Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-5731 June 22, 1954
HERBERT BROWNELL, JR., ! "##o$ne% Gene$& o' #(e Un)#e* S##e!, petitioner-appellee,
vs.
SUN L+,E "SSUR"NCE COMP"N- O, C"N".", respondent-appellant.
Rowland F. Kirks, Stanley Gilbert, Juan T. Santos and Lino M. Patajo for appelle.
Perkins, Pone !nrile and "ontreras for appellant.
L"BR".OR, J./
This is a petition instituted in the Court of the First nstance of Manila under the provisions of the
Philippine Propert! Act of the "nited #tates a$ainst the #un %ife Assurance Co&pan! of Canada, to
co&pel the latter to co&pl! 'ith the de&and of the for&er to pa! hi& the su& of P()*.)*, 'hich
represents one-half of the proceeds of an endo'&ent polic! +No. ,-,)../ 'hich &atured on Au$ust
0*, ).12, and 'hich is pa!able to one Nao$iro Aihara, a 3apanese national. "nder the polic! Aihara
and his 'ife, Filo&ena 4a!apan, 'ere insured 5ointl! for the su& of P),***, and upon its &aturit!
the proceeds thereof 'ere pa!able to said insured, share and share ali6e, or P()*.)* each. The
defenses set up in the court of ori$in are7 +)/ that the i&&unities provided in section - +b/ +0/ of the
Tradin$ 8ith the Ene&! Act of the "nited #tates are of doubtful application in the Philippines, and
have never been adopted b! an! la' of the Philippines as applicable here or obli$ator! on the local
courts9 +0/ that the defendant is a trustee of the funds and is under a le$al obli$ation to see it to that
it is paid to the person or persons entitled thereto, and unless the petitioner e:ecutes a suitable
dischar$e and an ade;uate $uarantee to inde&nif! and 6eep it free and har&less fro& an! further
liabilit! under the polic!, it &a! not be co&pelled to &a6e the pa!&ent de&anded. The Court of First
nstance of Manila havin$ approved and $ranted the petition, the respondent has appealed to this
Court, contendin$ that the Court of ori$in erred in holdin$ that the Tradin$ 8ith the Ene&! Act of the
"nited #tates is bindin$ upon the inhabitants of this countr!, not'ithstandin$ the attain&ent of
co&plete independence on 3ul! 1, ).12, and in orderin$ the pa!&ent pra!ed for.
<n 3ul! (, ).12, the Con$ress of the "nited #tates passed Public %a' 1=--,.th Con$ress, 6no'n
as the Philippine Propert! Act of ).12. #ection ( thereof provides that >The Tradin$ 'ith the Ene&!
Act of <ctober 2, ).), +1* #tat. 1))/, as a&ended, shall continue in force in the Philippines after
3ul! 1, ).12, ....> To i&ple&ent the provisions of the act, the President of the "nited #tates on 3ul! (,
).12, pro&ul$ated E:ecutive <rder No. .,1,, >continuin$ the functions of the Alien Propert!
Custodian and the ?epart&ent of the Treasur! in the Philippines.> Prior to and preparator! to the
approval of said Philippine Propert! Act of ).12, an a$ree&ent 'as entered into bet'een President
Manuel Ro:as of the Co&&on'ealth and ". #. Co&&issioner Paul @. McNutt 'hereb! title to
ene&! a$ricultural lands and other properties 'as to be conve!ed b! the "nited #tates to the
Philippines in order to help the rehabilitation of the latter, but that in order to avoid co&ple: le$al
proble&s in relation to said ene&! properties, the Alien Propert! Custodian of the "nited #tates 'as
to continue operations in the Philippines even after the latterAs independence, that he &a! settle all
clai&s that &a! e:ist or arise a$ainst the above-&entioned ene&! properties, in accordance 'ith
the Tradin$ 8ith the Ene&! Act of the "nited #tates. +Report of the Co&&ittee on nsural Affairs No.
00.2 and #enate Report No. )-,= fro& the Co&&ittee on Territories and nsular Affairs, to
acco&pan! #. 0(1-, acco&pan!in$ B. R. 2=*), ,.th Con$ress, 0nd #ession./ This purpose of
conve!in$ ene&! properties to the Philippines after all clai&s a$ainst the& shall have been settled
is e:pressl! e&bodied in the Philippine Propert! Act of ).12.
#EC. (. The Tradin$ 8ith the Ene&! Act of <ctober 2, ).), +1* #tat. 1))/ is a&ended, shall
continue in force in the Philippines after 3ul! 1, ).12, and all po'ers and authorit! conferred
upon the President of the "nited #tates or the Alien Propert! Custodian b! the ter&s of the
said Tradin$ 8ith the Ene&! Act, as a&ended, 'ith respect to the Philippines, shall continue
thereafter to be e:ercised b! the President of the "nited #tates, or such officer or a$enc! as
he &a! desi$nate7 Provided, That all propert! vested in or transferred to the President of the
"nited #tates, the Alien Propert! Custodian, or an! such officer or a$enc! as the President
of the "nited #tates &a! desi$nate under the Tradin$ 8ith the Ene&! Act, as a&ended,
'hich 'as located in the Philippines at the ti&e of such vestin$, or the proceeds thereof, and
'hich shall re&ain after the satisfaction of an! clai& pa!able under the Tradin$ 8ith the
Ene&! Act, as a&ended, and after the pa!&ent of such costs and e:penses of
ad&inistration as &a! be la' be char$ed a$ainst such propert! or proceeds, shall be
transferred b! the President of the "nited #tates to the Republic of the Philippines7 Provided
further, That such propert!, or proceeds thereof, &a! be transferred b! the President of the
"nited #tates to the Republic of the Philippines upon inde&nification acceptable to the
President of the "nited #tates b! the Republic of the Philippines for such clai&s, costs, and
e:penses of ad&inistration as &a! b! la' be char$ed a$ainst such propert! or proceeds
thereof before final ad5udication of such clai&s, costs and e:penses of ad&inistration.
Provided further, That the courts of first instance of the Republic of the Philippines are
hereb! $iven 5urisdiction to &a6e and enter all such rules as to notice or other'ise, and all
such orders and decrees and to issue such process as &a! be necessar! and proper in the
pre&ises to enforce an! orders, rules, and re$ulations issued b! the President of the "nited
#tates, the Alien Propert! Custodian, or such officer or a$enc! desi$nated b! the President
of the "nited #tates pursuant to the Tradin$ 8ith the Ene&! Act, as a&ended, 'ith such
ri$ht of appeal therefro& as &a! be provided b! la'7 And provided further, That an! suit
authoriCed under the Tradin$ 8ith the Ene&! Act, as a&ended, 'ith respect to propert!
vested in or transferred to the President of the "nited #tates, the Alien Propert! Custodian,
or an! officer or a$enc! desi$nated b! the President of the "nited #tates hereunder, 'hich
at the ti&e of such vestin$ or transfer 'as located 'ith the Philippines, shall after 3ul! 1,
).12, be brou$ht in the appropriate court of first instance of the Republic of the Philippines,
a$ainst the officer or a$enc! hereunder desi$nated b! the President of the "nited #tates
'ith ri$ht of appeal therefro& as &a! be provided b! la'. n an! liti$ation authoriCed under
this section, the officer or ad&inistrative head of the a$enc! desi$nated hereunder &a!
appear personall!, or throu$h attorne!s appointed b! hi&, 'ithout re$ard to the re;uire&ents
of la' other than this section.
And 'hen the procla&ation of the independence of the Philippines b! President Tru&an 'as &ade,
said independence 'as $ranted >in accordance 'ith the sub5ect to the reservations provided in the
applicable statutes of the "nites #tates.> The enforce&ent of the Tradin$ 8ith the Ene&! Act of the
"nited #tates 'as conte&plated to be &ade applicable after independence, 'ithin the &eanin$ of
the reservations.
<n the part of the Philippines, confor&it! to the enact&ent of the Philippine Propert! Act of ).12 of
the "nited #tates 'as announced b! President Manuel Ro:as in a 5oint state&ent si$ned b! hi& and
b! Co&&issioner Mcnutt. A&bassador Ro&ulo also for&all! e:pressed the confor&it! of the
Philippines 4overn&ent to the approval of said act to the A&erican #enate prior to its approval. And
after the $rant of independence, the Con$ress of the Philippines approved Republic Act No. =,
entitled.
AN ACT T< A"TB<RDE TBE PRE#?ENT <F TBE PB%PPNE# T< ENTER NT< #"CB
C<NTRACT <R "N?ERTAEN4# A# MAF BE NECE##ARF T< EFFECT"ATE TBE
TRAN#FER T< TBE REP"B%C <F TBE PB%PPNE# "N?ER TBE PB%PPNE#
PR<PERTF ACT <F NNETEEN B"N?RE? AN? F<RTF-#G <F ANF PR<PERTF <R
PR<PERTF R4BT# <R TBE PR<CEE?# TBERE<F A"TB<RDE? T< BE
TRAN#FERRE? "N?ER #A? ACT9 PR<@?N4 F<R TBE A?MN#TRAT<N AN?
?#P<#T<N <F #"CB PR<PERTE# <NCE RECE@E?9 AN? APPR<PRATN4 TBE
NECE##ARF F"N? TBEREF<R.
The Con$ress of the Philippines also approved Republic Act No. ,, 'hich established a Forei$n
Funds Control <ffice. After the approval of the Philippine Propert! Act of ).12 of the "nited #tates,
the Philippine 4overn&ent also for&all! e:pressed, throu$h the #ecretar! of Forei$n Affairs,
confor&it! thereto. +#ee letters of #ecretar! dated Au$ust 00, ).12, and 3une (, ).1,./ The
Con$ress of the Philippines has also approved Republic Act No. 1,,, 'hich provides for the
ad&inistration and disposition of properties 'hich have been or &a! hereafter be transferred to the
Republic of the Philippines in accordance 'ith the Philippines Propert! Act of ).12 of the "nited
#tates.
t is evident, therefore, that the consent of the Philippine 4overn&ent to the application of the
Philippine Propert! Act of ).12 to the Philippines after independence 'as $iven, not onl! b! the
E:ecutive ?epart&ent of the Philippines 4overn&ent, but also b! the Con$ress, 'hich enacted the
la's that 'ould i&ple&ent or carr! out the benefits accruin$ fro& the operation of the "nited #tates
la'. The respondent-appellant, ho'ever, contends that the operation of the la' after independence
could not have actuall! ta6en, or &a! not ta6e place, because both Republic Act No. = and Republic
Act No. 1,, do not contain an! specific provision 'hereb! the Philippine Propert! Act of ).12 or its
provisions is &ade applicable to the Philippines. t is also contended that in the absence of such
e:press provision in an! of the la's passed b! the Philippine Con$ress, said Philippine Propert! Act
of ).12 does not for& part of our la's and is not bindin$ upon the courts and inhabitants of the
countr!.
There is no ;uestion that a forei$n la' &a! have e:traterritorial effect in a countr! other than the
countr! of ori$in, provided the latter, in 'hich it is sou$ht to be &ade operative, $ives its consent
thereto. This principle is supported b! the un;uestioned authorit!.
The 5urisdiction of the nation 'ithin its territor! is necessaril! e:clusive and absolute. t is
susceptible of no li&itation not i&posed b! itself. An! restriction upon it, derivin$ validit! fro&
an e:ternal source, 'ould i&pl! a di&inution of its soverei$nt! to the e:tent of the restriction,
and an invest&ent of that soverei$nt! to the sa&e e:tent in that po'er in 'hich 'ould
i&pose such restriction. All e:ceptions, therefore, to the full and co&plete po'er of a nation
'ithin its o'n territories, &ust be traced up to the consent of the nation itself. The! can flo'
fro& no other le$iti&ate source. This consent &a! be either e:press or i&plied. +Philippine
Political %a' b! #inco, pp. 0,-0=, citin$ Chief 3ustice MarshallAs state&ent in the E:chan$e,
, Cranch ))2/
n the course of his dissentin$ opinion in the case of #. #. %otus, decided b! the Per&anent Court of
nternational 3ustice, 3ohn Bassett Moore said7
). t is an ad&itted principle of nternational %a' that a nation possesses and e:ercises
'ithin its o'n territor! an absolute and e:clusive 5urisdiction, and that an! e:ception to this
ri$ht &ust be traced to the consent of the nation, either e:press or i&plied +#chooner
E:chan$e #s. McFadden H=)0I, , Cranch ))2, )(2/. The benefit of this principle e;uall!
enures to all independent and soverei$n #tates, and is attended 'ith a correspondin$
responsibilit! for 'hat ta6es place 'ithin the national territor!. +?i$est of nternational %a', b!
Bac6'orth, @ol. , pp. )-0/
The above principle is not denied b! respondent-appellant. But its ar$u&ent on this appeal is that
'hile the acts enacted b! the Philippine Con$ress i&pliedl! accept the benefits of the operation of
the "nited #tates la' +Philippine Propert! Act of ).12/, no provision in the said acts of the Philippine
Con$ress &a6es said "nited #tates la' e:pressl! applicable. n ans'er to this contention, it &ust
be stated that the consent of a #enate to the operation of a forei$n la' 'ithin its territor! does not
need to be e:press9 it is enou$h that said consent be i&plied fro& its conduct or fro& that of its
authoriCed officers.
-)-. $o rule of %nternational Law e&ists w'i' presribe a neessary for( of ratifiation. J
Ratification can, therefore, be $iven tacitl! as 'ell as e:pressl!. Tacit ratification ta6es place
'hen a #tate be$ins the e:ecution of a treat! 'ithout e:pressl! ratif!in$ it. t is usual for
ratification to ta6e the for& of a docu&ent dul! si$ned b! the Beads of the #tates concerned
and their #ecretaries for Forei$n Affairs. t is usual to draft as &an! docu&ents as there are
parties to the Convention, and to e:chan$e these docu&ents bet'een the parties.
<ccasionall! the 'hole of the treat! is recited verbati& in the ratif!in$ docu&ents, but
so&eti&es onl! the title, prea&ble, and date of the treat!, and the na&es of the si$nator!
representatives are cited. As ratification is onl! the confir&ation of an alread! e:istin$ treat!,
the essential re;uire&ents in a ratif!in$ docu&ent is &erel! that it should refer clearl! and
un&ista6abl! to the treat! to be ratified. The citation of title, prea&ble, date, and na&es of
the representatives is, therefore ;uite sufficient to satisf! that re;uire&ents. +<ppenhei&, pp.
=)=-=).9 e&phasis ours./
nternational %a' does not re;uire that a$ree&ents bet'een nations &ust be concluded in
an! particular for& or st!le. The la' of nations is &uch &ore interested in the faithful
perfor&ance of international obli$ations than in prescribin$ procedural re;uire&ents.
+Treaties and E:ecutive A$ree&ents, b! M!ers #. Mc?ou$al and Asher %ands, Fale %a'
3ournal, @ol. -1, pp. ()=-()./
n the case at bar, our ratification of or concurrence to the a$ree&ent for the e:tension of the
Philippine Propert! Act of ).12 is clearl! i&plied fro& the acts of the President of the Philippines and
of the #ecretar! of Forei$n Affairs, as 'ell as b! the enact&ent of Republic Acts Nos. ,, =, and 1,,.
8e &ust e&phasiCe the fact that the operation of the Philippine Propert! Act of ).12 in the
Philippines is not derived fro& the unilateral act of the "nited #tates Con$ress, 'hich &ade it
e:pressl! applicable, or fro& the savin$ provision contained in the procla&ation of independence. t
is 'ell-settled in the "nited #tates that its la's have no e:traterritorial effect. The application of said
la' in the Philippines is based concurrentl! on said act +Philippine Propert! Act of ).12/ and on the
tacit consent thereto and the conduct of the Philippine 4overn&ent itself in receivin$ the benefits of
its provisions.
t is also clai&ed b! the respondent-appellant that the trial court erred in orderin$ it to pa! the
petitioner the a&ount de&anded, 'ithout the e:ecution b! the petitioner of a deed of dischar$e and
inde&nit! for its protection. The Tradin$ 8ith the Ene&! Act of the "nited #tates, the application of
'hich 'as e:tended to the Philippines b! &utual a$ree&ent of the t'o 4overn&ents, contains an
e:press provision to the effect that deliver! of propert! or interest therein &ade to or for the account
of the "nited #tates in pursuance of the provision of the la', shall be considered as a full
ac;uittance and dischar$e for purposes of the obli$ation of the person &a6in$ the deliver! or
pa!&ent. +#ection -+b/ +0/, Tradin$ 8ith the Ene&! Act./ This e:press provision of the "nited #tates
la' saves the respondent-appellant fro& an! further liabilit! for the a&ount ordered to be paid to the
petitioner, and full! protects it fro& an! further clai& 'ith respect thereto. The re;uest of the
respondent-appellant that a securit! be $ranted it for the pa!&ent to be &ade under the la' is,
therefore, unnecessar!, because the 5ud$&ent rendered in this case is sufficient to prove such
ac;uittance and dischar$e.
The decision appealed fro& should be as it is hereb! affir&ed, 'ith costs a$ainst the respondent-
appellant.
Paras, ". J., Pablo, )en*+on, Padilla, Monte(ayor, Reyes, ,., Ju*o, )autista ,n*elo and
"onepion, JJ., concur.