Government of the Philippine Islands v. Monte de Piedad

Government of the Philippine Islands v. Monte de Piedad

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

Trent, J.

Facts:

                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, 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. There was later distributed, in accordance 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, 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.

                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.

Issue:

                whether 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

Held:

                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, 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.

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. 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

Furthermore, upon the cession of the Philippine Islands the prerogatives of the crown of Spain devolved upon the United States. 

PVTA v. CIR

PVTA v. CIR

G.R. No. L-32052 July 25, 1975

Fernando, J.

Facts:

Private respondents filed 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. Petitioner Philippine Virginia Tobacco Administration 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.

Issue:

                whether PVTA discharges governmental and not proprietary functions

Held:

                No. 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, 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.” The amendatory statute, Republic Act No. 4155, 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.” 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.”

Functions 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 may not be strictly considered constituent. Under the traditional constituent-ministrant 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. Nonetheless, 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.