greater sum from the source mentioned than that solicited; and considering that this general Government has submitted for the determination of H. M. Government that the balance which, after strictly applying the proceeds obtained from the subscription referred to, may remain as a surplus should be delivered to the Monte de Piedad, either as a donation, or as a loan upon the security of the credit of the institution, believing that in so doing the wishes of the donors would be faithfully interpreted inasmuch as those wishes were no other than to relieve distress, an act of charity which is exercised in the highest degree by the Monte de Piedad, for it liberates needy person from the pernicious effects of usury; andConsidering 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; andConsidering 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; andConsidering 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 Piedad in June, 1893, to return the $80,000. The Monte declined to comply with this order upon the ground that only the Governor-General of the Philippine Islands and not the Department of Finance had the right to order the reimbursement. The amount was carried on the books of the Monte as a returnable loan until January 1, 1899, when it was transferred to the account of the "Sagrada Mitra." On March 31, 1902, the Monte, through its legal representative, stated in writing that the amount in question was received as a reimbursable loan, without interest. Act No. 2109 became effective January 30, 1912, and the action was instituted on May 3rd of that year.Counsel for the defendant treat the question of prescription as if the action was one between individuals or corporations wherein the plaintiff is seeking to recover an ordinary loan. Upon this theory June, 1893, cannot be taken as the date when the statute of limitations began to run, for the reason that the defendant acknowledged in writing on March 31, 1902, that the $80,000 were received as a loan, thereby in effect admitting that it still owed the amount. (Section 50, Code of Civil Procedure.) But if counsels' theory is the correct one the action may have prescribed on May 3, 1912, because more than ten full years had elapsed after March 31, 1902. (Sections 38 and 43, Code of Civil Procedure.)Is the Philippine Government bound by the statute of limitations? The Supreme Court of the United States in U. S. vs. Nashville, Chattanooga & St. Louis Railway Co. (118 U. S., 120, 125), said:It is settled beyond doubt or controversy upon the foundation of the great principle of public policy, applicable to all governments alike, which forbids that the public interests should be prejudiced by the negligence of the officers or agents to whose care they are confided that the United States, asserting rights vested in it as a sovereign government, is not bound by any statute of limitations, unless Congress has clearly manifested its intention that it should be so bound. (Lindsey vs. Miller, 6 Pet. 666; U. S. vs. Knight, 14 Pet., 301; Gibson vs. Chouteau, 13 Wall., 92; U. S. vs. Thompson, 98 U. S., 486; Fink vs. O'Neil, 106 U. S., 272, 281.)In Gibson vs. Choteau, supra, the court said:It is a matter of common knowledge that statutes of limitation do not run against the State. That no laches can be imputed to the King, and that no time can bar his rights, was the maxim of the common laws, and was founded on the principle of public policy, that as he was occupied with the cares of government he ought not to suffer from the negligence of his officer and servants. The principle is applicable to all governments, which must necessarily act through numerous agents, and is essential to a preservation of the interests and property of the public. It is upon this principle that in this country the statutes of a State prescribing periods within which rights must be prosecuted are not held to embrace the State itself, unless it is expressly designated or the mischiefs to be remedied are of such a nature that it must necessarily be included. As legislation of a State can only apply to persons and thing over which the State has jurisdiction, the United States are also necessarily excluded from the operation of such statutes.In 25 Cyc., 1006, the rule, supported by numerous authorities, is stated as follows:In the absence of express statutory provision to the contrary, statute of limitations do not as a general rule run against the sovereign or government, whether state or federal. But the rule is otherwise where the mischiefs to be remedied are of such a nature that the state must necessarily be included, where the state goes into business in concert or in competition with her citizens, or where a party seeks to enforces his private rights by suit in the name of the state or government, so that the latter is only a nominal party.In the instant case the Philippine Government is not a mere nominal party because it, in bringing and prosecuting this action, is exercising its sovereign functions or powers and is seeking to carry out a trust developed upon it when the Philippine Islands were ceded to the United States. The United States having in 1852, purchased as trustee for the Chickasaw Indians under treaty with that tribe, certain bonds of the State of Tennessee, the right of action of the Government on the coupons of such bonds could not be barred by the statute of limitations of Tennessee, either while it held them in trust for the Indians, or since it became the owner of such coupons. (U. S. vs. Nashville, etc., R. Co., supra.) So where lands are held in trust by the state and the beneficiaries have no right to sue, a statute does not run against the State's right of action for trespass on the trust lands. (Greene Tp. vs. Campbell, 16 Ohio St., 11; see also Atty.-Gen. vs. Midland R. Co., 3 Ont., 511 [following Reg. vs. Williams, 39 U. C. Q. B., 397].)These principles being based "upon the foundation of the great principle of public policy" are, in the very nature of things, applicable to the Philippine Government.Counsel in their argument in support of the sixth and last assignments of error do not question the amount of the judgment nor do they question the correctness of the judgment in so far as it allows interest, and directs its payment in gold coin or in the equivalent in Philippine currency.For the foregoing reasons the judgment appealed from is affirmed, with costs against the appellant. So ordered.Torres, Johnson and Araullo, JJ., concur.Republic of the PhilippinesSUPREME COURTManilaEN BANCG.R. No. L-23096 April 27, 1972MARTIN NERY and LEONCIA L. DE LEON, petitioners, vs.ROSARIO, ALFREDO, MARIANO, PACIFICO, ONOFRE, TEOFILO, LOLOY and TRINIDAD, all surnamed LORENZO, respondents.G.R. No. L-23376 April 27, 1972DIONISIO, PERFECTO, MARIA REBECCA, ASUNCION, MAURO, and, LOURDES, all surnamed LORENZO, petitioners, vs.MARTIN NERY and LEONCIA L. DE LEON, respondents.Salonga, Ordonez, Yap, Sicat & Associates for petitioners.Estanistao A. Fernandez for respondents.FERNANDO, J.:pThe point to be resolved in these two petitions for the review of a decision of the respondent Court of Appeals dated April 30, 1964 is the extent of the rights acquired by the vendees, the spouses Martin Nery and Leoncia L. de Leon 1 arising from a sale of a parcel of land, four (4) hectares more or less, situated in Malaking Kahoy, Paraaque, Rizal. The vendor, Bienvenida de la Isla, was the widow of the deceased Leoncio Lorenzo and guardian of their children, Dionisio, Perfecto, Maria Rebeeca, Asuncion, Mauro and Lourdes, 2 who thereafter challenged the validity of such a transaction. It was their contention that notwithstanding an order authorizing the sale from the probate court on June 2, 1953, it could be, impugned as they were not informed of such a move. Moreover, the guardianship proceeding, instituted on December 7, 1950, was heard without the two elder children, Dionisio and Perfecto Lorenzo being notified although they were then more than 14 years of age. The heirs of Silvestra Ferrer, who originally owned one-fourth of the property in question, 3 intervened in such action. In the lower court decision, they were adjudged co-owners of the aforesaid one-fourth portion of the property, the sale by the widow being considered null and void insofar as they were concerned. The rights of the Children of Leoncio Lorenzo and Bienvenida de la Isla to one-half of the three-fourths appertaining to such spouses were likewise accorded recognition.The matter was then elevated to the respondent Court of Appeals by the spouses Martin Nery and Leoncia L. de Leon. Respondent Court in its decision, now subject of this review, declared valid the deed of sale executed by the mother Bienvenida de la Isla in favor of the spouses Nery and de Leon as to the whole three-fourths, without prejudice however to the children demanding from their mother their participation in the amount paid for the sale of such property. It thus ignored the grave jurisdictional defects that attended the challenged orders, starting with the two elder children not being notified of the petition for guardianship, even if they were already above 14, as pointed out and stressed in their petition for review. There is need then for the exercise of the corrective power of this Court. The original decision of the lower court has much more to recommend it. Thereby, the rights of the children are fully respected. With a restoration in full of what was decided by the lower court, there is a corresponding modification of the judgment of the Court of Appeals. So we decide.The antecedents of the case were set forth in the appealed decision thus: "After hearing the evidence, the lower court handed down decision on June 24, 1961, finding that in the guardianship proceedings, the court acquired no jurisdiction over the persons of the minors who were not notified of the petition, at least 2 of them being over 14 years of age; that as the inventory submitted by the guardian stated that the minors had no real estate, the court did not acquire jurisdiction over the real property of the minors and could not have validly authorized its sale, and the total absence of the requisite notice necessarily rendered the order of sale, ... null and void, and the defendant, Martin S. Nery, a lawyer, could not be considered a purchaser in good faith of the one-half portion of the land belonging to the minors; ... that as Silvestra Ferrer, one of the sisters of Florentino Ferrer, did not sign the deed of sale ... upon her death in 1952, her 1/4 portion of the land passed to her nearest relatives, the third-party plaintiffs who are children of her sister, Tomasa Ferrer, whose action had not prescribed 'because from the death of Silvestra Ferrer in 1952 up to the filing of the third-party complaint on September 3, 1958, barely six yeaxs had elapsed'; and that the remaining 3/4 of the land in question was the conjugal property of Leoncio Lorenzo and his wife, Bienvenida de la Isla, 1/2 of which, upon the demise of Leoncio, corresponding to Bienvenida and the other half to their children, the herein plaintiffs, in equal shares." 4Why respondent Court reached the decision it did on appeal was explained this way: "It is unquestioned that the property in question formerly belonged to Florentino Ferrer and his three sisters, Agueda, Tomasa and Silvestra, and brother, Meliton. When, after the death of Florentino, that is, on December 6, 1943, the document denominated 'Bilihan Ganap Nang Lupang-Bukid', ... was executed in favor of Leoncio F. Lorenzo, one of the children of Agueda and married to Bienvenida de la Isla, by said Agueda, Tomasa and the children of Meliton, already deceased, said Leoncio merely acquired the participation of said sellers, equivalent to 3/4 undivided part of said land, and became a co-owner to that extent with Silvestra who did not execute said document and, therefore,did not sell her 1/4 undivided portion of the said land, which 1/4 undivided portion passed, upon her demise in 1952, to her nearest relatives who are the third-party plaintiffs Rosario, Alfredo, Mariano, Pacifica, Onofre, Teofilo, Loloy and Trinidad all surnamed Lorenzo, the children of her deceased sister, Tomasa. Bienvenida de la Isla, then the wife of said Leoncio F. Lorenzo, knew of this purchase made by her deceased husband, and she had no right to mortgage the whole land which, for taxation purposes was declared in her husband's name, without the consent of aforenamed successors-in-interest of Silvestra Ferrer, much less sell the same afterwards to the defendant spouses, Martin S. Nery and Leoncia L. de Leon, even if authorized by the guardianship court, said authority having been granted upon her misrepresentation, contained in her petition of May 26, 1953, that her minor children, the plaintiff's herein, were the owners in common of 1/2 portion of the land in question, the other 1/2 pertaining to her. However, inasmuch as the said minor plaintiffs were really the owners in common of 1/2 of 3/4 undivided part of the said land, and the other 1/2, to their mother and guardian, the orders of the guardianship court authorizing the guardian to sell the real property of the minors, and approving the deed of sale executed in accordance with said authority must be construed as referring to the correct real property of the said minors." 5Hence its dispositive portion provided as follows: "[Wherefore], the appealed judgment is hereby modified by declaring that the deed of sale ..., executed by Bienvenida de la Isla in favor of the defendants valid only insofar as the undivided 3/4 portion of the land in question is concerned, as to which portion, the defendants are declared owners, and that the third-party plaintiffs, Rosario, Alfredo, Mariano, Pacifica, Onofre, Teofilo, Loloy and Trinidad, all surnamed Lorenzo, are declared owners in common of the remaining undivided 1/4 portion of the said land. In all other respects, the appealed judgment is hereby affirmed. No Costs." 6The spouses Martin Nery and Leoncia L. de Leon and the children of the deceased Leoncio Lorenzo and the vendor, Bienvenida de la Isla, not being satisfied with the above decision instituted the petitions for review. As noted at the outset, the failure of respondent Court of Appeals to give due weight to the grave jurisdictional defect that tainted the guardianship proceeding resulted in its judgment suffering the corrosion of substantial legal error. The rights of the children of Leoncio Lorenzo as upheld by the lower court must, to repeat, be maintained. In that sense, the decision of the respondent Court of Appeals is subject to modification. Insofar however as it affirmed the lower court decision sustaining the claim of the heirs of Silvestra Ferrer, 7 it is free from any infirmity.1. What is indisputable in the light of the controlling legal doctrines is that it was the lower court and not the respondent Court of Appeals that yielded obeisance to the applicable procedural rule. It is worded thus: "When a petition for the appointment of a general guardian is filed, the court shall fix a time and place for hearing the same, and shall cause reasonable notice thereof to be given to the persons mentioned in the petition residing in the province, including the minor if above 14 years of age or the incompetent himself, and may direct other general or special notice thereof to be given." 8 The late Chief Justice Moran was quite explicit as to its jurisdictional character. These are his words: "Service of the notice upon the minor if above 14 years of age or upon the incompetent, is jurisdictional. Without such notice, the court acquires no jurisdiction to appoint a guardian." 9The case cited by him in support of such view is Yangco v. Court of First Instance, 10 a 1915 decision. As was therein made clear: "There is no need for interpretation or construction of the word in the case before us. Its meaning is so clear that interpretation and construction are unnecessary. Our simple duty is to leave untouched the meaning with which the English language has endowed the word; and that is the meaning which the ordinary reader would accord to it on reading a sentence in which it was found. Where language is plain, subtle refinements which tinge words so as to give them the color of a particular judicial theory are not only unnecessary but decidedly harmful. That which has caused so much confusion in the law, which has made it so difficult for the public to understand and know what the law is with respect to a given matter, is in considerable measure the unwarranted interference by judicial tribunals with the English language as found in statutes and contracts, cutting out words here and inserting them there, making them fit personal ideas of what the legislature ought to have done or what parties should have agreed upon, giving them meanings which they do not ordinarily have, cutting, trimming, fitting, changing and coloring until lawyers themselves are unable to advise their clients as to the meaning of a given statute or contract until it has been submitted to some court for its 'interpretation and construction.' " 11Respondent Court of Appeals cannot therefore be sustained in its assumption that the probate court could have authorized the sale in question. The jurisdictional infirmity was too patent to be overcome. It was the lower court that acted correctly. There is the more reason for deciding as we do considering that the rights of minors are involved. It is a distinctive feature of our law, one that is quite commendable, that whenever their welfare may be affected, its solicitude is made manifest. The rights of young are not to be ignored. Precisely their stage of immaturity calls for every procedural principle being observed before their interest in property to which they have a claim could be adversely affected. It does not matter that their guardian is their mother. As far back as 1811, in Salunga v. Evangelista, 12 Chief Justice Arellano took note that even a mother could have an "interest opposed to that of her children." 13 That may not have been the precise situation in this case, but certainly from the facts as found by the Court of Appeals, the Lorenzo children would have been better protected if they were notified as is required by law. If there is any occasion then why there should be a strict insistence on rule having the impress of a jurisdictional requirement, this is it.Moreover, where minors are involved, the State acts as parens patriae. To it is cast the duty of protecting the rights of persons or individual who because of age or incapacity are in an unfavorable position, vis-a-vis other parties. Unable as they are to take due care of what concerns them, they have the political community to look after their welfare. This obligation the state must live up to. It cannot be recreant to such a trust. As was set forth in an opinion of the United States Supreme Court: "This prerogative of parens patriae is inherent in the supreme power of every State, whether that power is