You are on page 1of 13


doc \ 1

Lacuna vs. Abes  Ex Parte Garland – effect that in the eyes of the law, the offender who is
pardoned is as innocent as if he had never committed the offense. Not
Monsanto vs. Factoran [February 9, 1989] universally accepted, recognized or approved.
Petition to review the resolution of the Deputy Executive Secretary  Pardon is forgiveness or remission of guilt. Pardon implies guilt. It does not
erase the fact of the commission of the crime and the conviction thereof.
Forgiveness NOT EQUAL WITH Forgetfulness.
Facts:  Pardon does not impose upon the government any obligation to make the
 Salvacion Monsanto was the Assistant Treasurer of Calbayog City. reparation for what has been suffered.
 The Sandiganbayan convicted her of estafa thru falsication of public documents  Court conceded that pardon may remit all the penal consequences of a criminal
and she was sentenced to 4 years, 2 months and 1 day of prision correctional, indictment if only to give meaning to the fiat that a pardon, being a presidential
as minimum, to 10 years and 1 day of prision mayor, as maximum. She was prerogative, should mot be circumscribed by a legislative action. The court
also ordered to pay a fine of P3,500 and to indemnify the government does not subscribe to the fictitious belief that pardon blots out the guilt of an
P4,892.50. individual and that once he is absolved, he should be treated as if he were
 The decision of the Sandiganbayan was affirmed by the Supreme Court. She innocent.
filed a motion for reconsideration and while her motion was still pending,  Pardon does not ipso facto restore him to public office that may have been
President Marcos granted her an absolute pardon and restored her to full civil forfeited by reason of the conviction, although such pardon undoubtedly
and political rights. restores his eligibility for reappointment but, in considering her qualifications,
 She wrote a letter requesting to reinstated to her former post as assistant the facts constituting her conviction should be taken into account to determine
treasurer. Her letter was forwarded to the Ministry of Finance which ruled that whether she can again be entrusted with public funds.
she may be reinstated to her position without the necessity of a new
appointment not earlier than the date she was extended the absolute pardon. 3. WON she is exempt from paying her civil liabilities. NO
She was also directed to settle the amount of P4,892.50 and the cost of the  Civil indemnity subsist not withstanding service of sentence, if for any reason
litigation. the sentence is not served by pardon, amnesty, or commutation of sentence.
 She filed a motion for reconsideration arguing that the full pardon that was
bestowed on her has wiped out the crime which implies that her services in Note: Pardon granted after conviction frees the individual from all the penalties and
government has never been interrupted and therefore her date of her legal disabilities and restores him to all civil rights. But unless expressly grounded
reinstatement should be from the date of her preventive suspension. She also on the person’s innocence, it cannot bring back lost reputation for honesty, integrity
contends that she is entitled to back pay and that she should not be required to and fair dealing.
pay P4,892.50.
 Her letter was forwarded to the Office of the President which ruled that she is PEOPLE v. SALLE, Jr. (December 4, 1995) Appeal from a decision of QC RTC
not entitled to automatic reinstatement on the basis of the pardon. She must
first secure an appointment to her former position. She was also held to be FACTS:
liable for the civil liabilities. • RTC decision, Nov 18, ’91: accused appellants FRANCISCO SALLE & RICKY
 She appealed her case to the Supreme Court. She based her argument on the MENGOTE were found guilty as co-principals of the compound crime of
theory that the general rules on pardon cannot apply to her case because she murder & destructive arson.
was extended executive clemency while her conviction was still pending appeal • Appellants then seasonably filed their Notice of Appeal, w/c the Court
in the Supreme Court. She contends that without final judgement of accepted on March 24, 1993.
conviction, the accessory penalty of forfeiture of office did not attach and the • However, on Jan 6, 1994, appellant Francisco Salle, Jr. filed an Urgent
status of her employment remained suspended. Motion to Withdraw Appeal.
• Atty. Ida La’o, Salle’s counsel, manifested that Salle signed the motion
under the misimpression that it was merely a bureaucratic requirement
1. WON the conviction of the Sandiganbayan became final by her acceptance of
necessary for his early release from the New Bilibid Prison (NBP) following
the pardon. YES
the grant of condt’l pardon by the Pres on Dec 9, 1993 & was discharged
 Pardon – an act of grace proceeding from the power entrusted with the Dec. 28. NBP Counsel also said that Ricy Mengote (accused-appellant) was,
execution of the laws, which exempts the individual, on whom it is bestowed, on the same dates, granted a condt’l pardon & released from confinement.
from the punishment the law inflicts for a crime he has committed. • Counsel prays that this Court grant Salle’s motion to withdraw his appeal &
 Validity of pardon – delivered and accepted
consider it withdrawn upon his acceptance of the condt’l pardon.
 By accepting the pardon she is deemed to have abandoned her appeal. As a
• ‘Til now, Mengote has not filed a motion to w/draw appeal.
result, the judgement of conviction of the Sandiganbayan became final.
• March 23, 1994: SC’s resolution granted Salle’s motion to w/draw his
(judgement entailed her temporary disqualification from holding public office)
appeal & considered this case closed & terminated insofar as he is
2. WON the pardon would have an effect of rendering the offender as innocent as
if he never had committed the offense. NO
/var/www/apps/collegelist/repos/collegelist/trunk/collegelist/tmp/scratch7/4689783.doc \ 2

• June 3, 1993: Asst. Dir Jesus Villanueva of Bureau of Corrections submitted or after conviction. The Gov-Gen can pardon a person
certified photocopies of the condt’l pardon granted separately to Salle & before the facts of the case were fully brought into light.
Mengote & of their certificates of release. Said copies state: THAT IT IS Framers of the 1935 Consti thought it undesirable &
UPON ACCEPTANCE OF THE PARDON THAT THE APPELLANTS WILL BE provided that the pardoning power can only be exercised
RELEASED FROM CONFINEMENT. But there is nothing to show when the after conviction. (p.587)
appellants accepted the pardon.  (1935 Consti) 2 limitations on Pres’ pardoning power: 1)
power be exercised after conviction; 2) power doesn’t
• In its Comment, SolGen asserted that w/ the acceptance of the condt’l
extend to cases of impeachment
pardon, the appellants impliedly admitted their guilt & accepted their  1973 Consti: pardon coult be granted after final conviction
sentence, & hence, the appeal should be dismissed. (Sec 14, Art IX, ’73 Consti)
• Considering Sec. 19, Art VII of the Consti, (that the Pres may, except in  1981 amendments: removed the limitation of final
cases of impeachment or as otherwise provided in Consti, grant pardon conviction, thus returning to Jones Law
after conviction by final judgment), SC resolved to require: 1) the OSG &  1987 Consti RESTORED said limitation. Thus, Sec. 19, Art
counsel for accused-appellants to submit their respective memoranda on VII: “Except on cases of impeachment, or as otherwise
the issue of the enforceability of the condt’l pardon; & 2) The Pres’l provided in this Consti, the Pres may grant reprieves,
Committee for the Grant of Bail, Release or Pardon (PCGBRP) to inform the commutations, & pardons & remit fines & forfeitures, after
Court why it recommended to the Pres the grant of the condt’l pardon conviction by final judgment…
despite the pendency of the appeal. • DISTINCTIONS: Where the pardoning power is subject to the limitation of
• Pursuant to #2 (previous bullet), PCGBRP Asst. Chief State Prosecutor Nilo CONVICTION, it may be exercised at any time after conviction even if the
Mariano avers that the Secretariat assisting them will recommend to the judgment is on appeal. Where the requirement is FINAL CONVICTION (as
Pres’l Committee for condt’l pardon by the Pres of convicted persons who in 1973 Consti) or CONVICTION BY FINAL JUDGMENT (as in 1987 Consti),
may have been convicted of crimes against nat’l security & public order or no pardon may be extended before a judgment of conviction becomes
of common crimes w/c appear to have been committed in pursuit of their final.
pol objectives; & that where the said convicted persons have pending • A judgment of conviction BECOMES FINAL when: 1) no appeal is
appeals, the lawyers will take care of filing the appropriate motions for the seasonably perfected; 2) the accused commences to serve the sentence;
withdrawal of their appeal considering that pres’l pardon may be extended 3) the right to appeal is expressly waived in writing, except where death
only to those serving sentence after final conviction. penalty is imposed by TC; 4) the accused applies for probation, thereby
• Mariano says that Mengote’s prison record doesn’t show that he has a waiving his right to appeal.
pending appeal w/ the CA or SC. Thus, the Secretariat wasn’t able to • WHERE THE JUDGMENT OF CONVICTION IS STILL PENDING, & HAS NOT
advise those concerned to take appropriate steps for the withdrawal of the YET AFFTAINED FINALITY, AS IN THE INSTANT CASE, EXECUTIVE
appeal before it recommended to the Committee the grant of condt’l CLEMENCY MMAY NOT YET BE GRANTED TO APPELLANT.
pardon in favor of Mengote. Mariano says there was no intention to violate • Note that in People v. Crisola, w/c states that the grant of executive
Sec 19, Art VII & what happened was just a misappreciation of facts due to
clemency during the pendency of appeal serves to put an end to the
incomplete records.
appeal, what was quoted was the 1973 Consti provision, w/c authorized
• Pursuant to #1, OSG, in its Memo, maintains that the condt’l pardon
the exercise of pardoning power at any time before/after conviction.
granted to appellant Mengote is unenforceable bec the judgment of
conviction is not yet final in view of the pendency in this Court of his • Also, in Monsanto v. Factoran, w/c states that the acceptance of a
appeal. pardon amounts to an abandonment of an appeal, thus rendering
• On the other hand, FLAG, through Atty, La’o says, that the condt’l conviction final. But this should not be taken as a guiding rule for it is
nothing but an obiter dictum. Further, pardon involved, was under the 1973
pardon of Mengote is valid & enforceable. Citing Monsano v. Consti, as amended in 1981 w/c allowed grant of pardon either before/after
Factoran, although Mengote didn’t file motion to withdraw appeal, he was conviction.
deemed to have abandoned the appeal by his acceptance of the condt’l
pardon w/c resulted in the finality of his conviction. • The REASON Con Com adopted the “conviction by final judgment” was to
prevent the Pres from exercising executive power in derogation of
ISSUE: WON the pardon granted to an accused during the pendency of his judicial power.
appeal from a judgment of conviction by TC is enforceable. NO
• An APPEAL brings the entire case w/n the EXCLUSIVE
• Review of Phil laws on Pres’l pardons: POWERS demands that such exclusive authority be fully respected.
Had there been no limitation of “conviction by final judgment”, the Pres
 People v. Vera: Under Jones Law, pardon could be granted
any time after the commission of the offense, either before
/var/www/apps/collegelist/repos/collegelist/trunk/collegelist/tmp/scratch7/4689783.doc \ 3

could at any time & even w/o knowledge of the court, extend executive government duly enacted a decree by which it dissolved, terminated, and liquidated
clemency to any one whom he believes to merit pres’l mercy. the corporation and nationalized and appropriated all of its property and assets of
• HENCE, BEFORE AN APPELLANT MAY BE VALIDLY GRANTED PARDON, HE every kind and wherever situated, including the deposit account with Belmont.
conviction must first be brought w/ finality. As a result, the deposit became the property of the Soviet government, and so
remained until November 16, 1933, at which time the Soviet government released
• People v. Pedro Sepada: Court dismissed the appeal for having become
and assigned to petitioner all amounts due to that government from American
moot & academic in view of the parole granted to the appellant. It declared nationals, including the deposit account of the corporation with Belmont.
the necessity of a final judgment before parole/pardon can be extended. Respondents failed and refused to pay the amount upon demand duly made by
• People v. Hinlo: Court declared to be in clear violation of the law the petitioner.
practice of processing applications for pardon/parole despite pending
appeals. The assignment was effected by an exchange of diplomatic correspondence between
the Soviet government and the United States. The purpose was to bring about a
• To resolve inconsistencies w/ SC’s pronouncements in Monsanto & Crisola final settlement of the claims and counterclaims between the Soviet government
on the one hand, and Sepada & Hinlo on the other, Court now declares: and the United States; and it was agreed that the Soviet government would take no
“CONVICTION BY FINAL JUDGMENT” LIMITATION UNDER SEC 19, ART VII steps to enforce claims against American nationals; but all such claims were
PROHIBITS THE GRANT OF PARDON WHETHER FULL OR CONDITIONAL TO released and assigned to the United States, with the understanding that the Soviet
AN ACCUSED DURING THE PENDENCY OF HIS APPEAL FROM HIS government was to be duly notified of all amounts realized by the United States
CONVICTION BY TC. from such release and assignment. The assignment and requirement for notice are
• The acceptance of the pardon shall not operate as an abandonment parts of the larger plan to bring about a settlement of the rival claims of the high
contracting parties. The continuing and definite interest of the Soviet government in
or waiver of the appeal, & the release of an accused by virtue of a
the collection of assigned claims is evident; and the case, therefore, presents a
pardon, commutation of sentence, or parole before the withdrawal of an
question of public concern, the determination of which well might involve the good
appeal shall render those responsible therefore administratively liable.
faith of the United States in the eyes of a foreign government.
• Considering that appellant Mengote has not filed a motion to withdraw his
appeal up to this date the condt’l pardon extended to him should not have This is thus an action at law brought by petitioner against respondents in a federal
been enforced. But since he stands on same footing as in Hinlo case, he District Court to recover a sum of money deposited by a Russian corporation
may be freed from the full force, impact, & effect of the rule herein Petrograd Metal Works with August Belmont, a private banker doing business in New
pronounced subject to the condition set forth below. This rule shall fully York City under the name of August Belmont & Co.
bind pardons extended after Jan 31, 1995 during the pendency of the
grantee’s appeal. August Belmont died in 1924; and respondents are the duly appointed executors of
his will. A motion to dismiss the complaint for failure to state facts sufficient to
HELD: Mengote is given 30 days from notice to secure the withdrawal of his appeal constitute a cause of action was sustained by the District Court, and its judgment
& submit it to SC. The conditional pardon granted him shall be deemed to take was affirmed by the court below.
effect only upon grant of such withdrawal.
Issues: (Actually more of contentions made by respondents and upheld by lower
(In a nutshell, the 2 accused were found guilty of a crime, so they appealed. But courts)
following the grant of condt’l pardon, Salle moved to w/draw appeal w/c was 1. WON there was any policy of the state of New York to be infringed
granted, & his case was terminated. Mengote didn’t move to withdraw his appeal, 2. WON the public policy of the United States, that private property shall not
thus his case is still deemed pending. Court says pardon can’t be granted when be taken without just compensation, may be relied upon to bar the current
there’s an appeal pending. Thus, Mengote has to withdraw his appeal first because action.
mere acceptance of the condt’l pardon is not a waiver of said appeal.) 
Ratio Holding: Judgment reversed in favor of petitioner United States.
Lansang vs. Garcia
Lower court took the view that the site of the bank deposit was within the state of
Araneta vs. Dinglasan (see Sept. 6 digest) New York; that in no sense could it be regarded as an intangible property right
within Soviet territory; and that the nationalization decree, if enforced, would put
UNITED STATES v. BELMONT et al. No. 532. into effect an act of confiscation. And it held that a judgment for the United States
Mr. Justice SUTHERLAND could not be had, because, in view of that result, it would be contrary to the
controlling public policy of the state of New York. The further contention is made by
Facts: respondents that the public policy of the United States would likewise be infringed
The Russian corporation Petrograd Metal Works had deposited with Belmont, prior to by such a judgment. The two questions are the only ones to be considered.
1918, the sum of money which petitioner seeks to recover. In 1918, the Soviet
/var/www/apps/collegelist/repos/collegelist/trunk/collegelist/tmp/scratch7/4689783.doc \ 4

1. It does not matter. validity of that decree and the sale of the wood to the defendants
could not be impugned, and gave judgment for defendants
We do not pause to inquire whether in fact there was any policy of the state of New accordingly.
York to be infringed, since we are of opinion that no state policy can prevail against
the international compact here involved. Lord Justice Scrutton discusses the contention that the courts should refuse
to recognize the decree and the titles derived under it as confiscatory and
This court has held, Underhill v. Hernandez, that every sovereign state must unjust, and concludes that the question is one not for the judges but for
recognize the independence of every other sovereign state; and that the the action of the sovereign through his ministers. 'I do not feel able,' he
courts of one will not sit in judgment upon the acts of the government of said, 'to come to the conclusion that the legislation of a state
another, done within its own territory. recognized by my Sovereign as an independent sovereign state is
so contrary to moral principle that the judges ought not to
PRECEDENTS recognize it. The responsibility for recognition or non-recognition
with the consequences of each rests on the political advisers of the
That general principle was applied in Oetjen v. Central Leather Co., Sovereign and not on the judges.
where an action in replevin had been brought in a New Jersey state court
to recover a consignment of hides purchased in Mexico from General Villa. We take judicial notice of the fact that coincident with the assignment set forth in
The government of the United States, after the trial of the case in the state the complaint, the President recognized the Soviet government, and normal
court, had recognized the government of Carranza, first as the de facto diplomatic relations were established between that government and the
government of the Republic of Mexico, and later as the government de government of the United States, followed by an exchange of ambassadors.
jure. This court held that the conduct of foreign relations was The effect of this was to validate, so far as this country is concerned, all
committed by the Constitution to the political departments of the acts of the Soviet government here involved from the commencement of its
government, and the propriety of what may be done in the exercise existence. The recognition, establishment of diplomatic relations, the assignment,
of this political power was not subject to judicial inquiry or and agreements with respect thereto, were all parts of one transaction, resulting in
decision; that who is the sovereign of a territory is not a judicial an international compact between the two governments. That the negotiations,
question, but one the determination of which by the political acceptance of the assignment and agreements and understandings in
departments conclusively binds the courts; and that recognition by respect thereof were within the competence of the President may not be
these departments is retroactive and validates all actions and doubted. Governmental power over internal affairs is distributed between
conduct of the government so recognized from the commencement the national government and the several states. Governmental power over
of its existence. 'The principle,' we said, 'that the conduct of one external affairs is not distributed, but is vested exclusively in the national
independent government cannot be successfully questioned in the government. And in respect of what was done here, the Executive had
courts of another is as applicable to a case involving the title to authority to speak as the sole organ of that government. The assignment
property brought within the custody of a court, such as we have and the agreements in connection therewith did not, as in the case of
here, as it was held to be to the cases cited, in which claims for treaties, as that term is used in the treaty making clause of the
damages were based upon acts done in a foreign country, for it Constitution, require the advice and consent of the Senate.
rests at last upon the highest considerations of international
comity and expediency. To permit the validity of the acts of one A treaty signifies 'a compact made between two or more independent
sovereign state to be reexamined and perhaps condemned by the nations, with a view to the public welfare. B. Altman & Co. v. United States.
courts of another would very certainly 'imperil the amicable But an international compact, as this was, is not always a treaty which requires the
relations between governments and vex the peace of nations." participation of the Senate. There are many such compacts, of which a protocol, a
Ricaud v. American Metal Co., is to the same effect. modus vivendi, a postal convention, and agreements like that now under
consideration are illustrations. The distinction was pointed out by this court in the
In A. M. Luther v. James Sagor & Co., the English Court of Appeal Altman Case, which arose under section 3 of the Tariff Act of 1897 authorizing the
expressly approved and followed our decision in the Oetjen Case. The President to conclude commercial agreements with foreign countries in certain
English case involved that part of the same decree of the Soviet specified matters. We held that although this might not be a treaty requiring
government here under consideration which declared certain private ratification by the Senate, it was a compact negotiated and proclaimed
woodworking establishments to be the property of the Republic. Under that under the authority of the President, and as such was a 'treaty' within the
decree the government seized plaintiff's factory in Russia together with a meaning of the Circuit Court of Appeals Act, the construction of which might be
stock of wood therein. Agents of the Republic sold a quantity of the stock reviewed upon direct appeal to this court.
so seized to the defendants, who imported it into England. Thereafter, the
British government recognized the Soviet government as the de Plainly, the external powers of the United States are to be exercised without regard
facto government of Russia. Upon these facts, the court held that, to state laws or policies. The supremacy of a treaty in this respect has been
the British government having thus recognized the Soviet recognized from the beginning. Mr. Madison, in the Virginia Convention,
government, existing at a date before the decree in question, the said that if a treaty does not supersede existing state laws, as far as they
/var/www/apps/collegelist/repos/collegelist/trunk/collegelist/tmp/scratch7/4689783.doc \ 5

contravene its operation, the treaty would be ineffective. 'To counteract it export and trading on new or non-tradt’l products and markets not normally
by the supremacy of the state laws, would bring on the Union the just pursued by the priv busi sector.
charge of national perfidy, and involve us in war. Elliot's Debates 515..
In April 1988, after Pres Aquino’s state visit to PROC, Phils and China entered into a
2. No. MOU3 wherein both countries agreed to make joint efforts w/in the next 5 yrs to
expand bilateral trade to USD600-800M by 1992 and to strive for a steady progress
The answer is that our Constitution, laws, and policies have no extraterritorial towards achieving a balance between the value of their imports and exports during
operation, unless in respect of our own citizens. What another country has done the period.
in the way of taking over property of its nationals, and especially of its
corporations, is not a matter for judicial consideration here. Such nationals In line w/ its powers under LOI 444 and in lieu of the MOU, PITC issued AO No
must look to their own government for any redress to which they may be SOCPEC 89-08-01 on Aug 30, 1989.
entitled. So far as the record shows, only the rights of the Russian corporation
have been affected by what has been done; and it will be time enough to consider Said AO provided for the procedure for the applications to PITC for
the rights of our nationals when, if ever, by proper judicial proceeding, it shall be importation from PROC and it indicated that importation must be
made to appear that they are so affected as to entitle them to judicial relief. The accompanied by a viable and confirmed Export Program of Phil Products to
substantive right to the moneys, as now disclosed, became vested in the Soviet PROC carried out by the (1) exporter himself or (2) through a tie-up
government as the successor to the corporation; and this right that government has between the importer and a legitimate exporter (of Phil products) who is
passed to the United States. Thus far no question under the Fifth Amendment is willing to carry out the export commitments of the importers. The tie-up
involved. We decide only that the complaint alleges facts sufficient to constitute a shall ensure that the importation sought to be approved is matched 1:1 in
cause of action against the respondents. value w/ a corresponding export of Phil products to PROC. The importer
must also submit an export performance guarantee in favor of PITC to
US vs. Curtis Wright Export Corp. (photocopy) ensure that the export program or tie-up will be completed w/in 6 mos
from date of approval of import application. The guarantee is refundable if
Phil International Trading Corp v Hon Zosimo Angeles, Remington Corp the conditions are met and may likewise be forfeited for failure to meet the
and Firestone, Inc. requirements.
Petition for review on certiorari of a decision of CA. 1996
1st ISSUE: Respondents contend, and the trial court held, that Pres Aquino’s EO No
FACTS (Torres, Jr.): 133 repealed LOI 444 that PITC’s authority to issue rules and regulations have
Respondents Remington and Firestone are Phil importers to China who ceased.
previously assailed the validity of Administrative Order issued by PITC,
now the implementing arm of DTI as regards imports and exports. TC ruled RATIO: The Court believes otherwise. PITC’s power to engage in commercial import
in favor of respondents. PITC, a govt owned and controlled corp created and export activities is still recognized by the EO but merely limited only to new or
under PD 1071, now on petition demands for the respondents’ payment of non-tradt’l products and markets not normally pursued by the priv busi sector.
an existing Counter Export Devt Service Fee of 0.5% of the total value of There is no indication in the law of the removal of the powers of PITC to exercise its
the exports it failed to deliver. The case went through the history and the regulatory functions re importations from SOCPEC countries. Though it does not
changes that affected PITC. mention the grant of regulatory power, EO 133 is silent as to the abolition of such
powers, previously granted under PD 1071. There can be no repeal of these
In Aug 1976, former Pres Marcos issued LOI No 444 directing trade (export and powers, absent any cogency or irreconcilable inconsistency or repugnance between
import of all commodities), whether direct or indirect, between the Phils and any of the issuances, relating to PITC’s regulatory power. The Pres, in EO 133, did not
the Socialist & other Centrally Planned Economy Countries (SOCPEC), including the intend to overhaul PITC’s functions. The PITC was attached as an integral part to
People’s Rep of China (PROC), to be coursed through PITC. Under the LOI, PITC was DTI as one of its line agencies and still holds the authority to issue AOs to
tasked to participate in all official trade between the members, adopt measures and implement the dept’s programs under DTI’s supervision.
issue rules and regulations necessary for discharge of its functions, and undertake
the processing and approval of all applications for export to/import from SOCPEC. The Pres could not have intended to deprive herself of the power to regulate the
flow of trade between countries RP and PROC under their MOU for such power
After EDSA Rev, in 1987, then Pres Aquino promulgated EO No 133, reorganizing necessarily flows from her office as Chief Exec. By EO 133, the Pres intended
the Dept of Trade & Industry1. The PITC became one of its line corporate agencies merely to reorganize DTI to cope w/ the need of a streamlined bureaucracy.
performing specific regulatory functions.2 PITC was limited to engage only in both
There is no real inconsistency between LOI 444 and EO 133, but only a rearranging
DTI was empowered to be the “primary coordinative, promotive, facilitative and regulatory arm of the govt for the of the admin functions among admin bodies affected, but not an abolition of power.
country’s trade, industry and investment activities.”
i.e. developmental responsibilities and specialized busi activities in a manner consonant w/ DTI’s mandate, objs,
policies, plans and programs. PITC was to be supervised by the Undersec for Intl Trade. Memorandum of Understanding
/var/www/apps/collegelist/repos/collegelist/trunk/collegelist/tmp/scratch7/4689783.doc \ 6

Where it is possible to do so, it is the Court’s duty, re construction of statutes, to • Nov. 26, 79: Pres. Granted a gen. license authorizing certain judicial
harmonize and reconcile them. proceedings vs Iran but didn’t allow entry of any judgment or of any
decree/order of similar/analogous effect. But he later on clarified that such gen.
Moreover, the grant of quasi-legislative powers (in making their own rules) and authorization included pre-judgment attachment.
quasi-judiciary powers (in interpreting rules and deciding contracts) vested in • Dec. 19, 1979: Dames & Moore filed suit against the Gov’t of Iran, the Atomic
administrative bodies is NOT unconsti’l for the intricate global trade and business Energy Organization (AEO) of Iran & other Iranian banks. It claimed that its
demands it to possess the necessary speed and knowledge to resolve issues w/c the company, Dames & Moore International, S.R.L. entered into a written contract
legislature and the courts do not have. w/ the AEO. The company was tasked to conduct site studies for a proposed
nuclear power plan in Iran. AEO terminated the agreement however it still owed
2nd ISSUE: Respondents likewise argue that PITC is not empowered to issue the AO the company $3,436,694.30 + interest. District Court issued orders of
because no grant of such power was made under MOU’s trade protocols. attachment directed against properties of defendant as well as properties of
certain Iranian banks to secure any judgment that might be entered vs them.
RATIO: On the contrary, PITC was legally empowered to issue AOs as a valid • Jan. 19, 1981: US & Iran entered into 2 agreements. Some of the terms were:
exercise of a power ancillary to legislation. 1. release of hostages
2. terminate all litigation bet 2 governments & their nationals & bring about
However, the subject AO was found to be an invalid exercise of such quasi- settlement & terminations of all such claims thru binding arbitration
legislative power for it was not published in the OG or newspaper of gen circulation. 3. establishment of an Iran-US Claims Tribunal w/c would arbitrate claims not
The questioned AO legally, until it is published, is invalid w/in the context of Art 2 settled w/in 6 mos. Awards of the tribunal will be final, binding &
CC. The fact that it was filed w/ and published by the UP Law Ctr in the NAR does enforceable in the courts of any nation.
not cure the defect in its effectivity. 4. US to terminate all legal proceedings in US courts involving claims of US
persons & institutions vs Iran & its state enterprises, to nullify all
Hence, AO No SOCPEC 89-08-01 was never legally effective and private attachments & judgments obtained therein, to prohibit all further litigation
respondents therefore cannot be made subject to them or any of their existing based on such claims & bring about termination of such claims thru binding
obligations to PITC for the AO was never published as mandated by law for its arbitration.
effectivity. 5. US should “act to bring about the transfer” of all Iranian assets held in the
US by American banks by July, 19, 1981. $1B of w/c will be deposited in
Moreover, the assailed AO is no longer consistent w/ the country’s interest to allow the claims tribunal.
economic growth and renewed trade relations w/ Asian neighbors because it • Jan. 19, 1981: Pres issued EOs implementing the terms of the agreement.
restrains trade and has become an unnecessary barrier to trade. Among these EOs:
1. ordered revocation of all licenses permitting the exercise of any rt, power,
PITC is enjoined from further implementing the said AO and from charging the cos or privilege w/regard to Iranian funds, securities/deposits
the outstanding service fee. It is likewise ordered to approve all pending 2. nullified all non-Iranian interests in such assets acquired subsequent to the
applications of respondents who need not comply w/ prior requirements. blocking order of Nov. 14, 79
3. required banks holding Iranian assets to transfer them to the Federal
Dames & Moore, petitioners vs. Reserve Bank of NY
Donald Regan, Sec. of the Treasury, et al., respondents [July 2, 1981] • Jan. 20, 1981: Americans held hostage were released pursuant to 2
agreements entered into by US & Iran.
Facts: • Jan. 27, 81: petitioner moved on summary judgment vs Iranian gov’t, et al.
• Nov. 4, 79: US Embassy in Tehran, Iran was seized & diplomatic personnel were
District Court granted the motion & awarded petitioners amount claimed under
captured & held hostage the contract + interest.
• Nov. 14, 79: responding to the crisis, Pres. Carter declared a national • Feb. 24, 81: Another EO issued ratifying the Jan. 21 EOs & suspending all
emergency & blocked removal/transfer of all properties & interests in property claims w/c may be presented to the tribunal & such claims shall have no legal
of the Gov’t of Iran, its instrumentalities & controlled entities & Central Bank of effect in any action pending in any US court. Suspension terminated if tribunal
Iran w/c are or become subject to US jurisdiction. He acted pursuant to the finds that it has no jurisdiction over the claim.
International Emergency Economic Powers Act (IEEPA) Secs. 1701-1706. • Petitioners tried to execute judgment by obtaining writs of garnishment &
• Nov. 15, 79: Sec. of Treasury, as per the president’s order, issued regulations re
execution. However, District Court stayed execution pending the other party’s
President’s declaration. The regulation provided: “unless licensed/authorized… appeal. All prejudgment attachments vs Iranian defendants were likewise
any attachment, judgment, decree, lien, execution, garnishment or other ordered vacated & that further proceedings be stayed pursuant to EOs issued.
judicial process is null & void WRT any prop in w/c on or since Nov. 14, 79 there • April 18, 81: petitioners filed for declaratory & injunctive relief seeking to
existed an interest of Iran.” It likewise stated that licenses or authorizations
prevent enforcement of EOs & Treasury Dept regulations claiming it was beyond
granted could be amended, modified or revoked at any time.
the statutory & constitutional powers of these officers to issue such orders.
They further claimed that acts were unconstitutional because it affected the
/var/www/apps/collegelist/repos/collegelist/trunk/collegelist/tmp/scratch7/4689783.doc \ 7

final judgment obtained against the defendants. Motion denied & dismissed. effect allow individual claimants to minimize or wholly eliminate the “bargaining
Upheld on appeal. chip” thru attachments, garnishments or similar encumbrances.
• June 4, 81: Treasury Dept amended regulations moving the deadline of transfer
to June 19, 81, noon. Prohibited by District Court w/regards to properties subj Since the Pres acted pursuant to a specific Congressional authorization (IEEPA), it’s
to any writ of attachment, garnishment, levy or other judicial lien issued by any supported by strongest of presumptions & widest latitude of judicial interpretation.
court in favor of petitioners. Burden of persuasion rests heavily on anyone who might attack it and in this case,
Issues & Ratio: petitioners who attacked such act failed to sustain the heavy burden.
1. WON it is w/in President’s power to issue the EOs of Nov 74 & Jan 81 –
YES. 2. WON President is authorized to suspend claims pending in US courts -
Youngstown v. Sawyer: President’s pow to issue order must stem either fr an act of YES
Congress or fr Consti itself. Executive action classified into 3: 1) If order is pursuant Although the IEEPA authorized the Pres to nullify attachments, it does not authorize
to an express/implied authorization fr Congress, such would be supported by suspension of claims since these claims are not in themselves transactions involving
strongest of presumptions & widest latitude of judicial interpretation & burden of Iranian prop/efforts to exercise any rt WRT such prop. This is an effort to establish
persuasion would rest heavily on anyone who might attack it. 2) More complicated liability & fix damages & doesn’t focus on any particular prop w/in jurisdiction.
or may even be considered as a twilight zone if act is w/o congressional
authorization. 3) If against the will of Congress, President’s pow is at its lowest ebb Neither does the Hostage Act of 1868 allow such. The Hostage Act only allows the
& court can sustain action only by disabling Congress fr acting upon the subj. But as Pres, in cases where any US citizen is unjustly deprived of his liberty & release is
the mentioned in Springer vs PI, the Consti does not establish & divide the 3 unreasonably delayed/refused, to use any means not amounting to acts of war as
branches of gov’t in black & white. This may be considered as an over-simplified he may deem necessary & proper to obtain/effectuate release & all facts &
grouping. Acts not falling exactly into one of these 3 classifications but rather along proceedings relative thereto shall be communicated by Pres to Congress ASAP. This
a spectrum running fr explicit congressional authorization to explicit congressional Hostage Act was concerned w/countries refusing to recognize citizenship of
prohibition, is still valid especially during times of international crises which naturalized Americans & repatriating such citizens against their will. Obviously, it’s
Congress can’t be expected to anticipate in detail. different from the Iranian crisis. No ransom was involved then.

IEEPA allows such. It allows Pres may under such regulations as he may prescribe But looking at these two statutes in the looser sense would indicate congressional
by means of instructions, licenses, or otherwise: investigate, regulate or prohibit: a) acceptance of a broad scope for executive action in circumstances such as
any transactions in foreign exchange; b) transfers of credit or payments bet, by, presented in this case (emergencies). IEEPA delegates broad authority to Pres to act
thru, or to any banking institution to extent that such transfers/payments involve in times of national emergency WRT prop of foreign country. Hostage Act indicates
interests of any foreign country or a national thereof; c) importing/exporting of similar congressional willingness to allow the Pres to have broad discretion when
currency/securities. It also allows Pres to investigate, regulate, direct & compel, responding to hostile acts. Indeed, loose discretion is placed in the hands of the
nullify, void, prevent or prohibit any acquisition, holding, w/holding, use, transfer, Pres to enable him to respond to the exigencies as they arise since Congress can’t
w/drawal, transportation, importation or exportation of, or dealing in, or exercising really anticipate forthcoming occurrences. He can choose to suspend trade, arrest
any rt, power or privilege WRT or transactions involving any prop in w/c any foreign citizens of the hostile country or choose other means that would be effective &
country or a national thereof has any interest or by any person or WRT any prop, where end result would be accomplished w/o resorting to dangerous & violent
subj to US jurisdiction. First act prevented & prohibited transfers later on, he measures. Failure of Congress to delegate authority is not tantamount to
directed & compelled the transfer & w/drawal of assets, nullifying certain rts & congressional disapproval. A systematic, unbroken, exec practice, long pursued to
privileges acquired in them. IEEPA language is sweeping & unqualified. It provides the knowledge of Congress & never before questioned may be treated as a gloss on
broadly that Pres may void/nullify the exercising by any person of any rt, power or “Executive Power” vested in the pres by the Consti. Past practice does not on its
privilege WRT to any prop in w/c any foreign country has any interest. Even the own create power but long-continued practice, known to & acquiesced in by
legislative history of the IEEPA sustains this broad authority of the Executive and Congress would raise a presumption that the action had been taken in pursuance of
does not limit pow to merely continue the freeze or discontinue controls as its consent (US vs Midwest).
petitioner claims. Note that when petitioners instituted the action, Pres already 3. WON Congress has implicitly approved the practice of claim settlement
entered the freeze orders and that petitioners only proceeded against blocked by executive agreement. - YES
assets after Treasury Dept issued revocable licenses authorizing such proceedings & International Claims Settlement Act (ICSA) of 1949 allowed allocation to US
attachments. Further, note that regulations specifically provided that unlicensed nationals, funds received thru executive claims settlement w/Yugoslavia & provided
attachments are null & void and that licenses granted may be amended, modified or procedure for distributing funds. To achieve this purpose, Congress created the
revoked any time. Thus, attachments obtained by petitioners were subordinate to International Claims Commission, now the Foreign Claims Settlement Commission.
further actions the Pres might take under IEEPA. They were notified of such. By creating a procedure to implement future settlement agreements, Congress
indeed approved executive agreements. The ICSA has been amended by Congress
Control of foreign assets is specifically put in the hands of the Pres so that such may frequently to respond to particular settlement agreement problems, demonstrating
be at his disposal for use in negotiating the resolution of a declared national its continuing acceptance of the President’s claim settlement authority (exec
emergency. These frozen assets may be considered as his “bargaining chip” when agreements w/People’s Republic of China, East Germany, Vietnam, etc.). As
dealing w/a hostile country. Petitioners claims cannot be allowed since it would in w/legislation involving other executive agreements, Congress did not question fact
/var/www/apps/collegelist/repos/collegelist/trunk/collegelist/tmp/scratch7/4689783.doc \ 8

of settlement or power of the Pres to have concluded it. US SC has likewise Facts:
recognized President’s power to enter into executive agreements w/o obtaining Petitioners (People’s Movement for Press Freedom et. al) filed a petition against
advice & consent of Senate (US v Pink upheld Litvinov Assignment, US-Soviet Union the respondents (Hon. Raul Manglapus, et. al.) who happened to be the
exec agreement). Court held then that it is w/in President’s modest & implied power representatives of the President of the Philippines in the on-going negotiations of
and that no obstacle can be placed in the way of rehabilitation of relations between the RP-US Military Bases Agreement.
US & another nation unless the historic concept of the powers & responsibilities is to Petitioners seek to compel the respondents to:
be drastically revised. In Ozanic v US, the Court ruled that the constitutional power oOpen to the petitioners their negotiations or session with the U.S.
of Pres extends to the settlement of mutual claims between a foreign gov’t & the US counterparts on the RP-US Military Agreement
at least when it’s incident to the recognition of that gov’t and that the necessary oReveal and/or give petitioners access to the items which the respondents
power to make compromises has existed from earliest times & been exercised by have already agreed upon with their American counterparts relative to the
foreign offices of all civilized nations. review of the RP-US MBA, and
oReveal and/or make accessible to the petitioners the respective positions of
Petitioners claim that since 1952, US started to employ a restrictive notion of respondents and their US counterparts on items they have not agreed upon,
sovereign immunity thru the “Tate” letter. They claim that US nationals no longer particularly the compensation package for the continued use by the U.S. of
need exec aid to settle claims & thus President’s pow to settle these claims has their military bases and facilities in the Philippines.
disappeared. This is refuted by the fact that since 1952, there have been at least 10 They argue that the closed-door negotiations amounted to the denial of the
claims settlements by executive agreement. petitioners’ right to press freedom (Art. III, Sec. 4, Consti) and their right to
information on matters of public concern (Art. III, Sec. 7, Consti)
Petitioners further claim that Congress, by creating the Foreign Sovereign
Immunities Act of 1976 (FSIA), divested Pres’ authority to settle claims. According Issue: WON secrecy of treaty negotiations is violative of said Constitutional rights
to the petitioners, the FSIA granted exclusive jurisdiction in the federal district NO. Petition denied for manifest lack of merit.
courts to settle these claims to depoliticize settlements since the Executive Branch, Under the Constitution, the conduct of foreign relations of our Government
who was then in charge of the settlements, was often subj to pressures of foreign especially the sensitive matter of negotiating a treaty with a foreign government is
states. However, the EOs issued by the Pres did not divest the courts of their lodged with the political Departments of the Government
jurisdiction. They merely suspend the claims & those claims that are not w/in the Otejen v. Central Leather Co.: The propriety of what may be done in the exercise
tribunal will be revived & become judicially enforceable in the US. Purpose of the of this political power is not subject to judicial inquiry or decision.
FSIA was to codify temporary concepts re scope of sovereign immunity & w/draw The Court found no grave abuse of discretion amounting to lack or excess of
from Pres authority to make binding determinations of sovereign immunity to be jurisdiction which would warrant the exercise of judicial power
accorded to foreign states but it did not prohibit Pres from settling claims. Congress As regards the President’s power to conclude treaties, given Art. VIII, Sec. 5(2a)
has repeatedly rejected proposals w/c limited pow of Pres to enter into exec of the Constitution, the SC has no jurisdiction over a case until the treaty or
agreements, they can’t possibly seek to accomplish such by creating the FSIA. FSIA agreement has been concluded and its terms questioned in an appropriate case.
was enacted before the IEEPA too. The Court further held that the secrecy of negotiations with foreign country is not
violative of the constitutional provisions of freedom of speech or of the press nor of
The Pres has chosen to settle claims in an alternative forum, the Claims Tribunal & freedom of access to information as an essential characteristic of diplomacy, apart
such is valid because it is capable of providing meaningful relief. The tribunal will from the centralization of authority and expedition of decision which are inherent in
actually enhance the opportunity for claimants to recover their claims since executive action, is its confidential nature.
jurisdictional & procedural impediments are removed. By means of this forum, we A complicated negotiation cannot be carried through without many, many private
can say that the claimants are receiving something in return for the suspension of talks and discussions..Delegates from other countries come and tell you in
their claims, namely, access to an international tribunal before w/c they may well confidence of their troubles at home and of their differences with other countries
recover something on their claims. Congress has not disapproved such act. But the and with other delegates…if these reports should become public, who would ever
Court does not decide that the Pres possesses plenary power to settle claims even trust American Delegation in another conference? ––Stimson, Secretary of State
as against foreign governmental entities. In the moment that negotiations are started, pressure groups attempt to ‘muscle
4. WON the suspension of claims constitutes taking of property thus in.’ An ill-timed speech by one of the parties or a frank declaration of the
violating the 5th amendment in the absence of just compensation. concessions which are extracted or offered on both sides would quickly lead to
Issue is not yet ripe for review since the condition that there must be at the time of widespread propaganda to block the negotiations. After a treaty has been drafted
taking, reasonable, certain & adequate provision for obtaining compensation has not and its terms are fully published, there is ample opportunity for discussion before it
been met yet. Court of Claims is the proper venue to settle this issue. is approved. –The New American Government and Its Works, J.T. Young
The negotiation of treaties calls for a class of expertise, experience and sensitivity
Held: EOs are valid. District Court decision affirmed. to national interest of an extremely high order—the Philippine panel and the
President may be hampered or embarrassed by criticisms or comments from
PEOPLE'S MOVEMENT v. MANGLAPUS persons with inadequate knowledge of the nuances of treaty negotiations or worse,
September 18, 1988 by publicity seekers or idle ibitzers.
/var/www/apps/collegelist/repos/collegelist/trunk/collegelist/tmp/scratch7/4689783.doc \ 9

Notwithstanding the power of the American Senate to give “advice and consent” to controverted act is "patently illegal" or was performed without jurisdiction or in
the President in the making of a treaty, the President alone negotiates. Not even excess of jurisdiction, or where the respondent is a department secretary,
the Senate or the House of Reps, unless they are asked, may intrude. The whose acts as an alter-ego of the President bear the implied or assumed
President is the sole organ of the nation in its external relations, and its sole approval of the latter, unless actually disapproved by him, or where there are
representative with foreign nations. He is the most and equipped and is in the best circumstances indicating the urgency of judicial intervention.
position to be so. The nature of foreign negotiations requires caution and their 3. WON the proposed importation is not governed by RA 2207 and 3452
success must often depend on secrecy. The necessity of such caution and secrecy  Petitioner's contends that the proposed importation in question is not governed
was one cogent reason for vesting the power of making treaties in the President, by Republic Acts Nos. 2207 and 3452, but was authorized by the President as
with the advice and consent of the Senate, the principle on which that body was Commander-in-Chief "for military stock pile purposes" in the exercise of his
formed confining it to a small number of members. –U.S. v. Curtiss-Wright Export alleged authority under Section 2 of Commonwealth Act No. 1
Since the Philippines has the same doctrine of separation of powers in the
 The two Acts are applicable to the proposed importation in question because
the language of said laws is such as to include within the purview thereof all
Constitution and the same grant of authority over foreign affairs to the President as
importations of rice and corn into the Philippines
in the American system, the same reasoning applies to treaty negotiations by our
government.  it shall be unlawful for any person, association, corporation or government
agency to import rice and corn into any point in the Philippines
Commissioner of Customs vs. Eastern Sea Trading o exception: the President of the Philippines may authorize the importation of
these commodities through any government agency that he may designate
Gonzales vs. Hechanova
 Respondents contends that said provisions of Republic Act Nos. 2207 and 3452,
Original Action in the SC. Prohibiton with preliminary injunction
prohibiting the importation of rice and corn by any "government agency", do
not apply to importations "made by the Government itself", because the latter
is not a "government agency".
 September 22, 1963 – Hechanova authorized the importation of 67,000 tons of
o The Department of National Defense and the Armed Forces of the
foreign rice to be purchased from private sources, and created a rice
Philippines and each and every officer and employee of our Government,
procurement committee for the implementation of said proposed importation.
our government agencies and/or agents
 September 25 , 1963 - Ramon A. Gonzales (a rice planter, and president of the o Republic Act No. 2207 is to be authorized by the "President of the
Iloilo Palay and Corn Planters Association, whose members are, likewise, Philippines"  by or on behalf of the Government of the Philippines
engaged in the production of rice and corn) filed the petition herein, averring
that, in making or attempting to make said importation of foreign rice, the o Section 10 of Republic Act No. 3452 adds "that the importation of rice and
aforementioned respondents "are acting without jurisdiction or in excess of corn is left to private parties upon payment of the corresponding taxes" 
jurisdiction", because Republic Act No. 3452 which allegedly repeals or amends only private parties may import rice
Republic Act No. 220 explicitly prohibits the importation of rice and corn "the o Section 15 of RA 3452  if the offender is a public official and/or
Rice and Corn Administration or any other government agency;" employees, he shall be subject to the additional penalty specified therein.

o restrictions imposed in said Republic Acts are merely additional to those
1. WON the petitioners have sufficient interest prescribed in Commonwealth Act No. 138, entitled "An Act to give native
 RA 3452 prohibits the importation of rice and corn by the Rice and Corn products and domestic entities the preference in the purchase of articles
Administration or any Government Agency for the Government." Section 1– all purchases by the Government,
including those made by and/or for the armed forces, preference shall be
 Republic Act No. 3452 declares, in Section 1 thereof, that "the policy of the given to materials produced in the Philippines (for complete section 1 see
Government" is to "engage in the purchase of these basic foods directly from p. 238)
those tenants, farmers, growers, producers and landowners in the Philippines o RA 3452 Section 3 – authorizes the Rice and Corn Administration to
who wish to dispose of their products at a price that will afford them a fair and
accumulate stocks as a national reserve in such quantities as it may deem
just return for their labor and capital investment
proper and necessary to meet any contingencies. Moreover, it ordains that
 Petitioners is entitled to a chance to sell to the Government the rice it now
the buffer stocks held as a national reserve ... be deposited by the
seeks to buy abroad.
administration throughout the country under the proper dispersal plans ...
 Funds that will be used for the purchase are public funds. Sufficient personality
and may be released only upon the occurrence of calamities or
and interest to seek judicial assistance with a view to restraining what he
believes to be an attempt to unlawfully disburse said funds.
 There is no rice shortage and the importation is for the stockpile of the Army
and not for the civilian population
2. WON the petitioners have exhausted all administrative remedies
4. WON the contracts with Vietnam and Burma are valid executive agreements
 the principle requiring the previous exhaustion of administrative remedies is not
applicable where the question in dispute is purely a legal one", or where the
/var/www/apps/collegelist/repos/collegelist/trunk/collegelist/tmp/scratch7/4689783.doc \ 10

 If a treaty and a statute are inconsistent with each other, the conflict must be Treasury, had no authority to retake such funds from the RP Govt; 3) The
resolved - under the American jurisprudence - in favor of the one which is latest RP Foreign Secretary Carlos P. Romulo had no authority to return or
in point of time; that petitioner herein assails the validity of acts of the promise to return the aforesaid sums of money through the Agreement.
Executive relative to foreign relations in the conduct of which the Supreme • The court eventually upheld the validity of the Agreement. Plaintiff
Court cannot interfere; and the aforementioned contracts have already been appealed.
consummated, the Government of the Philippines having already paid the price • July 26, 1941: Foreseeing the War in the Pacific, Pres Roosevelt, called into
of the rice involved therein through irrevocable letters of credit in favor of the the service of the US Armed Forces, for the duration of the emergency, all
sell of the said commodity. NO MERIT organized mil forces of the Commonwealth. (His order was published here
 Even if the contracts are executive agreements it would be unlawful, as well as by Proc No 740 of Pres Quezon on Aug 10, 1941)
null and void, from a constitutional viewpoint, said agreements being • October 1941: By 2 special orders, MacArthur, Commanding Gen of
inconsistent with the provisions of Republic Acts Nos. 2207 and 3452. USAFFE, placed under his command all the RP Army units including Phil
 The President may, under the American constitutional system enter into Constabulary.
executive agreements without previous legislative authority, he may not, by • Thus, US Congress provided in its Appropriation Act of Dec 17, 1941
executive agreement, enter into a transaction which is prohibited by statutes (Public Law No. 353): “For all expenses necessary for the mobilization,
enacted prior thereto. Under the Constitution, the main function of the operation & maintenance of the RP Army, including expenses connected w/
Executive is to enforce laws enacted by Congress. The Executive may not calling into the service RP mil forces…$269,000.00; to remain available ‘til
interfere in the performance of the legislative powers of the Congress, except in June 30, 1943, w/c shall be available for payment to the Commonwealth
the exercise of his veto power. He may not defeat legislative enactments that upon its written request, either in advance of or in reimbursement for
have acquired the status of law, by indirectly repealing the same through an all or any part of the estimated or actual costs, as authorized by the
executive agreement providing for the performance of the very act prohibited USAFFE Commanding Gen, of the necessary expenses for the purposes
by said laws. aforesaid.”
 An international agreement may be invalidated by the courts
• Pursuant to the power reserved to him under Public Law 353, Roosevelt
 Supreme Court may not be deprived "of its jurisdiction to review, revise, issued EO 9011: “2(a) Necessary expenditures from funds in the Phil
reverse, modify, or affirm on appeal, certiorari, or writ of error as the law or the Treasury for the purposes authorized by Public Law 353, will be made by
rules of court may provide, final judgments and decrees of inferior courts in — disbursing officers of the RP Army on the approval of authority of the
(1) All cases in which the constitutionality or validity of any treaty, law, Commandign General, USAFFE, & such purposes as he may deem proper…”
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 • P570,863,000.00 was transferred directly to the AFP by means of vouchers
with the fundamental law, but, also, when it runs counter to an act of Congress. w/c stated “Advance of Funds under Public Law 353 & EO 9011” This was
used mostly to discharge in RP the monetary obligations assumed by the
USAFFE VETERANS ASSOCIATION, INC. v TREASURER OF THE US as a result of the induction of the AFP into the US Army, & its
PHILIPPINES, ET. AL. (June 30, 1959) Appeal from a judgment of the CFI operations beginning in 1941.
of Manila • There remained unexpended & uncommitted $35M in the possession
of the AFP as of Dec 31, 1949. Bec the RP Govt then badly needed funds,
FACTS: Pres Quirino, through CB Gov Cuaderno, proposed to US officials the
• Romulo-Snyder Agreement (1950): RP Govt undertook to return to the retention of the $35M as a loan, & for its repayment in 10 annual
US Govt in 10 annual installments, a total of about $35M advanced by the installments. This was the Romulo-Snyder Agreement, signed in
US to, but unexpended by, the Nat’l Defense Forces of the RP. Washington on Nov 6, 1950 by RP Foreign Affairs Sec Romulo, & US Sec of
• Oct 1954: The Usaffe Veterans Associations Inc prayed in its complaint Treasury, John Snyder.
before the CFI that said Agreement be annulled; that payments thereunder • PRESENT ACTION: Usaffe’s arguments – 1) the money delivered by the US
be declared illegal; & that defendants as officers of RP be restrained from to the AFP were straight payments for mil services; ownership thus vested
disbursing any funds in the Nat’l Treasury in pursuance of said Agreement. in RP Govt upon delivery, & consequently, there was nothing to return,
• Usaffe Veterans further asked that the moneys available, instead of being nothing to consider as a loan; 2) the Agreement was void bec there was no
remitted to the US, should be turned over to the Finance Service of the AFP loan to be repaid & bec it was not binding on the RP Govt for lack of
for the payment of all pending claims of the veterans represented by authority of the officers who concluded it.
• 3 PROPOSITIONS OF PLAINTIFF IN COMPLAINT: 1) that the funds to be • Basic issue: Validity of the Romulo-Snyder Agreement – Court can’t pass
“returned” under the Agreement were funds appropriated by the US judgment
Congress for the RP Army, actually delivered to the RP Govt & actually 1. WON there is obligation to repay - YES
owned by the said Government; 2) that U.S Secretary Snyder of the
/var/www/apps/collegelist/repos/collegelist/trunk/collegelist/tmp/scratch7/4689783.doc \ 11

2. WON the officers who promised to repay had authority to bind this Govt – parties & dealing w/ impt commercial rel’ns bet’n the 2 countries,
YES is a treaty both internationally although as an executive
agreement it is not technically a treaty requiring the advice
RATIO: & consent of the Senate
 2 classes of Executive Agreements: 1) agreements made purely as
1. YES executive acts affecting external relations & independent of or w/o
• Note that the $269M appropriated in Public Law 353 (see 8 th bullet) legislative authorization, w/c may be termed as pres’l
agreements; 2) agreements entered into in pursuance of acts of
expressly said that the money is to be handed to the RP Govt either in
Cong, w/c have been designated as Congressional-Executive
advance of or in reimbursement thereof. Agreements
• In any system of accounting, advances of funds for expenditures  The Romulo-Snyder Agreement may fall under any of these 2
contemplate disbursements to be reported, & credited if approved, against classes for on Sept 18, 1946, RP Congress authorized the RP Pres
such advances, the unexpended sums to be returned later. Congressional to obtain such loans or incur such indebtedness w/ the US.
law itself required accounting “in the manner prescribed by US Pres - &  Even granting there’s no leg authorization, the Agreement was
said Pres in EO 9011, outlined the procedure whereby advanced funds shall legally & validly entered into to conform to the 2nd category,
be accounted for. namely, as agreements entered into purely as executive acts w/o
leg authorization’, w/c usu includes money agreements.
• It also requires as a condition sine qua non that all expenditures shall first
• The Agreement was not submitted to the US Senate either. But the Phil
be approved by the USAFFE Commanding Gen. Senate’s Resolution No. 15 practically admits the validity & binding force of
• These ideas of “funds advanced” to meet expenditures of the Phil Army such Agreement.
as may be approved by the USAFFE Comm-Gen, in connection w/ the • Further, the acts of Congress appropriating funds for the yearly
accounting requirement, evidently contradict appellant’s thesis that installments necessary to comply w/ such Agreement constitute a
the moneys represented straight payments to RP Govt for its armed ratification thereof, W/C PLACES THE QUESTION OF VALIDITY OUT OF THE
services, & passed into the absolute control of such Govt COURT’S REACH, NO CONST’L PRINCIPLE HAVING BEEN INVOKED TO
• Instead of returning such amount into one lump sum, our Exec Dept OR NO LOAN.
arranged for its repayment in 10 annual installments. Prima facie such
arrangement should raise no valid objection, given the obligation to HELD: Plaintiff failed to make a clear case for the relief demanded. Petition DENIED.
2. YES (They have authority to bind Govt even w/o Senate concurrence) SONS, INC. and THE COURT OF TAX APPEALS, respondents.
• There is no doubt Pres Quirino approved the negotiations. And he had the
power to contract budgetary loans under RA 213, amending RA 16.
The World Health Organization is an international organization which has a regional
• The most impt argument, however, rests on the lack of ratification of the office in Manila. It enjoys privileges and immunities which are defined more
Agreement by RP Senate to make it binding on the Govt. specifically in the Host Agreement entered into between the Republic of the
• The ff explanation of the defendant was considered persuasive by the Philippines and the said Organization on July 22, 1951. Section 11 of that
Court… Agreement provides, inter alit; that
 The agreement is not a ‘treaty’ as that term is used in CONSTI.
However, a treaty is not the only form that an int’l agreement may "the Organization, its assets, income and other properties shall be: (a)
assume. For the grant of treatymaking power to the Executive & exempt from all direct and indirect taxes. It is understood, however, that
the Senate does not exhaust the power of the govt over int’l the Organization will not claim exemption from taxes which are, in fact, no
relations. more than charges for public utility services; . . . "
 Executive agreements may be entered into w/ other states
& are effective even w/o concurrence of Senate. WHO decided to construct a building to house its own offices in Manila, and entered
 In int’l law, there’s no difference bet’n treaties & executive into a further agreement with the Government of the Republic of the Philippines on
agreements in their binding effect upon states concerned as long November 26, 1957. This agreement contained the following provision (Article III,
as the negotiating functionaries have remained w/n their powers. paragraph 2):
 The distinction bet’n executive agreements & treaties is purely a
const’l one & has not int’l legal significance. "The Organization may import into the country materials and fixtures
 Altman v. US: An int’l compact negotiated bet’n the reps of 2 required for the construction free from all duties and taxes and agrees not
sovereign nations & made in the name or behalf of the contracting to utilize any portion of the international reserves of the Government. "
/var/www/apps/collegelist/repos/collegelist/trunk/collegelist/tmp/scratch7/4689783.doc \ 12

realized from the construction of the World Health Organization office building in
Article VIII of the above-mentioned agreement referred to the Host Agreement Manila.
concluded on July 22, 1951 which granted the Organization exemption from all
direct and indirect taxes. Ratio/Holding: No. Accordingly, finding no reversible error committed by the
respondent Court of Tax Appeals, the appealed decision is hereby affirmed.
In inviting bids for the construction of the building, the WHO informed the bidders
that the building to be constructed belonged to an international organization with First: petitioner questions the entitlement of the WHO to tax exemption,
diplomatic status and thus exempt from the payment of all fees, licenses, and taxes, contending that the Host Agreement is null and void, not having been ratified by the
and that therefore their bids "must take this into account and should not Philippine Senate as required by the Constitution.
include items for such taxes, licenses and other payments to Government
agencies." We find no merit in this contention. While treaties are required to be ratified by
the Senate under the Constitution, less formal types of international
The construction contract was awarded to respondent John Gotamco & Sons, Inc. agreements may be entered into by the Chief Executive and become
(Gotamco for short) on February 10, 1958 for the stipulated price of P370,000.00, binding without the concurrence of the legislative body. The Host Agreement
but when the building was completed the price reached a total of P452,544.00. comes within the latter category; it is a valid and binding international agreement
even without the concurrence of the Philippine Senate. The privileges and
Sometime in May 1958, the WHO received an opinion from the Commissioner of the immunities granted to the WHO under the Host Agreement have been recognized by
Bureau of Internal Revenue stating that "as the 3% contractor's tax is an indirect this Court as legally binding on Philippine authorities.
tax on the assets and income of the Organization, the gross receipts derived by
contractors from their contracts with the WHO for the construction of its new Second: Petitioner maintains that even assuming that the Host Agreement granting
building, are exempt from tax in accordance with . . . the Host Agreement." tax exemption to the WHO is valid and enforceable, the 3% contractor's tax
Subsequently, however, on June 3, 1958, the Commissioner of Internal Revenue assessed on Gotamco is not an "indirect tax" within its purview. Petitioner's position
reversed his opinion and stated that "as the 3% contractor's tax is not a is that the contractor's tax "is in the nature of an excise tax which is a charge
direct nor an indirect tax on the WHO, but a tax that is primarily due from imposed upon the performance of an act, the enjoyment of a privilege or the
the contractor, the same is not covered by. . . the Host Agreement." engaging in an occupation . . . It is a tax due primarily and directly on the
On January 2, 1960, the WHO issued a certification stating, inter alia,: contractor, not on the owner of the building. Since this tax has no bearing upon the
WHO, it cannot be deemed an indirect taxation upon it."
"When the request for bids for the construction of the World Health
Organization office building was called for, contractors were informed "In context, direct taxes are those that are demanded from the very person
that there would be no taxes or fees levied upon them for their who, it is intended or desired, should pay them; while indirect taxes are
work in connection with the construction of the building as this will those that are demanded in the first instance from one person in the
be considered an indirect tax to the Organization caused by the expectation and intention that he can shift the burden to someone else.
increase of the contractor's bid in order to cover these taxes. This (Pollock vs. Farmers, L & T Co.) The contractor's tax is of course payable by
was upheld by the Bureau of Internal Revenue and it can be stated that the the contractor but in the last analysis it is the owner of the building that
contractors submitted their bids in good faith with the exemption in mind. shoulders the burden of the tax because the same is shifted by the
contractor to the owner as a matter of selfpreservation. Thus, it is an
The undersigned, therefore, certifies that the bid of John Gotamco & Sons, made indirect tax. And it is an indirect tax on the WHO because, although it is
under the condition stated above, should be exempted from any taxes in connection payable by the petitioner, the latter can shift its burden on the WHO. In the
with the construction of the World Health Organization office building. " last analysis it is the WHO that will pay the tax indirectly through the
contractor and it certainly cannot be said that 'this tax has no bearing upon
On January 17, 1961, the Commissioner of Internal Revenue sent a letter of the World Health Organization.' "
demand to Gotamco demanding payment of P16,970.40, representing the 3%
contractor's tax plus surcharges on the gross receipts it received from the WHO in Third: Petitioner claims that under the authority of the Philippine Acetylene
the construction of the latter's building. Company versus Commissioner of Internal Revenue, et al.,3 the 3% contractor's
tax falls directly on Gotamco and cannot be shifted to the WHO.
Respondent Gotamco appealed the Commissioner's decision to the Court of Tax
Appeals, which after trial rendered a decision, in favor of Gotamco and reversed the The Court of Tax Appeals, however, held that the said case is not
Commissioner's decision. The Court of Tax Appeal's decision is now before the court controlling in this case, since the Host Agreement specifically exempts the
for review on certiorari. WHO from "indirect taxes." We agree. The Philippine Acetylene case
involved a tax on sales of goods which under the law had to be paid by the
Issue: manufacturer or producer; the fact that the manufacturer or producer
WON respondent John Gotamco & Sons, Inc. should pay the 3% contractor's tax might have added the amount of the tax to the price of the goods did not
under Section 191 of the National Internal Revenue Code on the gross receipts it make the sales tax "a tax on the purchaser." The Court held that the sales tax
/var/www/apps/collegelist/repos/collegelist/trunk/collegelist/tmp/scratch7/4689783.doc \ 13

must be paid by the manufacturer or producer even if the sale is made to tax-
exempt entities like the National Power Corporation, an agency of the Philippine
Government, and to the Voice of America, an agency of the United States

The Host Agreement, in specifically exempting the WHO from "indirect
taxes," contemplates taxes which, although not imposed upon or paid by
the Organization directly, form part of the price paid or to be paid by it.
This is made clear in Section 12 of the Host Agreement which provides:

"While the Organization will not, as a general rule, in the case of minor
purchases, claim exemption from excise duties, and from taxes on the sale
of movable and immovable property which form part of the price to be
paid, nevertheless, when the Organization is making important purchases
for official use of property on which such duties and taxes have been
charged or are chargeable the Government of the Republic of the
Philippines shall make appropriate administrative arrangements for the
remission or return of the amount of duty or tax "

Summary of Ratio: The certification issued by the WHO, dated January 20, 1960,
sought exemption of the contractor, Gotamco, from any taxes in connection with the
construction of the WHO office building. The 3% contractor's tax would be within
this category and should be viewed as a form of an "indirect tax" on the
Organization, as the payment thereof or its inclusion in the bid price would have
meant an increase in the construction cost of the building.

Go Tek vs. Deportation Board (photocopy)