Republic of the Philippines In accordance with the generally accepted principle of international law of the present day including
principle of international law of the present day including the Hague Convention the Geneva
SUPREME COURT
Manila
EN BANC
G.R. No. L-2662 March 26, 1949
SHIGENORI KURODA, petitioner,
vs.
Major General RAFAEL JALANDONI, Brigadier General CALIXTO DUQUE, Colonel MARGARITO TORALBA, Colonel IRENEO
BUENCONSEJO, Colonel PEDRO TABUENA, Major FEDERICO ARANAS, MELVILLE S. HUSSEY and ROBERT PORT, respondents.
Pedro Serran, Jose G. Lukban, and Liberato B. Cinco for petitioner.
Fred Ruiz Castro Federico Arenas Mariano Yengco, Jr., Ricardo A. Arcilla and S. Melville Hussey for respondents.
MORAN, C.J.:
Shigenori Kuroda, formerly a Lieutenant-General of the Japanese Imperial Army and Commanding General of the Japanese Imperial Forces
in The Philippines during a period covering 19433 and 19444 who is now charged before a military Commission convened by the Chief of
Staff of the Armed forces of the Philippines with having unlawfully disregarded and failed "to discharge his duties as such command,
permitting them to commit brutal atrocities and other high crimes against noncombatant civilians and prisoners of the Imperial Japanese
Forces in violation of the laws and customs of war" — comes before this Court seeking to establish the illegality of Executive Order No. 68
of the President of the Philippines: to enjoin and prohibit respondents Melville S. Hussey and Robert Port from participating in the
prosecution of petitioner's case before the Military Commission and to permanently prohibit respondents from proceeding with the case
of petitioners.
In support of his case petitioner tenders the following principal arguments.
First. — "That Executive Order No. 68 is illegal on the ground that it violates not only the provision of our constitutional law but also our
local laws to say nothing of the fact (that) the Philippines is not a signatory nor an adherent to the Hague Convention on Rules and
Regulations covering Land Warfare and therefore petitioners is charged of 'crimes' not based on law, national and international." Hence
petitioner argues — "That in view off the fact that this commission has been empanelled by virtue of an unconstitutional law an illegal
order this commission is without jurisdiction to try herein petitioner."
Second. — That the participation in the prosecution of the case against petitioner before the Commission in behalf of the United State of
America of attorneys Melville Hussey and Robert Port who are not attorneys authorized by the Supreme Court to practice law in the
Philippines is a diminution of our personality as an independent state and their appointment as prosecutor are a violation of our
Constitution for the reason that they are not qualified to practice law in the Philippines.
Third. — That Attorneys Hussey and Port have no personality as prosecution the United State not being a party in interest in the case.
Executive Order No. 68, establishing a National War Crimes Office prescribing rule and regulation governing the trial of accused war
criminals, was issued by the President of the Philippines on the 29th days of July, 1947 This Court holds that this order is valid and
constitutional. Article 2 of our Constitution provides in its section 3, that —
The Philippines renounces war as an instrument of national policy and adopts the generally accepted principles of international
law as part of the of the nation.
Convention and significant precedents of international jurisprudence established by the United Nation all those person military or civilian
who have been guilty of planning preparing or waging a war of aggression and of the commission of crimes and offenses consequential
and incidental thereto in violation of the laws and customs of war, of humanity and civilization are held accountable therefor.
Consequently in the promulgation and enforcement of Execution Order No. 68 the President of the Philippines has acted in conformity
with the generally accepted and policies of international law which are part of the our Constitution.
The promulgation of said executive order is an exercise by the President of his power as Commander in chief of all our armed forces as
upheld by this Court in the case of Yamashita vs. Styer (L-129, 42 Off. Gaz., 664) 1 when we said —
War is not ended simply because hostilities have ceased. After cessation of armed hostilities incident of war may remain
pending which should be disposed of as in time of war. An importance incident to a conduct of war is the adoption of measure
by the military command not only to repel and defeat the enemies but to seize and subject to disciplinary measure those
enemies who in their attempt to thwart or impede our military effort have violated the law of war. (Ex parte Quirin 317 U.S., 1;
63 Sup. Ct., 2.) Indeed the power to create a military commission for the trial and punishment of war criminals is an aspect of
waging war. And in the language of a writer a military commission has jurisdiction so long as a technical state of war continues.
This includes the period of an armistice or military occupation up to the effective of a treaty of peace and may extend beyond
by treaty agreement. (Cowles Trial of War Criminals by Military Tribunals, America Bar Association Journal June, 1944.)
Consequently, the President as Commander in Chief is fully empowered to consummate this unfinished aspect of war namely the trial and
punishment of war criminal through the issuance and enforcement of Executive Order No. 68.
Petitioner argues that respondent Military Commission has no Jurisdiction to try petitioner for acts committed in violation of the Hague
Convention and the Geneva Convention because the Philippines is not a signatory to the first and signed the second only in 1947. It
cannot be denied that the rules and regulation of the Hague and Geneva conventions form, part of and are wholly based on the generally
accepted principals of international law. In facts these rules and principles were accepted by the two belligerent nation the United State
and Japan who were signatories to the two Convention, Such rule and principles therefore form part of the law of our nation even if the
Philippines was not a signatory to the conventions embodying them for our Constitution has been deliberately general and extensive in its
scope and is not confined to the recognition of rule and principle of international law as continued inn treaties to which our government
may have been or shall be a signatory.
Furthermore when the crimes charged against petitioner were allegedly committed the Philippines was under the sovereignty of United
States and thus we were equally bound together with the United States and with Japan to the right and obligation contained in the
treaties between the belligerent countries. These rights and obligation were not erased by our assumption of full sovereignty. If at all our
emergency as a free state entitles us to enforce the right on our own of trying and punishing those who committed crimes against crimes
against our people. In this connection it is well to remember what we have said in the case of Laurel vs. Misa (76 Phil., 372):
. . . The change of our form government from Commonwealth to Republic does not affect the prosecution of those charged
with the crime of treason committed during then Commonwealth because it is an offense against the same sovereign people. .
..
By the same token war crimes committed against our people and our government while we were a Commonwealth are triable and
punishable by our present Republic.
Petitioner challenges the participation of two American attorneys namely Melville S. Hussey and Robert Port in the prosecution of his case
on the ground that said attorney's are not qualified to practice law in Philippines in accordance with our Rules of court and the
appointment of said attorneys as prosecutors is violative of our national sovereignty.
In the first place respondent Military Commission is a special military tribunal governed by a special law and not by the Rules of court
which govern ordinary civil court. It has already been shown that Executive Order No. 68 which provides for the organization of such
military commission is a valid and constitutional law. There is nothing in said executive order which requires that counsel appearing
before said commission must be attorneys qualified to practice law in the Philippines in accordance with the Rules of Court. In facts it is proceedings pending in the courts of the defunct Republic of the Philippines in the absence of an enabling law granting such authority.
common in military tribunals that counsel for the parties are usually military personnel who are neither attorneys nor even possessed of And the same respondent, in his answer and memorandum filed in this Court, contends that the government established in the
legal training. Philippines during the Japanese occupation were no de facto governments.

Secondly the appointment of the two American attorneys is not violative of our nation sovereignty. It is only fair and proper that United
States, which has submitted the vindication of crimes against her government and her people to a tribunal of our nation should be
allowed representation in the trial of those very crimes. If there has been any relinquishment of sovereignty it has not been by our
government but by the United State Government which has yielded to us the trial and punishment of her enemies. The least that we
could do in the spirit of comity is to allow them representation in said trials.
On January 2, 1942, the Imperial Japanese Forces occupied the City of Manila, and on the next day their Commander in Chief proclaimed
"the Military Administration under law over the districts occupied by the Army." In said proclamation, it was also provided that "so far as
the Military Administration permits, all the laws now in force in the Commonwealth, as well as executive and judicial institutions, shall
continue to be effective for the time being as in the past," and "all public officials shall remain in their present posts and carry on faithfully
their duties as before."

Alleging that the United State is not a party in interest in the case petitioner challenges the personality of attorneys Hussey and Port as
prosecutors. It is of common knowledge that the United State and its people have been equally if not more greatly aggrieved by the
crimes with which petitioner stands charged before the Military Commission. It can be considered a privilege for our Republic that a
leader nation should submit the vindication of the honor of its citizens and its government to a military tribunal of our country.
The Military Commission having been convened by virtue of a valid law with jurisdiction over the crimes charged which fall under the
provisions of Executive Order No. 68, and having said petitioner in its custody, this Court will not interfere with the due process of such
Military commission.
For all the foregoing the petition is denied with costs de oficio.
Paras, Feria, Pablo, Bengzon, Tuason, Montemayor and Reyes, JJ., concur.
A civil government or central administration organization under the name of "Philippine Executive Commission was organized by Order
No. 1 issued on January 23, 1942, by the Commander in Chief of the Japanese Forces in the Philippines, and Jorge B. Vargas, who was
appointed Chairman thereof, was instructed to proceed to the immediate coordination of the existing central administrative organs and
judicial courts, based upon what had existed therefore, with approval of the said Commander in Chief, who was to exercise jurisdiction
over judicial courts.
The Chairman of the Executive Commission, as head of the central administrative organization, issued Executive Orders Nos. 1 and 4,
dated January 30 and February 5, 1942, respectively, in which the Supreme Court, Court of Appeals, Courts of First Instance, and the
justices of the peace and municipal courts under the Commonwealth were continued with the same jurisdiction, in conformity with the
instructions given to the said Chairman of the Executive Commission by the Commander in Chief of Japanese Forces in the Philippines in
the latter's Order No. 3 of February 20, 1942, concerning basic principles to be observed by the Philippine Executive Commission in
exercising legislative, executive and judicial powers. Section 1 of said Order provided that "activities of the administration organs and
judicial courts in the Philippines shall be based upon the existing statutes, orders, ordinances and customs. . . ."

Republic of the Philippines On October 14, 1943, the so-called Republic of the Philippines was inaugurated, but no substantial change was effected thereby in the
SUPREME COURT organization and jurisdiction of the different courts that functioned during the Philippine Executive Commission, and in the laws they
Manila administered and enforced.

EN BANC On October 23, 1944, a few days after the historic landing in Leyte, General Douglas MacArthur issued a proclamation to the People of the
Philippines which declared:
G.R. No. L-5 September 17, 1945
1. That the Government of the Commonwealth of the Philippines is, subject to the supreme authority of the Government of
CO KIM CHAM (alias CO KIM CHAM), petitioner, the United States, the sole and only government having legal and valid jurisdiction over the people in areas of the Philippines
vs. free of enemy occupation and control;
EUSEBIO VALDEZ TAN KEH and ARSENIO P. DIZON, Judge of First Instance of Manila, respondents.1
2. That the laws now existing on the statute books of the Commonwealth of the Philippines and the regulations promulgated
Marcelino Lontok for petitioner. pursuant thereto are in full force and effect and legally binding upon the people in areas of the Philippines free of enemy
P. A. Revilla for respondent Valdez Tan Keh. occupation and control; and
Respondent Judge Dizon in his own behalf.
3. That all laws, regulations and processes of any other government in the Philippines than that of the said Commonwealth are
FERIA, J.: null and void and without legal effect in areas of the Philippines free of enemy occupation and control.

This petition for mandamus in which petitioner prays that the respondent judge of the lower court be ordered to continue the On February 3, 1945, the City of Manila was partially liberated and on February 27, 1945, General MacArthur, on behalf of the
proceedings in civil case No. 3012 of said court, which were initiated under the regime of the so-called Republic of the Philippines Government of the United States, solemnly declared "the full powers and responsibilities under the Constitution restored to the
established during the Japanese military occupation of these Islands. Commonwealth whose seat is here established as provided by law."

The respondent judge refused to take cognizance of and continue the proceedings in said case on the ground that the proclamation issued In the light of these facts and events of contemporary history, the principal questions to be resolved in the present case may be reduced
on October 23, 1944, by General Douglas MacArthur had the effect of invalidating and nullifying all judicial proceedings and judgements to the following:(1) Whether the judicial acts and proceedings of the court existing in the Philippines under the Philippine Executive
of the court of the Philippines under the Philippine Executive Commission and the Republic of the Philippines established during the Commission and the Republic of the Philippines were good and valid and remained so even after the liberation or reoccupation of the
Japanese military occupation, and that, furthermore, the lower courts have no jurisdiction to take cognizance of and continue judicial Philippines by the United States and Filipino forces; (2)Whether the proclamation issued on October 23, 1944, by General Douglas
MacArthur, Commander in Chief of the United States Army, in which he declared "that all laws, regulations and processes of any of the
government in the Philippines than that of the said Commonwealth are null and void and without legal effect in areas of the Philippines
free of enemy occupation and control," has invalidated all judgements and judicial acts and proceedings of the said courts; and (3) If the
said judicial acts and proceedings have not been invalidated by said proclamation, whether the present courts of the Commonwealth,
which were the same court existing prior to, and continued during, the Japanese military occupation of the Philippines, may continue
those proceedings pending in said courts at the time the Philippines were reoccupied and liberated by the United States and Filipino
forces, and the Commonwealth of the Philippines were reestablished in the Islands.
We shall now proceed to consider the first question, that is, whether or not under the rules of international law the judicial acts and
proceedings of the courts established in the Philippines under the Philippine Executive Commission and the Republic of the Philippines
were good and valid and remained good and valid even after the liberation or reoccupation of the Philippines by the United States and
Filipino forces.
1. It is a legal truism in political and international law that all acts and proceedings of the legislative, executive, and judicial departments of
a de facto government are good and valid. The question to be determined is whether or not the governments established in these Islands
under the names of the Philippine Executive Commission and Republic of the Philippines during the Japanese military occupation or
regime were de facto governments. If they were, the judicial acts and proceedings of those governments remain good and valid even after
the liberation or reoccupation of the Philippines by the American and Filipino forces.
There are several kinds of de facto governments. The first, or government de facto in a proper legal sense, is that government that gets
possession and control of, or usurps, by force or by the voice of the majority, the rightful legal governments and maintains itself against
the will of the latter, such as the government of England under the Commonwealth, first by Parliament and later by Cromwell as
Protector. The second is that which is established and maintained by military forces who invade and occupy a territory of the enemy in
the course of war, and which is denominated a government of paramount force, as the cases of Castine, in Maine, which was reduced to
British possession in the war of 1812, and Tampico, Mexico, occupied during the war with Mexico, by the troops of the United States. And
the third is that established as an independent government by the inhabitants of a country who rise in insurrection against the parent
state of such as the government of the Southern Confederacy in revolt not concerned in the present case with the first kind, but only with
the second and third kinds of de facto governments.
Speaking of government "de facto" of the second kind, the Supreme Court of the United States, in the case of Thorington vs. Smith (8
Wall., 1), said: "But there is another description of government, called also by publicists a government de facto, but which might, perhaps,
be more aptly denominated a government of paramount force. Its distinguishing characteristics are (1), that its existence is maintained by
active military power with the territories, and against the rightful authority of an established and lawful government; and (2), that while it
exists it necessarily be obeyed in civil matters by private citizens who, by acts of obedience rendered in submission to such force, do not
become responsible, or wrongdoers, for those acts, though not warranted by the laws of the rightful government. Actual governments of
this sort are established over districts differing greatly in extent and conditions. They are usually administered directly by military
authority, but they may be administered, also, civil authority, supported more or less directly by military force. . . . One example of this
sort of government is found in the case of Castine, in Mine, reduced to British possession in the war of 1812 . . . U. S. vs. Rice (4 Wheaton,
253). A like example is found in the case of Tampico, occupied during the war with Mexico, by the troops of the United States . . .
Fleming vs. Page (9 Howard, 614). These were cases of temporary possessions of territory by lawfull and regular governments at war with
the country of which the territory so possessed was part."
The powers and duties of de facto governments of this description are regulated in Section III of the Hague Conventions of 1907, which is
a revision of the provisions of the Hague Conventions of 1899 on the same subject of said Section III provides "the authority of the
legislative power having actually passed into the hands of the occupant, the latter shall take steps in his power to reestablish and insure,
as far as possible, public order and safety, while respecting, unless absolutely prevented, the laws in force in the country."
According to the precepts of the Hague Conventions, as the belligerent occupant has the right and is burdened with the duty to insure
public order and safety during his military occupation, he possesses all the powers of a de factogovernment, and he can suspended the
old laws and promulgate new ones and make such changes in the old as he may see fit, but he is enjoined to respect, unless absolutely
prevented by the circumstances prevailing in the occupied territory, the municipal laws in force in the country, that is, those laws which
enforce public order and regulate social and commercial life of the country. On the other hand, laws of a political nature or affecting
political relations, such as, among others, the right of assembly, the right to bear arms, the freedom of the press, and the right to travel
freely in the territory occupied, are considered as suspended or in abeyance during the military occupation. Although the local and civil
administration of justice is suspended as a matter of course as soon as a country is militarily occupied, it is not usual for the invader to
take the whole administration into his own hands. In practice, the local ordinary tribunals are authorized to continue administering
justice; and judges and other judicial officers are kept in their posts if they accept the authority of the belligerent occupant or are required
to continue in their positions under the supervision of the military or civil authorities appointed, by the Commander in Chief of the
occupant. These principles and practice have the sanction of all publicists who have considered the subject, and have been asserted by
the Supreme Court and applied by the President of the United States.
The doctrine upon this subject is thus summed up by Halleck, in his work on International Law (Vol. 2, p. 444): "The right of one belligerent
to occupy and govern the territory of the enemy while in its military possession, is one of the incidents of war, and flows directly from the
right to conquer. We, therefore, do not look to the Constitution or political institutions of the conqueror, for authority to establish a
government for the territory of the enemy in his possession, during its military occupation, nor for the rules by which the powers of such
government are regulated and limited. Such authority and such rules are derived directly from the laws war, as established by the usage
of the of the world, and confirmed by the writings of publicists and decisions of courts — in fine, from the law of nations. . . . The
municipal laws of a conquered territory, or the laws which regulate private rights, continue in force during military occupation, excepts so
far as they are suspended or changed by the acts of conqueror. . . . He, nevertheless, has all the powers of a de facto government, and can
at his pleasure either change the existing laws or make new ones."
And applying the principles for the exercise of military authority in an occupied territory, which were later embodied in the said Hague
Conventions, President McKinley, in his executive order to the Secretary of War of May 19,1898, relating to the occupation of the
Philippines by United States forces, said in part: "Though the powers of the military occupant are absolute and supreme, and immediately
operate upon the political condition of the inhabitants, the municipal laws of the conquered territory, such as affect private rights of
person and property and provide for the punishment of crime, are considered as continuing in force, so far as they are compatible with
the new order of things, until they are suspended or superseded by the occupying belligerent; and in practice they are not usually
abrogated, but are allowed to remain in force and to be administered by the ordinary tribunals, substantially as they were before the
occupation. This enlightened practice is, so far as possible, to be adhered to on the present occasion. The judges and the other officials
connected with the administration of justice may, if they accept the authority of the United States, continue to administer the ordinary
law of the land as between man and man under the supervision of the American Commander in Chief." (Richardson's Messages and
Papers of President, X, p. 209.)
As to "de facto" government of the third kind, the Supreme Court of the United States, in the same case of Thorington vs. Smith, supra,
recognized the government set up by the Confederate States as a de factogovernment. In that case, it was held that "the central
government established for the insurgent States differed from the temporary governments at Castine and Tampico in the circumstance
that its authority did no originate in lawful acts of regular war; but it was not, on the account, less actual or less supreme. And we think
that it must be classed among the governments of which these are examples. . . .
In the case of William vs. Bruffy (96 U. S. 176, 192), the Supreme Court of the United States, discussing the validity of the acts of the
Confederate States, said: "The same general form of government, the same general laws for the administration of justice and protection
of private rights, which had existed in the States prior to the rebellion, remained during its continuance and afterwards. As far as the Acts
of the States do not impair or tend to impair the supremacy of the national authority, or the just rights of citizens under the Constitution,
they are, in general, to be treated as valid and binding. As we said in Horn vs. Lockhart (17 Wall., 570; 21 Law. ed., 657): "The existence of
a state of insurrection and war did not loosen the bonds of society, or do away with civil government or the regular administration of the
laws. Order was to be preserved, police regulations maintained, crime prosecuted, property protected, contracts enforced, marriages
celebrated, estates settled, and the transfer and descent of property regulated, precisely as in the time of peace. No one, that we are
aware of, seriously questions the validity of judicial or legislative Acts in the insurrectionary States touching these and kindered subjects,
where they were not hostile in their purpose or mode of enforcement to the authority of the National Government, and did not impair
the rights of citizens under the Constitution'. The same doctrine has been asserted in numerous other cases."
And the same court, in the case of Baldy vs. Hunter (171 U. S., 388, 400), held: "That what occured or was done in respect of such matters
under the authority of the laws of these local de facto governments should not be disregarded or held to be invalid merely because those
governments were organized in hostility to the Union established by the national Constitution; this, because the existence of war between
the United States and the Confederate States did not relieve those who are within the insurrectionary lines from the necessity of civil
obedience, nor destroy the bonds of society nor do away with civil government or the regular administration of the laws, and because
transactions in the ordinary course of civil society as organized within the enemy's territory although they may have indirectly or remotely
promoted the ends of the de facto or unlawful government organized to effect a dissolution of the Union, were without blame 'except
when proved to have been entered into with actual intent to further invasion or insurrection:'" and "That judicial and legislative acts in
the respective states composing the so-called Confederate States should be respected by the courts if they were not hostile in their
purpose or mode of enforcement to the authority of the National Government, and did not impair the rights of citizens under the
Constitution."
In view of the foregoing, it is evident that the Philippine Executive Commission, which was organized by Order No. 1, issued on January 23,
1942, by the Commander of the Japanese forces, was a civil government established by the military forces of occupation and therefore
a de facto government of the second kind. It was not different from the government established by the British in Castine, Maine, or by the
United States in Tampico, Mexico. As Halleck says, "The government established over an enemy's territory during the military occupation
may exercise all the powers given by the laws of war to the conqueror over the conquered, and is subject to all restrictions which that
code imposes. It is of little consequence whether such government be called a military or civil government. Its character is the same and
the source of its authority the same. In either case it is a government imposed by the laws of war, and so far it concerns the inhabitants of
such territory or the rest of the world, those laws alone determine the legality or illegality of its acts." (Vol. 2, p. 466.) The fact that the
Philippine Executive Commission was a civil and not a military government and was run by Filipinos and not by Japanese nationals, is of no
consequence. In 1806, when Napoleon occupied the greater part of Prussia, he retained the existing administration under the general
direction of a french official (Langfrey History of Napoleon, 1, IV, 25); and, in the same way, the Duke of Willington, on invading France,
authorized the local authorities to continue the exercise of their functions, apparently without appointing an English superior. (Wellington
Despatches, XI, 307.). The Germans, on the other hand, when they invaded France in 1870, appointed their own officials, at least in Alsace
and Lorraine, in every department of administration and of every rank. (Calvo, pars. 2186-93; Hall, International Law, 7th ed., p. 505, note
2.)
The so-called Republic of the Philippines, apparently established and organized as a sovereign state independent from any other
government by the Filipino people, was, in truth and reality, a government established by the belligerent occupant or the Japanese forces
of occupation. It was of the same character as the Philippine Executive Commission, and the ultimate source of its authority was the same
— the Japanese military authority and government. As General MacArthur stated in his proclamation of October 23, 1944, a portion of
which has been already quoted, "under enemy duress, a so-called government styled as the 'Republic of the Philippines' was established
on October 14, 1943, based upon neither the free expression of the people's will nor the sanction of the Government of the United
States." Japan had no legal power to grant independence to the Philippines or transfer the sovereignty of the United States to, or
recognize the latent sovereignty of, the Filipino people, before its military occupation and possession of the Islands had matured into an
absolute and permanent dominion or sovereignty by a treaty of peace or other means recognized in the law of nations. For it is a well-
established doctrine in International Law, recognized in Article 45 of the Hauge Conventions of 1907 (which prohibits compulsion of the
population of the occupied territory to swear allegiance to the hostile power), the belligerent occupation, being essentially provisional,
does not serve to transfer sovereignty over the territory controlled although the de jure government is during the period of occupancy
deprived of the power to exercise its rights as such. (Thirty Hogshead of Sugar vs. Boyle, 9 Cranch, 191; United States vs. Rice, 4 Wheat.,
246; Fleming vs. Page, 9 Howard, 603; Downes vs. Bidwell, 182 U. S., 345.) The formation of the Republic of the Philippines was a scheme
contrived by Japan to delude the Filipino people into believing in the apparent magnanimity of the Japanese gesture of transferring or
turning over the rights of government into the hands of Filipinos. It was established under the mistaken belief that by doing so, Japan
would secure the cooperation or at least the neutrality of the Filipino people in her war against the United States and other allied nations.
Indeed, even if the Republic of the Philippines had been established by the free will of the Filipino who, taking advantage of the
withdrawal of the American forces from the Islands, and the occupation thereof by the Japanese forces of invasion, had organized an
independent government under the name with the support and backing of Japan, such government would have been considered as one
established by the Filipinos in insurrection or rebellion against the parent state or the Unite States. And as such, it would have been a de
facto government similar to that organized by the confederate states during the war of secession and recognized as such by the by the
Supreme Court of the United States in numerous cases, notably those of Thorington vs. Smith, Williams vs. Bruffy, and Badly vs. Hunter,
above quoted; and similar to the short-lived government established by the Filipino insurgents in the Island of Cebu during the Spanish-
American war, recognized as a de facto government by the Supreme Court of the United States in the case of McCleod vs. United States
(299 U. S., 416). According to the facts in the last-named case, the Spanish forces evacuated the Island of Cebu on December 25, 1898,
having first appointed a provisional government, and shortly afterwards, the Filipinos, formerly in insurrection against Spain, took
possession of the Islands and established a republic, governing the Islands until possession thereof was surrendered to the United States
on February 22, 1898. And the said Supreme Court held in that case that "such government was of the class of de facto governments
described in I Moore's International Law Digest, S 20, . . . 'called also by publicists a government de facto, but which might, perhaps, be
more aptly denominated a government of paramount force . . '." That is to say, that the government of a country in possession of
belligerent forces in insurrection or rebellion against the parent state, rests upon the same principles as that of a territory occupied by the
hostile army of an enemy at regular war with the legitimate power.
The governments by the Philippine Executive Commission and the Republic of the Philippines during the Japanese military occupation
being de facto governments, it necessarily follows that the judicial acts and proceedings of the courts of justice of those governments,
which are not of a political complexion, were good and valid, and, by virtue of the well-known principle of postliminy (postliminium) in
international law, remained good and valid after the liberation or reoccupation of the Philippines by the American and Filipino forces
under the leadership of General Douglas MacArthur. According to that well-known principle in international law, the fact that a territory
which has been occupied by an enemy comes again into the power of its legitimate government of sovereignty, "does not, except in a
very few cases, wipe out the effects of acts done by an invader, which for one reason or another it is within his competence to do. Thus
judicial acts done under his control, when they are not of a political complexion, administrative acts so done, to the extent that they take
effect during the continuance of his control, and the various acts done during the same time by private persons under the sanction of
municipal law, remain good. Were it otherwise, the whole social life of a community would be paralyzed by an invasion; and as between
the state and the individuals the evil would be scarcely less, — it would be hard for example that payment of taxes made under duress
should be ignored, and it would be contrary to the general interest that the sentences passed upon criminals should be annulled by the
disappearance of the intrusive government ." (Hall, International Law, 7th ed., p. 518.) And when the occupation and the abandonment
have been each an incident of the same war as in the present case, postliminy applies, even though the occupant has acted as conqueror
and for the time substituted his own sovereignty as the Japanese intended to do apparently in granting independence to the Philippines
and establishing the so-called Republic of the Philippines. (Taylor, International Law, p. 615.)
That not only judicial but also legislative acts of de facto governments, which are not of a political complexion, are and remain valid after
reoccupation of a territory occupied by a belligerent occupant, is confirmed by the Proclamation issued by General Douglas MacArthur on
October 23, 1944, which declares null and void all laws, regulations and processes of the governments established in the Philippines
during the Japanese occupation, for it would not have been necessary for said proclamation to abrogate them if they were invalid ab
initio.
2. The second question hinges upon the interpretation of the phrase "processes of any other government" as used in the above-quoted
proclamation of General Douglas MacArthur of October 23, 1944 — that is, whether it was the intention of the Commander in Chief of the
American Forces to annul and void thereby all judgments and judicial proceedings of the courts established in the Philippines during the
Japanese military occupation.
The phrase "processes of any other government" is broad and may refer not only to the judicial processes, but also to administrative or
legislative, as well as constitutional, processes of the Republic of the Philippines or other governmental agencies established in the Islands
during the Japanese occupation. Taking into consideration the fact that, as above indicated, according to the well-known principles of
international law all judgements and judicial proceedings, which are not of a political complexion, of the de facto governments during the
Japanese military occupation were good and valid before and remained so after the occupied territory had come again into the power of
the titular sovereign, it should be presumed that it was not, and could not have been, the intention of General Douglas MacArthur, in
using the phrase "processes of any other government" in said proclamation, to refer to judicial processes, in violation of said principles of
international law. The only reasonable construction of the said phrase is that it refers to governmental processes other than judicial
processes of court proceedings, for according to a well-known rule of statutory construction, set forth in 25 R. C. L., p. 1028, "a statute
ought never to be construed to violate the law of nations if any other possible construction remains."
It is true that the commanding general of a belligerent army of occupation, as an agent of his government, may not unlawfully suspend
existing laws and promulgate new ones in the occupied territory, if and when the exigencies of the military occupation demand such
action. But even assuming that, under the law of nations, the legislative power of a commander in chief of military forces who liberates or
reoccupies his own territory which has been occupied by an enemy, during the military and before the restoration of the civil regime, is as
broad as that of the commander in chief of the military forces of invasion and occupation (although the exigencies of military
reoccupation are evidently less than those of occupation), it is to be presumed that General Douglas MacArthur, who was acting as an
agent or a representative of the Government and the President of the United States, constitutional commander in chief of the United
States Army, did not intend to act against the principles of the law of nations asserted by the Supreme Court of the United States from the
early period of its existence, applied by the Presidents of the United States, and later embodied in the Hague Conventions of 1907, as
above indicated. It is not to be presumed that General Douglas MacArthur, who enjoined in the same proclamation of October 23, 1944,
"upon the loyal citizens of the Philippines full respect and obedience to the Constitution of the Commonwealth of the Philippines," should
not only reverse the international policy and practice of his own government, but also disregard in the same breath the provisions of
section 3, Article II, of our Constitution, which provides that "The Philippines renounces war as an instrument of national policy, and
adopts the generally accepted principles of international law as part of the law of the Nation."
Moreover, from a contrary construction great inconvenience and public hardship would result, and great public interests would be
endangered and sacrificed, for disputes or suits already adjudged would have to be again settled accrued or vested rights nullified,
sentences passed on criminals set aside, and criminals might easily become immune for evidence against them may have already
disappeared or be no longer available, especially now that almost all court records in the Philippines have been destroyed by fire as a
consequence of the war. And it is another well-established rule of statutory construction that where great inconvenience will result from
a particular construction, or great public interests would be endangered or sacrificed, or great mischief done, such construction is to be
avoided, or the court ought to presume that such construction was not intended by the makers of the law, unless required by clear and
unequivocal words. (25 R. C. L., pp. 1025, 1027.)
The mere conception or thought of possibility that the titular sovereign or his representatives who reoccupies a territory occupied by an
enemy, may set aside or annul all the judicial acts or proceedings of the tribunals which the belligerent occupant had the right and duty to
establish in order to insure public order and safety during military occupation, would be sufficient to paralyze the social life of the country
or occupied territory, for it would have to be expected that litigants would not willingly submit their litigation to courts whose judgements
or decisions may afterwards be annulled, and criminals would not be deterred from committing crimes or offenses in the expectancy that
they may escaped the penalty if judgments rendered against them may be afterwards set aside.
That the proclamation has not invalidated all the judgements and proceedings of the courts of justice during the Japanese regime, is
impliedly confirmed by Executive Order No. 37, which has the force of law, issued by the President of the Philippines on March 10, 1945,
by virtue of the emergency legislative power vested in him by the Constitution and the laws of the Commonwealth of the Philippines. Said
Executive order abolished the Court of Appeals, and provided "that all case which have heretofore been duly appealed to the Court of
Appeals shall be transmitted to the Supreme Court final decision." This provision impliedly recognizes that the judgments and proceedings
of the courts during the Japanese military occupation have not been invalidated by the proclamation of General MacArthur of October 23,
because the said Order does not say or refer to cases which have been duly appealed to said court prior to the Japanese occupation, but
to cases which had therefore, that is, up to March 10, 1945, been duly appealed to the Court of Appeals; and it is to be presumed that
almost all, if not all, appealed cases pending in the Court of Appeals prior to the Japanese military occupation of Manila on January 2,
1942, had been disposed of by the latter before the restoration of the Commonwealth Government in 1945; while almost all, if not all,
appealed cases pending on March 10, 1945, in the Court of Appeals were from judgments rendered by the Court of First Instance during
the Japanese regime.
The respondent judge quotes a portion of Wheaton's International Law which say: "Moreover when it is said that an occupier's acts are
valid and under international law should not be abrogated by the subsequent conqueror, it must be remembered that no crucial instances
exist to show that if his acts should be reversed, any international wrong would be committed. What does happen is that most matters
are allowed to stand by the restored government, but the matter can hardly be put further than this." (Wheaton, International Law, War,
7th English edition of 1944, p. 245.) And from this quotion the respondent judge "draws the conclusion that whether the acts of the
occupant should be considered valid or not, is a question that is up to the restored government to decide; that there is no rule of
international law that denies to the restored government to decide; that there is no rule of international law that denies to the restored
government the right of exercise its discretion on the matter, imposing upon it in its stead the obligation of recognizing and enforcing the
acts of the overthrown government."
There is doubt that the subsequent conqueror has the right to abrogate most of the acts of the occupier, such as the laws, regulations and
processes other than judicial of the government established by the belligerent occupant. But in view of the fact that the proclamation
uses the words "processes of any other government" and not "judicial processes" prisely, it is not necessary to determine whether or not
General Douglas MacArthur had power to annul and set aside all judgments and proceedings of the courts during the Japanese
occupation. The question to be determined is whether or not it was his intention, as representative of the President of the United States,
to avoid or nullify them. If the proclamation had, expressly or by necessary implication, declared null and void the judicial processes of any
other government, it would be necessary for this court to decide in the present case whether or not General Douglas MacArthur had
authority to declare them null and void. But the proclamation did not so provide, undoubtedly because the author thereof was fully aware
of the limitations of his powers as Commander in Chief of Military Forces of liberation or subsequent conqueror.
Not only the Hague Regulations, but also the principles of international law, as they result from the usages established between civilized
nations, the laws of humanity and the requirements of the public of conscience, constitute or from the law of nations. (Preamble of the
Hague Conventions; Westlake, International Law, 2d ed., Part II, p. 61.) Article 43, section III, of the Hague Regulations or Conventions
which we have already quoted in discussing the first question, imposes upon the occupant the obligation to establish courts; and Article
23 (h), section II, of the same Conventions, which prohibits the belligerent occupant "to declare . . . suspended . . . in a Court of Law the
rights and action of the nationals of the hostile party," forbids him to make any declaration preventing the inhabitants from using their
courts to assert or enforce their civil rights. (Decision of the Court of Appeals of England in the case of Porter vs. Fruedenburg, L.R. [1915],
1 K.B., 857.) If a belligerent occupant is required to establish courts of justice in the territory occupied, and forbidden to prevent the
nationals thereof from asserting or enforcing therein their civil rights, by necessary implication, the military commander of the forces of
liberation or the restored government is restrained from nullifying or setting aside the judgments rendered by said courts in their
litigation during the period of occupation. Otherwise, the purpose of these precepts of the Hague Conventions would be thwarted, for to
declare them null and void would be tantamount to suspending in said courts the right and action of the nationals of the territory during
the military occupation thereof by the enemy. It goes without saying that a law that enjoins a person to do something will not at the same
time empower another to undo the same. Although the question whether the President or commanding officer of the United States Army
has violated restraints imposed by the constitution and laws of his country is obviously of a domestic nature, yet, in construing and
applying limitations imposed on the executive authority, the Supreme Court of the United States, in the case of Ochoa, vs. Hernandez (230
U.S., 139), has declared that they "arise from general rules of international law and from fundamental principles known wherever the
American flag flies."
In the case of Raymond vs. Thomas (91 U.S., 712), a special order issued by the officer in command of the forces of the United States in
South Carolina after the end of the Civil War, wholly annulling a decree rendered by a court of chancery in that state in a case within its
jurisdiction, was declared void, and not warranted by the acts approved respectively March 2, 1867 (14 Stat., 428), and July 19 of the
same year (15 id., 14), which defined the powers and duties of military officers in command of the several states then lately in rebellion. In
the course of its decision the court said; "We have looked carefully through the acts of March 2, 1867 and July 19, 1867. They give very
large governmental powers to the military commanders designated, within the States committed respectively to their jurisdiction; but we
have found nothing to warrant the order here in question. . . . The clearest language would be necessary to satisfy us that Congress
intended that the power given by these acts should be so exercised. . . . It was an arbitrary stretch of authority, needful to no good end
that can be imagined. Whether Congress could have conferred the power to do such an act is a question we are not called upon to
consider. It is an unbending rule of law that the exercise of military power, where the rights of the citizen are concerned, shall never be
pushed beyond what the exigency requires. (Mithell vs. Harmony, 13 How., 115; Warden vs. Bailey, 4 Taunt., 67; Fabrigas vs. Moysten, 1
Cowp., 161; s.c., 1 Smith's L.C., pt. 2, p. 934.) Viewing the subject before us from the standpoint indicated, we hold that the order was
void."
It is, therefore, evident that the proclamation of General MacArthur of October 23, 1944, which declared that "all laws, regulations and
processes of any other government in the Philippines than that of the said Commonwealth are null and void without legal effect in areas
of the Philippines free of enemy occupation and control," has not invalidated the judicial acts and proceedings, which are not a political
complexion, of the courts of justice in the Philippines that were continued by the Philippine Executive Commission and the Republic of the
Philippines during the Japanese military occupation, and that said judicial acts and proceedings were good and valid before and now good
and valid after the reoccupation of liberation of the Philippines by the American and Filipino forces.
3. The third and last question is whether or not the courts of the Commonwealth, which are the same as those existing prior to, and
continued during, the Japanese military occupation by the Philippine Executive Commission and by the so-called Republic of the
Philippines, have jurisdiction to continue now the proceedings in actions pending in said courts at the time the Philippine Islands were
reoccupied or liberated by the American and Filipino forces, and the Commonwealth Government was restored.
Although in theory the authority the authority of the local civil and judicial administration is suspended as a matter of course as soon as
military occupation takes place, in practice the invader does not usually take the administration of justice into his own hands, but
continues the ordinary courts or tribunals to administer the laws of the country which he is enjoined, unless absolutely prevented, to
respect. As stated in the above-quoted Executive Order of President McKinley to the Secretary of War on May 19, 1898, "in practice, they
(the municipal laws) are not usually abrogated but are allowed to remain in force and to be administered by the ordinary tribunals
substantially as they were before the occupation. This enlightened practice is, so far as possible, to be adhered to on the present
occasion." And Taylor in this connection says: "From a theoretical point of view it may be said that the conqueror is armed with the right
to substitute his arbitrary will for all preexisting forms of government, legislative, executive and judicial. From the stand-point of actual
practice such arbitrary will is restrained by the provision of the law of nations which compels the conqueror to continue local laws and
institution so far as military necessity will permit." (Taylor, International Public Law, p.596.) Undoubtedly, this practice has been adopted
in order that the ordinary pursuits and business of society may not be unnecessarily deranged, inasmuch as belligerent occupation is
essentially provisional, and the government established by the occupant of transient character.
Following these practice and precepts of the law of nations, Commander in Chief of the Japanese Forces proclaimed on January 3, 1942,
when Manila was occupied, the military administration under martial law over the territory occupied by the army, and ordered that "all
the laws now in force in the Commonwealth, as well as executive and judicial institutions, shall continue to be affective for the time being
as in the past," and "all public officials shall remain in their present post and carry on faithfully their duties as before." When the
Philippine Executive Commission was organized by Order No. 1 of the Japanese Commander in Chief, on January 23, 1942, the Chairman
of the Executive Commission, by Executive Orders Nos. 1 and 4 of January 30 and February 5, respectively, continued the Supreme Court,
Court of Appeals, Court of First Instance, and justices of the peace of courts, with the same jurisdiction in conformity with the instructions
given by the Commander in Chief of the Imperial Japanese Army in Order No. 3 of February 20, 1942. And on October 14, 1943 when the
so-called Republic of the Philippines was inaugurated, the same courts were continued with no substantial change in organization and
jurisdiction thereof.
If the proceedings pending in the different courts of the Islands prior to the Japanese military occupation had been continued during the
Japanese military administration, the Philippine Executive Commission, and the so-called Republic of the Philippines, it stands to reason
that the same courts, which had become reestablished and conceived of as having in continued existence upon the reoccupation and
liberation of the Philippines by virtue of the principle of postliminy (Hall, International Law, 7th ed., p. 516), may continue the proceedings
in cases then pending in said courts, without necessity of enacting a law conferring jurisdiction upon them to continue said proceedings.
As Taylor graphically points out in speaking of said principles "a state or other governmental entity, upon the removal of a foreign military
force, resumes its old place with its right and duties substantially unimpaired. . . . Such political resurrection is the result of a law
analogous to that which enables elastic bodies to regain their original shape upon removal of the external force, — and subject to the
same exception in case of absolute crushing of the whole fibre and content." (Taylor, International Public Law, p. 615.)
The argument advanced by the respondent judge in his resolution in support in his conclusion that the Court of First Instance of Manila
presided over by him "has no authority to take cognizance of, and continue said proceedings (of this case) to final judgment until and
unless the Government of the Commonwealth of the Philippines . . . shall have provided for the transfer of the jurisdiction of the courts of
the now defunct Republic of the Philippines, and the cases commenced and the left pending therein," is "that said courts were a
government alien to the Commonwealth Government. The laws they enforced were, true enough, laws of the Commonwealth prior to
Japanese occupation, but they had become the laws — and the courts had become the institutions — of Japan by adoption (U.S. vs.Reiter.
27 F. Cases, No. 16146), as they became later on the laws and institutions of the Philippine Executive Commission and the Republic of the
Philippines."
The court in the said case of U.S. vs. Reiter did not and could not say that the laws and institutions of the country occupied if continued by
the conqueror or occupant, become the laws and the courts, by adoption, of the sovereign nation that is militarily occupying the territory.
Because, as already shown, belligerent or military occupation is essentially provisional and does not serve to transfer the sovereignty over
the occupied territory to the occupant. What the court said was that, if such laws and institutions are continued in use by the occupant,
they become his and derive their force from him, in the sense that he may continue or set them aside. The laws and institution or courts
so continued remain the laws and institutions or courts of the occupied territory. The laws and the courts of the Philippines, therefore, did
not become, by being continued as required by the law of nations, laws and courts of Japan. The provision of Article 45, section III, of the
Hague Conventions of 1907 which prohibits any compulsion of the population of occupied territory to swear allegiance to the hostile
power, "extends to prohibit everything which would assert or imply a change made by the invader in the legitimate sovereignty. This duty
is neither to innovate in the political life of the occupied districts, nor needlessly to break the continuity of their legal life. Hence, so far as
the courts of justice are allowed to continue administering the territorial laws, they must be allowed to give their sentences in the name
of the legitimate sovereign " (Westlake, Int. Law, Part II, second ed., p. 102). According to Wheaton, however, the victor need not allow
the use of that of the legitimate government. When in 1870, the Germans in France attempted to violate that rule by ordering, after the
fall of the Emperor Napoleon, the courts of Nancy to administer justice in the name of the "High German Powers occupying Alsace and
Lorraine," upon the ground that the exercise of their powers in the name of French people and government was at least an implied
recognition of the Republic, the courts refused to obey and suspended their sitting. Germany originally ordered the use of the name of
"High German Powers occupying Alsace and Lorraine," but later offered to allow use of the name of the Emperor or a compromise.
(Wheaton, International Law, War, 7th English ed. 1944, p. 244.)
Furthermore, it is a legal maxim, that excepting that of a political nature, "Law once established continues until changed by the some
competent legislative power. It is not change merely by change of sovereignty." (Joseph H. Beale, Cases on Conflict of Laws, III, Summary
Section 9, citing Commonwealth vs. Chapman, 13 Met., 68.) As the same author says, in his Treatise on the Conflict on Laws (Cambridge,
1916, Section 131): "There can no break or interregnum in law. From the time the law comes into existence with the first-felt
corporateness of a primitive people it must last until the final disappearance of human society. Once created, it persists until a change
take place, and when changed it continues in such changed condition until the next change, and so forever. Conquest or colonization is
impotent to bring law to an end; in spite of change of constitution, the law continues unchanged until the new sovereign by legislative
acts creates a change."
As courts are creatures of statutes and their existence defends upon that of the laws which create and confer upon them their
jurisdiction, it is evident that such laws, not being a political nature, are not abrogated by a change of sovereignty, and continue in force
"ex proprio vigore" unless and until repealed by legislative acts. A proclamation that said laws and courts are expressly continued is not
necessary in order that they may continue in force. Such proclamation, if made, is but a declaration of the intention of respecting and not
repealing those laws. Therefore, even assuming that Japan had legally acquired sovereignty over these Islands, which she had afterwards
transferred to the so-called Republic of the Philippines, and that the laws and the courts of these Islands had become the courts of Japan,
as the said courts of the laws creating and conferring jurisdiction upon them have continued in force until now, it necessarily follows that
the same courts may continue exercising the same jurisdiction over cases pending therein before the restoration of the Commonwealth
Government, unless and until they are abolished or the laws creating and conferring jurisdiction upon them are repealed by the said
government. As a consequence, enabling laws or acts providing that proceedings pending in one court be continued by or transferred to
another court, are not required by the mere change of government or sovereignty. They are necessary only in case the former courts are
abolished or their jurisdiction so change that they can no longer continue taking cognizance of the cases and proceedings commenced
therein, in order that the new courts or the courts having jurisdiction over said cases may continue the proceedings. When the Spanish
sovereignty in the Philippine Islands ceased and the Islands came into the possession of the United States, the "Audiencia" or Supreme
Court was continued and did not cease to exist, and proceeded to take cognizance of the actions pending therein upon the cessation of
the Spanish sovereignty until the said "Audiencia" or Supreme Court was abolished, and the Supreme Court created in Chapter II of Act
No. 136 was substituted in lieu thereof. And the Courts of First Instance of the Islands during the Spanish regime continued taking
cognizance of cases pending therein upon the change of sovereignty, until section 65 of the same Act No. 136 abolished them and created
in its Chapter IV the present Courts of First Instance in substitution of the former. Similarly, no enabling acts were enacted during the
Japanese occupation, but a mere proclamation or order that the courts in the Island were continued.
On the other hand, during the American regime, when section 78 of Act No. 136 was enacted abolishing the civil jurisdiction of the
provost courts created by the military government of occupation in the Philippines during the Spanish-American War of 1898, the same
section 78 provided for the transfer of all civil actions then pending in the provost courts to the proper tribunals, that is, to the justices of
the peace courts, Court of First Instance, or Supreme Court having jurisdiction over them according to law. And later on, when the
criminal jurisdiction of provost courts in the City of Manila was abolished by section 3 of Act No. 186, the same section provided that
criminal cases pending therein within the jurisdiction of the municipal court created by Act No. 183 were transferred to the latter.
That the present courts as the same courts which had been functioning during the Japanese regime and, therefore, can continue the
proceedings in cases pending therein prior to the restoration of the Commonwealth of the Philippines, is confirmed by Executive Order
No. 37 which we have already quoted in support of our conclusion in connection with the second question. Said Executive Order
provides"(1) that the Court of Appeals created and established under Commonwealth Act No. 3 as amended, be abolished, as it is hereby
abolished," and "(2) that all cases which have heretofore been duly appealed to the Court of Appeals shall be transmitted to the Supreme
Court for final decision. . . ." In so providing, the said Order considers that the Court of Appeals abolished was the same that existed prior
to, and continued after, the restoration of the Commonwealth Government; for, as we have stated in discussing the previous question,
almost all, if not all, of the cases pending therein, or which had theretofore (that is, up to March 10, 1945) been duly appealed to said
court, must have been cases coming from the Courts of First Instance during the so-called Republic of the Philippines. If the Court of
Appeals abolished by the said Executive Order was not the same one which had been functioning during the Republic, but that which had
existed up to the time of the Japanese occupation, it would have provided that all the cases which had, prior to and up to that occupation
on January 2, 1942, been dully appealed to the said Court of Appeals shall be transmitted to the Supreme Court for final decision.
It is, therefore, obvious that the present courts have jurisdiction to continue, to final judgment, the proceedings in cases, not of political
complexion, pending therein at the time of the restoration of the Commonwealth Government.
Having arrived at the above conclusions, it follows that the Court of First Instance of Manila has jurisdiction to continue to final judgment
the proceedings in civil case No. 3012, which involves civil rights of the parties under the laws of the Commonwealth Government,
pending in said court at the time of the restoration of the said Government; and that the respondent judge of the court, having refused to
act and continue him does a duty resulting from his office as presiding judge of that court, mandamus is the speedy and adequate remedy
in the ordinary course of law, especially taking into consideration the fact that the question of jurisdiction herein involved does affect not
only this particular case, but many other cases now pending in all the courts of these Islands.
In view of all the foregoing it is adjudged and decreed that a writ of mandamus issue, directed to the respondent judge of the Court of
First Instance of Manila, ordering him to take cognizance of and continue to final judgment the proceedings in civil case No. 3012 of said
court. No pronouncement as to costs. So ordered.
Moran, C.J., Ozaeta, Paras, Jaranilla and Pablo, JJ., concur.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-4254 September 26, 1951
BORIS MEJOFF, petitioner,
vs.
THE DIRECTOR OF PRISONS, respondent.
Ambrosio T. Dollete for petitioner.
First Assistant Solicitor General Roberto A. Gianson and Solicitor Florencio Villamor for respondents.
TUASON, J.:
This is a second petition for habeas corpus by Boris Mejoff, the first having been denied in a decision of this Court of July 30, 1949. The
history of the petitioner's detention was thus briefly set forth in that decision, written by Mr. Justice Bengzon:
The petitioner Boris Mejoff is an alien of Russian descent who was brought to this country from Shanghai as a secret operative
by the Japanese forces during the latter's regime in these Islands. Upon liberation he was arrested as a Japanese spy, by U.S.
Army Counter Intelligence Corps. Later he was handed to theCommonwealth Government for disposition in accordance with
Commonwealth Act No. 682. Thereafter, the People's Court ordered his release. But the deportation Board taking his case up,
found that having no travel documents Mejoff was illegally in this country, and consequently referred the matter to the
immigration authorities. After the corresponding investigation, the Board of commissioners of Immigration on April 5, 1948,
declared that Mejoff had entered the Philippines illegally in 1944, without inspection and admission by the immigration
officials at a designation port of entry and, therefore, it ordered that he be deported on the first available transportation to
Russia. The petitioner was then under custody, he having been arrested on March 18, 1948. In May 1948 he was transferred to
the Cebu Provincial Jail together with three other Russians to await the arrival of some Russian vessels. In July and August of
that year two boats of Russian nationality called at the Cebu Port. But their masters refused to take petitioner and his
companions alleging lack of authority to do so. In October 1948 after repeated failures to ship this deportee abroad, the
authorities removed him to Bilibid Prison at Muntinglupa where he has been confined up to the present time, inasmuch as the
Commissioner of Immigration believes it is for the best interests of the country to keep him under detention while
arrangements for his departure are being made.
The Court held the petitioner's detention temporary and said that "temporary detention is a necessary step in the process of exclusion or
expulsion of undesirable aliens and that pending arrangements for his deportation, the Government has the right to hold the undesirable
alien under confinement for a reasonable lenght of time." It took note of the fact, manifested by the Solicitor General's representative in
the course of the of the oral argumment, that "this Government desires to expel the alien, and does not relish keeping him at the people's
expense . . . making efforts to carry out the decree of exclusion by the highest officer of the land." No period was fixed within which the
immigration authorities should carry out the contemplated deportation beyond the statement that "The meaning of 'reasonable time'
depends upon the circumstances, specially the difficulties of obtaining a passport, the availability of transportation, the diplomatic
arrangements with the governments concerned and the efforts displayed to send the deportee away;" but the Court warned that "under
established precedents, too long a detention may justify the issuance of a writ of habeas corpus."
Mr. Justice Paras, now Chief Justice, Mr. Justice Feria, Mr. Justice Perfecto, and the writer of this decision dissented. Mr. Justice Feria and
Mr. Justice Perfecto voted for outright discharge of the prisoner from custody. Mr. Justice Paras qualified his dissent by stating that he
might agree "to further detention of the herein petitioner, provided that he be released if after six months, the Government is still unable
to deport him." This writer joined in the latter dissent but thought that two months constituted reasonable time.
Over two years having elapsed since the decision aforesaid was promulgated, the Government has not found way and means of removing
the petitioner out of the country, and none are in sight, although it should be said in justice to the deportation authorities, it was through
no fault of theirs that no ship or country would take the petitioner.
Aliens illegally staying in the Philippines have no right of asylum therein (Sowapadji vs. Wixon, Sept. 18, 1946, 157 F. ed., 289, 290), even if
they are "stateless," which the petitioner claims to be. It is no less true however, as impliedly stated in this Court's decision, supra, that
foreign nationals, not enemy against whom no charge has been made other than that their permission to stay has expired, may not
indefinitely be kept in detention. The protection against deprivation of liberty without due process of law and except for crimes
committed against the laws of the land is not limited to Philippine citizens but extends to all residents, except enemy aliens, regardless of
nationality. Whether an alien who entered the country in violation of its immigration laws may be detained for as long as the Government
is unable to deport him, is a point we need not decide. The petitioner's entry into the Philippines was not unlawful; he was brought by the
armed and belligerent forces of a de facto government whose decrees were law furing the occupation.
Moreover, by its Constitution (Art. II, Sec. 3) the Philippines "adopts the generally accepted principles of international law as part of the
law of Nation." And in a resolution entitled "Universal Declaration of Human Rights" and approved by the General Assembly of the United
Nations of which the Philippines is a member, at its plenary meeting on December 10, 1948, the right to life and liberty and all other
fundamental rights as applied to all human beings were proclaimed. It was there resolved that "All human beings are born free and equal
in degree and rights" (Art. 1); that "Everyone is entitled to all the rights and freedom set forth in this Declaration, without distinction of
any kind, such as race, colour, sex, language, religion, political or other opinion, nationality or social origin, property, birth, or other
status" (Art. 2): that "Every one has the right to an effective remedy by the competent national tribunals for acts violating the
fundamental rights granted him by the Constitution or by law" (Art. 8); that "No one shall be subjected to arbitrary arrest, detention or
exile" (Art. 9); etc.
In U. S. vs. Nichols, 47 Fed. Supp., 201, it was said that the court "has the power to release from custody an alien who has been detained
an unreasonably long period of time by the Department of Justice after it has become apparent that although a warrant for his
deportation has been issued, the warrant can not be effectuated;" that "the theory on which the court is given the power to act is that the
warrant of deportation, not having been able to be executed, is functus officio and the alien is being held without any authority of law."
The decision cited several cases which, it said, settled the matter definitely in that jurisdiction, adding that the same result had reached in
innumerable cases elsewhere. The cases referred to were United States ex rel. Ross vs. Wallis, 2 Cir. 279 F. 401, 404; Caranica vs. Nagle, 9
Cir., 28 F. 2d 955; Saksagansky vs. Weedin, 9 Cir., 53 F. 2d 13, 16 last paragraph; Ex parte Matthews, D.C.W.D. Wash., 277 F. 857;
Moraitis vs. Delany, D.C. Md. Aug. 28, 1942, 46 F. Supp. 425.
The most recent case, as far as we have been able to find, was that of Staniszewski vs. Watkins (1948), 90 Fed. Supp., 132, which is nearly
foursquare with the case at hand. In that case a stateless person, formerly a Polish national, resident in the United States since 1911 and
many times serving as a seaman on American vessels both in peace and in war, was ordered excluded from the United States and
detained at Ellis Island at the expense of the steamship company, when he returned from a voyage on which he had shipped from New
York for one or more European ports and return to the United States. The grounds for his exclusion were that he had no passport or
immigration visa, and that in 1937 had been convicted of perjury because in certain documents he presented himself to be an American
citizen. Upon his application for release on habeas corpus, the Court released him upon his own recognizance. Judge Leibell, of the United
States District Court for the Southern District of New York, said in part:
When the return to the writ of habeas corpus came before this court, I suggested that all interested parties . . . make an effort
to arrange to have the petitioner ship out of some country that he would receive him as a resident. He is, a native-born Pole
but the Polish Consul has advised him in writing that he is no longer a Polish subject. This Government does not claim that he is
a Polish citizen. His attorney says he is a stateless. The Government is willing that he go back to the ship, but if he were sent
back aboard a ship and sailed to the Port (Cherbourg, France) from which he last sailed to the United States, he would probably
be denied permission to land. There is no other country that would take him, without proper documents.
It seems to me that this is a genuine hardship case and that the petitioner should be released from custody on proper terms. . .
.
What is to be done with the petitioner? The government has had him in custody almost seven months and practically admits it
has no place to send him out of this country. The steamship company, which employed him as one of a group sent to the ship
by the Union, with proper seaman's papers issued by the United States Coast Guard, is paying $3 a day for petitioner's board at
Ellis Island. It is no fault of the steamship company that petitioner is an inadmissible alien as the immigration officials describe
him. . . .
I intend to sustain the writ of habeas corpus and order the release of the petitioner on his own recognizance. He will be
required to inform the immigration officials at Ellis Island by mail on the 15th of each month, stating where he is employed and
where he can be reached by mail. If the government does succeed in arranging for petitioner's deportation to a country that
will be ready to receive him as a resident, it may then advise the petitioner to that effect and arrange for his deportation in the
manner provided by law.
Although not binding upon this Court as a precedent, the case aforecited affords a happy solution to the quandry in which the parties here
finds themselves, solution which we think is sensible, sound and compatible with law and the Constitution. For this reason, and since the
Philippine law on immigration was patterned after or copied from the American law and practice, we choose to follow and adopt the
reasoning and conclusions in the Staniszewski decision with some modifications which, it is believed, are in consonance with the
prevailing conditions of peace and order in the Philippines.
It was said or insinuated at the hearing ofthe petition at bar, but not alleged in the return, that the petitioner was engaged in subversive
activities, and fear was expressed that he might join or aid the disloyal elements if allowed to be at large. Bearing in mind the
Government's allegation in its answer that "the herein petitioner was brought to the Philippines by the Japanese forces," and the fact that
Japan is no longer at war with the United States or the Philippines nor identified with the countries allied against these nations, the
possibility of the petitioner's entertaining or committing hostile acts prejudicial to the interest and security of this country seems remote.
If we grant, for the sake of argument, that such a possibility exists, still the petitioner's unduly prolonged detention would be unwarranted
by law and the Constitution, if the only purpose of the detention be to eliminate a danger that is by no means actual, present, or
uncontrolable. After all, the Government is not impotent to deal with or prevent any threat by such measure as that just outlined. The
thought eloquently expressed by Mr. Justice Jackson of the United States Supreme Court in connection with the appliccation for bail of
ten Communists convicted by a lower court of advocacy of violent overthrow of the United States Government is, in principle, pertinent
and may be availed of at this juncture. Said the learned Jurist:
The Governmet's alternative contention is that defendants, by misbehavior after conviction, have forfeited their claim to bail.
Grave public danger is said to result from what they may be expected to do, in addition to what they have done since their
conviction. If I assume that defendants are disposed to commit every opportune disloyal to act helpful to Communist
countries, it is still difficult to reconcile with traditional American law the jailing of persons by the courts because of anticipated
but as yet uncommitted crimes. lmprisonment to protect society from predicted but unconsummated offenses is so
unprecedented in this country and so fraught with danger of excesses and injustice that I am loath to resort it, even as a
discretionary judicial technique to supplement conviction of such offenses as those of which defendants stand convicted.
But the right of every American to equal treatment before the law is wrapped up in the same constitutional bundle with those
of these Communists. If an anger or disgust with these defendants we throw out the bundle, we alsocast aside protection for
the liberties of more worthy critics who may be in opposition to the government of some future day.
xxx xxx x x x1âwphïl.nêt
If, however, I were to be wrong on all of these abstract or theoretical matters of principle, there is a very practical aspect of
this application which must not be overlooked or underestimated — that is the disastrous effect on the reputation of American
justice if I should now send these men to jail and the full Court later decide that their conviction is invalid. All experience with
litigation teaches that existence of a substantial question about a conviction implies a more than negligible risk of reversal.
Indeed this experience lies back of our rule permitting and practice of allowing bail where such questions exist, to avoid the
hazard of unjustifiably imprisoning persons with consequent reproach to our system of justice. If that is prudent judicial
practice in the ordinary case, how much more important to avoid every chance of handing to the Communist world such an
ideological weapon as it would have if this country should imprison this handful of Communist leaders on a conviction that our
highest Court would confess to be illegal. Risks, of course, are involved in either granting or refusing bail. I am naive enough to
underestimate the troublemaking propensities of the defendants. But, with the Department of Justice alert to the the dangers,
the worst they can accomplish in the short time it will take to end the litigation is preferable to the possibility of national
embarrassment from a celebrated case of unjustified imprisonment of Communist leaders. Under no circumstances must we
permit their symbolization of an evil force in the world to be hallowed and glorified by any semblance of martyrdom. The way
to avoid that risk is not to jail these men until it is finally decided that they should stay jailed.
If that case is not comparable with ours on the issues presented, its underlying principle is of universal application. In fact, its ratio
decidendi applies with greater force to the present petition, since the right of accused to bail pending apppeal of his case, as in the case of
the ten Communists, depends upon the discretion of the court, whereas the right to be enlarged before formal charges are instituted is
absolute. As already noted, not only are there no charges pending against the petitioner, but the prospects of bringing any against him are
slim and remote.
Premises considered, the writ will issue commanding the respondents to release the petitioner from custody upon these terms: The
petitioner shall be placed under the surveillance of the immigration authorities or their agents in such form and manner as may be
deemed adequate to insure that he keep peace and be available when the Government is ready to deport him. The surveillance shall be
reasonable and the question of reasonableness shall be submitted to this Court or to the Court of First Instance of Manila for decision in
case of abuse. He shall also put up a bond for the above purpose in the amount of P5,000 with sufficient surety or sureties, which bond
the Commissioner of Immigration is authorized to exact by section 40 of Commonwealth Act No. 613.
No costs will be charged.
Paras, C.J., Feria, Bengzon, Padilla, Reyes and Jugo, JJ., concur.
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-24294 May 3, 1974
DONALD BAER, Commander U.S. Naval Base, Subic Bay, Olongapo, Zambales, petitioner,
vs.
HON. TITO V. TIZON, as Presiding Judge of the Court of First Instance of Bataan, and EDGARDO GENER, respondents.
Sycip, Salazar, Luna Manalo & Feliciano for petitioner.
A. E. Dacanay for private respondent.
Office of the Solicitor General Camilo D. Quiason as amicus curiae.
FERNANDO, J.:p
There is nothing novel about the question raised in this certiorari proceeding against the then Judge Tito V. Tizon, filed by petitioner
Donald Baer, then Commander of the United States Naval Base, Subic Bay, Olongapo, Zambales, seeking to nullify the orders of
respondent Judge denying his motion to dismiss a complaint filed against him by the private respondent, Edgardo Gener, on the ground of
sovereign immunity of a foreign power, his contention being that it was in effect a suit against the United States, which had not given its
consent. The answer given is supplied by a number of cases coming from this Tribunal starting from a 1945 decision, Raquiza v.
Bradford1 to Johnson v. Turner,2 promulgated in 1954. The doctrine of immunity from suit is of undoubted applicability in this jurisdiction.
It cannot be otherwise, for under the 1935 Constitution, as now, it is expressly made clear that the Philippines "adopts the generally
accepted principles of international law as part of the law of the Nation."3 As will subsequently be shown, there was a failure on the part
of the lower court to accord deference and respect to such a basic doctrine, a failure compounded by its refusal to take note of the
absence of any legal right on the part of petitioner. Hence, certiorari is the proper remedy.
The facts are not in dispute. On November 17, 1964, respondent Edgardo Gener, as plaintiff, filed a complaint for injunction with the
Court of First Instance of Bataan against petitioner, Donald Baer, Commander of the United States Naval Base in Olongapo. It was
docketed as Civil Case No. 2984 of the Court of First Instance of Bataan. He alleged that he was engaged in the business of logging in an
area situated in Barrio Mabayo, Municipality of Morong, Bataan and that the American Naval Base authorities stopped his logging
operations. He prayed for a writ of preliminary injunction restraining petitioner from interfering with his logging operations. A restraining
order was issued by respondent Judge on November 23, 1964.4 Counsel for petitioner, upon instructions of the American Ambassador to
the Philippines, entered their appearance for the purpose of contesting the jurisdiction of respondent Judge on the ground that the suit
was one against a foreign sovereign without its consent.5 Then, on December 12, 1964, petitioner filed a motion to dismiss, wherein such
ground was reiterated. It was therein pointed out that he is the chief or head of an agency or instrumentality of the United States of
America, with the subject matter of the action being official acts done by him for and in behalf of the United States of America. It was
added that in directing the cessation of logging operations by respondent Gener within the Naval Base, petitioner was entirely within the
scope of his authority and official duty, the maintenance of the security of the Naval Base and of the installations therein being the first
concern and most important duty of the Commander of the Base.6 There was, on December 14, 1964, an opposition and reply to
petitioner's motion to dismiss by respondent Gener, relying on the principle that "a private citizen claiming title and right of possession of
certain property may, to recover possession of said property, sue as individuals, officers and agents of the Government, who are said to
be illegally withholding the same from him, though in doing so, said officers and agents claim that they are acting for the Government."
That was his basis for sustaining the jurisdiction of respondent Judge.7 Petitioner, thereafter, on January 12, 1965, made a written offer of
documentary evidence, including certified copies of telegrams of the Forestry Director to Forestry personnel in Balanga, Bataan dated
January 8, and January 11, 1965, directing immediate investigation of illegal timber cutting in Bataan and calling attention to the fact that
the records of the office show no new renewal of timber license or temporary extension permits.8 The above notwithstanding,
respondent Judge, on January 12, 1965, issued an order granting respondent Gener's application for the issuance of a writ of preliminary
injunction and denying petitioner's motion to dismiss the opposition to the application for a writ of preliminary injunction.9
A motion for reconsideration having proved futile, this petition for certiorari was filed with this Court. The prayer was for the nullification
and setting aside of the writ of preliminary injunction issued by respondent Judge in the aforesaid Civil Case No. 2984 of the Court of First
Instance of Bataan. A resolution of March 17, 1965 was issued by this Court requiring respondents to file an answer and upon petitioner's
posting a bond of P5,000.00 enjoining them from enforcing such writ of preliminary injunction. The answer was duly forthcoming. It
sought to meet the judicial question raised by the legal proposition that a private citizen claiming title and right of possession of a certain
property may, to recover the same, sue as individuals officers and agents of the government alleged to be illegally withholding such
property even if there is an assertion on their part that they are acting for the government. Support for such a view is found in the
American Supreme Court decisions of United States v. Lee10 and Land v. Dollar.11Thus the issue is squarely joined whether or not the
doctrine of immunity from suit without consent is applicable. Thereafter, extensive memoranda were filed both by petitioner and
respondents. In addition, there was a manifestation and memorandum of the Republic of the Philippines as amicus curiae where, after a
citation of American Supreme Court decisions going back to Schooner Exchange v. M'faddon,12 an 1812 decision, to United States v.
Belmont,13 decided in 1937, the plea was made that the petition for certiorari be granted..
A careful study of the crucial issue posed in this dispute yields the conclusion, as already announced, that petitioner should prevail.
1. The invocation of the doctrine of immunity from suit of a foreign state without its consent is appropriate. More specifically, insofar as
alien armed forces is concerned, the starting point is Raquiza v. Bradford, a 1945 decision.14In dismissing a habeas corpus petition for the
release of petitioners confined by American army authorities, Justice Hilado, speaking for the Court, cited from Coleman v.
Tennessee,15 where it was explicitly declared: "It is well settled that a foreign army, permitted to march through a friendly country or to be
stationed in it, by permission of its government or sovereign, is exempt from the civil and criminal jurisdiction of the place."16 Two years
later, in Tubb and Tedrow v. Griess,17 this Court relied on the ruling in Raquiza v. Bradford and cited in support thereof excerpts from the
works of the following authoritative writers: Vattel, Wheaton, Hall, Lawrence, Oppenhein, Westlake, Hyde, and McNair and
Lauterpacht.18 Accuracy demands the clarification that after the conclusion of the Philippine-American Military Bases Agreement, the
treaty provisions should control on such matter, the assumption being that there was a manifestation of the submission to jurisdiction on
the part of the foreign power whenever appropriate.19More to the point is Syquia v. Almeda Lopez,20 where plaintiffs as lessors sued the
Commanding General of the United States Army in the Philippines, seeking the restoration to them of the apartment buildings they
owned leased to United States armed forces stationed in the Manila area. A motion to dismiss on the ground of non-suability was filed
and upheld by respondent Judge. The matter was taken to this Court in a mandamus proceeding. It failed. It was the ruling that
respondent Judge acted correctly considering that the "action must be considered as one against the U.S. Government."21 The opinion of
Justice Montemayor continued: "It is clear that the courts of the Philippines including the Municipal Court of Manila have no jurisdiction
over the present case for unlawful detainer. The question of lack of jurisdiction was raised and interposed at the very beginning of the
action. The U.S. Government has not given its consent to the filing of this suit which is essentially against her, though not in name.
Moreover, this is not only a case of a citizen filing a suit against his own Government without the latter's consent but it is of a citizen filing
an action against a foreign government without said government's consent, which renders more obvious the lack of jurisdiction of the
courts of his country. The principles of law behind this rule are so elementary and of such general acceptance that we deem it
unnecessary to cite authorities in support thereof."22 Then came Marvel Building Corporation v. Philippine War Damage
Commission,23 where respondent, a United States agency established to compensate damages suffered by the Philippines during World
War II was held as falling within the above doctrine as the suit against it "would eventually be a charge against or financial liability of the
United States Government because ..., the Commission has no funds of its own for the purpose of paying money
judgments."24 The Syquiaruling was again explicitly relied upon in Marquez Lim v. Nelson,25 involving a complaint for the recovery of a
motor launch, plus damages, the special defense interposed being "that the vessel belonged to the United States Government, that the
defendants merely acted as agents of said Government, and that the United States Government is therefore the real party in
interest."26 So it was in Philippine Alien Property Administration v. Castelo,27 where it was held that a suit against the Alien Property
Custodian and the Attorney General of the United States involving vested property under the Trading with the Enemy Act is in substance a
suit against the United States. To the same effect is Parreno v. McGranery,28 as the following excerpt from the opinion of Justice Tuason
clearly shows: "It is a widely accepted principle of international law, which is made a part of the law of the land (Article II, Section 3 of the
Constitution), that a foreign state may not be brought to suit before the courts of another state or its own courts without its
consent."29 Finally, there is Johnson v. Turner,30 an appeal by the defendant, then Commanding General, Philippine Command (Air Force,
with office at Clark Field) from a decision ordering the return to plaintiff of the confiscated military payment certificates known as scrip
money. In reversing the lower court decision, this Tribunal, through Justice Montemayor, relied on Syquia v. Almeda Lopez,31 explaining
why it could not be sustained.
The solidity of the stand of petitioner is therefore evident. What was sought by private respondent and what was granted by respondent
Judge amounted to an interference with the performance of the duties of petitioner in the base area in accordance with the powers
possessed by him under the Philippine-American Military Bases Agreement. This point was made clear in these words: "Assuming, for
purposes of argument, that the Philippine Government, through the Bureau of Forestry, possesses the "authority to issue a Timber
License to cut logs" inside a military base, the Bases Agreement subjects the exercise of rights under a timber license issued by the
Philippine Government to the exercise by the United States of its rights, power and authority of control within the bases; and the findings
of the Mutual Defense Board, an agency of both the Philippine and United States Governments, that "continued logging operation by Mr.
Gener within the boundaries of the U.S. Naval Base would not be consistent with the security and operation of the Base," is conclusive
upon the respondent Judge. .. The doctrine of state immunity is not limited to cases which would result in a pecuniary charge against the
sovereign or would require the doing of an affirmative act by it. Prevention of a sovereign from doing an affirmative act pertaining directly
and immediately to the most important public function of any government - the defense of the state — is equally as untenable as
requiring it to do an affirmative act."32 That such an appraisal is not opposed to the interpretation of the relevant treaty provision by our
government is made clear in the aforesaid manifestation and memorandum as amicus curiae, wherein it joined petitioner for the grant of
the remedy prayed for.
2. There should be no misinterpretation of the scope of the decision reached by this Court. Petitioner, as the Commander of the United
States Naval Base in Olongapo, does not possess diplomatic immunity. He may therefore be proceeded against in his personal capacity, or
when the action taken by him cannot be imputed to the government which he represents. Thus, after the Military Bases Agreement,
in Miquiabas v. Commanding General33and Dizon v. The Commanding General of the Philippine-Ryukus Command,34 both of them being
habeas corpus petitions, there was no question as to the submission to jurisdiction of the respondents. As a matter of fact, in Miquiabas v.
Commanding General,35 the immediate release of the petitioner was ordered, it being apparent that the general court martial appointed
by respondent Commanding General was without jurisdiction to try petitioner. Thereafter, in the cited cases of Syquia, Marquez Lim,
and Johnson, the parties proceeded against were American army commanding officers stationed in the Philippines. The insuperable
obstacle to the jurisdiction of respondent Judge is that a foreign sovereign without its consent is haled into court in connection with acts
performed by it pursuant to treaty provisions and thus impressed with a governmental character.
3. The infirmity of the actuation of respondent Judge becomes even more glaring when it is considered that private respondent had
ceased to have any right of entering within the base area. This is made clear in the petition in these words: "In 1962, respondent Gener
was issued by the Bureau of Forestry an ordinary timber license to cut logs in Barrio Mabayo, Morong, Bataan. The license was renewed
on July 10, 1963. In 1963, he commenced logging operation inside the United States Naval Base, Subic Bay, but in November 1963 he was
apprehended and stopped by the Base authorities from logging inside the Base. The renewal of his license expired on July 30, 1964, and to
date his license has not been renewed by the Bureau of Forestry. .. In July 1964, the Mutual Defense Board, a joint Philippines-United
States agency established pursuant to an exchange of diplomatic notes between the Secretary of Foreign Affairs and the United States
Ambassador to provide "direct liaison and consultation between appropriate Philippine and United States authorities on military matters
of mutual concern,' advised the Secretary of Foreign Affairs in writing that: "The enclosed map shows that the area in which Mr. Gener
was logging definitely falls within the boundaries of the base. This map also depicts certain contiguous and overlapping areas whose
functional usage would be interfered with by the logging operations.'"36 Nowhere in the answer of respondents, nor in their
memorandum, was this point met. It remained unrefuted.
WHEREFORE, the writ of certiorari prayed for is granted, nullifying and setting aside the writ of preliminary injunction issued by
respondent Judge in Civil Case No. 2984 of the Court of First Instance of Bataan. The injunction issued by this Court on March 18, 1965
enjoining the enforcement of the aforesaid writ of preliminary injunction of respondent Judge is hereby made permanent. Costs against
private respondent Edgardo Gener.
Zaldivar, Antonio, Fernandez and Aquino, JJ., concur.
Barredo, J., took no part.
EN BANC
[G.R. No. 118295. May 2, 1997]
WIGBERTO E. TAADA and ANNA DOMINIQUE COSETENG, as members of the Philippine Senate and as taxpayers; GREGORIO
ANDOLANA and JOKER ARROYO as members of the House of Representatives and as taxpayers; NICANOR P. PERLAS and
HORACIO R. MORALES, both as taxpayers; CIVIL LIBERTIES UNION, NATIONAL ECONOMIC PROTECTIONISM ASSOCIATION,
CENTER FOR ALTERNATIVE DEVELOPMENT INITIATIVES, LIKAS-KAYANG KAUNLARAN FOUNDATION, INC., PHILIPPINE RURAL
RECONSTRUCTION MOVEMENT, DEMOKRATIKONG KILUSAN NG MAGBUBUKID NG PILIPINAS, INC., and PHILIPPINE
PEASANT INSTITUTE, in representation of various taxpayers and as non-governmental organizations, petitioners,
vs. EDGARDO ANGARA, ALBERTO ROMULO, LETICIA RAMOS-SHAHANI, HEHERSON ALVAREZ, AGAPITO AQUINO, RODOLFO
BIAZON, NEPTALI GONZALES, ERNESTO HERRERA, JOSE LINA, GLORIA MACAPAGAL-ARROYO, ORLANDO MERCADO, BLAS
OPLE, JOHN OSMEA, SANTANINA RASUL, RAMON REVILLA, RAUL ROCO, FRANCISCO TATAD and FREDDIE WEBB, in their
respective capacities as members of the Philippine Senate who concurred in the ratification by the President of the
Philippines of the Agreement Establishing the World Trade Organization; SALVADOR ENRIQUEZ, in his capacity as Secretary
of Budget and Management; CARIDAD VALDEHUESA, in her capacity as National Treasurer; RIZALINO NAVARRO, in his
capacity as Secretary of Trade and Industry; ROBERTO SEBASTIAN, in his capacity as Secretary of Agriculture; ROBERTO DE
OCAMPO, in his capacity as Secretary of Finance; ROBERTO ROMULO, in his capacity as Secretary of Foreign Affairs; and
TEOFISTO T. GUINGONA, in his capacity as Executive Secretary, respondents.
DECISION
PANGANIBAN, J.:
The emergence on January 1, 1995 of the World Trade Organization, abetted by the membership thereto of the vast majority of
countries has revolutionized international business and economic relations amongst states. It has irreversibly propelled the world towards
trade liberalization and economic globalization. Liberalization, globalization, deregulation and privatization, the third-millennium buzz
words, are ushering in a new borderless world of business by sweeping away as mere historical relics the heretofore traditional modes of
promoting and protecting national economies like tariffs, export subsidies, import quotas, quantitative restrictions, tax exemptions and
currency controls. Finding market niches and becoming the best in specific industries in a market-driven and export-oriented global
scenario are replacing age-old beggar-thy-neighbor policies that unilaterally protect weak and inefficient domestic producers of goods and
services. In the words of Peter Drucker, the well-known management guru, Increased participation in the world economy has become the
key to domestic economic growth and prosperity.
Brief Historical Background
To hasten worldwide recovery from the devastation wrought by the Second World War, plans for the establishment of three
multilateral institutions -- inspired by that grand political body, the United Nations -- were discussed at Dumbarton Oaks and Bretton
Woods. The first was the World Bank (WB) which was to address the rehabilitation and reconstruction of war-ravaged and later
developing countries; the second, the International Monetary Fund (IMF) which was to deal with currency problems; and the third, the
International Trade Organization (ITO), which was to foster order and predictability in world trade and to minimize unilateral protectionist
policies that invite challenge, even retaliation, from other states. However, for a variety of reasons, including its non-ratification by the
United States, the ITO, unlike the IMF and WB, never took off. What remained was only GATT -- the General Agreement on Tariffs and
Trade. GATT was a collection of treaties governing access to the economies of treaty adherents with no institutionalized body
administering the agreements or dependable system of dispute settlement.
After half a century and several dizzying rounds of negotiations, principally the Kennedy Round, the Tokyo Round and the Uruguay
Round, the world finally gave birth to that administering body -- the World Trade Organization -- with the signing of the Final Act in
Marrakesh, Morocco and the ratification of the WTO Agreement by its members.[1]
Like many other developing countries, the Philippines joined WTO as a founding member with the goal, as articulated by President
Fidel V. Ramos in two letters to the Senate (infra), of improving Philippine access to foreign markets, especially its major trading partners,
through the reduction of tariffs on its exports, particularly agricultural and industrial products. The President also saw in the WTO the
opening of new opportunities for the services sector x x x, (the reduction of) costs and uncertainty associated with exporting x x x, and
(the attraction of) more investments into the country. Although the Chief Executive did not expressly mention it in his letter, the
Philippines - - and this is of special interest to the legal profession - - will benefit from the WTO system of dispute settlement by judicial
adjudication through the independent WTO settlement bodies called (1) Dispute Settlement Panels and (2) Appellate Tribunal.Heretofore,
trade disputes were settled mainly through negotiations where solutions were arrived at frequently on the basis of relative bargaining
strengths, and where naturally, weak and underdeveloped countries were at a disadvantage.
The Petition in Brief
Arguing mainly (1) that the WTO requires the Philippines to place nationals and products of member-countries on the same footing
as Filipinos and local products and (2) that the WTO intrudes, limits and/or impairs the constitutional powers of both Congress and the
Supreme Court, the instant petition before this Court assails the WTO Agreement for violating the mandate of the 1987 Constitution to
develop a self-reliant and independent national economy effectively controlled by Filipinos x x x (to) give preference to qualified Filipinos
(and to) promote the preferential use of Filipino labor, domestic materials and locally produced goods.
Simply stated, does the Philippine Constitution prohibit Philippine participation in worldwide trade liberalization and economic
globalization? Does it prescribe Philippine integration into a global economy that is liberalized, deregulated and privatized? These are the
main questions raised in this petition for certiorari, prohibition and mandamus under Rule 65 of the Rules of Court praying (1) for the
nullification, on constitutional grounds, of the concurrence of the Philippine Senate in the ratification by the President of the Philippines
of the Agreement Establishing the World Trade Organization (WTO Agreement, for brevity) and (2) for the prohibition of its
implementation and enforcement through the release and utilization of public funds, the assignment of public officials and employees, as
well as the use of government properties and resources by respondent-heads of various executive offices concerned therewith. This
concurrence is embodied in Senate Resolution No. 97, dated December 14, 1994.
The Facts
On April 15, 1994, Respondent Rizalino Navarro, then Secretary of the Department of Trade and Industry (Secretary Navarro, for
brevity), representing the Government of the Republic of the Philippines, signed in Marrakesh, Morocco, the Final Act Embodying the
Results of the Uruguay Round of Multilateral Negotiations (Final Act, for brevity).
By signing the Final Act,[2] Secretary Navarro on behalf of the Republic of the Philippines, agreed:
(a) to submit, as appropriate, the WTO Agreement for the consideration of their respective competent authorities, with a view to seeking
approval of the Agreement in accordance with their procedures; and
(b) to adopt the Ministerial Declarations and Decisions.
On August 12, 1994, the members of the Philippine Senate received a letter dated August 11, 1994 from the President of the
Philippines,[3] stating among others that the Uruguay Round Final Act is hereby submitted to the Senate for its concurrence pursuant to
Section 21, Article VII of the Constitution.
On August 13, 1994, the members of the Philippine Senate received another letter from the President of the Philippines [4] likewise
dated August 11, 1994, which stated among others that the Uruguay Round Final Act, the Agreement Establishing the World Trade
Organization, the Ministerial Declarations and Decisions, and the Understanding on Commitments in Financial Services are hereby
submitted to the Senate for its concurrence pursuant to Section 21, Article VII of the Constitution.
On December 9, 1994, the President of the Philippines certified the necessity of the immediate adoption of P.S. 1083, a resolution
entitled Concurring in the Ratification of the Agreement Establishing the World Trade Organization.[5]
On December 14, 1994, the Philippine Senate adopted Resolution No. 97 which Resolved, as it is hereby resolved, that the Senate
concur, as it hereby concurs, in the ratification by the President of the Philippines of the Agreement Establishing the World Trade
Organization.[6] The text of the WTO Agreement is written on pages 137 et seq. of Volume I of the 36-volume Uruguay Round of
Multilateral Trade Negotiations and includes various agreements and associated legal instruments (identified in the said Agreement as
Annexes 1, 2 and 3 thereto and collectively referred to as Multilateral Trade Agreements, for brevity) as follows:
ANNEX 1
Annex 1A: Multilateral Agreement on Trade in Goods
General Agreement on Tariffs and Trade 1994
Agreement on Agriculture
Agreement on the Application of Sanitary and
Phytosanitary Measures
Agreement on Textiles and Clothing
Agreement on Technical Barriers to Trade
Agreement on Trade-Related Investment Measures
Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994
Agreement on Implementation of Article VII of the General on Tariffs and Trade 1994
Agreement on Pre-Shipment Inspection
Agreement on Rules of Origin
Agreement on Imports Licensing Procedures
Agreement on Subsidies and Coordinating Measures
Agreement on Safeguards
Annex 1B: General Agreement on Trade in Services and Annexes
Annex 1C: Agreement on Trade-Related Aspects of Intellectual Property Rights
ANNEX 2
Understanding on Rules and Procedures Governing the Settlement of Disputes
ANNEX 3
Trade Policy Review Mechanism
On December 16, 1994, the President of the Philippines signed[7] the Instrument of Ratification, declaring:
NOW THEREFORE, be it known that I, FIDEL V. RAMOS, President of the Republic of the Philippines, after having seen and considered the
aforementioned Agreement Establishing the World Trade Organization and the agreements and associated legal instruments included in
Annexes one (1), two (2) and three (3) of that Agreement which are integral parts thereof, signed at Marrakesh, Morocco on 15 April
1994, do hereby ratify and confirm the same and every Article and Clause thereof.
To emphasize, the WTO Agreement ratified by the President of the Philippines is composed of the Agreement Proper and the
associated legal instruments included in Annexes one (1), two (2) and three (3) of that Agreement which are integral parts thereof.
On the other hand, the Final Act signed by Secretary Navarro embodies not only the WTO Agreement (and its integral annexes
aforementioned) but also (1) the Ministerial Declarations and Decisions and (2) the Understanding on Commitments in Financial
Services. In his Memorandum dated May 13, 1996,[8] the Solicitor General describes these two latter documents as follows:
The Ministerial Decisions and Declarations are twenty-five declarations and decisions on a wide range of matters, such as measures in
favor of least developed countries, notification procedures, relationship of WTO with the International Monetary Fund (IMF), and
agreements on technical barriers to trade and on dispute settlement.
The Understanding on Commitments in Financial Services dwell on, among other things, standstill or limitations and qualifications of
commitments to existing non-conforming measures, market access, national treatment, and definitions of non-resident supplier of
financial services, commercial presence and new financial service.
On December 29, 1994, the present petition was filed. After careful deliberation on respondents comment and petitioners reply
thereto, the Court resolved on December 12, 1995, to give due course to the petition, and the parties thereafter filed their respective
memoranda. The Court also requested the Honorable Lilia R. Bautista, the Philippine Ambassador to the United Nations stationed in
Geneva, Switzerland, to submit a paper, hereafter referred to as Bautista Paper,[9] for brevity, (1) providing a historical background of and
(2) summarizing the said agreements.
During the Oral Argument held on August 27, 1996, the Court directed:
(a) the petitioners to submit the (1) Senate Committee Report on the matter in controversy and (2) the transcript of proceedings/hearings
in the Senate; and
(b) the Solicitor General, as counsel for respondents, to file (1) a list of Philippine treaties signed prior to the Philippine adherence to the
WTO Agreement, which derogate from Philippine sovereignty and (2) copies of the multi-volume WTO Agreement and other documents
mentioned in the Final Act, as soon as possible.
After receipt of the foregoing documents, the Court said it would consider the case submitted for resolution. In a Compliance dated
September 16, 1996, the Solicitor General submitted a printed copy of the 36-volume Uruguay Round of Multilateral Trade Negotiations,
and in another Compliance dated October 24, 1996, he listed the various bilateral or multilateral treaties or international instruments
involving derogation of Philippine sovereignty. Petitioners, on the other hand, submitted their Compliance dated January 28, 1997, on
January 30, 1997.
The Issues
In their Memorandum dated March 11, 1996, petitioners summarized the issues as follows:
A. Whether the petition presents a political question or is otherwise not justiciable.
B. Whether the petitioner members of the Senate who participated in the deliberations and voting leading to the concurrence are
estopped from impugning the validity of the Agreement Establishing the World Trade Organization or of the validity of the
concurrence.
C. Whether the provisions of the Agreement Establishing the World Trade Organization contravene the provisions of Sec. 19, Article
II, and Secs. 10 and 12, Article XII, all of the 1987 Philippine Constitution.
D. Whether provisions of the Agreement Establishing the World Trade Organization unduly limit, restrict and impair Philippine
sovereignty specifically the legislative power which, under Sec. 2, Article VI, 1987 Philippine Constitution is vested in the
Congress of the Philippines;
E. Whether provisions of the Agreement Establishing the World Trade Organization interfere with the exercise of judicial power.
F. Whether the respondent members of the Senate acted in grave abuse of discretion amounting to lack or excess of jurisdiction
when they voted for concurrence in the ratification of the constitutionally-infirm Agreement Establishing the World Trade
Organization.
G. Whether the respondent members of the Senate acted in grave abuse of discretion amounting to lack or excess of jurisdiction
when they concurred only in the ratification of the Agreement Establishing the World Trade Organization, and not with the
Presidential submission which included the Final Act, Ministerial Declaration and Decisions, and the Understanding on
Commitments in Financial Services.
On the other hand, the Solicitor General as counsel for respondents synthesized the several issues raised by petitioners into the
following:[10]
1. Whether or not the provisions of the Agreement Establishing the World Trade Organization and the Agreements and Associated Legal
Instruments included in Annexes one (1), two (2) and three (3) of that agreement cited by petitioners directly contravene or undermine
the letter, spirit and intent of Section 19, Article II and Sections 10 and 12, Article XII of the 1987 Constitution.
2. Whether or not certain provisions of the Agreement unduly limit, restrict or impair the exercise of legislative power by Congress.
3. Whether or not certain provisions of the Agreement impair the exercise of judicial power by this Honorable Court in promulgating the
rules of evidence.
4. Whether or not the concurrence of the Senate in the ratification by the President of the Philippines of the Agreement establishing the
World Trade Organization implied rejection of the treaty embodied in the Final Act.
 By raising and arguing only four issues against the seven presented by petitioners, the Solicitor General has effectively ignored
three, namely: (1) whether the petition presents a political question or is otherwise not justiciable; (2) whether petitioner-members of the
Senate (Wigberto E. Taada and Anna Dominique Coseteng) are estopped from joining this suit; and (3) whether the respondent-members
of the Senate acted in grave abuse of discretion when they voted for concurrence in the ratification of the WTO Agreement. The foregoing
notwithstanding, this Court resolved to deal with these three issues thus:
(1) The political question issue -- being very fundamental and vital, and being a matter that probes into the very jurisdiction of this Court
to hear and decide this case -- was deliberated upon by the Court and will thus be ruled upon as the first issue;
(2) The matter of estoppel will not be taken up because this defense is waivable and the respondents have effectively waived it by not
pursuing it in any of their pleadings; in any event, this issue, even if ruled in respondents favor, will not cause the petitions dismissal as
there are petitioners other than the two senators, who are not vulnerable to the defense of estoppel; and
(3) The issue of alleged grave abuse of discretion on the part of the respondent senators will be taken up as an integral part of the
disposition of the four issues raised by the Solicitor General.
During its deliberations on the case, the Court noted that the respondents did not question the locus standi of petitioners. Hence,
they are also deemed to have waived the benefit of such issue. They probably realized that grave constitutional issues, expenditures of
public funds and serious international commitments of the nation are involved here, and that transcendental public interest requires that
the substantive issues be met head on and decided on the merits, rather than skirted or deflected by procedural matters.[11]
To recapitulate, the issues that will be ruled upon shortly are:
(1) DOES THE PETITION PRESENT A JUSTICIABLE CONTROVERSY? OTHERWISE STATED, DOES THE PETITION INVOLVE A
POLITICAL QUESTION OVER WHICH THIS COURT HAS NO JURISDICTION?
(2) DO THE PROVISIONS OF THE WTO AGREEMENT AND ITS THREE ANNEXES CONTRAVENE SEC. 19, ARTICLE II, AND SECS. 10
AND 12, ARTICLE XII, OF THE PHILIPPINE CONSTITUTION?
(3) DO THE PROVISIONS OF SAID AGREEMENT AND ITS ANNEXES LIMIT, RESTRICT, OR IMPAIR THE EXERCISE OF LEGISLATIVE
POWER BY CONGRESS?
(4) DO SAID PROVISIONS UNDULY IMPAIR OR INTERFERE WITH THE EXERCISE OF JUDICIAL POWER BY THIS COURT IN
PROMULGATING RULES ON EVIDENCE?
(5) WAS THE CONCURRENCE OF THE SENATE IN THE WTO AGREEMENT AND ITS ANNEXES SUFFICIENT AND/OR VALID,
CONSIDERING THAT IT DID NOT INCLUDE THE FINAL ACT, MINISTERIAL DECLARATIONS AND DECISIONS, AND THE
UNDERSTANDING ON COMMITMENTS IN FINANCIAL SERVICES?
The First Issue: Does the Court Have Jurisdiction Over the Controversy?
In seeking to nullify an act of the Philippine Senate on the ground that it contravenes the Constitution, the petition no doubt raises
a justiciable controversy. Where an action of the legislative branch is seriously alleged to have infringed the Constitution, it becomes not
only the right but in fact the duty of the judiciary to settle the dispute. The question thus posed is judicial rather than political. The duty
(to adjudicate) remains to assure that the supremacy of the Constitution is upheld.[12] Once a controversy as to the application or
interpretation of a constitutional provision is raised before this Court (as in the instant case), it becomes a legal issue which the Court is
bound by constitutional mandate to decide.[13]
The jurisdiction of this Court to adjudicate the matters[14] raised in the petition is clearly set out in the 1987 Constitution,[15] as
follows:
Judicial power includes the duty of the courts of justice to settle actual controversies involving rights which are legally demandable and
enforceable, and to determine whether or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on
the part of any branch or instrumentality of the government.
The foregoing text emphasizes the judicial departments duty and power to strike down grave abuse of discretion on the part of any
branch or instrumentality of government including Congress. It is an innovation in our political law.[16] As explained by former Chief Justice
Roberto Concepcion,[17] the judiciary is the final arbiter on the question of whether or not a branch of government or any of its officials
has acted without jurisdiction or in excess of jurisdiction or so capriciously as to constitute an abuse of discretion amounting to excess of
jurisdiction. This is not only a judicial power but a duty to pass judgment on matters of this nature.
As this Court has repeatedly and firmly emphasized in many cases,[18] it will not shirk, digress from or abandon its sacred duty and
authority to uphold the Constitution in matters that involve grave abuse of discretion brought before it in appropriate cases, committed
by any officer, agency, instrumentality or department of the government.
As the petition alleges grave abuse of discretion and as there is no other plain, speedy or adequate remedy in the ordinary course
of law, we have no hesitation at all in holding that this petition should be given due course and the vital questions raised therein ruled
upon under Rule 65 of the Rules of Court. Indeed, certiorari, prohibition and mandamus are appropriate remedies to raise constitutional
issues and to review and/or prohibit/nullify, when proper, acts of legislative and executive officials. On this, we have no equivocation.
We should stress that, in deciding to take jurisdiction over this petition, this Court will not review the wisdom of the decision of the
President and the Senate in enlisting the country into the WTO, or pass upon the merits of trade liberalization as a policy espoused by said
international body. Neither will it rule on the propriety of the governments economic policy of reducing/removing tariffs, taxes, subsidies,
quantitative restrictions, and other import/trade barriers. Rather, it will only exercise its constitutional duty to determine whether or not
there had been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of the Senate in ratifying the WTO
Agreement and its three annexes.
Second Issue: The WTO Agreement and Economic Nationalism
This is the lis mota, the main issue, raised by the petition.
Petitioners vigorously argue that the letter, spirit and intent of the Constitution mandating economic nationalism are violated by
the so-called parity provisions and national treatment clauses scattered in various parts not only of the WTO Agreement and its annexes
but also in the Ministerial Decisions and Declarations and in the Understanding on Commitments in Financial Services.
Specifically, the flagship constitutional provisions referred to are Sec. 19, Article II, and Secs. 10 and 12, Article XII, of the
Constitution, which are worded as follows:
Article II
DECLARATION OF PRINCIPLES AND STATE POLICIES
xx xx xx xx
Sec. 19. The State shall develop a self-reliant and independent national economy effectively controlled by Filipinos.
xx xx xx xx
Article XII
NATIONAL ECONOMY AND PATRIMONY
xx xx xx xx
Sec. 10. x x x. The Congress shall enact measures that will encourage the formation and operation of enterprises whose capital is wholly
owned by Filipinos.
In the grant of rights, privileges, and concessions covering the national economy and patrimony, the State shall give preference to
qualified Filipinos.
xx xx xx xx
Sec. 12. The State shall promote the preferential use of Filipino labor, domestic materials and locally produced goods, and adopt measures
that help make them competitive.
Petitioners aver that these sacred constitutional principles are desecrated by the following WTO provisions quoted in their
memorandum:[19]
a) In the area of investment measures related to trade in goods (TRIMS, for brevity):
Article 2
National Treatment and Quantitative Restrictions.
1. Without prejudice to other rights and obligations under GATT 1994. no Member shall apply any TRIM that is inconsistent
with the provisions of Article III or Article XI of GATT 1994.
2. An Illustrative list of TRIMS that are inconsistent with the obligations of general elimination of quantitative restrictions
provided for in paragraph I of Article XI of GATT 1994 is contained in the Annex to this Agreement. (Agreement on Trade-
Related Investment Measures, Vol. 27, Uruguay Round, Legal Instruments, p.22121, emphasis supplied).
The Annex referred to reads as follows:
ANNEX
Illustrative List
1. TRIMS that are inconsistent with the obligation of national treatment provided for in paragraph 4 of Article III of GATT 1994
include those which are mandatory or enforceable under domestic law or under administrative rulings, or compliance with
which is necessary to obtain an advantage, and which require:
(a) the purchase or use by an enterprise of products of domestic origin or from any domestic source, whether specified in
terms of particular products, in terms of volume or value of products, or in terms of proportion of volume or value of
its local production; or
(b) that an enterprises purchases or use of imported products be limited to an amount related to the volume or value of
local products that it exports.
2. TRIMS that are inconsistent with the obligations of general elimination of quantitative restrictions provided for in paragraph 1 of
Article XI of GATT 1994 include those which are mandatory or enforceable under domestic laws or under administrative
rulings, or compliance with which is necessary to obtain an advantage, and which restrict:
(a) the importation by an enterprise of products used in or related to the local production that it exports;
(b) the importation by an enterprise of products used in or related to its local production by restricting its access to foreign
exchange inflows attributable to the enterprise; or
(c) the exportation or sale for export specified in terms of particular products, in terms of volume or value of products, or in
terms of a preparation of volume or value of its local production. (Annex to the Agreement on Trade-Related
Investment Measures, Vol. 27, Uruguay Round Legal Documents, p.22125, emphasis supplied).
The paragraph 4 of Article III of GATT 1994 referred to is quoted as follows:
The products of the territory of any contracting party imported into the territory of any other contracting party shall be accorded
treatment no less favorable than that accorded to like products of national origin in respect of laws, regulations and requirements
affecting their internal sale, offering for sale, purchase, transportation, distribution or use. the provisions of this paragraph shall not
prevent the application of differential internal transportation charges which are based exclusively on the economic operation of the
means of transport and not on the nationality of the product. (Article III, GATT 1947, as amended by the Protocol Modifying Part II, and
Article XXVI of GATT, 14 September 1948, 62 UMTS 82-84 in relation to paragraph 1(a) of the General Agreement on Tariffs and Trade
1994, Vol. 1, Uruguay Round, Legal Instruments p.177, emphasis supplied).
b) In the area of trade related aspects of intellectual property rights (TRIPS, for brevity):
Each Member shall accord to the nationals of other Members treatment no less favourable than that it accords to its own
nationals with regard to the protection of intellectual property... (par. 1, Article 3, Agreement on Trade-Related Aspect of Intellectual
Property rights, Vol. 31, Uruguay Round, Legal Instruments, p.25432 (emphasis supplied)
(c) In the area of the General Agreement on Trade in Services:
National Treatment
1. In the sectors inscribed in its schedule, and subject to any conditions and qualifications set out therein, each Member shall
accord to services and service suppliers of any other Member, in respect of all measures affecting the supply of
services, treatment no less favourable than it accords to its own like services and service suppliers.
2. A Member may meet the requirement of paragraph I by according to services and service suppliers of any other Member,
either formally identical treatment or formally different treatment to that it accords to its own like services and service
suppliers.
3. Formally identical or formally different treatment shall be considered to be less favourable if it modifies the conditions of
completion in favour of services or service suppliers of the Member compared to like services or service suppliers of any
other Member. (Article XVII, General Agreement on Trade in Services, Vol. 28, Uruguay Round Legal Instruments, p.22610
emphasis supplied).
It is petitioners position that the foregoing national treatment and parity provisions of the WTO Agreement place nationals and
products of member countries on the same footing as Filipinos and local products, in contravention of the Filipino First policy of the
Constitution. They allegedly render meaningless the phrase effectively controlled by Filipinos. The constitutional conflict becomes more
manifest when viewed in the context of the clear duty imposed on the Philippines as a WTO member to ensure the conformity of its laws,
regulations and administrative procedures with its obligations as provided in the annexed agreements. [20] Petitioners further argue that
these provisions contravene constitutional limitations on the role exports play in national development and negate the preferential
treatment accorded to Filipino labor, domestic materials and locally produced goods.
On the other hand, respondents through the Solicitor General counter (1) that such Charter provisions are not self-executing and
merely set out general policies; (2) that these nationalistic portions of the Constitution invoked by petitioners should not be read in
isolation but should be related to other relevant provisions of Art. XII, particularly Secs. 1 and 13 thereof; (3) that read properly, the cited
WTO clauses do not conflict with the Constitution; and (4) that the WTO Agreement contains sufficient provisions to protect developing
countries like the Philippines from the harshness of sudden trade liberalization.
We shall now discuss and rule on these arguments.
Declaration of Principles Not Self-Executing
By its very title, Article II of the Constitution is a declaration of principles and state policies. The counterpart of this article in the
1935 Constitution[21] is called the basic political creed of the nation by Dean Vicente Sinco.[22] These principles in Article II are not intended
to be self-executing principles ready for enforcement through the courts.[23] They are used by the judiciary as aids or as guides in the
exercise of its power of judicial review, and by the legislature in its enactment of laws. As held in the leading case of Kilosbayan,
Incorporated vs. Morato,[24] the principles and state policies enumerated in Article II and some sections of Article XII are not self-executing
provisions, the disregard of which can give rise to a cause of action in the courts.They do not embody judicially enforceable constitutional
rights but guidelines for legislation.
In the same light, we held in Basco vs. Pagcor[25] that broad constitutional principles need legislative enactments to implement
them, thus:
On petitioners allegation that P.D. 1869 violates Sections 11 (Personal Dignity) 12 (Family) and 13 (Role of Youth) of Article II; Section 13
(Social Justice) of Article XIII and Section 2 (Educational Values) of Article XIV of the 1987 Constitution, suffice it to state also that these
are merely statements of principles and policies. As such, they are basically not self-executing, meaning a law should be passed by
Congress to clearly define and effectuate such principles.
In general, therefore, the 1935 provisions were not intended to be self-executing principles ready for enforcement through the
courts. They were rather directives addressed to the executive and to the legislature. If the executive and the legislature failed to heed the
directives of the article, the available remedy was not judicial but political. The electorate could express their displeasure with the failure
of the executive and the legislature through the language of the ballot. (Bernas, Vol. II, p. 2).
The reasons for denying a cause of action to an alleged infringement of broad constitutional principles are sourced from basic
considerations of due process and the lack of judicial authority to wade into the uncharted ocean of social and economic policy
making. Mr. Justice Florentino P. Feliciano in his concurring opinion in Oposa vs. Factoran, Jr.,[26] explained these reasons as follows:
My suggestion is simply that petitioners must, before the trial court, show a more specific legal right -- a right cast in language of a
significantly lower order of generality than Article II (15) of the Constitution -- that is or may be violated by the actions, or failures to act,
imputed to the public respondent by petitioners so that the trial court can validly render judgment granting all or part of the relief prayed
for. To my mind, the court should be understood as simply saying that such a more specific legal right or rights may well exist in our
corpus of law, considering the general policy principles found in the Constitution and the existence of the Philippine Environment Code,
and that the trial court should have given petitioners an effective opportunity so to demonstrate, instead of aborting the proceedings on a
motion to dismiss.
It seems to me important that the legal right which is an essential component of a cause of action be a specific, operable legal right, rather
than a constitutional or statutory policy, for at least two (2) reasons.One is that unless the legal right claimed to have been violated or
disregarded is given specification in operational terms, defendants may well be unable to defend themselves intelligently and effectively;
in other words, there are due process dimensions to this matter.
The second is a broader-gauge consideration -- where a specific violation of law or applicable regulation is not alleged or proved,
petitioners can be expected to fall back on the expanded conception of judicial power in the second paragraph of Section 1 of Article VIII
of the Constitution which reads:
Section 1. x x x
Judicial power includes the duty of the courts of justice to settle actual controversies involving rights which are legally demandable and
enforceable, and to determine whether or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on
the part of any branch or instrumentality of the Government. (Emphases supplied)
When substantive standards as general as the right to a balanced and healthy ecology and the right to health are combined with remedial
standards as broad ranging as a grave abuse of discretion amounting to lack or excess of jurisdiction, the result will be, it is respectfully
submitted, to propel courts into the uncharted ocean of social and economic policy making. At least in respect of the vast area of
environmental protection and management, our courts have no claim to special technical competence and experience and professional
qualification. Where no specific, operable norms and standards are shown to exist, then the policy making departments -- the legislative
and executive departments -- must be given a real and effective opportunity to fashion and promulgate those norms and standards, and
to implement them before the courts should intervene.
Economic Nationalism Should Be Read with Other Constitutional Mandates to Attain Balanced Development of Economy
On the other hand, Secs. 10 and 12 of Article XII, apart from merely laying down general principles relating to the national economy
and patrimony, should be read and understood in relation to the other sections in said article, especially Secs. 1 and 13 thereof which
read:
Section 1. The goals of the national economy are a more equitable distribution of opportunities, income, and wealth; a sustained increase
in the amount of goods and services produced by the nation for the benefit of the people; and an expanding productivity as the key to
raising the quality of life for all, especially the underprivileged.
The State shall promote industrialization and full employment based on sound agricultural development and agrarian reform, through
industries that make full and efficient use of human and natural resources, and which are competitive in both domestic and foreign
markets. However, the State shall protect Filipino enterprises against unfair foreign competition and trade practices.
In the pursuit of these goals, all sectors of the economy and all regions of the country shall be given optimum opportunity to develop. x x x
xxxxxxxxx
Sec. 13. The State shall pursue a trade policy that serves the general welfare and utilizes all forms and arrangements of exchange on the
basis of equality and reciprocity.
As pointed out by the Solicitor General, Sec. 1 lays down the basic goals of national economic development, as follows:
1. A more equitable distribution of opportunities, income and wealth;
2. A sustained increase in the amount of goods and services provided by the nation for the benefit of the people; and
3. An expanding productivity as the key to raising the quality of life for all especially the underprivileged.
With these goals in context, the Constitution then ordains the ideals of economic nationalism (1) by expressing preference in favor
of qualified Filipinos in the grant of rights, privileges and concessions covering the national economy and patrimony[27] and in the use of
Filipino labor, domestic materials and locally-produced goods; (2) by mandating the State to adopt measures that help make them
competitive;[28] and (3) by requiring the State to develop a self-reliant and independent national economy effectively controlled by
Filipinos.[29] In similar language, the Constitution takes into account the realities of the outside world as it requires the pursuit of a trade
policy that serves the general welfare and utilizes all forms and arrangements of exchange on the basis of equality and reciprocity;[30] and
speaks of industries which are competitive in both domestic and foreign markets as well as of the protection of Filipino enterprises against
unfair foreign competition and trade practices.
 It is true that in the recent case of Manila Prince Hotel vs. Government Service Insurance System, et al.,[31] this Court held that Sec.
10, second par., Art. XII of the 1987 Constitution is a mandatory, positive command which is complete in itself and which needs no further
guidelines or implementing laws or rules for its enforcement. From its very words the provision does not require any legislation to put it in
operation. It is per se judicially enforceable. However, as the constitutional provision itself states, it is enforceable only in regard to the
grants of rights, privileges and concessions covering national economy and patrimony and not to every aspect of trade and commerce. It
refers to exceptions rather than the rule. The issue here is not whether this paragraph of Sec. 10 of Art. XII is self-executing or not. Rather,
the issue is whether, as a rule, there are enough balancing provisions in the Constitution to allow the Senate to ratify the Philippine
concurrence in the WTO Agreement. And we hold that there are.
All told, while the Constitution indeed mandates a bias in favor of Filipino goods, services, labor and enterprises, at the same time,
it recognizes the need for business exchange with the rest of the world on the bases of equality and reciprocity and limits protection of
Filipino enterprises only against foreign competition and trade practices that are unfair.[32] In other words, the Constitution did not intend
to pursue an isolationist policy. It did not shut out foreign investments, goods and services in the development of the Philippine
economy. While the Constitution does not encourage the unlimited entry of foreign goods, services and investments into the country, it
does not prohibit them either. In fact, it allows an exchange on the basis of equality and reciprocity, frowning only on foreign competition
that is unfair.
WTO Recognizes Need to Protect Weak Economies
Upon the other hand, respondents maintain that the WTO itself has some built-in advantages to protect weak and developing
economies, which comprise the vast majority of its members. Unlike in the UN where major states have permanent seats and veto powers
in the Security Council, in the WTO, decisions are made on the basis of sovereign equality, with each members vote equal in weight to
that of any other. There is no WTO equivalent of the UN Security Council.
WTO decides by consensus whenever possible, otherwise, decisions of the Ministerial Conference and the General Council shall be taken
by the majority of the votes cast, except in cases of interpretation of the Agreement or waiver of the obligation of a member which would
require three fourths vote. Amendments would require two thirds vote in general. Amendments to MFN provisions and the Amendments
provision will require assent of all members. Any member may withdraw from the Agreement upon the expiration of six months from the
date of notice of withdrawals.[33]
Hence, poor countries can protect their common interests more effectively through the WTO than through one-on-one
negotiations with developed countries. Within the WTO, developing countries can form powerful blocs to push their economic agenda
more decisively than outside the Organization. This is not merely a matter of practical alliances but a negotiating strategy rooted in
law. Thus, the basic principles underlying the WTO Agreement recognize the need of developing countries like the Philippines to share in
the growth in international trade commensurate with the needs of their economic development. These basic principles are found in the
preamble[34] of the WTO Agreement as follows:
The Parties to this Agreement,
Recognizing that their relations in the field of trade and economic endeavour should be conducted with a view to raising standards of
living, ensuring full employment and a large and steadily growing volume of real income and effective demand, and expanding the
production of and trade in goods and services, while allowing for the optimal use of the worlds resources in accordance with the objective
of sustainable development, seeking both to protect and preserve the environment and to enhance the means for doing so in a manner
consistent with their respective needs and concerns at different levels of economic development,
Recognizing further that there is need for positive efforts designed to ensure that developing countries, and especially the least developed
among them, secure a share in the growth in international trade commensurate with the needs of their economic development,
Being desirous of contributing to these objectives by entering into reciprocal and mutually advantageous arrangements directed to the
substantial reduction of tariffs and other barriers to trade and to the elimination of discriminatory treatment in international trade
relations,
Resolved, therefore, to develop an integrated, more viable and durable multilateral trading system encompassing the General Agreement
on Tariffs and Trade, the results of past trade liberalization efforts, and all of the results of the Uruguay Round of Multilateral Trade
Negotiations,
Determined to preserve the basic principles and to further the objectives underlying this multilateral trading system, x x x. (underscoring
supplied.)
Specific WTO Provisos Protect Developing Countries
So too, the Solicitor General points out that pursuant to and consistent with the foregoing basic principles, the WTO Agreement
grants developing countries a more lenient treatment, giving their domestic industries some protection from the rush of foreign
competition. Thus, with respect to tariffs in general, preferential treatment is given to developing countries in terms of the amount of
tariff reduction and the period within which the reduction is to be spread out. Specifically, GATT requires an average tariff reduction rate
of 36% for developed countries to be effected within a period of six (6) years while developing countries -- including the Philippines --
are required to effect an average tariff reduction of only 24% within ten (10) years.
In respect to domestic subsidy, GATT requires developed countries to reduce domestic support to agricultural products by 20%
over six (6) years, as compared to only 13% for developing countries to be effected within ten (10) years.
In regard to export subsidy for agricultural products, GATT requires developed countries to reduce their budgetary outlays for
export subsidy by 36% and export volumes receiving export subsidy by 21% within a period of six (6) years. For developing countries,
however, the reduction rate is only two-thirds of that prescribed for developed countries and a longer period of ten (10) years within
which to effect such reduction.
Moreover, GATT itself has provided built-in protection from unfair foreign competition and trade practices including anti-dumping
measures, countervailing measures and safeguards against import surges. Where local businesses are jeopardized by unfair foreign
competition, the Philippines can avail of these measures. There is hardly therefore any basis for the statement that under the WTO, local
industries and enterprises will all be wiped out and that Filipinos will be deprived of control of the economy. Quite the contrary, the
weaker situations of developing nations like the Philippines have been taken into account; thus, there would be no basis to say that in
joining the WTO, the respondents have gravely abused their discretion.True, they have made a bold decision to steer the ship of state into
the yet uncharted sea of economic liberalization. But such decision cannot be set aside on the ground of grave abuse of discretion, simply
because we disagree with it or simply because we believe only in other economic policies. As earlier stated, the Court in taking jurisdiction
of this case will not pass upon the advantages and disadvantages of trade liberalization as an economic policy. It will only perform its
constitutional duty of determining whether the Senate committed grave abuse of discretion.
Constitution Does Not Rule Out Foreign Competition
Furthermore, the constitutional policy of a self-reliant and independent national economy[35] does not necessarily rule out the entry
of foreign investments, goods and services. It contemplates neither economic seclusion nor mendicancy in the international
community. As explained by Constitutional Commissioner Bernardo Villegas, sponsor of this constitutional policy:
Economic self-reliance is a primary objective of a developing country that is keenly aware of overdependence on external assistance for
even its most basic needs. It does not mean autarky or economic seclusion; rather, it means avoiding mendicancy in the international
community. Independence refers to the freedom from undue foreign control of the national economy, especially in such strategic
industries as in the development of natural resources and public utilities.[36]
The WTO reliance on most favored nation, national treatment, and trade without discrimination cannot be struck down as
unconstitutional as in fact they are rules of equality and reciprocity that apply to all WTO members. Aside from envisioning a trade policy
based on equality and reciprocity,[37] the fundamental law encourages industries that are competitive in both domestic and foreign
markets, thereby demonstrating a clear policy against a sheltered domestic trade environment, but one in favor of the gradual
development of robust industries that can compete with the best in the foreign markets. Indeed, Filipino managers and Filipino
enterprises have shown capability and tenacity to compete internationally. And given a free trade environment, Filipino entrepreneurs
and managers in Hongkong have demonstrated the Filipino capacity to grow and to prosper against the best offered under a policy
of laissez faire.
Constitution Favors Consumers, Not Industries or Enterprises
The Constitution has not really shown any unbalanced bias in favor of any business or enterprise, nor does it contain any specific
pronouncement that Filipino companies should be pampered with a total
proscription of foreign competition. On the other hand, respondents claim that WTO/GATT aims to make available to the Filipino
consumer the best goods and services obtainable anywhere in the world at the most reasonable prices. Consequently, the question boils
down to whether WTO/GATT will favor the general welfare of the public at large.
Will adherence to the WTO treaty bring this ideal (of favoring the general welfare) to reality?
Will WTO/GATT succeed in promoting the Filipinos general welfare because it will -- as promised by its promoters -- expand the
countrys exports and generate more employment?
Will it bring more prosperity, employment, purchasing power and quality products at the most reasonable rates to the Filipino
public?
The responses to these questions involve judgment calls by our policy makers, for which they are answerable to our people during
appropriate electoral exercises. Such questions and the answers thereto are not subject to judicial pronouncements based on grave abuse
of discretion.
Constitution Designed to Meet Future Events and Contingencies
No doubt, the WTO Agreement was not yet in existence when the Constitution was drafted and ratified in 1987. That does not
mean however that the Charter is necessarily flawed in the sense that its framers might not have anticipated the advent of a borderless
world of business. By the same token, the United Nations was not yet in existence when the 1935 Constitution became effective. Did that
necessarily mean that the then Constitution might not have contemplated a diminution of the absoluteness of sovereignty when the
Philippines signed the UN Charter, thereby effectively surrendering part of its control over its foreign relations to the decisions of various
UN organs like the Security Council?
It is not difficult to answer this question. Constitutions are designed to meet not only the vagaries of contemporary events. They
should be interpreted to cover even future and unknown circumstances. It is to the credit of its drafters that a Constitution can withstand
the assaults of bigots and infidels but at the same time bend with the refreshing winds of change necessitated by unfolding events. As one
eminent political law writer and respected jurist[38] explains:
The Constitution must be quintessential rather than superficial, the root and not the blossom, the base and framework only of the edifice
that is yet to rise. It is but the core of the dream that must take shape, not in a twinkling by mandate of our delegates, but slowly in the
crucible of Filipino minds and hearts, where it will in time develop its sinews and gradually gather its strength and finally achieve its
substance. In fine, the Constitution cannot, like the goddess Athena, rise full-grown from the brow of the Constitutional Convention, nor
can it conjure by mere fiat an instant Utopia. It must grow with the society it seeks to re-structure and march apace with the progress of
the race, drawing from the vicissitudes of history the dynamism and vitality that will keep it, far from becoming a petrified rule, a pulsing,
living law attuned to the heartbeat of the nation.
Third Issue: The WTO Agreement and Legislative Power
The WTO Agreement provides that (e)ach Member shall ensure the conformity of its laws, regulations and administrative
procedures with its obligations as provided in the annexed Agreements.[39] Petitioners maintain that this undertaking unduly limits,
restricts and impairs Philippine sovereignty, specifically the legislative power which under Sec. 2, Article VI of the 1987 Philippine
Constitution is vested in the Congress of the Philippines. It is an assault on the sovereign powers of the Philippines because this means
that Congress could not pass legislation that will be good for our national interest and general welfare if such legislation will not conform
with the WTO Agreement, which not only relates to the trade in goods x x x but also to the flow of investments and money x x x as well as
to a whole slew of agreements on socio-cultural matters x x x.[40]
More specifically, petitioners claim that said WTO proviso derogates from the power to tax, which is lodged in the Congress.[41] And
while the Constitution allows Congress to authorize the President to fix tariff rates, import and export quotas, tonnage and wharfage
dues, and other duties or imposts, such authority is subject to specified limits and x x x such limitations and restrictions as Congress may
provide,[42] as in fact it did under Sec. 401 of the Tariff and Customs Code.
Sovereignty Limited by International Law and Treaties
This Court notes and appreciates the ferocity and passion by which petitioners stressed their arguments on this issue. However,
while sovereignty has traditionally been deemed absolute and all-encompassing on the domestic level, it is however subject to restrictions
and limitations voluntarily agreed to by the Philippines, expressly or impliedly, as a member of the family of nations. Unquestionably, the
Constitution did not envision a hermit-type isolation of the country from the rest of the world. In its Declaration of Principles and State
Policies, the Constitution adopts the generally accepted principles of international law as part of the law of the land, and adheres to the
policy of peace, equality, justice, freedom, cooperation and amity, with all nations." [43] By the doctrine of incorporation, the country is
bound by generally accepted principles of international law, which are considered to be automatically part of our own laws.[44] One of the
oldest and most fundamental rules in international law is pacta sunt servanda -- international agreements must be performed in good
faith. A treaty engagement is not a mere moral obligation but creates a legally binding obligation on the parties x x x. A state which has
contracted valid international obligations is bound to make in its legislations such modifications as may be necessary to ensure the
fulfillment of the obligations undertaken.[45]
By their inherent nature, treaties really limit or restrict the absoluteness of sovereignty. By their voluntary act, nations may
surrender some aspects of their state power in exchange for greater benefits granted by or derived from a convention or pact. After all,
states, like individuals, live with coequals, and in pursuit of mutually covenanted objectives and benefits, they also commonly agree to
limit the exercise of their otherwise absolute rights. Thus, treaties have been used to record agreements between States concerning such
widely diverse matters as, for example, the lease of naval bases, the sale or cession of territory, the termination of war, the regulation of
conduct of hostilities, the formation of alliances, the regulation of commercial relations, the settling of claims, the laying down of rules
governing conduct in peace and the establishment of international organizations.[46] The sovereignty of a state therefore cannot in fact
and in reality be considered absolute. Certain restrictions enter into the picture: (1) limitations imposed by the very nature of membership
in the family of nations and (2) limitations imposed by treaty stipulations. As aptly put by John F. Kennedy, Today, no nation can build its
destiny alone. The age of self-sufficient nationalism is over. The age of interdependence is here.[47]
UN Charter and Other Treaties Limit Sovereignty
Thus, when the Philippines joined the United Nations as one of its 51 charter members, it consented to restrict its sovereign rights
under the concept of sovereignty as auto-limitation.47-A Under Article 2 of the UN Charter, (a)ll members shall give the United Nations
every assistance in any action it takes in accordance with the present Charter, and shall refrain from giving assistance to any state against
which the United Nations is taking preventive or enforcement action. Such assistance includes payment of its corresponding share not
merely in administrative expenses but also in expenditures for the peace-keeping operations of the organization. In its advisory opinion of
July 20, 1961, the International Court of Justice held that money used by the United Nations Emergency Force in the Middle East and in
the Congo were expenses of the United Nations under Article 17, paragraph 2, of the UN Charter. Hence, all its members must bear their
corresponding share in such expenses. In this sense, the Philippine Congress is restricted in its power to appropriate. It is compelled to
appropriate funds whether it agrees with such peace-keeping expenses or not. So too, under Article 105 of the said Charter, the UN and
its representatives enjoy diplomatic privileges and immunities, thereby limiting again the exercise of sovereignty of members within their
own territory. Another example: although sovereign equality and domestic jurisdiction of all members are set forth as underlying
principles in the UN Charter, such provisos are however subject to enforcement measures decided by the Security Council for the
maintenance of international peace and security under Chapter VII of the Charter. A final example: under Article 103, (i)n the event of a
conflict between the obligations of the Members of the United Nations under the present Charter and their obligations under any other
international agreement, their obligation under the present charter shall prevail, thus unquestionably denying the Philippines -- as a
member -- the sovereign power to make a choice as to which of conflicting obligations, if any, to honor.
Apart from the UN Treaty, the Philippines has entered into many other international pacts -- both bilateral and multilateral -- that
involve limitations on Philippine sovereignty. These are enumerated by the Solicitor General in his Compliance dated October 24, 1996, as
follows:
(a) Bilateral convention with the United States regarding taxes on income, where the Philippines agreed, among others, to exempt
from tax, income received in the Philippines by, among others, the Federal Reserve Bank of the United States, the
Export/Import Bank of the United States, the Overseas Private Investment Corporation of the United States. Likewise, in said
convention, wages, salaries and similar remunerations paid by the United States to its citizens for labor and personal
services performed by them as employees or officials of the United States are exempt from income tax by the Philippines.
(b) Bilateral agreement with Belgium, providing, among others, for the avoidance of double taxation with respect to taxes on
income.
(c) Bilateral convention with the Kingdom of Sweden for the avoidance of double taxation.
(d) Bilateral convention with the French Republic for the avoidance of double taxation.
(e) Bilateral air transport agreement with Korea where the Philippines agreed to exempt from all customs duties, inspection fees
and other duties or taxes aircrafts of South Korea and the regular equipment, spare parts and supplies arriving with said
aircrafts.
(f) Bilateral air service agreement with Japan, where the Philippines agreed to exempt from customs duties, excise taxes, inspection
fees and other similar duties, taxes or charges fuel, lubricating oils, spare parts, regular equipment, stores on board Japanese
aircrafts while on Philippine soil.
(g) Bilateral air service agreement with Belgium where the Philippines granted Belgian air carriers the same privileges as those
granted to Japanese and Korean air carriers under separate air service agreements.
(h) Bilateral notes with Israel for the abolition of transit and visitor visas where the Philippines exempted Israeli nationals from the
requirement of obtaining transit or visitor visas for a sojourn in the Philippines not exceeding 59 days.
(I) Bilateral agreement with France exempting French nationals from the requirement of obtaining transit and visitor visa for a
sojourn not exceeding 59 days.
(j) Multilateral Convention on Special Missions, where the Philippines agreed that premises of Special Missions in the Philippines
are inviolable and its agents can not enter said premises without consent of the Head of Mission concerned. Special Missions
are also exempted from customs duties, taxes and related charges.
(k) Multilateral Convention on the Law of Treaties. In this convention, the Philippines agreed to be governed by the Vienna
Convention on the Law of Treaties.
(l) Declaration of the President of the Philippines accepting compulsory jurisdiction of the International Court of Justice. The
International Court of Justice has jurisdiction in all legal disputes concerning the interpretation of a treaty, any question of
international law, the existence of any fact which, if established, would constitute a breach of international obligation.
In the foregoing treaties, the Philippines has effectively agreed to limit the exercise of its sovereign powers of taxation, eminent
domain and police power. The underlying consideration in this partial surrender of sovereignty is the reciprocal commitment of the other
contracting states in granting the same privilege and immunities to the Philippines, its officials and its citizens. The same reciprocity
characterizes the Philippine commitments under WTO-GATT.
International treaties, whether relating to nuclear disarmament, human rights, the environment, the law of the sea, or trade, constrain
domestic political sovereignty through the assumption of external obligations. But unless anarchy in international relations is preferred as
an alternative, in most cases we accept that the benefits of the reciprocal obligations involved outweigh the costs associated with any loss
of political sovereignty. (T)rade treaties that structure relations by reference to durable, well-defined substantive norms and objective
dispute resolution procedures reduce the risks of larger countries exploiting raw economic power to bully smaller countries, by subjecting
power relations to some form of legal ordering. In addition, smaller countries typically stand to gain disproportionately from trade
liberalization. This is due to the simple fact that liberalization will provide access to a larger set of potential new trading relationship than
in case of the larger country gaining enhanced success to the smaller countrys market.[48]
The point is that, as shown by the foregoing treaties, a portion of sovereignty may be waived without violating the Constitution,
based on the rationale that the Philippines adopts the generally accepted principles of international law as part of the law of the land and
adheres to the policy of x x x cooperation and amity with all nations.
Fourth Issue: The WTO Agreement and Judicial Power
 Petitioners aver that paragraph 1, Article 34 of the General Provisions and Basic Principles of the Agreement on Trade-Related
Aspects of Intellectual Property Rights (TRIPS)[49]intrudes on the power of the Supreme Court to promulgate rules concerning pleading,
practice and procedures.[50]
To understand the scope and meaning of Article 34, TRIPS,[51] it will be fruitful to restate its full text as follows:
Article 34
Process Patents: Burden of Proof
1. For the purposes of civil proceedings in respect of the infringement of the rights of the owner referred to in paragraph 1(b) of
Article 28, if the subject matter of a patent is a process for obtaining a product, the judicial authorities shall have the authority to
order the defendant to prove that the process to obtain an identical product is different from the patented process. Therefore,
Members shall provide, in at least one of the following circumstances, that any identical product when produced without the
consent of the patent owner shall, in the absence of proof to the contrary, be deemed to have been obtained by the patented
process:
(a) if the product obtained by the patented process is new;
(b) if there is a substantial likelihood that the identical product was made by the process and the owner of the patent has
been unable through reasonable efforts to determine the process actually used.
2. Any Member shall be free to provide that the burden of proof indicated in paragraph 1 shall be on the alleged infringer only if
the condition referred to in subparagraph (a) is fulfilled or only if the condition referred to in subparagraph (b) is fulfilled.
3. In the adduction of proof to the contrary, the legitimate interests of defendants in protecting their manufacturing and business
secrets shall be taken into account.
From the above, a WTO Member is required to provide a rule of disputable (note the words in the absence of proof to the contrary)
presumption that a product shown to be identical to one produced with the use of a patented process shall be deemed to have been
obtained by the (illegal) use of the said patented process, (1) where such product obtained by the patented product is new, or (2) where
there is substantial likelihood that the identical product was made with the use of the said patented process but the owner of the patent
could not determine the exact process used in obtaining such identical product. Hence, the burden of proof contemplated by Article 34
should actually be understood as the duty of the alleged patent infringer to overthrow such presumption. Such burden, properly
understood, actually refers to the burden of evidence (burden of going forward) placed on the producer of the identical (or fake) product
to show that his product was produced without the use of the patented process.
The foregoing notwithstanding, the patent owner still has the burden of proof since, regardless of the presumption provided under
paragraph 1 of Article 34, such owner still has to introduce evidence of the existence of the alleged identical product, the fact that it is
identical to the genuine one produced by the patented process and the fact of newness of the genuine product or the fact of substantial
likelihood that the identical product was made by the patented process.
The foregoing should really present no problem in changing the rules of evidence as the present law on the subject, Republic Act
No. 165, as amended, otherwise known as the Patent Law, provides a similar presumption in cases of infringement of patented design or
utility model, thus:
SEC. 60. Infringement. - Infringement of a design patent or of a patent for utility model shall consist in unauthorized copying of the
patented design or utility model for the purpose of trade or industry in the article or product and in the making, using or selling of the
article or product copying the patented design or utility model. Identity or substantial identity with the patented design or utility model
shall constitute evidence of copying. (underscoring supplied)
Moreover, it should be noted that the requirement of Article 34 to provide a disputable presumption applies only if (1) the product
obtained by the patented process is NEW or (2) there is a substantial likelihood that the identical product was made by the process and
the process owner has not been able through reasonable effort to determine the process used. Where either of these two provisos does
not obtain, members shall be free to determine the appropriate method of implementing the provisions of TRIPS within their own internal
systems and processes.
By and large, the arguments adduced in connection with our disposition of the third issue -- derogation of legislative power - will
apply to this fourth issue also. Suffice it to say that the reciprocity clause more than justifies such intrusion, if any actually exists. Besides,
Article 34 does not contain an unreasonable burden, consistent as it is with due process and the concept of adversarial dispute settlement
inherent in our judicial system.
So too, since the Philippine is a signatory to most international conventions on patents, trademarks and copyrights, the adjustment
in legislation and rules of procedure will not be substantial.[52]
Fifth Issue: Concurrence Only in the WTO Agreement and Not in Other Documents Contained in the Final Act
Petitioners allege that the Senate concurrence in the WTO Agreement and its annexes -- but not in the other documents referred to
in the Final Act, namely the Ministerial Declaration and Decisions and the Understanding on Commitments in Financial Services -- is
defective and insufficient and thus constitutes abuse of discretion. They submit that such concurrence in the WTO Agreement alone is
flawed because it is in effect a rejection of the Final Act, which in turn was the document signed by Secretary Navarro, in representation
of the Republic upon authority of the President. They contend that the second letter of the President to the Senate[53] which enumerated
what constitutes the Final Act should have been the subject of concurrence of the Senate.
A final act, sometimes called protocol de clture, is an instrument which records the winding up of the proceedings of a diplomatic
conference and usually includes a reproduction of the texts of treaties, conventions, recommendations and other acts agreed upon and
signed by the plenipotentiaries attending the conference.[54] It is not the treaty itself. It is rather a summary of the proceedings of a
protracted conference which may have taken place over several years. The text of the Final Act Embodying the Results of the Uruguay
Round of Multilateral Trade Negotiations is contained in just one page[55] in Vol. I of the 36-volume Uruguay Round of Multilateral Trade
Negotiations. By signing said Final Act, Secretary Navarro as representative of the Republic of the Philippines undertook:
"(a) to submit, as appropriate, the WTO Agreement for the consideration of their respective competent authorities with a view to
seeking approval of the Agreement in accordance with their procedures; and
(b) to adopt the Ministerial Declarations and Decisions."
The assailed Senate Resolution No. 97 expressed concurrence in exactly what the Final Act required from its signatories, namely,
concurrence of the Senate in the WTO Agreement.
The Ministerial Declarations and Decisions were deemed adopted without need for ratification. They were approved by the
ministers by virtue of Article XXV: 1 of GATT which provides that representatives of the members can meet to give effect to those
provisions of this Agreement which invoke joint action, and generally with a view to facilitating the operation and furthering the
objectives of this Agreement.[56]
The Understanding on Commitments in Financial Services also approved in Marrakesh does not apply to the Philippines. It applies
only to those 27 Members which have indicated in their respective schedules of commitments on standstill, elimination of monopoly,
expansion of operation of existing financial service suppliers, temporary entry of personnel, free transfer and processing of information,
and national treatment with respect to access to payment, clearing systems and refinancing available in the normal course of business.[57]
On the other hand, the WTO Agreement itself expresses what multilateral agreements are deemed included as its integral
parts,[58] as follows:
Article II
Scope of the WTO
1. The WTO shall provide the common institutional framework for the conduct of trade relations among its Members in matters to
the agreements and associated legal instruments included in the Annexes to this Agreement.
2. The Agreements and associated legal instruments included in Annexes 1, 2, and 3 (hereinafter referred to as Multilateral
Agreements) are integral parts of this Agreement, binding on all Members.
3. The Agreements and associated legal instruments included in Annex 4 (hereinafter referred to as Plurilateral Trade Agreements)
are also part of this Agreement for those Members that have accepted them, and are binding on those Members. The Plurilateral
Trade Agreements do not create either obligation or rights for Members that have not accepted them.
4. The General Agreement on Tariffs and Trade 1994 as specified in annex 1A (hereinafter referred to as GATT 1994) is legally
distinct from the General Agreement on Tariffs and Trade, dated 30 October 1947, annexed to the Final Act adopted at the
conclusion of the Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment, as
subsequently rectified, amended or modified (hereinafter referred to as GATT 1947).
It should be added that the Senate was well-aware of what it was concurring in as shown by the members deliberation on August
25, 1994. After reading the letter of President Ramos dated August 11, 1994,[59] the senators of the Republic minutely dissected what the
Senate was concurring in, as follows: [60]
THE CHAIRMAN: Yes. Now, the question of the validity of the submission came up in the first day hearing of this Committee
yesterday. Was the observation made by Senator Taada that what was submitted to the Senate was not the agreement on establishing
the World Trade Organization by the final act of the Uruguay Round which is not the same as the agreement establishing the World Trade
Organization?And on that basis, Senator Tolentino raised a point of order which, however, he agreed to withdraw upon understanding
that his suggestion for an alternative solution at that time was acceptable. That suggestion was to treat the proceedings of the Committee
as being in the nature of briefings for Senators until the question of the submission could be clarified.
And so, Secretary Romulo, in effect, is the President submitting a new... is he making a new submission which improves on the clarity of
the first submission?
MR. ROMULO: Mr. Chairman, to make sure that it is clear cut and there should be no misunderstanding, it was his intention to clarify all
matters by giving this letter.
THE CHAIRMAN: Thank you.
Can this Committee hear from Senator Taada and later on Senator Tolentino since they were the ones that raised this question yesterday?
Senator Taada, please.
SEN. TAADA: Thank you, Mr. Chairman.
Based on what Secretary Romulo has read, it would now clearly appear that what is being submitted to the Senate for ratification is not
the Final Act of the Uruguay Round, but rather the Agreement on the World Trade Organization as well as the Ministerial Declarations and
Decisions, and the Understanding and Commitments in Financial Services.
I am now satisfied with the wording of the new submission of President Ramos.
SEN. TAADA. . . . of President Ramos, Mr. Chairman.
THE CHAIRMAN. Thank you, Senator Taada. Can we hear from Senator Tolentino? And after him Senator Neptali Gonzales and Senator
Lina.
SEN TOLENTINO, Mr. Chairman, I have not seen the new submission actually transmitted to us but I saw the draft of his earlier, and I think
it now complies with the provisions of the Constitution, and with the Final Act itself. The Constitution does not require us to ratify the
Final Act. It requires us to ratify the Agreement which is now being submitted. The Final Act itself specifies what is going to be submitted
to with the governments of the participants.
In paragraph 2 of the Final Act, we read and I quote:
By signing the present Final Act, the representatives agree: (a) to submit as appropriate the WTO Agreement for the consideration of the
respective competent authorities with a view to seeking approval of the Agreement in accordance with their procedures.
In other words, it is not the Final Act that was agreed to be submitted to the governments for ratification or acceptance as whatever their
constitutional procedures may provide but it is the World Trade Organization Agreement. And if that is the one that is being submitted
now, I think it satisfies both the Constitution and the Final Act itself.
Thank you, Mr. Chairman.
THE CHAIRMAN. Thank you, Senator Tolentino, May I call on Senator Gonzales.
SEN. GONZALES. Mr. Chairman, my views on this matter are already a matter of record. And they had been adequately reflected in the
journal of yesterdays session and I dont see any need for repeating the same.
Now, I would consider the new submission as an act ex abudante cautela.
THE CHAIRMAN. Thank you, Senator Gonzales. Senator Lina, do you want to make any comment on this?
SEN. LINA. Mr. President, I agree with the observation just made by Senator Gonzales out of the abundance of question. Then the new
submission is, I believe, stating the obvious and therefore I have no further comment to make.
Epilogue
In praying for the nullification of the Philippine ratification of the WTO Agreement, petitioners are invoking this Courts
constitutionally imposed duty to determine whether or not there has been grave abuse of discretion amounting to lack or excess of
jurisdiction on the part of the Senate in giving its concurrence therein via Senate Resolution No. 97. Procedurally, a writ
of certiorari grounded on grave abuse of discretion may be issued by the Court under Rule 65 of the Rules of Court when it is amply shown
that petitioners have no other plain, speedy and adequate remedy in the ordinary course of law.
By grave abuse of discretion is meant such capricious and whimsical exercise of judgment as is equivalent to lack of
jurisdiction.[61] Mere abuse of discretion is not enough. It must be grave abuse of discretion as when the power is exercised in an arbitrary
or despotic manner by reason of passion or personal hostility, and must be so patent and so gross as to amount to an evasion of a positive
duty or to a virtual refusal to perform the duty enjoined or to act at all in contemplation of law.[62] Failure on the part of the petitioner to
show grave abuse of discretion will result in the dismissal of the petition.[63]
In rendering this Decision, this Court never forgets that the Senate, whose act is under review, is one of two sovereign houses of
Congress and is thus entitled to great respect in its actions. It is itself a constitutional body independent and coordinate, and thus its
actions are presumed regular and done in good faith. Unless convincing proof and persuasive arguments are presented to overthrow such
presumptions, this Court will resolve every doubt in its favor. Using the foregoing well-accepted definition of grave abuse of discretion
and the presumption of regularity in the Senates processes, this Court cannot find any cogent reason to impute grave abuse of discretion
to the Senates exercise of its power of concurrence in the WTO Agreement granted it by Sec. 21 of Article VII of the Constitution.[64]
It is true, as alleged by petitioners, that broad constitutional principles require the State to develop an independent national
economy effectively controlled by Filipinos; and to protect and/or prefer Filipino labor, products, domestic materials and locally produced
goods. But it is equally true that such principles -- while serving as judicial and legislative guides -- are not in themselves sources of causes
of action. Moreover, there are other equally fundamental constitutional principles relied upon by the Senate which mandate the pursuit
of a trade policy that serves the general welfare and utilizes all forms and arrangements of exchange on the basis of equality and
reciprocity and the promotion of industries which are competitive in both domestic and foreign markets, thereby justifying its acceptance
of said treaty. So too, the alleged impairment of sovereignty in the exercise of legislative and judicial powers is balanced by the adoption
of the generally accepted principles of international law as part of the law of the land and the adherence of the Constitution to the policy
of cooperation and amity with all nations.
That the Senate, after deliberation and voting, voluntarily and overwhelmingly gave its consent to the WTO Agreement thereby
making it a part of the law of the land is a legitimate exercise of its sovereign duty and power. We find no patent and gross arbitrariness or
despotism by reason of passion or personal hostility in such exercise. It is not impossible to surmise that this Court, or at least some of its
members, may even agree with petitioners that it is more advantageous to the national interest to strike down Senate Resolution No.
97. But that is not a legal reason to attribute grave abuse of discretion to the Senate and to nullify its decision. To do so would constitute
grave abuse in the exercise of our own judicial power and duty.Ineludably, what the Senate did was a valid exercise of its authority. As to
whether such exercise was wise, beneficial or viable is outside the realm of judicial inquiry and review. That is a matter between the
elected policy makers and the people. As to whether the nation should join the worldwide march toward trade liberalization and
economic globalization is a matter that our people should determine in electing their policy makers. After all, the WTO Agreement allows
withdrawal of membership, should this be the political desire of a member.
The eminent futurist John Naisbitt, author of the best seller Megatrends, predicts an Asian Renaissance[65] where the East will
become the dominant region of the world economically, politically and culturally in the next century. He refers to the free market
espoused by WTO as the catalyst in this coming Asian ascendancy. There are at present about 31 countries including China, Russia and
Saudi Arabia negotiating for membership in the WTO. Notwithstanding objections against possible limitations on national sovereignty, the
WTO remains as the only viable structure for multilateral trading and the veritable forum for the development of international trade
law. The alternative to WTO is isolation, stagnation, if not economic self-destruction. Duly enriched with original membership, keenly
aware of the advantages and disadvantages of globalization with its on-line experience, and endowed with a vision of the future, the
Philippines now straddles the crossroads of an international strategy for economic prosperity and stability in the new millennium. Let the
people, through their duly authorized elected officers, make their free choice.
WHEREFORE, the petition is DISMISSED for lack of merit.
SO ORDERED.
Narvasa, C.J., Regalado, Davide, Jr., Romero, Bellosillo, Melo, Puno, Kapunan, Mendoza, Francisco, Hermosisima, Jr., and Torres, Jr.,
JJ., concur.
Padilla, and Vitug, JJ., in the result.
EN BANC
G.R. No. 151445 April 11, 2002
ARTHUR D. LIM and PAULINO R. ERSANDO, petitioners,
vs.
HONORABLE EXECUTIVE SECRETARY as alter ego of HER EXCELLENCEY GLORIA MACAPAGAL-ARROYO, and HONORABLE ANGELO REYES
in his capacity as Secretary of National Defense, respondents.
----------------------------------------
SANLAKAS and PARTIDO NG MANGGAGAWA, petitioners-intervenors,
vs.
GLORIA MACAPAGA-ARROYO, ALBERTO ROMULO, ANGELO REYES, respondents.
DISSENTING OPINION
SEPARATE OPINION
DE LEON, JR., J.:
This case involves a petition for certiorari and prohibition as well as a petition-in-intervention, praying that respondents be restrained
from proceeding with the so-called "Balikatan 02-1" and that after due notice and hearing, that judgment be rendered issuing a
permanent writ of injunction and/or prohibition against the deployment of U.S. troops in Basilan and Mindanao for being illegal and in
violation of the Constitution.
The facts are as follows:
Beginning January of this year 2002, personnel from the armed forces of the United States of America started arriving in Mindanao to take
part, in conjunction with the Philippine military, in "Balikatan 02-1." These so-called "Balikatan" exercises are the largest combined
training operations involving Filipino and American troops. In theory, they are a simulation of joint military maneuvers pursuant to the
Mutual Defense Treaty,1 a bilateral defense agreement entered into by the Philippines and the United States in 1951.
Prior to the year 2002, the last "Balikatan" was held in 1995. This was due to the paucity of any formal agreement relative to the
treatment of United States personnel visiting the Philippines. In the meantime, the respective governments of the two countries agreed to
hold joint exercises on a reduced scale. The lack of consensus was eventually cured when the two nations concluded the Visiting Forces
Agreement (V FA) in 1999.
The entry of American troops into Philippine soil is proximately rooted in the international anti-terrorism campaign declared by President
George W. Bush in reaction to the tragic events that occurred on September 11, 2001. On that day, three (3) commercial aircrafts were
hijacked, flown and smashed into the twin towers of the World Trade Center in New York City and the Pentagon building in Washington,
D.C. by terrorists with alleged links to the al-Qaeda ("the Base"), a Muslim extremist organization headed by the infamous Osama bin
Laden. Of no comparable historical parallels, these acts caused billions of dollars worth of destruction of property and incalculable loss of
hundreds of lives.
On February 1, 2002, petitioners Arthur D. Lim and Paulino P. Ersando filed this petition for certiorari and prohibition, attacking the
constitutionality of the joint exercise.2 They were joined subsequently by SANLAKAS and PARTIDO NG MANGGAGAWA, both party-Iist
organizations, who filed a petition-in-intervention on February 11, 2002.
Lim and Ersando filed suit in their capacities as citizens, lawyers and taxpayers. SANLAKAS and PARTIDO, on the other hand, aver that
certain members of their organization are residents of Zamboanga and Sulu, and hence will be directly affected by the operations being
conducted in Mindanao. They likewise pray for a relaxation on the rules relative to locus standi citing the unprecedented importance of
the issue involved.
On February 71 2002 the Senate conducted a hearing on the "Balikatan" exercise wherein Vice-President Teofisto T. Guingona, Jr., who is
concurrently Secretary of Foreign. Affairs, presented the Draft Terms of Reference (TOR).3Five days later, he approved the TOR, which we
quote hereunder:
I. POLICY LEVEL
1. The Exercise shall be consistent with the Philippine Constitution and all its activities shall be in consonance with the laws of
the land and the provisions of the RP-US Visiting Forces Agreement (VFA).
2. The conduct of this training Exercise is in accordance with pertinent United Nations resolutions against global terrorism as
understood by the respective parties.
3. No permanent US basing and support facilities shall be established. Temporary structures such as those for troop billeting,
classroom instruction and messing may be set up for use by RP and US Forces during the Exercise.
4. The Exercise shall be implemented jointly by RP and US Exercise Co-Directors under the authority of the Chief of Staff, AFP.
In no instance will US Forces operate independently during field training exercises (FTX). AFP and US Unit Commanders will
retain command over their respective forces under the overall authority of the Exercise Co-Directors. RP and US participants
shall comply with operational instructions of the AFP during the FTX.
5. The exercise shall be conducted and completed within a period of not more than six months, with the projected
participation of 660 US personnel and 3,800 RP Forces. The Chief of Staff, AFP shall direct the Exercise Co-Directors to wind up
and terminate the Exercise and other activities within the six month Exercise period.
6. The Exercise is a mutual counter-terrorism advising, assisting and training Exercise relative to Philippine efforts against the
ASG, and will be conducted on the Island of Basilan. Further advising, assisting and training exercises shall be conducted in
Malagutay and the Zamboanga area. Related activities in Cebu will be for support of the Exercise.
7. Only 160 US Forces organized in 12-man Special Forces Teams shall be deployed with AFP field, commanders. The US teams
shall remain at the Battalion Headquarters and, when approved, Company Tactical headquarters where they can observe and
assess the performance of the AFP Forces.
8. US exercise participants shall not engage in combat, without prejudice to their right of self-defense.
9. These terms of Reference are for purposes of this Exercise only and do not create additional legal obligations between the
US Government and the Republic of the Philippines.
II. EXERCISE LEVEL
1. TRAINING
a. The Exercise shall involve the conduct of mutual military assisting, advising and training of RP and US Forces with
the primary objective of enhancing the operational capabilities of both forces to combat terrorism.
b. At no time shall US Forces operate independently within RP territory.
c. Flight plans of all aircraft involved in the exercise will comply with the local air traffic regulations.
2. ADMINISTRATION & LOGISTICS
a. RP and US participants shall be given a country and area briefing at the start of the Exercise. This briefing shall
acquaint US Forces on the culture and sensitivities of the Filipinos and the provisions of the VF A. The briefing shall
also promote the full cooperation on the part of the RP and US participants for the successful conduct of the
Exercise.
b. RP and US participating forces may share, in accordance with their respective laws and regulations, in the use of
their resources, equipment and other assets. They will use their respective logistics channels.
c. Medical evaluation shall be jointly planned and executed utilizing RP and US assets and resources.
d. Legal liaison officers from each respective party shall be appointed by the Exercise Directors.
3. PUBLIC AFFAIRS
a. Combined RP-US Information Bureaus shall be established at the Exercise Directorate in Zamboanga City and at
GHQ, AFP in Camp Aguinaldo, Quezon City.
b. Local media relations will be the concern of the AFP and all public affairs guidelines shall be jointly developed by
RP and US Forces.
 c. Socio-Economic Assistance Projects shall be planned and executed jointly by RP and US Forces in accordance with
their respective laws and regulations, and in consultation with community and local government officials.
Contemporaneously, Assistant Secretary for American Affairs Minerva Jean A. Falcon and United States Charge d' Affaires Robert Fitts
signed the Agreed Minutes of the discussion between the Vice-President and Assistant Secretary Kelly.4
Petitioners Lim and Ersando present the following arguments:
I
THE PHILIPPINES AND THE UNITED STATES SIGNED THE MUTUAL DEFENSE TREATY (MDT) in 1951 TO PROVIDE MUTUAL
MILITARY ASSIST ANCE IN ACCORDANCE WITH THE 'CONSTITUTIONAL PROCESSE-S' OF EACH COUNTRY ONLY IN THE CASE OF
AN ARMED ATTACK BY AN EXTERNAL AGGRESSOR, MEANING A THIRD COUNTRY AGAINST ONE OF THEM.
BY NO STRETCH OF THE IMAGINA TION CAN IT BE SAID THAT THE ABU SAYYAF BANDITS IN BASILAN CONSTITUTE AN EXTERNAL
ARMED FORCE THAT HAS SUBJECT THE PHILIPPINES TO AN ARMED EXTERNAL ATTACK TO WARRANT U.S. MILITARY
ASSISTANCE UNDER THE MDT OF 1951.
II
NEITHER DOES THE VFA OF 1999 AUTHORIZE AMERICAN SOLDIERS TO ENGAGE IN COMBAT OPERATIONS IN PHILIPPINE
TERRITORY, NOT EVEN TO FIRE BACK "IF FIRED UPON".
Substantially the same points are advanced by petitioners SANLAKAS and PARTIDO.
In his Comment, the Solicitor General points to infirmities in the petitions regarding, inter alia, Lim and Ersando's standing to file suit, the
prematurity of the action, as well as the impropriety of availing of certiorari to ascertain a question of fact. Anent their locus standi, the
Solicitor General argues that first, they may not file suit in their capacities as, taxpayers inasmuch as it has not been shown that "Balikatan
02-1 " involves the exercise of Congress' taxing or spending powers. Second, their being lawyers does not invest them with sufficient
personality to initiate the case, citing our ruling in Integrated Bar of the Philippines v. Zamora.5 Third, Lim and Ersando have failed to
demonstrate the requisite showing of direct personal injury. We agree.
It is also contended that the petitioners are indulging in speculation. The Solicitor General is of the view that since the Terms of Reference
are clear as to the extent and duration of "Balikatan 02-1," the issues raised by petitioners are premature, as they are based only on a fear
of future violation of the Terms of Reference. Even petitioners' resort to a special civil action for certiorari is assailed on the ground that
the writ may only issue on the basis of established facts.
Apart from these threshold issues, the Solicitor General claims that there is actually no question of constitutionality involved. The true
object of the instant suit, it is said, is to obtain an interpretation of the V FA. The Solicitor General asks that we accord due deference to
the executive determination that "Balikatan 02-1" is covered by the VFA, considering the President's monopoly in the field of foreign
relations and her role as commander-in-chief of the Philippine armed forces.
Given the primordial importance of the issue involved, it will suffice to reiterate our view on this point in a related case:
Notwithstanding, in view of the paramount importance and the constitutional significance of the issues raised in the
petitions, this Court, in the exercise of its sound discretion, brushes aside the procedural barrier and takes
cognizance of the petitions, as we have done in the early Emergency Powers Cases, where we had occasion to rule:
'x x x ordinary citizens and taxpayers were allowed to question the constitutionality of several executive orders
issued by President Quirino although they were involving only an indirect and general interest shared in common
with the public. The Court dismissed the objection that they were not proper parties and ruled that 'transcendental
importance to the public of these cases demands that they be settled promptly and definitely, brushing aside, if
we must, technicalities of procedure.' We have since then applied the exception in many other cases. [citation
omitted]
This principle was reiterated in the subsequent cases of Gonzales vs. COMELEC, Daza vs. Singson, and Basco vs. Phil,
Amusement and Gaming Corporation, where we emphatically held:
Considering however the importance to the public of the case at bar, and in keeping with the Court's duty, under
the 1987 Constitution, to determine whether or not the other branches of the government have kept themselves
within the limits of the Constitution and the laws that they have not abused the discretion given to them, the Court
has brushed aside technicalities of procedure and has taken cognizance of this petition. xxx'
Again, in the more recent case of Kilosbayan vs. Guingona, Jr., this Court ruled that in cases of transcendental importance, the
Court may relax the standing requirements and allow a suit to prosper even where there is no direct injury to the party
claiming the right of judicial review.
Although courts generally avoid having to decide a constitutional question based on the doctrine of separation of powers,
which enjoins upon the department of the government a becoming respect for each other's act, this Court nevertheless
resolves to take cognizance of the instant petition.6
Hence, we treat with similar dispatch the general objection to the supposed prematurity of the action. At any rate, petitioners' concerns
on the lack of any specific regulation on the latitude of activity US personnel may undertake and the duration of their stay has been
addressed in the Terms of Reference.
The holding of "Balikatan 02-1" must be studied in the framework of the treaty antecedents to which the Philippines bound itself. The first
of these is the Mutual Defense Treaty (MDT, for brevity). The MDT has been described as the "core" of the defense relationship between
the Philippines and its traditional ally, the United States. Its aim is to enhance the strategic and technological capabilities of our armed
forces through joint training with its American counterparts; the "Balikatan" is the largest such training exercise directly supporting the
MDT's objectives. It is this treaty to which the V FA adverts and the obligations thereunder which it seeks to reaffirm.
The lapse of the US-Philippine Bases Agreement in 1992 and the decision not to renew it created a vacuum in US-Philippine defense
relations, that is, until it was replaced by the Visiting Forces Agreement. It should be recalled that on October 10, 2000, by a vote of eleven
to three, this Court upheld the validity of the VFA.7 The V FA provides the "regulatory mechanism" by which "United States military and
civilian personnel [may visit] temporarily in the Philippines in connection with activities approved by the Philippine Government." It
contains provisions relative to entry and departure of American personnel, driving and vehicle registration, criminal jurisdiction, claims,
importation and exportation, movement of vessels and aircraft, as well as the duration of the agreement and its termination. It is the VFA
which gives continued relevance to the MDT despite the passage of years. Its primary goal is to facilitate the promotion of optimal
cooperation between American and Philippine military forces in the event of an attack by a common foe.
The first question that should be addressed is whether "Balikatan 02-1" is covered by the Visiting Forces Agreement. To resolve this, it is
necessary to refer to the V FA itself: Not much help can be had therefrom, unfortunately, since the terminology employed is itself the
source of the problem. The VFA permits United States personnel to engage, on an impermanent basis, in "activities," the exact meaning of
which was left undefined. The expression is ambiguous, permitting a wide scope of undertakings subject only to the approval of the
Philippine government.8 The sole encumbrance placed on its definition is couched in the negative, in that United States personnel must
"abstain from any activity inconsistent with the spirit of this agreement, and in particular, from any political activity."9 All other activities,
in other words, are fair game.
We are not left completely unaided, however. The Vienna Convention on the Law of Treaties, which contains provisos governing refers to as the context of the treaty, as well as other elements may be taken into account alongside the aforesaid context. As explained
interpretations of international agreements, state: by a writer on the Convention ,

SECTION 3. INTERPRETATION OF TREATIES [t]he Commission's proposals (which were adopted virtually without change by the conference and are now reflected in
Articles 31 and 32 of the Convention) were clearly based on the view that the text of a treaty must be presumed to be the
authentic expression of the intentions of the parties; the Commission accordingly came down firmly in favour of the view that
Article 31
'the starting point of interpretation is the elucidation of the meaning of the text, not an investigation ab initio into the
intentions of the parties'. This is not to say that the travauxpreparatoires of a treaty , or the circumstances of its conclusion,
General rule of interpretation are relegated to a subordinate, and wholly ineffective, role. As Professor Briggs points out, no rigid temporal prohibition on
resort to travaux preparatoires of a treaty was intended by the use of the phrase 'supplementary means of interpretation' in
1. A treaty shall be interpreted in good faith ill accordance with the ordinary meaning to be given to the tenus of the treaty in what is now Article 32 of the Vienna Convention. The distinction between the general rule of interpretation and the
their context and in the light of its object and purpose. supplementary means of interpretation is intended rather to ensure that the supplementary means do not constitute an
alternative, autonomous method of interpretation divorced from the general rule.10

2. The context for the purpose of the interpretation of a treaty shall comprise, in addition to the text, including its preamble
and annexes: The Terms of Reference rightly fall within the context of the VFA.

(a) any agreement relating to the treaty which was made between all the parties in connexion with the conclusion
of the treaty;
(b) any instrument which was made by one or more parties in connexion with the conclusion of the treaty and
accepted by the other parties as an instrument related to the party .
After studied reflection, it appeared farfetched that the ambiguity surrounding the meaning of the word .'activities" arose from accident.
In our view, it was deliberately made that way to give both parties a certain leeway in negotiation. In this manner, visiting US forces may
sojourn in Philippine territory for purposes other than military. As conceived, the joint exercises may include training on new techniques
of patrol and surveillance to protect the nation's marine resources, sea search-and-rescue operations to assist vessels in distress, disaster
relief operations, civic action projects such as the building of school houses, medical and humanitarian missions, and the like.

3. There shall be taken into account, together with the context:
(a) any subsequent agreement between the parties regarding the interpretation of the treaty or the application of
its provisions;
(b) any subsequent practice in the application of the treaty which establishes the agreement of the parties
regarding its interpretation;
(c) any relevant rules of international law applicable in the relations between the parties.
4. A special meaning shall be given to a term if it is established that the parties so intended.
Article 32
Under these auspices, the VFA gives legitimacy to the current Balikatan exercises. It is only logical to assume that .'Balikatan 02-1," a
"mutual anti- terrorism advising, assisting and training exercise," falls under the umbrella of sanctioned or allowable activities in the
context of the agreement. Both the history and intent of the Mutual Defense Treaty and the V FA support the conclusion that combat-
related activities -as opposed to combat itself -such as the one subject of the instant petition, are indeed authorized.
That is not the end of the matter, though. Granted that "Balikatan 02-1" is permitted under the terms of the VFA, what may US forces
legitimately do in furtherance of their aim to provide advice, assistance and training in the global effort against terrorism? Differently
phrased, may American troops actually engage in combat in Philippine territory? The Terms of Reference are explicit enough. Paragraph 8
of section I stipulates that US exercise participants may not engage in combat "except in self-defense." We wryly note that this sentiment
is admirable in the abstract but difficult in implementation. The target of "Balikatan 02-1 I" the Abu Sayyaf, cannot reasonably be
expected to sit idly while the battle is brought to their very doorstep. They cannot be expected to pick and choose their targets for they
will not have the luxury of doing so. We state this point if only to signify our awareness that the parties straddle a fine line, observing the
honored legal maxim "Nemo potest facere per alium quod non potest facere per directum."11 The indirect violation is actually petitioners'
worry, that in reality, "Balikatan 02-1 " is actually a war principally conducted by the United States government, and that the provision on
self-defense serves only as camouflage to conceal the true nature of the exercise. A clear pronouncement on this matter thereby becomes
crucial.

Supplementary means of interpretation

In our considered opinion, neither the MDT nor the V FA allow foreign troops to engage in an offensive war on Philippine territory. We
bear in mind the salutary proscription stated in the Charter of the United Nations, to wit:
Recourse may be had to supplementary means of interpretation, including the preparatory work of the treaty and the
circumstances of its conclusion, in order to confirm the meaning resulting from the application of article 31, or to determine
Article 2
the meaning when the interpretation according to article 31 :

The Organization and its Members, in pursuit of the Purposes stated in Article 1, shall act in accordance with the following
(a) leaves the meaning ambiguous or obscure; or
Principles.

(b) leads to a result which is manifestly absurd unreasonable.

xxx xxx xxx xxx

It is clear from the foregoing that the cardinal rule of interpretation must involve an examination of the text, which is presumed to
verbalize the parties' intentions. The Convention likewise dictates what may be used as aids to deduce the meaning of terms, which it
 4. All Members shall refrain in their international relations from the threat or use of force against the territorial integrity or
political independence of any state, or in any other manner inconsistent with the Purposes of the United Nations.
xxx xxx xxx xxx
In the same manner, both the Mutual Defense Treaty and the Visiting Forces Agreement, as in all other treaties and international
agreements to which the Philippines is a party, must be read in the context of the 1987 Constitution. In particular, the Mutual Defense
Treaty was concluded way before the present Charter, though it nevertheless remains in effect as a valid source of international
obligation. The present Constitution contains key provisions useful in determining the extent to which foreign military troops are allowed
in Philippine territory. Thus, in the Declaration of Principles and State Policies, it is provided that:
xxx xxx xxx xxx
SEC. 2. The Philippines renounces war as an instrument of national policy, adopts the generally accepted principles of
international law as part of the law of the land and adheres to the policy of peace, equality, justice, freedom, cooperation, and
amity with all nations.
xxx xxx xxx xxx
SEC. 7. The State shall pursue an independent foreign policy. In its relations with other states the paramount consideration
shall be national sovereignty, territorial integrity, national interest, and the right to self- determination.
SEC. 8. The Philippines, consistent with the national interest, adopts and pursues a policy of freedom from nuclear weapons in
the country.
xxx xxx xxx xxx
The Constitution also regulates the foreign relations powers of the Chief Executive when it provides that "[n]o treaty or international
agreement shall be valid and effective unless concurred in by at least two-thirds of all the members of the Senate."12 Even more pointedly,
the Transitory Provisions state:
Sec. 25. After the expiration in 1991 of the Agreement between the Republic of the Philippines and the United States of
America concerning Military Bases, foreign military bases, troops or facilities shall not be allowed in the Philippines except
under a treaty duly concurred in by the Senate and, when the Congress so requires, ratified by a majority of the votes cast by
the people in a national referendum held for that purpose, and recognized as a treaty by the other contracting state.
The aforequoted provisions betray a marked antipathy towards foreign military presence in the country, or of foreign influence in general.
Hence, foreign troops are allowed entry into the Philippines only by way of direct exception. Conflict arises then between the
fundamental law and our obligations arising from international agreements.
A rather recent formulation of the relation of international law vis-a-vis municipal law was expressed in Philip Morris, Inc. v.
Court of Appeals,13 to wit:
xxx Withal, the fact that international law has been made part of the law of the land does not by any means imply the primacy
of international law over national law in the municipal sphere. Under the doctrine of incorporation as applied in most
countries, rules of international law are given a standing equal, not superior, to national legislation.
This is not exactly helpful in solving the problem at hand since in trying to find a middle ground, it favors neither one law nor the other,
which only leaves the hapless seeker with an unsolved dilemma. Other more traditional approaches may offer valuable insights.
From the perspective of public international law, a treaty is favored over municipal law pursuant to the principle of pacta sunt
servanda. Hence, "[e]very treaty in force is binding upon the parties to it and must be performed by them in good faith." 14 Further, a party
to a treaty is not allowed to "invoke the provisions of its internal law as justification for its failure to perform a treaty."15
Our Constitution espouses the opposing view. Witness our jurisdiction as I stated in section 5 of Article VIII:
The Supreme Court shall have the following powers:
xxx xxx xxx xxx
(2) Review, revise, reverse, modify, or affirm on appeal or certiorari, as the law or the Rules of Court may provide, final
judgments and order of lower courts in:
(A) All cases in which the constitutionality or validity of any treaty, international or executive agreement, law,
presidential decree, proclamation, order, instruction, ordinance, or regulation is in question.
xxx xxx xxx xxx
In Ichong v. Hernandez,16 we ruled that the provisions of a treaty are always subject to qualification or amendment by a subsequent law,
or that it is subject to the police power of the State. In Gonzales v. Hechanova,17
xxx As regards the question whether an international agreement may be invalidated by our courts, suffice it to say that the
Constitution of the Philippines has clearly settled it in the affirmative, by providing, in Section 2 of Article VIII thereof, that the
Supreme Court may not be deprived "of its jurisdiction to review, revise, reverse, modify, or affirm on appeal, certiorari, or writ
of error as the law or the rules of court may provide, final judgments and decrees of inferior courts in -( I) All cases in which
the constitutionality or validity of any treaty, law, ordinance, or executive order or regulation is in question." In other words,
our Constitution authorizes the nullification of a treaty, not only when it conflicts with the fundamental law, but, also, when it
runs counter to an act of Congress.
The foregoing premises leave us no doubt that US forces are prohibited / from engaging in an offensive war on Philippine territory.
Yet a nagging question remains: are American troops actively engaged in combat alongside Filipino soldiers under the guise of an alleged
training and assistance exercise? Contrary to what petitioners would have us do, we cannot take judicial notice of the events transpiring
down south,18 as reported from the saturation coverage of the media. As a rule, we do not take cognizance of newspaper or electronic
reports per se, not because of any issue as to their truth, accuracy, or impartiality, but for the simple reason that facts must be established
in accordance with the rules of evidence. As a result, we cannot accept, in the absence of concrete proof, petitioners' allegation that the
Arroyo government is engaged in "doublespeak" in trying to pass off as a mere training exercise an offensive effort by foreign troops on
native soil. The petitions invite us to speculate on what is really happening in Mindanao, to issue I make factual findings on matters well
beyond our immediate perception, and this we are understandably loath to do.
It is all too apparent that the determination thereof involves basically a question of fact. On this point, we must concur with the Solicitor
General that the present subject matter is not a fit topic for a special civil action for certiorari. We have held in too many instances that
questions of fact are not entertained in such a remedy. The sole object of the writ is to correct errors of jurisdiction or grave abuse of
discretion: The phrase "grave abuse of discretion" has a precise meaning in law, denoting abuse of discretion "too patent and gross as to
amount to an evasion of a positive duty, or a virtual refusal to perform the duty enjoined or act in contemplation of law, or where the
power is exercised in an arbitrary and despotic manner by reason of passion and personal hostility."19
In this connection, it will not be amiss to add that the Supreme Court is not a trier of facts.20
Under the expanded concept of judicial power under the Constitution, courts are charged with the duty "to determine whether or not
there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the
government."21 From the facts obtaining, we find that the holding of "Balikatan 02-1" joint military exercise has not intruded into that
penumbra of error that would otherwise call for correction on our part. In other words, respondents in the case at bar have not
committed grave abuse of discretion amounting to lack or excess of jurisdiction.
WHEREFORE, the petition and the petition-in-intervention are hereby DISMISSED without prejudice to the filing of a new petition
sufficient in form and substance in the proper Regional Trial Court.
SO ORDERED.
Bellosillo, Melo, Mendoza, Quisumbing, Carpio, JJ., concur.
Kapunan, dissenting opinion.
Ynares-Santiago, join the dissenting opinion.
Panganiban, separate opinion.
Davide., Jr., C.J., Puno, Sandoval-Gutierrez, join the main and separate opinion of J. Panganiban.
[A.M. No. 90-11-2697-CA. June 29, 1992.]
LETTER OF ASSOCIATE JUSTICE REYNATO S. PUNO of the Court of Appeals dated 14 November 1990.
RESOLUTION
PADILLA, J.:
Petitioner Associate Justice Reynato S. Puno, a member of the Court of Appeals, wrote a letter dated 14 November 1990 addressed to this
Court, seeking the correction of his seniority ranking in the Court of Appeals.
It appears from the records that petitioner was first appointed Associate Justice of the Court of Appeals on 20 June 1980 but took his oath
of office for said position only on 29 November 1982, after serving as Assistant Solicitor General in the Office of the Solicitor General since
1974. 1
On 17 January 1983, the Court of Appeals was reorganized and became the Intermediate Appellate Court pursuant to Batas Pambansa
Blg. 129 entitled "An Act Reorganizing the Judiciary. Appropriating Funds Therefor and For Other Purposes." 2 Petitioner was appointed
Appellate Justice in the First Special Cases Division of the Intermediate Appellate Court. On 7 November 1984, petitioner accepted an
appointment to be ceased to be a member of the Judiciary. 3
The aftermath of the EDSA Revolution in February 1986 brought about a reorganization of the entire government, including the Judiciary.
To effect the reorganization of the Intermediate Appellate Court and other lower courts, a Screening Committee was created, with the
then Minister of Justice, now Senator Neptali Gonzales as Chairman and then Solicitor General, now Philippine Ambassador to the United
Nations Sedfrey Ordoñez as Vice Chairman. President Corazon C. Aquino, exercising legislative powers by virtue of the revolution, issued
Executive Order No. 33 to govern the aforementioned reorganization of the Judiciary. 4
The Screening Committee recommended the return of petitioner as Associate Justice of the new Court of Appeals and assigned him the
rank of number eleven (11) in the roster of appellate court justices. When the appointments were signed by President Aquino on 28 July
1986, petitioner’s seniority ranking changed, however, from number eleven (11) to number twenty six (26). 5
Petitioner now alleges that the change in his seniority ranking could only be attributed to inadvertence for, otherwise, it would run
counter to the provisions of Section 2 of Executive Order No. 33, which reads:chanrobles virtual lawlibrary
"SECTION 2. Section 3, Chapter 1 of Batas Pambansa Blg. 129, is hereby amended to read as follows:jgc:chanrobles.com.ph
"SEC. 2. Organization. — There is hereby created a Court of Appeals which shall consist of a Presiding Justice and fifty Associate Justices
who shall be appointed by the President of the Philippines. The Presiding Justice shall be so designated in his appointment and the
Associate Justice shall have precedence according to the dates of their respective appointments, or when the appointments of two or
more shall bear the same date, according to the order in which their appointments were issued by the President. Any Member who is
reappointed to the Court after rendering service in any other position in the government shall retain the precedence to which he was
entitled under his original appointment, and his service in the Court shall, for all intents and purpose be considered as continuous and
uninterrupted." 6
Petitioner elaborates that President Aquino is presumed to have intended to comply with her own Executive Order No. 33 so much so that
the correction of the inadvertent error would only implement the intent of the President as well as the spirit of Executive Order No. 33
and will not provoke any kind of constitutional confrontation (between the President and the Supreme Court). 7
Petitioner points to the case of Justice Oscar Victoriano, former Presiding Justice of the Court of Appeals who, according to petitioner, was
transferred from his position as Justice of the Court of Appeals to the Ministry of Justice as Commissioner of Land Registration and in 1986
was reappointed to the Court of Appeals. Petitioner states that his (Victoriano’s) stint in the Commission of Land Registration did not
adversely affect his seniority ranking in the Court of Appeals, for, in his case, Executive Order No. 33 was correctly applied. 8
In a resolution of the Court en banc dated 29 November 1990, the Court granted Justice Puno’s request. 9 It will be noted that before the
issuance of said resolution, there was no written opposition to, or comment on petitioner’s aforesaid request. The dispositive portion of
the resolution reads:jgc:chanrobles.com.ph
"IN VIEW WHEREOF, the petition of Associate Justice Reynato S. Puno for correction of his seniority ranking in the Court of Appeals is
granted. The presiding Justice of the Court of Appeals, the Honorable Rodolfo A. Nocon, is hereby directed to correct the seniority rank of
Justice Puno from number twelve (12) to number five (5). Let copies of this Resolution be furnished the Court Administrator and the
Judicial and Bar Council for their guidance and information." 10
A motion for reconsideration of the resolution of the Court en banc dated 29 November 1990 was later filed by Associate Justices Jose C.
Campos, Jr. and Luis A. Javellana, two (2) of the Associate Justices affected by the ordered correction. They contend that the present
Court of Appeals is a new Court with fifty one (51) members and that petitioner could not claim a reappointment to a prior court; neither
can he claim that he was returning to his former court, for the courts where he had previously been appointed ceased to exist at the date
of his last appointment. 11
The Court en banc in a resolution dated 17 January 1992 required the petitioner to file his comment on the motion for reconsideration of
the resolution dated 29 November 1990.
In his Comment, petitioner argues that, by virtue of Executive Order No. 33 read in relation to B.P. Blg. 129, his seniority ranking in the
Court of Appeals is now number five (5) for, though President Aquino rose to power by virtue of a revolution, she had pledged at the
issuance of Proclamation No. 3 (otherwise known as the Freedom Constitution) that "no right provided under the unratified 1973
Constitution (shall) be absent in the Freedom Constitution." 12
Moreover, since the last sentence of Section 2 of Executive Order No. 33 virtually re-enacted the last sentence of Sec. 3, Chapter 1 of B.P.
Blg. 129, statutory construction rules on simultaneous repeal and re-enactment mandate, according to petitioner, the preservation and
enforcement of all rights and liabilities which had accrued under the original statute. 13 Furthermore, petitioner avers that, although the
power of appointment is executive in character and cannot be usurped by any other branch of the Government, such power can still be
regulated by the Constitution and by the appropriate law, in this case, by the limits set by Executive Order NO. 33 14 for the power of
appointment cannot be wielded in violation of law. 15
Justices Javellana and Campos were required by the Court to file their reply to Justice Puno’s comment on their motion for
reconsideration of the resolution of the Court en banc dated 24 January 1991.chanrobles.com:cralaw:red
In their Reply and Supplemental Reply, Associate Justices Javellana and Campos submit that the appeal or request for correction filed by
the petitioner was addressed to the wrong party. They aver that as petitioner himself had alleged the mistake to be an "inadvertent error"
of the Office of the President, ergo, he should have filed his request for correction also with said Office of the President and not directly
with the Supreme Court. 16 Furthermore, they point out that petitioner had indeed filed with the Office of the President a request or
petition for correction of his ranking, (seniority) but the same was not approved such that his recourse should have been an appropriate
action before the proper court and impleading all parties concerned. The aforesaid non-approval by the Office of the President they
argue, should be respected by the Supreme Court "not only on the basis of the doctrine of separation of powers but also their presumed
knowledge ability and even expertise in the laws they are entrusted to enforce" 17 for it (the non-approval) is a confirmation that
petitioner’s seniority ranking at the time of his appointment by President Aquino was, in fact, deliberate and not an "inadvertent error" as
petitioner would have the Court believe. 18
The resolution of this controversy is not a pleasant task for the Court since it involves not only members of the next highest court of the
land but persons who are close to members of this Court. But the controversy has to be resolved. The core issue in this case is whether
the present Court of Appeals is a new court such that it would negate any claim to precedence or seniority admittedly enjoyed by
petitioner in the Court of Appeals and Intermediate Appellate Court existing prior to Executive Order No. 33 or whether the present Court
of Appeals is merely a continuation of the Court of Appeals and Intermediate Appellate Court existing prior to said Executive Order No. 33.
It is the holding of the Court that the present Court of Appeals is a new entity, different and distinct from the Court of Appeals or the
Intermediate Appellate Court existing prior to Executive Order No. 33, for it was created in the wake of the massive reorganization
launched by the revolutionary government of Corazon C. Aquino in the aftermath of the people power (EDSA) revolution in 1986.
A resolution has been defined as "the complete overthrow of the established government in any country or state by those who were
previously subject to it" 19 or as "a sudden, radical and fundamental change in the government or political system, usually effected with
violence or at least some acts of violence." 20 In Kelsen’s book, General Theory of Law and State, it is defined as that which "occurs
whenever the legal order of a community is nullified and replaced by a new order . . . a way not prescribed by the first order itself." 21
It was through the February 1986 revolution, a relatively peaceful one, and more popularly known as the "people power revolution" that
the Filipino people tore themselves away from an existing regime. This revolution also saw the unprecedented rise to power of the Aquino
government.
From the natural law point of view, the right of revolution has been defined as "an inherent right of a people to cast out their rulers,
change their policy or effect radical reforms in their system of government or institutions by force or a general uprising when the legal and
constitutional methods of making such change have proved inadequate or are so obstructed as to be unavailable." 22 It has been said that
"the locus of positive law-making power lies with the people of the state" and from there is derived "the right of the people to abolish, to
reform and to alter any existing form of government without regard to the existing constitution." 23
The three (3) clauses that precede the text of the Provisional (Freedom) Constitution, 24 read:jgc:chanrobles.com.ph
"WHEREAS, the new government under President Corazon C. Aquino was installed through a direct exercise of the power of the Filipino
people assisted by units of the New Armed Forces of the Philippines;
"WHEREAS, the heroic action of the people was done in defiance of the provisions of the 1973 Constitution, as amended;
"WHEREFORE, I, Corazon C. Aquino, President of the Philippines, by virtue of the powers vested in me by the sovereign mandate of the
people, do hereby promulgate the following Provisional Constitution."25cralaw:red
These summarize the Aquino government’s position that its mandate is taken from "a direct exercise of the power of the Filipino people."
26
Discussions and opinions of legal experts also proclaim that the Aquino government was "revolutionary in the sense that it came into
existence in defiance of the existing legal processes" 27 and that it was a revolutionary government "instituted by the direct action of the
people and in opposition to the authoritarian values and practices of the overthrown government." 28
A question which naturally comes to mind is whether the then existing legal order was overthrown by the Aquino government. "A legal
order is the authoritative code of a polity. Such code consists of all the rules found in the enactments of the organs of the polity. Where
the state operates under a written constitution, its organs may be readily determined from a reading of its provisions. Once such organs
are ascertained, it becomes an easy matter to locate their enactments. The rules in such enactments, along with those in the constitution,
comprise the legal order of that constitutional state." 29 It is assumed that the legal order remains as a "culture system" of the polity as
long as the latter endures 30 and that a point may be reached, however, where the legal system ceases to be operative as a whole for it is
no longer obeyed by the population nor enforced by the officials. 31
It is widely known that Mrs. Aquino’s rise to the presidency was not due to constitutional processes; in fact, it was achieved in violation of
the provisions of the 1973 Constitution as a Batasang Pambansa resolution had earlier declared Mr. Marcos at the winner in the 1986
presidential election. 32 Thus it can be said that the organization of Mrs. Aquino’s Government which was met by little resistance and her
control of the state evidenced by the appointment of the Cabinet and other key officers of the administration, the departure of the
Marcos Cabinet officials, revampt of the Judiciary and the Military signalled the point where the legal system then in effect, had ceased to
be obeyed by the Filipino.
The Court holds that the Court of Appeals and Intermediate Appellate Court existing prior to Executive Order No. 33 phased out as part of
the legal system abolished by the revolution and that the Court of Appeals established under Executive Order No. 33 was an entirely new
court with appointments thereto having no relation to earlier appointments to the abolished courts, and that the reference to precedence
in rank contained in the last sentence of Sec. 2, BP Blg. No. 129 as amended by Executive Order No. 33 refers to prospective situations as
distinguished from retroactive ones.
But even assuming, arguendo, that Executive Order No. 33 did not abolish the precedence or seniority ranking resulting from previous
appointment to the Court of Appeals or Intermediate Appellate Court existing prior to the 1986 revolution, it is believed that President
Aquino as head of then revolutionary government, could disregard or set aside such precedence or seniority in ranking when she made
her appointments to the reorganized Court of Appeals in 1986.
It is to be noted that, at the time of the issuance of Executive Order No. 33, President Aquino was still exercising the powers of a
revolutionary government, encompassing both executive and legislative powers, such that she could, if she so desired, amend, modify or
repeal any part of B.P. Blg. 129 or her own Executive Order No. 33. It should also be remembered that the same situation was still in force
when she issued the 1986 appointments to the Court of Appeals. In other words, President Aquino, at the time of the issuance of the 1986
appointments, modified or disregarded the rule embodied in B.P. Blg. 129 as amended by Executive Order No. 33, on precedence or
seniority in the case of the petitioner, for reasons known only to her. Since the appointment extended by the President to the petitioner
in 1986 for membership in the new Court of Appeals with its implicit ranking in the roster of justices, was a valid appointment anchored
on the President’s exercise of her then revolutionary powers, it is not for the Court at this time to question or correct that exercise.
ACCORDINGLY, the Court GRANTS the Motion for Reconsideration and the seniority rankings of members of the Court of Appeals,
including that of the petitioner, at the time the appointments were made by the President in 1986, are recognized and upheld.
SO ORDERED.
Paras, Griño-Aquino, Regalado, Davide, Jr. and Romero, JJ., concur.
G.R. No. 101949 December 1, 1994
THE HOLY SEE, petitioner,
vs.
THE HON. ERIBERTO U. ROSARIO, JR., as Presiding Judge of the Regional Trial Court of Makati, Branch 61 and STARBRIGHT SALES
ENTERPRISES, INC., respondents.
Padilla Law Office for petitioner.
Siguion Reyna, Montecillo & Ongsiako for private respondent.
QUIASON, J.:
This is a petition for certiorari under Rule 65 of the Revised Rules of Court to reverse and set aside the Orders dated June 20, 1991 and
September 19, 1991 of the Regional Trial Court, Branch 61, Makati, Metro Manila in Civil Case No. 90-183.
The Order dated June 20, 1991 denied the motion of petitioner to dismiss the complaint in Civil Case No. 90-183, while the Order dated On June 8, 1990, petitioner and Msgr. Cirilos separately moved to dismiss the complaint — petitioner for lack of jurisdiction based on
September 19, 1991 denied the motion for reconsideration of the June 20,1991 Order. sovereign immunity from suit, and Msgr. Cirilos for being an improper party. An opposition to the motion was filed by private respondent.

Petitioner is the Holy See who exercises sovereignty over the Vatican City in Rome, Italy, and is represented in the Philippines by the Papal On June 20, 1991, the trial court issued an order denying, among others, petitioner's motion to dismiss after finding that petitioner "shed
Nuncio. off [its] sovereign immunity by entering into the business contract in question" (Rollo, pp. 20-21).

Private respondent, Starbright Sales Enterprises, Inc., is a domestic corporation engaged in the real estate business.
This petition arose from a controversy over a parcel of land consisting of 6,000 square meters (Lot 5-A, Transfer Certificate of Title No.
390440) located in the Municipality of Parañaque, Metro Manila and registered in the name of petitioner.
On July 12, 1991, petitioner moved for reconsideration of the order. On August 30, 1991, petitioner filed a "Motion for a Hearing for the
Sole Purpose of Establishing Factual Allegation for claim of Immunity as a Jurisdictional Defense." So as to facilitate the determination of
its defense of sovereign immunity, petitioner prayed that a hearing be conducted to allow it to establish certain facts upon which the said
defense is based. Private respondent opposed this motion as well as the motion for reconsideration.

On October 1, 1991, the trial court issued an order deferring the resolution on the motion for reconsideration until after trial on the
Said Lot 5-A is contiguous to Lots 5-B and 5-D which are covered by Transfer Certificates of Title Nos. 271108 and 265388 respectively and
merits and directing petitioner to file its answer (Rollo, p. 22).
registered in the name of the Philippine Realty Corporation (PRC).

Petitioner forthwith elevated the matter to us. In its petition, petitioner invokes the privilege of sovereign immunity only on its own behalf
The three lots were sold to Ramon Licup, through Msgr. Domingo A. Cirilos, Jr., acting as agent to the sellers. Later, Licup assigned his
and on behalf of its official representative, the Papal Nuncio.
rights to the sale to private respondent.

On December 9, 1991, a Motion for Intervention was filed before us by the Department of Foreign Affairs, claiming that it has a legal
In view of the refusal of the squatters to vacate the lots sold to private respondent, a dispute arose as to who of the parties has the
interest in the outcome of the case as regards the diplomatic immunity of petitioner, and that it "adopts by reference, the allegations
responsibility of evicting and clearing the land of squatters. Complicating the relations of the parties was the sale by petitioner of Lot 5-A
contained in the petition of the Holy See insofar as they refer to arguments relative to its claim of sovereign immunity from suit" (Rollo, p.
to Tropicana Properties and Development Corporation (Tropicana).
87).

I
Private respondent opposed the intervention of the Department of Foreign Affairs. In compliance with the resolution of this Court, both
parties and the Department of Foreign Affairs submitted their respective memoranda.
On January 23, 1990, private respondent filed a complaint with the Regional Trial Court, Branch 61, Makati, Metro Manila for annulment
of the sale of the three parcels of land, and specific performance and damages against petitioner, represented by the Papal Nuncio, and
II
three other defendants: namely, Msgr. Domingo A. Cirilos, Jr., the PRC and Tropicana (Civil Case No.
90-183).
A preliminary matter to be threshed out is the procedural issue of whether the petition for certiorari under Rule 65 of the Revised Rules of
Court can be availed of to question the order denying petitioner's motion to dismiss. The general rule is that an order denying a motion to
The complaint alleged that: (1) on April 17, 1988, Msgr. Cirilos, Jr., on behalf of petitioner and the PRC, agreed to sell to Ramon Licup Lots
dismiss is not reviewable by the appellate courts, the remedy of the movant being to file his answer and to proceed with the hearing
5-A, 5-B and 5-D at the price of P1,240.00 per square meters; (2) the agreement to sell was made on the condition that earnest money of
before the trial court. But the general rule admits of exceptions, and one of these is when it is very clear in the records that the trial court
P100,000.00 be paid by Licup to the sellers, and that the sellers clear the said lots of squatters who were then occupying the same; (3)
has no alternative but to dismiss the complaint (Philippine National Bank v. Florendo, 206 SCRA 582 [1992]; Zagada v. Civil Service
Licup paid the earnest money to Msgr. Cirilos; (4) in the same month, Licup assigned his rights over the property to private respondent
Commission, 216 SCRA 114 [1992]. In such a case, it would be a sheer waste of time and energy to require the parties to undergo the
and informed the sellers of the said assignment; (5) thereafter, private respondent demanded from Msgr. Cirilos that the sellers fulfill
rigors of a trial.
their undertaking and clear the property of squatters; however, Msgr. Cirilos informed private respondent of the squatters' refusal to
vacate the lots, proposing instead either that private respondent undertake the eviction or that the earnest money be returned to the
latter; (6) private respondent counterproposed that if it would undertake the eviction of the squatters, the purchase price of the lots The other procedural question raised by private respondent is the personality or legal interest of the Department of Foreign Affairs to
should be reduced from P1,240.00 to P1,150.00 per square meter; (7) Msgr. Cirilos returned the earnest money of P100,000.00 and wrote intervene in the case in behalf of the Holy See (Rollo, pp. 186-190).
private respondent giving it seven days from receipt of the letter to pay the original purchase price in cash; (8) private respondent sent
the earnest money back to the sellers, but later discovered that on March 30, 1989, petitioner and the PRC, without notice to private
In Public International Law, when a state or international agency wishes to plead sovereign or diplomatic immunity in a foreign court, it
respondent, sold the lots to Tropicana, as evidenced by two separate Deeds of Sale, one over Lot 5-A, and another over Lots 5-B and 5-D;
requests the Foreign Office of the state where it is sued to convey to the court that said defendant is entitled to immunity.
and that the sellers' transfer certificate of title over the lots were cancelled, transferred and registered in the name of Tropicana; (9)
Tropicana induced petitioner and the PRC to sell the lots to it and thus enriched itself at the expense of private respondent; (10) private
respondent demanded the rescission of the sale to Tropicana and the reconveyance of the lots, to no avail; and (11) private respondent is In the United States, the procedure followed is the process of "suggestion," where the foreign state or the international organization sued
willing and able to comply with the terms of the contract to sell and has actually made plans to develop the lots into a townhouse project, in an American court requests the Secretary of State to make a determination as to whether it is entitled to immunity. If the Secretary of
but in view of the sellers' breach, it lost profits of not less than P30,000.000.00. State finds that the defendant is immune from suit, he, in turn, asks the Attorney General to submit to the court a "suggestion" that the
defendant is entitled to immunity. In England, a similar procedure is followed, only the Foreign Office issues a certification to that effect
instead of submitting a "suggestion" (O'Connell, I International Law 130 [1965]; Note: Immunity from Suit of Foreign Sovereign
Private respondent thus prayed for: (1) the annulment of the Deeds of Sale between petitioner and the PRC on the one hand, and
Instrumentalities and Obligations, 50 Yale Law Journal 1088 [1941]).
Tropicana on the other; (2) the reconveyance of the lots in question; (3) specific performance of the agreement to sell between it and the
owners of the lots; and (4) damages.
In the Philippines, the practice is for the foreign government or the international organization to first secure an executive endorsement of
its claim of sovereign or diplomatic immunity. But how the Philippine Foreign Office conveys its endorsement to the courts varies.
In International Catholic Migration Commission v. Calleja, 190 SCRA 130 (1990), the Secretary of Foreign Affairs just sent a letter directly the world. Indeed, the world-wide interests and activities of the Vatican City are such as to make it in a sense an "international state"
to the Secretary of Labor and Employment, informing the latter that the respondent-employer could not be sued because it enjoyed (Fenwick, supra., 125; Kelsen, Principles of International Law 160 [1956]).
diplomatic immunity. In World Health Organization v. Aquino, 48 SCRA 242 (1972), the Secretary of Foreign Affairs sent the trial court a
telegram to that effect. In Baer v. Tizon, 57 SCRA 1 (1974), the U.S. Embassy asked the Secretary of Foreign Affairs to request the Solicitor
One authority wrote that the recognition of the Vatican City as a state has significant implication — that it is possible for any entity
General to make, in behalf of the Commander of the United States Naval Base at Olongapo City, Zambales, a "suggestion" to respondent
pursuing objects essentially different from those pursued by states to be invested with international personality (Kunz, The Status of the
Judge. The Solicitor General embodied the "suggestion" in a Manifestation and Memorandum as amicus curiae.
Holy See in International Law, 46 The American Journal of International Law 308 [1952]).

In the case at bench, the Department of Foreign Affairs, through the Office of Legal Affairs moved with this Court to be allowed to
Inasmuch as the Pope prefers to conduct foreign relations and enter into transactions as the Holy See and not in the name of the Vatican
intervene on the side of petitioner. The Court allowed the said Department to file its memorandum in support of petitioner's claim of
City, one can conclude that in the Pope's own view, it is the Holy See that is the international person.
sovereign immunity.

In some cases, the defense of sovereign immunity was submitted directly to the local courts by the respondents through their private
counsels (Raquiza v. Bradford, 75 Phil. 50 [1945]; Miquiabas v. Philippine-Ryukyus Command, 80 Phil. 262 [1948]; United States of America
v. Guinto, 182 SCRA 644 [1990] and companion cases). In cases where the foreign states bypass the Foreign Office, the courts can inquire
into the facts and make their own determination as to the nature of the acts and transactions involved.
III
The burden of the petition is that respondent trial court has no jurisdiction over petitioner, being a foreign state enjoying sovereign
immunity. On the other hand, private respondent insists that the doctrine of non-suability is not anymore absolute and that petitioner has
divested itself of such a cloak when, of its own free will, it entered into a commercial transaction for the sale of a parcel of land located in
the Philippines.
A. The Holy See
Before we determine the issue of petitioner's non-suability, a brief look into its status as a sovereign state is in order.
Before the annexation of the Papal States by Italy in 1870, the Pope was the monarch and he, as the Holy See, was considered a subject of
International Law. With the loss of the Papal States and the limitation of the territory under the Holy See to an area of 108.7 acres, the
position of the Holy See in International Law became controversial (Salonga and Yap, Public International Law 36-37 [1992]).
In 1929, Italy and the Holy See entered into the Lateran Treaty, where Italy recognized the exclusive dominion and sovereign jurisdiction
of the Holy See over the Vatican City. It also recognized the right of the Holy See to receive foreign diplomats, to send its own diplomats to
foreign countries, and to enter into treaties according to International Law (Garcia, Questions and Problems In International Law, Public
and Private 81 [1948]).
The Lateran Treaty established the statehood of the Vatican City "for the purpose of assuring to the Holy See absolute and visible
independence and of guaranteeing to it indisputable sovereignty also in the field of international relations" (O'Connell, I International Law
311 [1965]).
In view of the wordings of the Lateran Treaty, it is difficult to determine whether the statehood is vested in the Holy See or in the Vatican
City. Some writers even suggested that the treaty created two international persons — the Holy See and Vatican City (Salonga and
Yap, supra, 37).
The Vatican City fits into none of the established categories of states, and the attribution to it of "sovereignty" must be made in a sense
different from that in which it is applied to other states (Fenwick, International Law 124-125 [1948]; Cruz, International Law 37 [1991]). In
a community of national states, the Vatican City represents an entity organized not for political but for ecclesiastical purposes and
international objects. Despite its size and object, the Vatican City has an independent government of its own, with the Pope, who is also
head of the Roman Catholic Church, as the Holy See or Head of State, in conformity with its traditions, and the demands of its mission in
The Republic of the Philippines has accorded the Holy See the status of a foreign sovereign. The Holy See, through its Ambassador, the
Papal Nuncio, has had diplomatic representations with the Philippine government since 1957 (Rollo, p. 87). This appears to be the
universal practice in international relations.
B. Sovereign Immunity
As expressed in Section 2 of Article II of the 1987 Constitution, we have adopted the generally accepted principles of International Law.
Even without this affirmation, such principles of International Law are deemed incorporated as part of the law of the land as a condition
and consequence of our admission in the society of nations (United States of America v. Guinto, 182 SCRA 644 [1990]).
There are two conflicting concepts of sovereign immunity, each widely held and firmly established. According to the classical or absolute
theory, a sovereign cannot, without its consent, be made a respondent in the courts of another sovereign. According to the newer or
restrictive theory, the immunity of the sovereign is recognized only with regard to public acts or acts jure imperii of a state, but not with
regard to private acts or acts jure gestionis
(United States of America v. Ruiz, 136 SCRA 487 [1987]; Coquia and Defensor-Santiago, Public International Law 194 [1984]).
Some states passed legislation to serve as guidelines for the executive or judicial determination when an act may be considered as jure
gestionis. The United States passed the Foreign Sovereign Immunities Act of 1976, which defines a commercial activity as "either a regular
course of commercial conduct or a particular commercial transaction or act." Furthermore, the law declared that the "commercial
character of the activity shall be determined by reference to the nature of the course of conduct or particular transaction or act, rather
than by reference to its purpose." The Canadian Parliament enacted in 1982 an Act to Provide For State Immunity in Canadian Courts. The
Act defines a "commercial activity" as any particular transaction, act or conduct or any regular course of conduct that by reason of its
nature, is of a "commercial character."
The restrictive theory, which is intended to be a solution to the host of problems involving the issue of sovereign immunity, has created
problems of its own. Legal treatises and the decisions in countries which follow the restrictive theory have difficulty in characterizing
whether a contract of a sovereign state with a private party is an act jure gestionis or an act jure imperii.
The restrictive theory came about because of the entry of sovereign states into purely commercial activities remotely connected with the
discharge of governmental functions. This is particularly true with respect to the Communist states which took control of nationalized
business activities and international trading.
This Court has considered the following transactions by a foreign state with private parties as acts jure imperii: (1) the lease by a foreign
government of apartment buildings for use of its military officers (Syquia v. Lopez, 84 Phil. 312 [1949]; (2) the conduct of public bidding for
the repair of a wharf at a United States Naval Station (United States of America v. Ruiz, supra.); and (3) the change of employment status
of base employees (Sanders v. Veridiano, 162 SCRA 88 [1988]).
On the other hand, this Court has considered the following transactions by a foreign state with private parties as acts jure gestionis: (1)
the hiring of a cook in the recreation center, consisting of three restaurants, a cafeteria, a bakery, a store, and a coffee and pastry shop at
the John Hay Air Station in Baguio City, to cater to American servicemen and the general public (United States of America v. Rodrigo, 182
SCRA 644 [1990]); and (2) the bidding for the operation of barber shops in Clark Air Base in Angeles City (United States of America v. Organization v. Aquino, 48 SCRA 242 [1972]). As in International Catholic Migration Commission and in World Health Organization, we
Guinto, 182 SCRA 644 [1990]). The operation of the restaurants and other facilities open to the general public is undoubtedly for profit as abide by the certification of the Department of Foreign Affairs.
a commercial and not a governmental activity. By entering into the employment contract with the cook in the discharge of its proprietary
function, the United States government impliedly divested itself of its sovereign immunity from suit.
Ordinarily, the procedure would be to remand the case and order the trial court to conduct a hearing to establish the facts alleged by
petitioner in its motion. In view of said certification, such procedure would however be pointless and unduly circuitous (Ortigas & Co. Ltd.
In the absence of legislation defining what activities and transactions shall be considered "commercial" and as constituting acts jure Partnership v. Judge Tirso Velasco, G.R. No. 109645, July 25, 1994).
gestionis, we have to come out with our own guidelines, tentative they may be.
IV
Certainly, the mere entering into a contract by a foreign state with a private party cannot be the ultimate test. Such an act can only be the
start of the inquiry. The logical question is whether the foreign state is engaged in the activity in the regular course of business. If the
Private respondent is not left without any legal remedy for the redress of its grievances. Under both Public International Law and
foreign state is not engaged regularly in a business or trade, the particular act or transaction must then be tested by its nature. If the act is
Transnational Law, a person who feels aggrieved by the acts of a foreign sovereign can ask his own government to espouse his cause
in pursuit of a sovereign activity, or an incident thereof, then it is an act jure imperii, especially when it is not undertaken for gain or profit.
through diplomatic channels.

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

There is no question that the United States of America, like any other state, will be deemed to have impliedly
waived its non-suability if it has entered into a contract in its proprietary or private capacity. It is only when the
contract involves its sovereign or governmental capacity that no such waiver may be implied.
Private respondent can ask the Philippine government, through the Foreign Office, to espouse its claims against the Holy See. Its first task
is to persuade the Philippine government to take up with the Holy See the validity of its claims. Of course, the Foreign Office shall first
make a determination of the impact of its espousal on the relations between the Philippine government and the Holy See
(Young, Remedies of Private Claimants Against Foreign States, Selected Readings on Protection by Law of Private Foreign Investments 905,
919 [1964]). Once the Philippine government decides to espouse the claim, the latter ceases to be a private cause.

In the case at bench, if petitioner has bought and sold lands in the ordinary course of a real estate business, surely the said transaction can According to the Permanent Court of International Justice, the forerunner of the International Court of Justice:
be categorized as an act jure gestionis. However, petitioner has denied that the acquisition and subsequent disposal of Lot 5-A were made
for profit but claimed that it acquired said property for the site of its mission or the Apostolic Nunciature in the Philippines. Private
By taking up the case of one of its subjects and by reporting to diplomatic action or international judicial
respondent failed to dispute said claim.
proceedings on his behalf, a State is in reality asserting its own rights — its right to ensure, in the person of its
subjects, respect for the rules of international law (The Mavrommatis Palestine Concessions, 1 Hudson, World Court
Lot 5-A was acquired by petitioner as a donation from the Archdiocese of Manila. The donation was made not for commercial purpose, Reports 293, 302 [1924]).
but for the use of petitioner to construct thereon the official place of residence of the Papal Nuncio. The right of a foreign sovereign to
acquire property, real or personal, in a receiving state, necessary for the creation and maintenance of its diplomatic mission, is recognized
WHEREFORE, the petition for certiorari is GRANTED and the complaint in Civil Case No. 90-183 against petitioner is DISMISSED.
in the 1961 Vienna Convention on Diplomatic Relations (Arts. 20-22). This treaty was concurred in by the Philippine Senate and entered
into force in the Philippines on November 15, 1965.
SO ORDERED.
In Article 31(a) of the Convention, a diplomatic envoy is granted immunity from the civil and administrative jurisdiction of the receiving
state over any real action relating to private immovable property situated in the territory of the receiving state which the envoy holds on Narvasa, C.J., Bidin, Regalado, Davide, Jr., Romero, Bellosillo, Melo, Puno, Vitug, Kapunan and Mendoza, JJ., concur.
behalf of the sending state for the purposes of the mission. If this immunity is provided for a diplomatic envoy, with all the more reason
should immunity be recognized as regards the sovereign itself, which in this case is the Holy See. Padilla, J., took no part.

The decision to transfer the property and the subsequent disposal thereof are likewise clothed with a governmental character. Petitioner Feliciano, J., is on leave.
did not sell Lot
5-A for profit or gain. It merely wanted to dispose off the same because the squatters living thereon made it almost impossible for
petitioner to use it for the purpose of the donation. The fact that squatters have occupied and are still occupying the lot, and that they LAWYERS LEAGUE V AQUINO G.R. No. 73748 - May 22, 1986
stubbornly refuse to leave the premises, has been admitted by private respondent in its complaint (Rollo, pp. 26, 27). LAWYERS LEAGUE FOR A BETTER PHILIPPINES vs. AQUINO
(G.R. No. 73748 - May 22, 1986)
------------------------
The issue of petitioner's non-suability can be determined by the trial court without going to trial in the light of the pleadings, particularly (There is no "Full-Text" of this case. This is a Minute Resolution made by the SC.)
the admission of private respondent. Besides, the privilege of sovereign immunity in this case was sufficiently established by the
Memorandum and Certification of the Department of Foreign Affairs. As the department tasked with the conduct of the Philippines' Minute Resolutions
foreign relations (Administrative Code of 1987, Book IV, Title I, Sec. 3), the Department of Foreign Affairs has formally intervened in this
case and officially certified that the Embassy of the Holy See is a duly accredited diplomatic mission to the Republic of the Philippines EN BANC
exempt from local jurisdiction and entitled to all the rights, privileges and immunities of a diplomatic mission or embassy in this country
(Rollo, pp. 156-157). The determination of the executive arm of government that a state or instrumentality is entitled to sovereign or [G.R. No. 73748, May 22, 1986]
diplomatic immunity is a political question that is conclusive upon the courts (International Catholic Migration Commission v. Calleja, 190
SCRA 130 [1990]). Where the plea of immunity is recognized and affirmed by the executive branch, it is the duty of the courts to accept LAWYERS LEAGUE FOR A BETTER PHILIPPINES AND/OR OLIVER A. LOZANO VS. PRESIDENT CORAZON C. AQUINO, ET AL.
this claim so as not to embarrass the executive arm of the government in conducting the country's foreign relations (World Health SIRS/MESDAMES:
 EN BANC
Quoted hereunder, for your information, is a resolution of this Court MAY 22, 1986.
G.R. No. L-18463 October 4, 1922
In G.R. No. 73748, Lawyers League for a Better Philippines vs. President Corazon C. Aquino, et al.; G.R. No. 73972, People's Crusade for
Supremacy of the Constitution vs. Mrs. Cory Aquino, et al., and G.R. No. 73990, Councilor Clifton U. Ganay vs. Corazon C. Aquino, et al.,
the legitimacy of the government of President Aquino is questioned. It is claimed that her government is illegal because it was not THE PEOPLE OF THE PHILIPPINE ISLANDS, plaintiff-appellee,
established pursuant to the 1973 Constitution. vs.
GREGORIO PERFECTOR, defendant-appellant.
As early as April 10, 1986, this Court* had already voted to dismiss the petitions for the reasons to be stated below. On April 17, 1986,
Atty. Lozano as counsel for the petitioners in G.R. Nos. 73748 and 73972 withdrew the petitions and manifested that they would pursue Alfonso E. Mendoza and the appellant in behalf of the latter.
the question by extra-judicial methods. The withdrawal is functus oficio. Attorney-General Villa-Real for appellee.

The three petitions obviously are not impressed with merit. Petitioners have no personality to sue and their petitions state no cause of
action. For the legitimacy of the Aquino government is not a justiciable matter. It belongs to the realm of politics where only the people of
the Philippines are the judge. And the people have made the judgment; they have accepted the government of President Corazon C. MALCOLM, J.:
Aquino which is in effective control of the entire country so that it is not merely a de factogovernment but is in fact and law a de jure
government. Moreover, the community of nations has recognized the legitimacy of the present government. All the eleven members of The important question is here squarely presented of whether article 256 of the Spanish Penal Code, punishing "Any person who, by . . .
this Court, as reorganized, have sworn to uphold the fundamental law of the Republic under her government. writing, shall defame, abuse, or insult any Minister of the Crown or other person in authority . . .," is still in force.

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

About August 20, 1920, the Secretary of the Philippine Senate, Fernando M. Guerrero, discovered that certain documents which
constituted the records of testimony given by witnesses in the investigation of oil companies, had disappeared from his office. Shortly
Very truly yours, thereafter, the Philippine Senate, having been called into special session by the Governor-General, the Secretary for the Senate informed
that body of the loss of the documents and of the steps taken by him to discover the guilty party. The day following the convening of the
(Sgd.) GLORIA C. PARAS Senate, September 7, 1920, the newspaper La Nacion, edited by Mr. Gregorio Perfecto, published an article reading as follows:
Clerk of Court
Half a month has elapsed since the discovery, for the first time, of the scandalous robbery of records which were kept and
preserved in the iron safe of the Senate, yet up to this time there is not the slightest indication that the author or authors of
* The Court was then composed of Teehankee, C.J. and Abad Santos., Melencio-Herrera, Plana, Escolin, Gutierrez, Jr., Cuevas, Alampay the crime will ever be discovered.
and Patajo, JJ.------------------------------------------
DIGEST
To find them, it would not, perhaps, be necessary to go out of the Sente itself, and the persons in charge of the investigation of
the case would not have to display great skill in order to succeed in their undertaking, unless they should encounter the
FACTS:
insuperable obstacle of offical concealment.
On February 25, 1986, President Corazon Aquino issued Proclamation No. 1 announcing that she and Vice President Laurel were taking
power.
On March 25, 1986, proclamation No.3 was issued providing the basis of the Aquino government assumption of power by stating that the In that case, every investigation to be made would be but a mere comedy and nothing more.
"new government was installed through a direct exercise of the power of the Filipino people assisted by units of the New Armed Forces of
the Philippines." After all, the perpetration of the robbery, especially under the circumstances that have surrounded it, does not surprise us at
all.
ISSUE:
Whether or not the government of Corazon Aquino is legitimate.
The execution of the crime was but the natural effect of the environment of the place in which it was committed.
HELD:
Yes. The legitimacy of the Aquino government is not a justiciable matter but belongs to the realm of politics where only the people are the How many of the present Senators can say without remorse in their conscience and with serenity of mind, that they do not
judge. owe their victory to electoral robbery? How may?
The Court further held that:
The people have accepted the Aquino government which is in effective control of the entire country;
It is not merely a de facto government but in fact and law a de jure government; and The author or authors of the robbery of the records from the said iron safe of the Senate have, perhaps, but followed the
The community of nations has recognized the legitimacy of the new government. example of certain Senators who secured their election through fraud and robbery.

The Philippine Senate, in its session of September 9, 1920, adopted a resolution authorizing its committee on elections and privileges to
Republic of the Philippines report as to the action which should be taken with reference to the article published in La Nacion. On September 15, 1920, the Senate
SUPREME COURT adopted a resolution authorizing the President of the Senate to indorse to the Attorney-General, for his study and corresponding action,
Manila all the papers referring to the case of the newspaper La Nacion and its editor, Mr. Gregorio Perfecto. As a result, an information was filed
in the municipal court of the City of Manila by an assistant city fiscal, in which the editorial in question was set out and in which it was
alleged that the same constituted a violation of article 256 of the Penal Code. The defendant Gregorio Perfecto was found guilty in the
municipal court and again in the Court of First Instance of Manila.
During the course of the trial in the Court of First Instance, after the prosecution had rested, the defense moved for the dismissal of the
case. On the subject of whether or not article 256 of the Penal Code, under which the information was presented, is in force, the trial
judge, the Honorable George R. Harvey, said:
This antiquated provision was doubtless incorporated into the Penal Code of Spain for the protection of the Ministers of the
Crown and other representatives of the King against free speech and action by Spanish subjects. A severe punishment was
prescribed because it was doubtless considered a much more serious offense to insult the King's representative than to insult
an ordinary individual. This provision, with almost all the other articles of that Code, was extended to the Philippine Islands
when under the dominion of Spain because the King's subject in the Philippines might defame, abuse or insult the Ministers of
the Crown or other representatives of His Majesty. We now have no Ministers of the Crown or other persons in authority in
the Philippines representing the King of Spain, and said provision, with other articles of the Penal Code, had apparently passed
into "innocuous desuetude," but the Supreme Corut of the Philippine Islands has, by a majority decision, held that said article
256 is the law of the land to-day. . . .
The Helbig case is a precedent which, by the rule of stare decisis, is binding upon this court until otherwise determined by
proper authority.
In the decision rendered by the same judge, he concluded with the following language:
In the United States such publications are usually not punishable as criminal offense, and little importance is attached to them,
because they are generally the result of political controversy and are usually regarded as more or less colored or exaggerated.
Attacks of this character upon a legislative body are not punishable, under the Libel Law. Although such publications are
reprehensible, yet this court feels some aversion to the application of the provision of law under which this case was filed. Our
Penal Code has come to us from the Spanish regime. Article 256 of that Code prescribes punishment for persons who use
insulting language about Ministers of the Crown or other "authority." The King of Spain doubtless left the need of such
protection to his ministers and others in authority in the Philippines as well as in Spain. Hence, the article referred to was made
applicable here. Notwithstanding the change of sovereignty, our Supreme Court, in a majority decision, has held that this
provision is still in force, and that one who made an insulting remark about the President of the United States was punishable
under it. (U.S. vs. Helbig, supra.) If it applicable in that case, it would appear to be applicable in this case. Hence, said article
256 must be enforced, without fear or favor, until it shall be repealed or superseded by other legislation, or until the Supreme
Court shall otherwise determine.
In view of the foregoing considerations, the court finds the defendant guilty as charged in the information and under article
256 of their Penal Code sentences him to suffer two months and one day of arresto mayor and the accessory penalties
prescribed by law, and to pay the costs of both instances.
The fifteen errors assigned by the defendant and appellant, reenforced by an extensive brief, and eloquent oral argument made in his
own behalf and by his learned counsel, all reduce themselves to the pertinent and decisive question which was announced in the
beginning of this decision.
It will be noted in the first place that the trial judge considered himself bound to follow the rule announced in the case of United
States vs. Helbig (R. G. No. 14705, 1 not published). In that case, the accused was charged with having said, "To hell with the President and
his proclamations, or words to that effect," in violation of article 256 of the Penal Code. He was found guilty in a judgment rendered by
the Court of First Instance of Manila and again on appeal to the Supreme Court, with the writer of the instant decision dissenting on two
principal grounds: (1) That the accused was deprived of the constitutional right of cross-examination, and (2) that article 256 of the
Spanish Penal Code is no longer in force. Subsequently, on a motion of reconsideration, the court, being of the opinion that the Court of
First Instance had committed a prejudicial error in depriving the accused of his right to cross-examine a principal witness, set aside the
judgment affirming the judgment appealed from and ordered the return of the record to the court of origin for the celebration of a new
trial. Whether such a trial was actually had, is not known, but at least, the record in the Helbig case has never again been elevated to this
court.
There may perchance exist some doubt as to the authority of the decision in the Helbig case, in view of the circumstances above
described. This much, however, is certain: The facts of the Helbig case and the case before us, which we may term the Perfecto case, are
different, for in the first case there was an oral defamation, while in the second there is a written defamation. Not only this, but a new
point which, under the facts, could not have been considered in the Helbig case, is, in the Perfecto case, urged upon the court. And,
finally, as is apparent to all, the appellate court is not restrained, as was the trial court, by strict adherence to a former decision. We much
prefer to resolve the question before us unhindered by references to the Helbig decision.
This is one of those cases on which a variety of opinions all leading to the same result can be had. A majority of the court are of the
opinion that the Philippine Libel Law, Act No. 277, has had the effect of repealing so much of article 256 of the Penal Code as relates to
written defamation, abuse, or insult, and that under the information and the facts, the defendant is neither guilty of a violation of article
256 of the Penal Code, nor of the Libel Law. The view of the Chief Justice is that the accused should be acquitted for the reason that the
facts alleged in the information do not constitute a violation of article 156 of the Penal Code. Three members of the court believe that
article 256 was abrogated completely by the change from Spanish to American sovereignty over the Philippines and is inconsistent with
democratic principles of government.
Without prejudice to the right of any member of the court to explain his position, we will discuss the two main points just mentioned.
1. Effect of the Philippine Libel Law, Act No. 277, on article 256 of the Spanish Penal Code. — The Libel Law, Act No. 277, was
enacted by the Philippine Commission shortly after organization of this legislative body. Section 1 defines libel as a "malicious
defamation, expressed either in writing, printing, or by signs or pictures, or the like, or public theatrical exhibitions, tending to
blacken the memory of one who is dead or to impeach the honesty, virtue, or reputation, or publish the alleged or natural
deffects of one who is alive, and thereby expose him to public hatred, contempt or ridicule." Section 13 provides that "All laws
and parts of laws now in force, so far as the same may be in conflict herewith, are hereby repealed. . . ."
That parts of laws in force in 1901 when the Libel Law took effect, were in conflict therewith, and that the Libel Law abrogated certain
portion of the Spanish Penal Code, cannot be gainsaid. Title X of Book II of the Penal Code, covering the subjects of calumny and insults,
must have been particularly affected by the Libel Law. Indeed, in the early case of Pardo de Tavera vs. Garcia Valdez ([1902], 1. Phil., 468),
the Supreme Court spoke of the Libel Law as "reforming the preexisting Spanish law on the subject of calumnia and injuria." Recently,
specific attention was given to the effect of the Libel Law on the provisions of the Penal Code, dealing with calumny and insults, and it was
found that those provisions of the Penal Code on the subject of calumny and insults in which the elements of writing an publicity entered,
were abrogated by the Libel Law. (People vs. Castro [1922], p. 842, ante.)
The Libel Law must have had the same result on other provisions of the Penal Code, as for instance article 256.
The facts here are that the editor of a newspaper published an article, naturally in writing, which may have had the tendency to impeach
the honesty, virtue, or reputation of members of the Philippine Senate, thereby possibly exposing them to public hatred, contempt, or
ridicule, which is exactly libel, as defined by the Libel Law. Sir J. F. Stephen is authority for the statement that a libel is indictable when
defaming a "body of persons definite and small enough for individual members to be recognized as such, in or by means of anything
capable of being a libel." (Digest of Criminal Law, art. 267.) But in the United States, while it may be proper to prosecute criminally the
author of a libel charging a legislator with corruption, criticisms, no matter how severe, on a legislature, are within the range of the liberty
of the press, unless the intention and effect be seditious. (3 Wharton's Criminal Law, p. 2131.) With these facts and legal principles in
mind, recall that article 256 begins: Any person who, by . . . writing, shall defame, abuse, or insult any Minister of the Crown or other
person in authority," etc.
The Libel Law is a complete and comprehensive law on the subject of libel. The well-known rule of statutory construction is, that where
the later statute clearly covers the old subject-matter of antecedent acts, and it plainly appears to have been the purpose of the
legislature to give expression in it to the whole law on the subject, previous laws are held to be repealed by necessary implication. (1
Lewis' Sutherland Statutory Construction, p. 465.) For identical reasons, it is evident that Act No. 277 had the effect so much of this article
as punishes defamation, abuse, or insults by writing.
Act No. 292 of the Philippine Commission, the Treason and Sedition Law, may also have affected article 256, but as to this point, it is not
necessary to make a pronouncement.
2. Effect of the change from Spanish to Amercian sevoreignty over the Philippine son article 256 of the Spanish Penal Code. —
Appellant's main proposition in the lower court and again energetically pressed in the appellate court was that article 256 of
the Spanish Penal Code is not now in force because abrogated by the change from Spanish to American sovereignty over the
Philippines and because inconsistent with democratic principles of government. This view was indirectly favored by the trial
judge, and, as before stated, is the opinion of three members of this court.
Article 256 is found in Chapter V of title III of Book II of the Spanish Penal Code. Title I of Book II punishes the crimes of treason, crimes
that endanger the peace or independence of the state, crimes against international law, and the crime of piracy. Title II of the same book
punishes the crimes of lese majeste, crimes against the Cortes and its members and against the council of ministers, crimes against the
form of government, and crimes committed on the occasion of the exercise of rights guaranteed by the fundamental laws of the state,
including crime against religion and worship. Title III of the same Book, in which article 256 is found, punishes the crimes of rebellion,
sedition, assaults upon persons in authority, and their agents, and contempts, insults, injurias, and threats against persons in authority,
and insults, injurias, and threats against their agents and other public officers, the last being the title to Chapter V. The first two articles in
Chapter V define and punish the offense of contempt committed by any one who shall be word or deed defame, abuse, insult, or
threathen a minister of the crown, or any person in authority. The with an article condemning challenges to fight duels intervening, comes
article 256, now being weighed in the balance. It reads as follows: "Any person who, by word, deed, or writing, shall defame, abuse, or
insult any Minister of the Crown or other person in authority, while engaged in the performance of official duties, or by reason of such
performance, provided that the offensive minister or person, or the offensive writing be not addressed to him, shall suffer the penalty
of arresto mayor," — that is, the defamation, abuse, or insult of any Minister of the Crown of the Monarchy of Spain (for there could not
be a Minister of the Crown in the United States of America), or other person in authority in the Monarchy of Spain.
It cannot admit of doubt that all those provisions of the Spanish Penal Code having to do with such subjects as treason, lese majeste,
religion and worship, rebellion, sedition, and contempts of ministers of the crown, are not longer in force. Our present task, therefore, is a
determination of whether article 256 has met the same fate, or, more specifically stated, whether it is in the nature of a municipal law or
political law, and is consistent with the Constitution and laws of the United States and the characteristics and institutions of the American
Government.
It is a general principle of the public law that on acquisition of territory the previous political relations of the ceded region are totally
abrogated. "Political" is here used to denominate the laws regulating the relations sustained by the inhabitants to the sovereign.
(American Insurance Co. vs. Canter [1828], 1 Pet., 511; Chicago, Rock Island and Pacific Railway Co. vs. McGlinn [1885], 114 U.S., 542;
Roa vs. Collector of Customs [1912], 23 Phil., 315.) Mr. Justice Field of the United States Supreme Court stated the obvious when in the
course of his opinion in the case of Chicago, Rock Island and Pacific Railway Co. vs. McGlinn, supra, he said: "As a matter of course, all
laws, ordinances and regulations in conflict with the political character, institutions and Constitution of the new government are at once
displaced. Thus, upon a cession of political jurisdiction and legislative power — and the latter is involved in the former — to the United
States, the laws of the country in support of an established religion or abridging the freedom of the press, or authorizing cruel and unusual
punishments, and he like, would at once cease to be of obligatory force without any declaration to that effect." To quote again from the
United States Supreme Court: "It cannot be admitted that the King of Spain could, by treaty or otherwise, impart to the United States any
of his royal prerogatives; and much less can it be admitted that they have capacity to receive or power to exercise them. Every nation
acquiring territory, by treaty or otherwise, must hold it subject to the Constitution and laws of its own government, and not according to
those of the government ceding it." (Pollard vs. Hagan [1845], 3 Hos., 210.)
On American occupation of the Philippines, by instructions of the President to the Military Commander dated May 28, 1898, and by
proclamation of the latter, the municipal laws of the conquered territory affecting private rights of person and property and providing for
the punishment of crime were nominally continued in force in so far as they were compatible with the new order of things. But President
McKinley, in his instructions to General Merritt, was careful to say: "The first effect of the military occupation of the enemy's territory is
the severance of the former political relation of the inhabitants and the establishment of a new political power." From that day to this, the
ordinarily it has been taken for granted that the provisions under consideration were still effective. To paraphrase the language of the
United States Supreme Court in Weems vs. United States ([1910], 217 U. S., 349), there was not and could not be, except as precise
questions were presented, a careful consideration of the codal provisions and a determination of the extent to which they accorded with
or were repugnant to the "'great principles of liberty and law' which had been 'made the basis of our governmental system.' " But when
the question has been squarely raised, the appellate court has been forced on occasion to hold certain portions of the Spanish codes
repugnant t democratic institutions and American constitutional principles. (U.S. vs. Sweet [1901], 1 Phil., 18; U.S. vs. Balcorta [1913], 25
Phil., 273; U.S. vs. Balcorta [1913], 25 Phil., 533; Weems vs. U.S., supra.)
The nature of the government which has been set up in the Philippines under American sovereignty was outlined by President McKinley in
that Magna Charta of Philippine liberty, his instructions to the Commission, of April 7, 1900. In part, the President said:
In all the forms of government and administrative provisions which they are authorized to prescribe, the Commission should
bear in mind that he government which they are establishing is designed not for our satisfaction or for the expression of our
theoretical views, but for the happiness, peace, and prosperity of the people of the Philippine Islands, and the measures
adopted should be made to conform to their customs, their habits, and even their prejudices, to the fullest extent consistent
with the accomplishment of the indispensable requisites of just and effective government. At the same time the Commission
should bear in mind, and the people of the Islands should be made plainly to understand, that there are certain great principles
of government which have been made the basis of our governmental system, which we deem essential to the rule of law and
the maintenance of individual freedom, and of which they have, unfortunately, been denied the experience possessed by us;
that there are also certain practical rules of government which we have found to be essential to the preservation of these great
principles of liberty and law, and that these principles and these rules of government must be established and maintained in
their islands for the sake of their liberty and happiness, however much they may conflict with the customs or laws of procedure
with which they are familiar. It is evident that the most enligthened thought of the Philippine Islands fully appreciates the
importance of these principles and rules, and they will inevitably within a short time command universal assent.
The courts have naturally taken the same view. Mr. Justice Elliott, speaking for our Supreme Court, in the case of United States vs. Bull
([1910], 15 Phil., 7), said: "The President and Congress framed the government on the model with which American are familiar, and which
has proven best adapted for the advancement of the public interests and the protection of individual rights and privileges."
Therefore, it has come with somewhat of a shock to hear the statement made that the happiness, peace, and prosperity of the people of
the Philippine Islands and their customs, habits, and prejudices, to follow the language of President McKinley, demand obeisance to
authority, and royal protection for that authority.
According to our view, article 256 of the Spanish Penal Code was enacted by the Government of Spain to protect Spanish officials who
were the representatives of the King. With the change of sovereignty, a new government, and a new theory of government, as set up in
the Philippines. It was in no sense a continuation of the old, although merely for convenience certain of the existing institutions and laws
were continued. The demands which the new government made, and makes, on the individual citizen are likewise different. No longer is
there a Minister of the Crown or a person in authority of such exalted position that the citizen must speak of him only with bated breath.
"In the eye of our Constitution and laws, every man is a sovereign, a ruler and a freeman, and has equal rights with every other man. We
have no rank or station, except that of respectability and intelligence as opposed to indecency and ignorance, and the door to this rank
stands open to every man to freely enter and abide therein, if he is qualified, and whether he is qualified or not depends upon the life and
character and attainments and conduct of each person for himself. Every man may lawfully do what he will, so long as it is not malum in
se or malum prohibitum or does not infringe upon the qually sacred rights of others." (State vs. Shepherd [1903], 177 Mo., 205; 99 A. S. R.,
624.)
It is true that in England, from which so many of the laws and institutions of the United States are derived, there were once statutes
of scandalum magnatum, under which words which would not be actionable if spoken of an ordinary subject were made actionable if
spoken of a peer of the realm or of any of the great officers of the Crown, without proof of any special damage. The Crown of England,
unfortunately, took a view less tolerant that that of other sovereigns, as for instance, the Emperors Augustus, Caesar, and Tiberius. These
English statutes have, however, long since, become obsolete, while in the United States, the offense of scandalum magnatum is not
known. In the early days of the American Republic, a sedition law was enacted, making it an offense to libel the Government, the
Congress, or the President of the United States, but the law met with so much popular disapproval, that it was soon repealed. "In this
country no distinction as to persons is recognized, and in practice a person holding a high office is regarded as a target at whom any
person may let fly his poisonous words. High official position, instead of affording immunity from slanderous and libelous charges, seems On 9 January 2003, Mexico brought a case against the United States of America in a dispute concerning alleged violations of Articles 5 and
rather to be regarded as making his character free plunder for any one who desires to create a senation by attacking it." (Newell, Slander
36 of the Vienna Convention on Consular Relations of 24 April 1963 with respect to 54 Mexican nationals who had been sentenced to
and Libel, 3d ed., p. 245; Sillars vs. Collier [1890], 151 Mass., 50; 6 L.R.A., 680.)
death in certain states of the United States. At the same time as its Application, Mexico also submitted a request for the indication of
Article 256 of the Penal Code is contrary to the genius and fundamental principles of the American character and system of government.
provisional measures, among other things so that the United States would take all measures necessary to ensure that no Mexican national
The gulf which separates this article from the spirit which inspires all penal legislation of American origin, is as wide as that which
separates a monarchy from a democratic Republic like that of the United States. This article was crowded out by implication as soon as was executed and no action was taken that might prejudice the rights of Mexico or its nationals with regard to any decision the Court
the United States established its authority in the Philippine Islands. Penalties out of all proportion to the gravity of the offense, grounded
in a distorted monarchical conception of the nature of political authority, as opposed to the American conception of the protection of the might render on the merits of the case. After hearing the Parties at public hearings on the provisional measures held on 21 January 2003,
interests of the public, have been obliterated by the present system of government in the Islands. 1awph!l.net
the Court, on 5 February 2003, made an Order, by which it decided that the :

From an entirely different point of view, it must be noted that this article punishes contempts against executive officials, although its
terms are broad enough to cover the entire official class. Punishment for contempt of non-judicial officers has no place in a government
based upon American principles. Our official class is not, as in monarchies, an agent of some authority greater than the people but it is an “United States of America sh[ould] take all measures necessary to ensure that Mr. Cesar Roberto Fierro Reyna, Mr. Roberto Moreno
agent and servant of the people themselves. These officials are only entitled to respect and obedience when they are acting within the
scope of their authority and jurisdiction. The American system of government is calculated to enforce respect and obedience where such Ramos and Mr. Osvaldo Torres Aguilera [three Mexican nationals] [we]re not executed pending final judgment in these proceedings”,
respect and obedience is due, but never does it place around the individual who happens to occupy an official position by mandate of the
people any official halo, which calls for drastic punishment for contemptuous remarks.

The crime of lese majeste disappeared in the Philippines with the ratification of the Treaty of Paris. Ministers of the Crown have no place that the “United States of America sh[ould] inform the Court of all measures taken in implementation of [that] Order”, and that the Court
under the American flag.
would remain seised of the matters which formed the subject of that Order until the Court had rendered its final judgment. The same day,

To summarize, the result is, that all the members of the court are of the opinion, although for different reasons, that the judgment should it issued another Order fixing 6 June 2003 as the time-limit for the filing of the Memorial by Mexico and 6 October 2003 as the time-limit
be reversed and the defendant and appellant acquitted, with costs de officio. So ordered.
for the filing of the Counter-Memorial by the United States of America. The President of the Court subsequently extended those dates

Ostrand and Johns, JJ., concur. respectively to 20 June 2003 and 3 November 2003. Those pleadings were filed within the time-limits thus extended.

Tinoco Claims Arbitration (Great Britain v. Costa Rica)

Brief Fact Summary. The Tinoco regime, which was the former government of Costa Rica, was alleged by Great Britain to have granted oil
concession to a British company that had to be honored by the present regime.
Synopsis of Rule of Law. A government need not conform to a previous constitution if the government had established itself and
maintained a peaceful de facto administration and non-recognition of the government by other government does not destroy the de facto
status of the government.
After holding public hearings in December 2004, the Court rendered its Judgment on 31 March 2004. Mexico had amended its claims
during the written phase of the proceedings and again at the oral proceedings, so that the Court ultimately ruled on the cases of 52
(rather than 54) Mexican nationals.

Facts. The Tinoco regime that had seized power in Costa Rica by coup was not recognized by Great Britain and the United States. When
the regime was removed, the new government nullified all Tinoco’c contract including an oil concession to a British company. The claim of
Great Britain (P) was that the contract could not be repudiated because the Tinoco government was the only government in existence at
the time of the contract was signed. This view was not shared by Costa Rica (D) who claimed that Great Britain (P) was estopped from
enforcing the contract by its non-recognition of the Tinoco regime. The matter was sent for arbitration.
The Court first considered four objections by the United States to its jurisdiction and five objections to admissibility. Mexico had argued
that all of these objections were inadmissible because they had been submitted outside the time-limit prescribed by the Rules of Court,
but the Court did not accept this. The Court then dismissed the United States objections, whilst reserving certain of them for

consideration at the merits stage.

Issue. Does a government need to conform to a previous constitution if the government had established itself and maintained a peaceful
de facto administration and does non-recognition of the government by other government destroy the de facto status of the
government?
(Mexico v. United States of America)
Ruling on the merits of the case, the Court began by considering whether the 52 individuals concerned were solely of Mexican nationality.

Finding that the United States had failed to show that certain of them were also United States nationals, the Court held that the United

States was under an obligation to provide consular information pursuant to Article 36, paragraph 1 (b), of the Vienna Convention in

respect of all 52 Mexican nationals. Regarding the meaning to be given to the phrase “without delay” in Article 36 (1) (b), the Court
further held that there is an obligation to provide consular information as soon as it is realized that the arrested person is a foreign
national, or that there are grounds for thinking that he is probably a foreign national. The Court found that, in all of the cases except one,
the United States had violated its obligation to provide the required consular information. Taking note of the interrelated nature of the
three subparagraphs (a), (b) and (c) of paragraph 1 of Article 36 of the Vienna Convention, the Court then went on to find that the United
States had, in 49 cases, also violated the obligation to enable Mexican consular officers to communicate with, have access to and visit
their nationals and, in 34 cases, to arrange for their legal representation.
In relation to Mexico’s arguments concerning paragraph 2 of Article 36 and the right of its nationals to effective review and
reconsideration of convictions and sentences impaired by a violation of Article 36 (1), the Court found that, in view of its failure to revise
the procedural default rule since the Court’s decision in the LaGrand case, the United States had in three cases violated paragraph 2 of
Article 36, although the possibility of judicial re-examination was still open in the 49 other cases.
In regard to the legal consequences of the proven violations of Article 36 and to Mexico’s requests for restitutio in integrum, through the
partial or total annulment of convictions and sentences, the Court pointed out that what international law required was reparation in an
adequate form, which in this case meant review and reconsideration by United States courts of the Mexican nationals’ convictions and
sentences. The Court considered that the choice of means for review and reconsideration should be left to the United States, but that it
was to be carried out by taking account of the violation of rights under the Vienna Convention. After recalling that the process of review
and reconsideration should occur in the context of judicial proceedings, the Court stated that the executive clemency process was not
sufficient in itself to serve that purpose, although appropriate clemency procedures could supplement judicial review and reconsideration.
Contrary to Mexico’s claims, the Court found no evidence of a regular and continuing pattern of breaches of Article 36 by the United
States. The Court moreover recognized the efforts of the United States to encourage compliance with the Vienna Convention, and took
the view that that commitment provided a sufficient guarantee and assurance of non-repetition as requested by Mexico.
The Court further observed that, while the present case concerned only Mexican nationals, that should not be taken to imply that its
conclusions did not apply to other foreign nationals finding themselves in similar situations in the United States. Finally, the Court recalled
that the United States had violated paragraphs 1 and 2 of Article 36 in the case of the three Mexican nationals concerned by the Order of
5 February 2003 indicating provisional measures, and that no review and reconsideration of conviction and sentence had been carried out
in those cases. The Court considered that it was therefore for the United States to find an appropriate remedy having the nature of review
and reconsideration according to the criteria indicated in the Judgment.
The Republic of the Philippines, Plaintiff-appellee, v. Ferdinand E. Marcos, et al., Defendants-appellants, 862 F.2d 1355 (9th Cir. 1988)
US Court of Appeals for the Ninth Circuit - 862 F.2d 1355 (9th Cir. 1988)
Argued and Submitted Feb. 10, 1988. Decided Dec. 1, 1988. Special Concurrence, Dec. 2, 1988
Richard A. Hibey, Anderson, Hibey, Nauheim & Blair, Washington, D.C., John J. Bartko, Bartko, Welsch, Tarrant & Miller, and Stephen
Horn, Schmeltzer, Aptaker & Sheppard, P.C., Washington, D.C., for defendants-appellants Ferdinand E. Marcos, Imelda R. Marcos and
Ramon Azurin.
John J. Stumreiter, Rosenfeld, Meyer & Susman, Beverly Hills, Cal. and Gerald Walpin, Rosenman, Colin, Freund, Lewis & Cohen, New York
City, for defendants-appellants Diosdado C. Ordonez and Ancor Holdings, N.V.
Ronald L. Olson, Bradley S. Phillips, Richard B. Kendall, Munger, Tolles & Olson, Los Angeles, Cal., for plaintiff-appellee Republic of the
Philippines.
Richard K. Willard, Asst. Atty. Gen., James M. Spears, Deputy Asst. Atty. Gen., Robert C. Bonner, U.S. Atty., Robert E. Kopp, John F. Cordes,
and John P. Schnitker, Asst. U.S. Attys., Washington, D.C., for the amicus curiae U.S.
Appeal from the United States District Court for the Central District of California.
Before BROWNING, Chief Judge, ANDERSON,* SCHROEDER, FLETCHER, PREGERSON, ALARCON, CANBY, NORRIS, BEEZER BRUNETTI, and
NOONAN, Circuit Judges.
NOONAN, Circuit Judge:
The Republic of the Philippines (the Republic) brought a civil suit against its former president, Ferdinand Marcos, and his wife Imelda (the
Marcoses), asserting claims under the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. §§ 1961 et seq., and other
applicable law. The district court on June 25, 1986 entered a preliminary injunction enjoining the Marcoses from disposing of any of their
assets save for the payment of attorney fees and normal living expenses. The Marcoses appealed. A panel of this court reversed, 2-1. 818
F.2d 1473 (9th Cir. 1987). We took the case en banc and now affirm the district court.
Federal Jurisdiction
The Republic alleges that the Marcoses engaged in mail fraud, wire fraud, and the transportation of stolen property in the foreign or
interstate commerce of the United States. The acts alleged are crimes under 18 U.S.C. §§ 1341, 1343, and 2315. The Republic alleges that
the acts were repeated, forming a pattern of predicate acts under RICO, 18 U.S.C. § 1961, and thereby giving rise to civil liability under
RICO, 18 U.S.C. § 1964.
Contrary to the contention of the Marcoses, the Republic as a governmental body is a person within the meaning of 18 U.S.C. § 1961(3).
Illinois Department of Revenue v. Phillips, 771 F.2d 312 (7th Cir. 1985). The foreign nature of the Republic does not deprive it of statutory
personhood. Cf. Pfizer, Inc. v. Government of India, 434 U.S. 308, 98 S. Ct. 584, 54 L. Ed. 2d 563 (1978). Accordingly the Republic has
standing to assert the RICO claims.
Contrary to the contention of the Marcoses, the complaint, as interpreted by the district court, sufficiently alleges a RICO offense. The
Republic alleges that the Marcoses and the other defendants arranged for the investment in real estate in Beverly Hills, California of $4
million fraudulently obtained by the Marcoses; that the Marcoses arranged for the creation of two bank accounts in the name of Imelda
Marcos at Lloyds Bank of California totaling over $800,000 also fraudulently obtained by the Marcoses; and that the Marcoses transported
into Hawaii money, jewels, and other property worth over $7 million also fraudulently obtained by them. Criminal conduct under RICO
"forms a pattern if it embraces criminal acts that have the same or similar purposes, results, participants, victims, or methods of
commission, or otherwise are interrelated by distinguishing characteristics and are not isolated events." Sedima, S.P.R.L. v. Imrex Co.,
Inc., 473 U.S. 479, 496 n. 14, 105 S. Ct. 3275, 3285, n. 14, 87 L. Ed. 2d 346 (quoting 18 U.S.C. § 3575(e)). The purposes of the acts here
alleged are the same--to invest and to conceal fraudulently-obtained booty. The results are the same--the investment of the booty. The
principals are the same--the Marcoses. The victim is the same--the Republic. The episodes are not isolated events. They represent a plan
and a practice of getting the fruits of fraud out of the Philippines and into the assumed safety of the United States. If proved, the
allegations show acts that form a pattern.
Contrary to the contention of the Marcoses, the complaint as read by the district court also alleges a RICO enterprise. A RICO enterprise
has been found to consist of "a group of individuals associated in fact for the purpose of illegally trafficking in narcotics ..., utilizing the
United States mail to defraud ..., and corruptly influencing ... the outcome of state court proceedings." United States v. Turkette, 452 U.S.
576, 579, 101 S. Ct. 2524, 2526, 69 L. Ed. 2d 246 (1981). Here there is alleged to be a group of individuals associated in fact for the
purpose of illegally investing the fruits of fraud and illegally using the mails and wire and illegally transporting in interstate commerce the
fruits of the fraud.
The effect on the commerce of the United States of engaging in mail or wire fraud or bringing stolen property into the country is palpable.
The Marcoses are mistaken in arguing that such criminal acts have no consequences for commerce to or in this country. The criminal
enterprise which they are charged with conducting consisted in operations taking place within the United States. These operations had
multiple effects on the domestic and foreign commerce of this country. If the operations were criminal, the operators incurred criminal
liability under our law. United States v. Stratton, 649 F.2d 1066, 1075 (5th Cir. 1981) (appearance of out-of-state litigants before court that
was a criminal RICO enterprise); United States v. Altomare, 625 F.2d 5 (4th Cir. 1980) (interstate telephone calls perpetuating RICO
enterprise affected interstate commerce). The Republic's allegations are sufficient to establish federal jurisdiction. 18 U.S.C. § 1964.
Pendent Jurisdiction
The gravamen of the Republic's entire case is the allegation that the Marcoses stole public money:
During his twenty years as President of the Philippines, Mr. Marcos used his position of power and authority to convert and cause to be
converted, to his use and that of his friends, family, and associates, money, funds, and property belonging to the Philippines and its
people. Complaint, p 12 (emphasis added).
This common allegation supports not only plaintiff's RICO claims but also the eight claims for conversion, fraud and deceit, constructive
fraud, constructive trust, breach of implied contract, quiet title, accounting, and subrogation. The claims for a constructive trust, to quiet
title, an accounting, and subrogation merely set forth different forms of relief for the same underlying wrongs.
The Republic's strategy of bringing suit in a number of other jurisdictions is not decisive of the question whether the claims are such that
they would ordinarily be tried in one judicial proceeding. The present location of the sought-for funds in banks in various countries is not
determinative as to the underlying wrongs alleged in the complaint. The claims brought in this suit would ordinarily be tried in a single
case. In both the RICO and non-RICO claims, the Republic alleges that the Marcoses converted public funds while in office. The district
court concluded:
This Court has pendent jurisdiction over plaintiff's other claims under state and foreign law in that such claims arise from a common
nucleus of operative fact and are so intertwined with other matters pending before the court as to make the exercise of such jurisdiction
over these claims appropriate.
The district court was correct in asserting pendent jurisdiction over these claims. They derive from "a common nucleus of operative fact"
and are such that a plaintiff "would ordinarily be expected to try them all in one judicial proceeding." United Mine Workers v. Gibbs, 383
U.S. 715, 725, 86 S. Ct. 1130, 1138, 16 L. Ed. 2d 218 (1966). The power of a federal court to decide pendent claims is "wide-ranging." See
Carnegie-Mellon Univ. v. Cohill, --- U.S. ----, 108 S. Ct. 614, 618, 98 L. Ed. 2d 720 (1988). The exercise of the power is discretionary but
ordinarily the power if it exists is exercised; only exceptionally is the power not employed. See C. Wright, A. Miller & E. Cooper 13B
Federal Practice and Procedure Sec. 3567.1 (1984 and 1988 Supp.).
The common nucleus of operative facts that binds the RICO and non-RICO claims together is pleaded in paragraph 12, which is
incorporated by reference into each claim for relief. To prove the predicates for RICO that allegedly occurred in this country, the Republic
will have to prove theft, the acceptance of bribes, extortion, conspiracy, and similar acts in the Marcoses' conduct of the government in
the Philippines. For example, to prove that stolen money was unlawfully transported in the United States, the Republic will have to prove
theft in the Philippines. The operative facts necessary as part of the proof of the RICO claim are also the facts necessary to prove the theft.
The RICO claims cannot be proved without getting deeply into the pendent claims and proving some or all of them. Because the acts
charged, if proved, support both the RICO and the non-RICO claims, the district court has subject matter jurisdiction over all claims in the
Republic's complaint.
True, the pendent claims may involve more property than that which entered into or affected the foreign or domestic commerce of the
United States. The dissent appears to assume that jurisdiction over the pendent claims cannot extend beyond this property. But that is
not the law. Properly pendent claims need not be for the identical property involved in the federal cause of action. The pendent claims
remain within the court's jurisdiction if the vital facts that must be proved as predicates of the RICO claims are the same as those that
must be proved to establish the extortion, bribery, theft, fraud, and conversions alleged by the pendent claims.
At "every stage of the proceeding" the district court must exercise discretion as to the pendent claims. See Carnegie-Mellon Univ. v. Cohill,
108 S. Ct. at 618. In light of a more fully developed record than that now before this court, the district judge may conclude that some or all
of the pendent claims should be dismissed notwithstanding our holding that the district court has the power to assert jurisdiction over
those claims. Gibbs, 383 U.S. at 727, 86 S. Ct. at 1139. See also 3A J. Moore, W. Taggert & J. Wicker, Moore's Federal Practice p 18.07 [1.-
3] at 18-36-37 (2d ed. 1987). As of the record now before us, pendent jurisdiction exists and supports an injunction based on the pendent
claims.
Act of State and Political Question
Before determining whether issuance of an injunction was appropriate we consider two defenses which, if accepted, would block trial of
the case: the Marcoses maintain, first, that their acts are insulated because they were acts of state not reviewable by our courts; and
second, that any adjudication of these acts would involve the investigation of political questions beyond our courts' competence.
Acts of State. The classification of certain acts as "acts of state" with the consequence that their validity will be treated as beyond judicial
review is a pragmatic device, not required by the nature of sovereign authority and inconsistently applied in international law. Banco
Nacional de Cuba v. Sabbatino, 376 U.S. 398, 421-22, 84 S. Ct. 923, 936-37, 11 L. Ed. 2d 804 (1964). The purpose of the device is to keep
the judiciary from embroiling the courts and the country in the affairs of the foreign nation whose acts are challenged. Minimally viewed,
the classification keeps a court from making pronouncements on matters over which it has no power; maximally interpreted, the
classification prevents the embarrassment of a court offending a foreign government that is "extant at the time of suit." Id. at 428, 84 S.
Ct. at 940.
The "continuing vitality" of the doctrine depends on "its capacity to reflect the proper distribution of functions between the judicial and
political branches of the Government on matters bearing upon foreign relations." Id. at 427-28, 84 S. Ct. at 939-40. Consequently, there
are "constitutional underpinnings" to the classification. Id. at 423, 84 S. Ct. at 938. A court that passes on the validity of an "act of state"
intrudes into the domain of the political branches. The proper application of the doctrine is illustrated by Occidental Petroleum Corp. v.
Buttes Gas & Oil Co., 331 F. Supp. 92 (C.D. Cal. 1971), aff'd per curiam, 461 F.2d 1261 (9th Cir.), cert. denied, 409 U.S. 950, 93 S. Ct. 272, 34
L. Ed. 2d 221 (1972).
As a practical tool for keeping the judicial branch out of the conduct of foreign affairs, the classification of "act of state" is not a promise to
the ruler of any foreign country that his conduct, if challenged by his own country after his fall, may not become the subject of scrutiny in
our courts. No estoppel exists insulating a deposed dictator from accounting. No guarantee has been granted that immunity may be
acquired by an ex-chief magistrate invoking the magic words "act of state" to cover his or her past performance.
The classification might, it may be supposed, be used to prevent judicial challenge in our courts to many deeds of a dictator in power, at
least when it is apparent that sustaining such challenge would bring our country into a hostile confrontation with the dictator. Once
deposed, the dictator will find it difficult to deploy the defense successfully. The "balance of considerations" is shifted. Sabbatino, 376 U.S.
at 428, 84 S. Ct. at 940. A fortiori, when a ruler's former domain has turned against him and seeks the recovery of what it claims he has
stolen, the classification has little or no applicability. The act of state doctrine is supple, flexible, ad hoc. The doctrine is meant to facilitate
the foreign relations of the United States, not to furnish the equivalent of sovereign immunity to a deposed leader.
In the instant case the Marcoses offered no evidence whatsoever to support the classification of their acts as acts of state. The burden of
proving acts of state rested upon them. Alfred Dunhill of London, Inc. v. Republic of Cuba, 425 U.S. 682, 695, 96 S. Ct. 1854, 1861, 48 L. Ed.
2d 301 (1976). They did not even undertake the proof. The United States, invited by the court to address this matter as an amicus, assures
us that the Executive does not at present see the applicability of this defense. Brief of the United States of America as Amicus Curiae, p.
11. The act of state doctrine, the Executive declares, has "no bearing" on this case as it stands. As the doctrine is a pragmatic one, we
cannot exclude the possibility that, at some later point in the development of this litigation, the Marcoses might produce evidence that
would warrant its application. On the present record, the defense does not apply.
Political Questions. Bribetaking, theft, embezzlement, extortion, fraud, and conspiracy to do these things are all acts susceptible of
concrete proofs that need not involve political questions. The court, it is true, may have to determine questions of Philippine law in
determining whether a given act was legal or illegal. But questions of foreign law are not beyond the capacity of our courts. See Zschernig
v. Miller, 389 U.S. 429, 461, 88 S. Ct. 664, 681, 19 L. Ed. 2d 683 (1968) (Harlan, J. concurring); Fed. R. Civ. P. 44.1 (allowing consideration of
foreign law materials). The court will be examining the acts of the president of a country whose immediate political heritage is from our
own. Although sometimes criticized as a ruler and at times invested with extraordinary powers, Ferdinand Marcos does not appear to
have had the authority of an absolute autocrat. He was not the state, but the head of the state, bound by the laws that applied to him.
Our courts have had no difficulty in distinguishing the legal acts of a deposed ruler from his acts for personal profit that lack a basis in law.
As in the case of the deposed Venezuelan ruler, Marcos Perez Jimenez, the latter acts are as adjudicable and redressable as would be a
dictator's act of rape. Jimenez v. Aristeguieta, 311 F.2d 547 (5th Cir. 1962).
The Convenience of the Forum
The Marcoses maintain that the Republic's action should have been dismissed, even if the district court had jurisdiction, on the ground of
forum non conveniens. They point to the foreign character of the plaintiff, the nature of the Republic's claims about the Marcoses'
conduct in office, and the fact that the court will be called upon to decide questions of Philippine law. The inconvenience of the forum
was argued by the Marcoses to the district court. But the court did not address the argument. On the present record the district court did
not abuse its discretion in refusing to dismiss the Republic's action on forum non conveniens grounds before issuing the preliminary
injunction.
Injunction Rather Than Attachment
Fed. R. Civ. P. 64 makes available all remedies for the seizure of property "in the manner provided by the law of the state in which the
district court is held." The Marcoses argue that the freeze of their assets is an attachment and that California law permits attachment only
in connection with a claim based upon a contract. Cal.Civ.Proc.Code Sec. 483.010(c). The Marcoses are mistaken. While a freeze of assets
has the effect of an attachment, it is not an attachment. F.T.C. v. H.N. Singer, Inc., 668 F.2d 1107, 1112 (9th Cir. 1982). The court has
power to preserve the status quo by equitable means. A preliminary injunction is such a means. F.T.C., 668 F.2d at 1112.
The Standard for Issuance of the Injunction
The issuance of the preliminary injunction was not an abuse of discretion by the district court if that court properly concluded that the
Republic had shown the probability of success on the merits of its pendent claims and the possibility of irreparable injury, or that the
pendent claims raised serious questions and the balance of hardships tipped sharply in favor of the Republic. Hoopa Valley Tribe v.
Christie, 812 F.2d 1097, 1102 (9th Cir. 1987). "These are not two distinct tests, but rather the opposite ends of a single 'continuum in
which the required showing of harm varies inversely with the required showing of meritoriousness.' " Rodeo Collection, Ltd. v. West
Seventh, 812 F.2d 1215, 1217 (9th Cir. 1987) (quoting San Diego Committee Against Registration and the Draft v. Governing Board of the
Grossmont Union High School Dist., 790 F.2d 1471, 1473 n. 3 (9th Cir. 1986)). "The critical element in determining the test to be applied is
the relative hardship to the parties. If the balance of harm tips decidedly toward the plaintiff, then the plaintiff need not show as robust a
likelihood of success on the merits as when the balance tips less decidedly." Benda v. Grand Lodge of Int'l Assoc. of Machinists &
Aerospace Workers, 584 F.2d 308, 315 (9th Cir. 1978), cert. dismissed, 441 U.S. 937, 99 S. Ct. 2065, 60 L. Ed. 2d 667 (1979) (citation
omitted).
For the purposes of injunctive relief, "serious questions" refers to questions which cannot be resolved one way or the other at the hearing
on the injunction and as to which the court perceives a need to preserve the status quo lest one side prevent resolution of the questions
or execution of any judgment by altering the status quo. Serious questions are "substantial, difficult and doubtful, as to make them a fair
ground for litigation and thus for more deliberative investigation." Hamilton Watch Co. v. Benrus Watch Co., 206 F.2d 738, 740 (2d Cir.
1952) (Frank, J.). Serious questions need not promise a certainty of success, nor even present a probability of success, but must involve a
"fair chance of success on the merits." National Wildlife Fed'n v. Coston, 773 F.2d 1513, 1517 (9th Cir. 1985) (Duniway, J.). Applying these
principles and definitions to this case, we conclude that the district court did not abuse its discretion in granting the preliminary
injunction.
The district court stated orally that "the hardship is clearly on the side of the plaintiff." The district court also made the written finding
that there was more than a mere possibility of irreparable harm; in fact, it concluded that the Republic "would be irreparably injured if
[the injunction] were not issued." (emphasis added). The Marcoses have offered no evidence of any hardship they would suffer if the
injunction were issued. Indeed, the district court stipulated in the injunction that the Marcoses may use their assets to cover normal living
expenses and legal fees. Irreparable injury was weighed against zero evidence of hardship. On this record, the balance of hardships tipped
decidedly in the Republic's favor.
The district court also concluded that the Republic had a "substantial likelihood" of prevailing on the merits. Although we do not read this
as a finding of probability of success, we do believe that it represents a finding that the Republic has at least a fair chance of success,
which is all that is required. See Benda, 584 F.2d at 315. We agree with the district court that the Republic has at least a fair chance of
prevailing on the merits, including on the merits of its constructive trust claim.
The Republic presented evidence that in February 1986 the Marcoses had transported from the Philippines to Hawaii $8.2 million worth
of cash, negotiable instruments, jewelry, and other property, allegedly derived from the Marcoses' wrongdoing in the Philippines.
Ferdinand Marcos swore by affidavit that it had not been his intention to go to Hawaii and that he had been taken there involuntarily by
the government of the United States. But as he sought to recover from United States Customs all of these items he clearly intended to
introduce them into the United States. He used the United States mail and telephone services for this purpose.
The Republic also presented evidence that since at least 1968 the Marcoses had a checking account at a bank in Beverly Hills, California
and that this account was used to make payments of $200,000 to "William Saunders" and $100,000 to "Jane Ryan." The Republic
introduced evidence that these names were aliases under which Ferdinand Marcos and Imelda Marcos acted. The Republic presented
evidence of the creation by the Marcoses in 1970 of a Lichtenstein entity entitled the "Sandy Foundation," which in effect was a trust to
make investments for the benefit of the Marcoses and their children, Imelda, Ferdinand, and Irene, and which was funded by the
Marcoses with an initial capital of 100,000 Swiss francs. The Republic presented evidence that "Jane Ryan" and "William Saunders"
transferred their accounts to this trust and that Credit Suisse, a Zurich bank, was "the administering bank" of the trust. The Republic
presented evidence of correspondence by the Marcoses as customers of that bank and the use by Imelda Marcos of the alias of Jane Ryan
in dealing with that bank.
According to the Republic's evidence, a code was worked out for contacts between the Marcoses and the trust. According to a copy of a
memorandum signed by Ferdinand Marcos, if he cabled "Happy Birthday" to the bank, its Hong Kong representative, Ralph Klein, would
proceed to Manila and "contact him through Col. Fabian C. Ver." (Colonel Ver is now General Ver, associated with the Marcoses in power
and in their flight from the Philippines.)
In addition to this evidence of secretive dealings in substantial sums of money in the course of which the Marcoses used a bank in
California, the Republic submitted a statement by the Minister of the Budget of the Philippines as to the total salaries authorized to be
paid Ferdinand Marcos as president from 1966 to 1985 and Imelda Marcos as a minister of government from 1976 to 1985. The total
authorized amount is P 2,288,750, in dollars less than $800,000. The Republic submitted what purports to be a balance sheet signed by
Ferdinand Marcos as part of a tax return stating his assets as of December 31, 1966 as P 150,000, in dollars less than $60,000. The
Republic submitted the sworn deposition, executed June 16, 1986, of Rafael Fernando, Representative and Coordinator on the West Coast
of the United States of the Presidential Commission on Good Government of the Republic of the Philippines. Fernando declares that Swiss
bank authorities have documented to the government of the Republic the existence of bank accounts owned by Ferdinand Marcos in the
amount of $200 million and have reported to the Republic the existence of other accounts held for or on behalf of him in the amount of
approximately $1.3 billion.
The Marcoses' clandestine dealings with Credit Suisse and the Lichtenstein trust and the discrepancy between the purported balance
sheet of 1966 and the reported assets of 1986, coupled with the reported authorized salaries of the Marcoses as members of the
government of the Republic, give rise to the inference that very large sums of money were amassed by the Marcoses by the unlawful
means alleged by the Republic. The inference depends in part on the hearsay statements of Fernando. It was within the discretion of the
district court to accept this hearsay for purposes of deciding whether to issue the preliminary injunction. Flynt Distrib. Co., Inc. v. Harvey,
734 F.2d 1389, 1394 (9th Cir. 1984) ("The urgency of obtaining a preliminary injunction necessitates a prompt determination and makes it
difficult to obtain affidavits from persons who would be competent to testify at trial. The trial court may give even inadmissible evidence
some weight, when to do so serves the purpose of preventing irreparable harm before trial."); see also K-2 Ski Co. v. Head Ski Co., 467
F.2d 1087, 1088 (9th Cir. 1972) (trial court may consider allegations in verified complaint in issuing preliminary injunction). No affidavits
countering the inference were presented by the Marcoses. See K-2 Ski Co., 467 F.2d at 1089. The Republic's case remains to be proved.
The Republic has put forward enough to show a fair chance of succeeding with its proof.
The Scope of the Injunction
The injunction is directed against individuals, not against property; it enjoins the Marcoses and their associates from transferring certain
assets wherever they are located. Because the injunction operates in personam, not in rem, there is no reason to be concerned about its
territorial reach. See, e.g., Steele v. Bulova Watch Co., 344 U.S. 280, 289, 73 S. Ct. 252, 257, 97 L. Ed. 319 (1952) (district court "in
exercising its equity powers may command persons properly before it to cease to perform acts outside its territorial jurisdiction")
(citations omitted).
A court has the power to issue a preliminary injunction to prevent a defendant from dissipating assets in order to preserve the possibility
of equitable remedies. See, e.g., F.T.C. v. H.N. Singer, Inc., 668 F.2d 1107, 1112 (9th Cir. 1982) (preliminary injunction appropriate to
preserve the possibility of equitable remedies). The injunction here enjoins the defendants from secreting those assets necessary to
preserve the possibility of equitable relief.
Although the gravamen of the complaint is that the Marcoses converted public property to their own use, the seventh claim for relief,
which alleges a constructive trust, states an equitable cause of action and seeks equitable relief: " [The Marcoses], by virtue of their
position as President of the Philippines and Governor of Manila, respectively, occupied positions of trust as to the Philippines and its
people. [The Marcoses] violated said trust by their numerous acts of conversion, fraud, deceit, constructive fraud, civil conspiracy, acts of
racketeering, and other unlawful acts." As the result of these asserted violations of trust, the Marcoses acquired specific funds and real
property, including the accounts with Lloyds Bank, the real property in Beverly Hills, the deposits with the Swiss banks and the property
brought into Hawaii. Complaint, paragraphs 62-67. In granting the preliminary injunction, the district court specifically found "that the
Philippines will be entitled to an accounting for, and to impose a constructive trust upon, the property subject to this Order." The district
court found the preliminary injunction necessary to preserve the possibility of equitable relief. On this record, the district court did not
abuse its discretion in entering an injunction of this scope.
The district court remains free to modify or dissolve the preliminary injunction if warranted by developments in this case subsequent to
the noticing of this appeal. Lyng v. Northwest Indian Cemetery Protective Assoc., --- U.S. ----, 108 S. Ct. 1319, 1330, 99 L. Ed. 2d 534 (1988).
See also 7 J. Moore, W. Taggert & J. Wicker, Moore's Federal Practice p 65.07 at 65-114 (2d ed. 1987).
In Summation. Jurisdiction to hear the Republic's claims and to enter the preliminary injunction exists. A serious question of liability has
been presented and the Republic has a fair chance of success on the merits of its case. The Marcoses have not presented any preclusive
defense. The scope of the injunction is justified. It was imperative for the district court to preserve the status quo lest the defendants
prevent resolution of the case by putting their property beyond the reach of the court. Hardship to the Republic would have been great
and irreparable if the district court had not taken its prudent, amply justified action to keep the Marcoses' assets from disappearing.
AFFIRMED.
SCHROEDER, Circuit Judge, with whom CANBY, Circuit Judge, joins concurring in part and dissenting in part.
I join in the majority's conclusion that there is a well-pleaded RICO claim providing federal subject matter jurisdiction. I agree further that
the act of state doctrine is not a threshold bar to considering the activities of the defendants during the time that Mr. Marcos was the
Philippine head of state. Those were the principal issues that a majority of the three-judge panel considered and that we undertook to
decide in this en banc proceeding.
The injunction we review, however, was entered only a week after this suit was filed, and the record before us is minimal. It does not
provide support for the majority's resolution of the further issues it must reach, without reasoned analysis, in order to uphold this
injunction. I therefore dissent from the affirmance.
The injunction is based upon the district court's exercise of pendent jurisdiction, not federal question jurisdiction. It is based on a
complaint alleging, in the most sweeping of generalities, pendent claims of fraud and conversion by the Marcoses over the course of
twenty years. The pendent claims are alleged to be violations of as yet unspecified laws of as yet unspecified states and countries. The
district court's injunction purports to reach over a billion dollars worth of assets, the bulk of which are located in Switzerland. See Republic
of the Philippines v. Marcos, 818 F.2d 1473, 1476 (9th Cir. 1987).
To affirm this injunction, the majority must hold that the district court properly exercised pendent jurisdictional authority to reach all of
the Marcoses' property, wherever located. I cannot agree. The basis for federal jurisdiction is contained in RICO allegations of illegal
activities concerning assets now located in the United States. There has been no showing that these claims arise in any way from the same
allegedly wrongful transactions through which the Marcoses acquired other property located elsewhere. Nor does the record disclose any
reason why a court in California, as opposed to courts in the Philippines or Switzerland, should decide claims to property stolen from the
Philippines and transported to Switzerland. I therefore part company with the majority when it affirms on this record the district court's
issuance of a preliminary injunction preventing the Marcoses from disposing of any assets anywhere in the world.
In my view the existence of pendent jurisdiction over claims reaching all the Marcoses' assets has not yet been established. As explained
more fully below this injunction should be vacated and the matter remanded to the district court for consideration of pendent jurisdiction
and other issues on the basis of a fuller record.
BACKGROUND
The plaintiff sought an injunction to be entered solely in the exercise of pendent jurisdiction because RICO does not authorize injunctive
relief. See Religious Technology Center v. Wollersheim, 796 F.2d 1076, 1088-89 (9th Cir. 1986), cert. denied, 479 U.S. 1103, 107 S. Ct.
1336, 94 L. Ed. 2d 187 (1987). RICO, however, does provide the requisite federal question jurisdiction.
For the RICO predicate acts in violation of the laws of the United States, the complaint alleged violations of 18 U.S.C. §§ 1341, 1343, 2314,
and 2315. The alleged racketeering activities essentially involve mail and wire fraud and the importation of stolen goods into the United
States. The showing before the district court of the Marcoses' actual holdings in the United States included the Marcoses' interests in
California real estate, the existence of a bank account with a California bank, and the transporting to Hawaii of $8.2 million in funds and
property.
The district court granted the injunction in conclusory fashion, finding:
(1) That there is a substantial danger that, if this Order were not issued, the parties against whom this Order is directed would transfer or
conceal funds, property, books and records, placing said items beyond the Court's process and recovery by the Philippines in this action.
(2) That the Philippines therefore would be irreparably injured if this Order were not issued.
(3) That there is a substantial likelihood that the Philippines will prevail in this action, and that the Philippines will be entitled to an
accounting for, and to impose a constructive trust upon, the property subject to this Order.
When this court first considered this appeal, a fractured three-judge panel held that the complaint should have been dismissed in its
entirety. A majority of the panel held that the act of state doctrine prevented the court from inquiring into the Marcoses' activities during
the period in question. Marcos, 818 F.2d at 1489-90. Because a majority of the panel concluded that the act of state doctrine prevented
the court from adjudicating any of the claims, the majority did not need to consider, and did not address, the issues of pendent
jurisdiction.
Judge Hall, in a separate concurring opinion, concluded that there was additionally a lack of subject matter jurisdiction because no RICO
claim had been well pleaded. Id. at 1490-91.
Judge Nelson dissented, disagreeing with the other judges as to the applicability of the act of state doctrine. The dissent argued
persuasively that the majority's holding with respect to the act of state doctrine was inconsistent with existing Supreme Court and Ninth
Circuit authority. Id. at 1492-95. We granted en banc review because of that inconsistency, which was the principal focus of the petition
for rehearing and rehearing en banc filed by the Government of the Philippines.
RICO CLAIMS AND FEDERAL QUESTION JURISDICTION
In defense of the panel's decision that the complaint be dismissed in its entirety, the Marcoses have focused upon Judge Hall's separate
opinion that there was no well-pleaded RICO claim and hence no federal jurisdiction. See id. at 1490-91. The Marcoses have urged that in
order to make out a claim under RICO, the complaint would have to allege that there was an adverse economic impact upon the United
States by virtue of the defendants' conduct.
RICO, however, was aimed at the destructive effect of organized criminal activity on our society. Its provisions do not focus on any
adverse effect of specific activity on the nation's GNP. Its history emphasizes the adverse consequences of organized crime on our
democratic processes, our domestic security and our general welfare, including but not limited to the economic system. See RICO
Statement of Findings and Purpose, Pub. L. No. 91-452, 84 Stat. 922 (1970), 91st Cong., 2d Sess., reprinted in 1970 U.S.Code Cong. &
Admin.News 1073. The Supreme Court has stated:
RICO is to be read broadly. This is the lesson not only of Congress' self-consciously expansive language and overall approach, ... but also of
its express admonition that RICO is to "be liberally construed to effectuate its remedial purposes." ... RICO was an aggressive initiative to
supplement old remedies and develop new methods for fighting crime.
Sedima, S.P.R.L. v. Imrex Co., Inc., 473 U.S. 479, 497-98, 105 S. Ct. 3275, 3286, 87 L. Ed. 2d 346 (1985); see also Russello v. United
States, 464 U.S. 16, 26, 104 S. Ct. 296, 302, 78 L. Ed. 2d 17 (1983) (" [t]he legislative history clearly demonstrates that the RICO statute was
intended to provide new weapons of unprecedented scope for an assault upon organized crime and its economic roots").
What RICO does require is "a pattern of racketeering activity." 18 U.S.C. § 1962. By definition, "racketeering activity" necessitates a
violation of one of our state or federal laws. 18 U.S.C. § 1961. Federal RICO jurisdiction thus attaches only to those activities that allegedly
violate our domestic laws.
In this case, in Count One of the Complaint, the plaintiff alleges that the Marcoses engaged in mail and wire fraud, and importation of
stolen property into the United States in violation of 18 U.S.C. §§ 1341, 1343, 2314, 2315. In engaging in these activities, the plaintiff
alleges that the Marcoses were conducting a RICO enterprise as part of an association in fact with the other defendants. These allegations,
on their face at least, would survive a motion to dismiss for lack of subject matter jurisdiction. I therefore agree that there is a RICO basis
for federal subject matter jurisdiction.
Finding a basis for federal question jurisdiction is but a first step, however, in reviewing the propriety of this injunction. The claims on
which this injunction rests are pleaded as claims pendent to the RICO claims. The next step is thus to consider whether the relationship
between the pendent claims and the federal claims are sufficiently close to permit the district court to assume jurisdiction over pendent
claims reaching the Marcoses' worldwide holdings. See United Mine Workers v. Gibbs, 383 U.S. 715, 725, 86 S. Ct. 1130, 1138, 16 L. Ed. 2d
218 (1966).THE INJUNCTION AND PENDENT JURISDICTION
In holding that the district court had pendent jurisdiction over claims to the Marcoses' assets wherever located in the world, the majority
fails to appreciate that pendent jurisdiction can derive only when there is a sufficient factual connection between the activities giving rise
to the pendent claims and the activities giving rise to the federal claims. In this case, such pendent jurisdiction should properly derive only
from activities directly related to the alleged RICO violations of United States law. These comprise the alleged fraudulent dealings in this
country and illegal importation of assets into the United States. It is not enough for the majority to characterize all the claims as involving
criminal misconduct. See majority op. at 1359-1360.
Plaintiff claims the assets now in the United States are traceable to thefts of assets rightfully belonging to the people of the Philippines.
There may well be a sufficient factual nexus to sustain pendent jurisdiction for claims arising from the original wrongful appropriations of
the property now found in this country. This is because the property is the same. No such factual link as yet exists for the pendent claims
to property transferred from the Philippines to other countries.
It is an elementary legal principle that federal courts are courts of limited jurisdiction. There are constitutional restraints on their exercise
of jurisdiction. The Constitution restricts federal courts' jurisdiction to claims "arising under [the] Constitution, the Laws of the United
States, and Treaties made, or which shall be made, under their Authority." U.S. Const., art. III, Sec. 2. When a plaintiff pleads a federal
claim within a district court's federal subject matter jurisdiction, a plaintiff may not automatically bring any other claim against the same
defendant. Subject matter jurisdiction of non-federal claims, under the judicially-created doctrine of pendent jurisdiction, depends upon
the relationship between those claims and the federal claims.
The Supreme Court initially set out the concept underlying pendent jurisdiction in 1824 in Osborn v. Bank of the United States, 22 U.S. (9
Wheat.) 738, 6 L. Ed. 204 (1824). There, the Court stated that
when a question to which the judicial power of the Union is extended by the constitution, forms an ingredient of the original cause, it is in
the power of congress to give the Circuit Courts jurisdiction of that cause, although other questions of fact or of law may be involved in it.
Id. at 823. The Court subsequently expanded the Osborn doctrine in Siler v. Louisville & Nashville R.R. Co., 213 U.S. 175, 29 S. Ct. 451, 53 L.
Ed. 753 (1909), then narrowed pendent jurisdiction's scope in Hurn v. Oursler, 289 U.S. 238, 53 S. Ct. 586, 77 L. Ed. 1148 (1933). Finally,
more than two decades ago, the Court clarified the scope of pendent jurisdiction in United Mine Workers v. Gibbs, 383 U.S. 715, 86 S. Ct.
1130, 16 L. Ed. 2d 218 (1966).
In Gibbs, a unanimous Court rejected Hurn as "unnecessarily grudging," id. at 725, 86 S. Ct. at 1138, and adopted a two-part test resting
on considerations of power and discretion. In evaluating a federal court's power to hear a pendent claim, the Court stated that:
[p]endent jurisdiction, in the sense of judicial power, exists whenever there is a claim "arising under [the] Constitution, the Laws of the
United States, and Treaties made, or which shall be made, under their Authority ...," U.S. Const., Art. III, Sec. 2, and the relationship
between that claim and the state claim permits the conclusion that the entire action before the court comprises but one constitutional
"case." The federal claim must have substance sufficient to confer subject matter jurisdiction on the court.... The state and federal claims
must derive from a common nucleus of operative fact. But if, considered without regard to their federal or state character, a plaintiff's
claims are such that he would ordinarily be expected to try them all in one judicial proceeding, then, assuming substantiality of the federal
issues, there is power in federal courts to hear the whole.
Id.
Thus, federal claims and pendent claims must all derive from a "common nucleus of operative fact." They must also be the sort that would
ordinarily be tried in "one judicial proceeding." Id. The majority opinion does not analyze the pendent claims. Instead, it merely
announces that the pendent claims arose from a nucleus of operative fact common to the RICO claims. Majority op. at 1359.
In reviewing the entry of the preliminary injunction, we should consider the nature of the asserted pendent jurisdiction and address the
two jurisdictional issues that Gibbs requires courts to address when dealing with pendent claims.
The first question, therefore, is whether the RICO claims and all of the pendent claims arise from a "common nucleus of operative fact."
They do not. The RICO claims of necessity have to do with the defendants' activities that violated the criminal laws of the United States.
The pendent claims are not limited to those activities and reach property that has not been shown to have any connection with the
United States itself or violations of our law.
Upholding pendent jurisdiction in such circumstances is thus contrary to the teaching of decisions following Gibbs that have focused on
the nexus between events underlying the federal cause of action and those underlying pendent state causes of action. See, e.g., Finn v.
Gunter, 722 F.2d 711, 713 (11th Cir. 1984) (finding pendent jurisdiction); PAAC v. Rizzo, 502 F.2d 306, 312-13 (3d Cir. 1974), cert. denied,
419 U.S. 1108, 95 S. Ct. 780, 42 L. Ed. 2d 804 (1975) (no pendent jurisdiction); see also C. Wright, A. Miller & E. Cooper, 13B Federal
Practice and Procedure Sec. 3567.1 (1984). Our circuit also evaluates pendent claims under the nexus test. See, e.g., Klaus v. Hi-Shear
Corp., 528 F.2d 225, 231 (9th Cir. 1975). The plaintiffs have provided us with no explanation of how the pendent claims are related to the
RICO claims. The only factual connection between all the claims of wrongdoing in this case appears to be a common plaintiff and common
defendants. Under Gibbs and the constitutional restraints on the exercise of power by the federal judiciary in Article III, that is not
sufficient.
Moreover, even assuming there is a common nexus of fact reaching all the Marcoses' assets, pendent jurisdiction would exist only as to
the claims that would ordinarily be tried in one judicial proceeding. Gibbs, 383 U.S. at 725, 86 S. Ct. at 1138. These are not such claims.
The RICO claims allege violations of the United States' criminal laws through activities in this country. The pendent claims, on the other
hand, encompass allegations of fraud and conversion stemming from the Marcoses' actions in the Philippines spanning a twenty-year
period. Further, the bulk of the property claimed, according to the complaint, is located in Switzerland. The claims against the Marcoses
are in fact already the subject of multiple judicial proceedings. See, e.g., Republic of the Philippines v. Marcos, litigation in the Southern
District of New York, 86 Civ. 2294 (PNL), and Republic of the Philippines v. Marcos, litigation in the District of Hawaii, No. CV-86-0155 HMF.
The plaintiff cites no case remotely similar in scope to this case. The claims here are not those ordinarily tried in one judicial proceeding.
ACT OF STATE DOCTRINE
The majority of our three-judge panel concluded that the act of state doctrine bars consideration of the plaintiffs' claims. I agree with the
majority of this en banc court that such a holding is not appropriate on this record. I do not agree with the majority, however, that this
injunction can be affirmed without any regard to the act of state doctrine.
The panel majority's use of the act of state doctrine as a threshold bar in the circumstances of this case is not consistent with the
development of that doctrine under Supreme Court authority. See, e.g., Alfred Dunhill of London, Inc. v. Cuba, 425 U.S. 682, 96 S. Ct.
1854, 48 L. Ed. 2d 301 (1976); Banco Nacional de Cuba v. Sabbatino, 376 U.S. 398, 84 S. Ct. 923, 11 L. Ed. 2d 804 (1964). We have expressly
stated that the act of state doctrine is not jurisdictional. See International Association of Machinists and Aerospace Workers v. OPEC, 649
F.2d 1354, 1359 (9th Cir. 1981), cert. denied, 454 U.S. 1163, 102 S. Ct. 1036, 71 L. Ed. 2d 319 (1982); Timberlane Lumber Co. v. Bank of
America, 549 F.2d 597, 602 (9th Cir. 1976), cert. denied, 472 U.S. 1032, 105 S. Ct. 3514, 87 L. Ed. 2d 643 (1985). Rather, the doctrine
involves the judiciary's prudential decision to refrain from adjudicating the legality of a foreign sovereign's public acts that were
committed within its own territory. See OPEC, 649 F.2d at 1359; see also Sabbatino, 376 U.S. at 401, 84 S. Ct. at 926. The Supreme Court,
in addressing the act of state doctrine, has stated:
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.
Sabbatino, 376 U.S. at 416, 84 S. Ct. at 934 (quoting Underhill v. Hernandez, 168 U.S. 250, 252, 18 S. Ct. 83, 84, 42 L. Ed. 456 (1897)).
The act of state doctrine "expresses the strong sense of the Judicial Branch that its engagement in the task of passing on the validity of
foreign acts of state may hinder rather than further this country's pursuit of goals both for itself and for the community of nations as a
whole in the international sphere." Sabbatino, 376 U.S. at 423, 84 S. Ct. at 938. The Court further elaborated that the doctrine involves
separation of powers:
[The doctrine's] continuing vitality depends on its capacity to reflect the proper distribution of functions between the judicial and political
branches of the Government on matters bearing upon foreign affairs.... [S]ome aspects of international law touch much more sharply on
national nerves than do others; the less important the implications of an issue are for our foreign relations, the weaker the justification for
exclusivity in the political branches.... [W]e decide only that the Judicial Branch will not examine the validity of a taking of property within
its own territory by a foreign sovereign government, extant and recognized by this country at the time of suit.
Id. at 427-28, 84 S. Ct. at 940.
However, these considerations are less compelling in the situation before us, where the foreign government has itself invoked our
jurisdiction, and the challenged actions involve a government no longer in power. In Sabbatino, the Supreme Court observed that, " [t]he
balance of relevant considerations may also be shifted if the government which perpetrated the challenged act of state is no longer in
existence ... for the political interest of this country may, as a result, be measurably altered." 376 U.S. at 428, 84 S. Ct. at 940. "Moreover,
the act of state doctrine reflects respect for foreign states, so that when a state comes into our courts and asks that our courts scrutinize
its actions, the justification for application of the doctrine may well be significantly weaker." Republic of the Philippines v. Marcos, 806
F.2d 344, 359 (2d Cir. 1986).
Further, the Supreme Court has noted that for doctrine to apply the acts in question must have involved public acts of the sovereign. The
Court stated that in each of its act of state decisions, the facts were sufficient to demonstrate that
the conduct in question was the public act of those with authority to exercise sovereign powers and was entitled to respect in our courts.
[H]ere, no statute, decree, order, or resolution of the Cuban Government itself was offered in evidence indicating that Cuba had
repudiated its obligations in general or any class thereof or that it had as a sovereign matter determined to confiscate the amounts due
three foreign importers.
Alfred Dunhill, 425 U.S. at 694-95, 96 S. Ct. at 1861.
Accordingly, the courts have insisted that the act of state doctrine precludes review of public acts of the sovereign. See, e.g., Marcos, 806
F.2d at 358 (" [t]hat the acts must be public acts of the sovereign as been repeatedly affirmed") (emphasis in original); Filartiga v. Pena-
Irala, 630 F.2d 876, 889 (2d Cir. 1980) ("we doubt whether action by a state official in violation of the Constitution and laws of the
Republic of Paraguay, and wholly unratified by that nation's government, could properly be characterized as an act of state"); Arango v.
Guzman Travel Advisors Corp., 621 F.2d 1371, 1380 (5th Cir. 1980) (" [t]he act of state doctrine only precludes judicial inquiry into the
legality, validity, and propriety of the acts and motivations of foreign sovereigns acting in their governmental roles within their own
boundaries"); Jimenez v. Aristeguieta, 311 F.2d 547, 557 (5th Cir. 1962) ("judicial authorities cannot review the acts done by a sovereign in
his own territory to determine illegality"); Sharon v. Time, Inc., 599 F. Supp. 538, 544 (S.D.N.Y. 1984) (" [t]he doctrine is limited to laws,
decrees, decisions, seizures, and other officially authorized 'public acts' "); see also Restatement (Second) of Foreign Relations Law Sec. 41
(1965) (doctrine involves refraining "from examining the validity of an act of a foreign state by which that state has exercised its
jurisdiction to give effect to its public interest").
As the dissenting opinion of Judge Nelson quite rightly pointed out, the act of state doctrine cannot bar the plaintiffs' action at this stage
in the proceedings due to the distinction between the official acts and the private conduct of a former head of state. As Judge Nelson
stated:
Marcos and his agents no doubt exercised broad power, especially after the imposition of martial law in 1972. But the appropriate inquiry
is not to invoke the talismanic label "dictator." The district court should determine which of the challenged acts were official and which
were not. Only by doing so can the court determine the extent to which the act of state doctrine may apply.
818 F.2d at 1494-95.
At this point, no determinations have been made regarding the capacity in which the Marcoses were acting when the alleged unlawful
conduct occurred. Accordingly, the original panel majority erred in finding that, at this stage of the litigation, the act of state doctrine bars
adjudication of the bulk of the Philippine government's pendent claims.
The majority decision here, however, goes much further. It declares that the injunction can be affirmed without regard to the act of state
doctrine. In my view, we should instead instruct the district court to consider to what extent, if any, the doctrine applies in the
circumstances of this case, and on the basis of the record which has developed more fully during the pendency of this interlocutory
appeal. Until such consideration can be given, an injunction of this breadth is not appropriate.
This en banc court requested the amicus views of the Department of State on the act of state issues. Its brief concludes that the
application of the act of state doctrine at this stage is speculative and the injunction premature. The majority's reliance upon the position
of the United States as support for its holding is wholly misplaced. The government urges that an injunction should not have been entered
on the basis of this record. The government amicus curiae brief states in appropriate context as follows:
[T]he record before the district court, which did not include any detailed specification of the factual basis for the bulk of the nonfederal
claims, did not make it possible even to analyze the extent to which those claims are properly before the court....
Even assuming jurisdiction, it is not clear at this stage that the district court should, as a prudential matter, undertake to adjudicate the
bulk of the nonfederal claims. The court's capacity to do so fairly and expeditiously and without offending the sensibility of other nations
cannot be resolved on this record. Adjudication in this district court may turn out to be barred by considerations of international comity
and forum non conveniens.
The act of state doctrine seems to us to have little or no bearing on this case at this stage of its development. The doctrine provides, in
general, that the validity of specific acts of a foreign sovereign is not subject to challenge in our courts; the circumstances of a particular
case may, however, make that general principle inapplicable. On the present record, it is not clear that any act of state--an act of a
sovereign within its territorial jurisdiction on matters pertaining to its governmental sovereignty--is involved in this case. Nor is it clear
that the case would require an adjudication of the validity of such an act, without which the case could not fairly proceed. Under these
circumstances, the bearing, if any, of the act of state doctrine on this case should be determined only after further development of the
case on the merits.
Amicus brief at 11-12.
The United States' views are wholly in accord with those expressed in this dissent and are in conflict with the majority.
CONCLUSION
This injunction is unprecedented in its breadth. To decide the merits of the pendent claims, the district court would have to unravel all of
the Marcoses' financial transactions over a long period of time and over much of the globe. It would take a corps of historians years to
accomplish the task. We are not yet told why a single district judge in California should undertake it.
I would vacate the injunction and remand the matter to the district court for further consideration of the appropriate scope of a
preliminary injunction.
FLETCHER, Circuit Judge, concurring specially in Judge SCHROEDER's concurring and dissenting opinion:
I concur fully in the following portions of Judge Schroeder's opinion: its discussion of the basis for finding jurisdiction based on a well-
pleaded RICO claim; its discussion of the basis for concluding that the act of state doctrine is not a prudential bar at this stage of the
proceedings in this case.
I concur only in its conclusion that the injunction should be vacated and remanded for further consideration in that I do not agree with its
restrictive view of pendent jurisdiction (by the same token, I cannot agree with the majority's expansive approach). Also, I would stay the
vacation of the injunction for a reasonable period of time to allow the district court to reconsider the injunction and its scope in light of
the current state of the record.
*
Judge Anderson heard argument and participated in the discussion of this case, but died before the opinion was finally agreed upon
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