You are on page 1of 2

IN RE: PHILIPPINE NATIONAL BANK, Philippine National Bank, Petitioner, v.

United States District


Court for the District of Hawaii, Respondent, Maximo Hilao; Estate of Ferdinand Marcos; Imelda
R. Marcos; Ferdinand R. Marcos, Jr., Real Parties in Interest.

A class of plaintiffs obtained judgement from a court in Hawaii against the estate of former
president Marcos. It included an injunction prohibiting the transfer of any of its assets. But PH-SC
declared them as forfeited to RP. So the district court invalidated PH-SC decision. US Court of
Appeals declared such invalidation as contrary to act of state doctrine.

FACTS:

PRIOR CASE:

1. RP requested the Swiss government to freeze Swiss assets seeking their forfeiture on the
ground that they wore stolen by Marcos from the treasury.
2. However, the district court issued an injunction order prohibiting the transfer of any of
Marcos assets at the behest of the class of plaintiffs for human rights violations
committed by the Marcos regime.
3. The U.S. CA granted a mandamus dismissing the said order for violating the act of state
doctrine. (Credit Suisse v. U.S.)
4. Frozen assets were then transferred to the PNB, who then deposited it in Singapore. SC
subsequently declared them as forfeited to RP.

CURRENT CASE:

1. The district court issued orders ruling that the SC violated due process by any standard
and thus entitled to no deference. It then ordered the reinstatement of the settlement
agreement that had been rejected. Because of the imminent threat that banking officials
might release said funds to RP, it also ordered that that any such transfer without first
appearing and showing cause that it wont violate the injunction order shall be considered
contempt of court.
2. It then ordered PNB to show cause why it should not be held in contempt. It sought a
deposition of the Banking officers declaration.
3. Bank filed present petition for mandamus in court asserting:
a. It has transferred nearly all of the funds in issue to the Republic pursuant to the
judgment of the Philippine courts.
b. Officer's deposition would violate Philippine bank secrecy laws.
c. Entire proceeding against the Bank for its transfer of funds violated the act of
state doctrine.

ISSUE: W/N district courts orders violated the act of state doctrine?
RULING: Yes. Writ of mandamus issued.

RATIO:

Act of state doctrine- Every sovereign state is bound to respect the independence of every other
sovereign state, and the courts of one country will not sit in judgment on the acts of the
government of another, done within its own territory. Redress of grievances by reason of such
acts must be obtained through the means open to be availed of by sovereign powers as between
themselves.

Declaring the forfeiture judgment of the Philippine Supreme Court as invalid violated this
doctrine. Contrary to district courts view, doctrine is applicable not only to legislative and
executive branches. A judgment of court may be an act of state. The forfeiture action was not a
mere dispute between private parties;it was an action initiated by the Philippine government
pursuant to its statutory mandate to recover property allegedly stolen from the treasury. In an
earlier case, such mandate was deemed to be governmental and thus qualifies as an act of state.

The act of the Philippine Supreme Court was not wholly external as contended by the district
court. Its judgment, which the district court declared invalid, was issued in the Philippines and
much of its force upon the Philippine Bank arose from the fact that the Bank is a Philippine
corporation.

Furthermore, even if it was, it does not preclude it from being an act of state. The doctrine
should be flexibly applied because the interest of a state does not end at its borders. Underlying
government interest in this case supports the treatment of the judgment as an act of state.