Political Law Review: The Philippine as a State

III. THE PHILIPPINES AS A STATE

A. Definition of a State

A community of persons, more or less numerous, 

permanently occupying a definite portion of territory, 

independent of external control, 

and possessing a government 

to which a great body of inhabitants render habitual obedience.

See: Collector of Internal Revenue v. Campos Rueda, G.R. No. L-13250, October 29, 1971.

• Doña Maria de la Estrella Soriano Vda. de Cerdeira, a Spanish national residing in Tangier, Morocco from 1931 until her death in 1955. Her estate included intangible personal properties located in the Philippines. The Court clarified that “foreign country” under Section 122 does not require full international personality or statehood. Tangier, while not a sovereign state in the full sense, was still considered a foreign country for tax purposes due to its legal system and reciprocal tax treatment.

1. Distinguished from Nation

• State – legal or juristic concept

• Nation – ethnic or racial concept.

2. Distinguished from Government

• Government – 

merely an instrumentality of the State through 

which the will of the State is implemented and realized.

B. Elements of a State

1. People

2. Territory

3. Government

4. Sovereignty

People

• [a] Different meanings as used in the Constitution: ICE

1. Inhabitants [Sec. 2, Art. III; Sec. 1, Art. XIII]

• All persons within the Philippine territory, regardless of citizenship.

• “The right of the people to be secure in their persons, houses, papers, and effects…”

• “The Congress shall give highest priority to the enactment of measures that protect and enhance the right of all the people to human dignity, reduce social, economic, and political inequalities…”

2. Citizens [Preamble; Secs. 1 & 4, Art. II; Sec. 7, Art. III]

• Filipino citizens as members of the political community.

• “We, the sovereign Filipino people…”

• “Sovereignty resides in the people and all government authority emanates from them.”

• “The prime duty of the Government is to serve and protect the people…”

• “The right of the people to information on matters of public concern…”

3. Electors [Sec. 4, Art. VII]

• Qualified voters

• “The President and the Vice-President shall be elected by direct vote of the people…”

• [b] As requisite for Statehood: 

• Adequate number for self-sufficiency and defense; small enough to be easily administered and sustained.

• of both sexes for perpetuity.
  
  

Territory [Art. I, Constitution; R.A. 3046; R.A. 5446; R.A. 9522]

• [a] The National Territory:
  The national territory comprises the Philippine archipelago, 

with all the islands and waters embraced therein, 

and all other territories over which the Philippines has sovereignty or jurisdiction, 

consisting of its terrestrial, fluvial and aerial domains, 

including its territorial sea, the seabed, the subsoil, 

the insular shelves, and other submarine areas. [Sec. 1, Art. I].

1. Territorial Sea: 

• That portion of the open sea adjacent to the shores of a State

over which that State exercises jurisdiction. 

• Every State has the right to establish the breadth of its territorial sea to a limit not exceeding 12 nautical miles, measured from the baseline [Art. 3, UNCLOS].
  
  

• [b] Components: 

1. Terrestrial 

• land mass

2. Fluvial 

• inland waters

3. Maritime and 

• waters surrounding, between, and connecting islands

4. Aerial domains

• atmosphere above
  
  

• [c] The Philippine Archipelago. 

• The boundaries of the Philippine archipelago are historically defined in the following treaties:

• Treaty of Paris, December 10, 1898

• Cession of the Philippine Islands by Spain to the United States

• Treaty between Spain and US at Washington, November 7, 1900

• Cagayan, Sulu & Sibuto

• Treaty between US and Great Britain, January 2, 1930

• Turtle & Mangsee Islands
  
  

• [d] Other territories over which the Philippines exercises jurisdiction:

• Batanes [1935 Constitution]

• Those contemplated in Art. I, 1973 Constitution [belonging to the Philippines by historic right or legal title]

• Rep. Act No. 5446 (September 8, 1968), which expanded R.A. 3046, specifically declaring that Sabah is part of Philippine territory, and which, as held in Magallona v. Ermita, G.R. No. 187167, August 16, 2011, is not repealed by Rep. Act No. 9522

• P.D. 1596, June 11, 1978, which formalized the Philippine claim over the Kalayaan Islands Group (KIG)
  
  

• [e] Archipelago Doctrine:
  The waters around, between and connecting the islands of the archipelago, 

regardless of their breadth and dimensions, 

form part of the internal waters of the Philippines [2nd sentence, Sec. 1, Art. I].

• [i] This articulates the archipelagic doctrine of national territory, based on the principle that an archipelago, which consists of a number of islands separated by bodies of water, should be treated as one integral unit, and the waters inside the baselines are considered internal waters.
  
  

• [ia] Archipelago.

• An archipelago is a group of islands, including parts of islands, interconnecting waters, and other natural features which are closely interrelated in such islands, waters and other natural features, forming an intrinsic geographical, economic, and political entity, or which historically have been regarded as such [Art. 46, UNCLOS].
  
  

• [ib] Straight baseline method. 

• Imaginary straight lines are drawn joining the outermost points of the outermost islands of the archipelago, enclosing an area the ratio of which should not be more than 9:1 (water to land); provided that the drawing of baselines shall not depart, to any appreciable extent, from the general configuration of the archipelago. The waters within the baselines shall be considered internal waters; while the breadth of the territorial sea, the contiguous zone, the exclusive economic zone and the continental shelf shall then be measured from the baselines [Art. 48, UNCLOS].

• Baseline is the low-water line along the coast.
  
  

• [f] UN Convention on the Law of the Sea (UNCLOS).

• The UNCLOS is a multilateral treaty opened for signature on December 10, 1982, at Montego Bay, Jamaica. 

• It was ratified by the Philippines in August 1984, but came into force on November 16, 1994, upon the submission of the 60th ratification. 

• It is a product of international negotiation that seeks to balance:

• State sovereignty (mare clausum) and 

• the principle of freedom of the high seas (mare liberum).

An overwhelming majority—over 80%—of nation states are now members of UNCLOS, but the United States, the world’s leading maritime power, has not ratified it.

• [i] The international law of the sea is generally defined as"a body of treaty rules and customary norms governing the:

• uses of the sea,

• the exploitation of its resources, and 

• the exercise of jurisdiction over maritime regimes. 

• It is a branch of public international law regulating the relations of states with respect to the uses of the oceans" [Magallona, A Primer on the Law of the Sea, quoted in Most Rev. Pedro Arigo v. Scott Swift, G.R. No. 206510, September 16, 2014].

Most Rev. Pedro Arigo v. Scott Swift, G.R. No. 206510, September 16, 2014:

• The USS Guardian, a U.S. Navy warship, ran aground on the Tubbataha Reefs, a UNESCO World Heritage Site and protected marine park in the Philippines, on January 17, 2013. Environmental advocates and public figures filed a petition for a Writ of Kalikasan and Temporary Environmental Protection Order (TEPO), citing violations of environmental laws under R.A. No. 10067 (Tubbataha Reefs Natural Park Act). Justice Carpio emphasized that even though the U.S. has not ratified UNCLOS, it adheres to its principles as customary international law. Thus, the U.S. is expected to bear responsibility for the damage caused by the USS Guardian.
  
  

• [ii] Rights of the coastal State. 

• The freedom to use the world's marine waters is one of the oldest customary principles of international law. 

• The UNCLOS gives to the coastal State sovereign rights in varying degrees over the different zones of the sea:

1. internal waters;

• Waters on the landward side of the baseline of the territorial sea. [UNCLOS Article 8]

• Full sovereignty of the coastal state, equivalent to its land territory.

• Bays, ports, rivers, and lakes connected to the sea.

2. territorial sea;

• A belt of sea adjacent to the coast, not exceeding 12 nautical miles from the baseline. [UNCLOS Article 2-3]

• Coastal state exercises sovereignty over the territorial sea, its airspace, seabed, and subsoil.

• Subject to innocent passage by foreign vessels.

3. contiguous zone;

• A zone contiguous to the territorial sea, extending up to 24 nautical miles from the baseline.  [UNCLOS Article 33]

• Coastal state may exercise control to prevent infringement of customs, fiscal, immigration, or sanitary laws.

4. exclusive economic zone;

• An area beyond and adjacent to the territorial sea, extending up to 200 nautical miles from the baseline.  [UNCLOS Article 55-57]

• Coastal state has sovereign rights for exploring, exploiting, conserving, and managing natural resources.

• Other States enjoy freedoms of navigation, overflight, and laying submarine cables, subject to coastal state’s laws.

5. high seas.

• All parts of the sea not included in the EEZ, territorial sea, internal waters, or archipelagic waters.  [UNCLOS Article 87]

• Open to all states; no state may claim sovereignty.

• Freedoms: Navigation, fishing, overflight, laying cables/pipelines, and scientific research.

• It also gives the coastal State jurisdiction over foreign vessels depending on where the vessel is located (Anne Bardin, Coastal State's Jurisdiction over Foreign Vessels, quoted in Arigo v. Swift, supra).

• [iia] Insofar as the internal waters and territorial sea are concerned, the coastal State exercises sovereignty, subject to UNCLOS and other rules of international law. Such sovereignty extends to the air space over the territorial sea as well as to its bed and subsoil [Art. 2, UNCLOS].
  
  

• [iib] Warships continue to enjoy sovereign immunity, subject to the provisions of:

1. Art. 30 (non-compliance by warships with the laws and regulations of the coastal State) and 

2. Art. 31 (responsibility of the flag State for damages caused by a warship or other government ship operated for non-commercial purposes) of UNCLOS.
   
   

• [iic] Thus, in Arigo v. Swift, supra, the Supreme Court said that a foreign warship's unauthorized entry into our internal waters with resulting damage to marine resources is one situation in which Arts. 30 and 31 may apply, even if the flag State of the offending warship is a non-party to the UNCLOS, such as the United States. Non-membership in UNCLOS does not mean that the US will disregard the rights of the Philippines as a coastal State over its internal waters and territorial sea. "We expect the US to bear 'international responsibility' under Art. 31 in connection with the USS Guardian grounding which adversely affected the Tubbataha Reefs."
  
  

• [iii] Right of innocent passage. 

• The archipelagic State enjoys sovereign rights over all waters enclosed by the baselines, described as archipelagic waters, regardless of their depth and distance from the coast. 

• However, to preserve international navigation, especially through waters that were formerly high seas, all States enjoy the right of innocent passage through archipelagic waters. 

• The archipelagic State may, however, suspend temporarily, without discrimination, the right of innocent passage in specified areas, when deemed essential for the protection of national security, provided that such suspension shall take effect only after due publication [Arts. 52 & 53, UNCLOS].
  
  

• [iiia] Sealanes and air routes. 

• The archipelagic State may designate sealanes and air routes suitable for the safe, continuous, and expeditious passage of foreign ships and aircraft through or over its archipelagic waters and the adjacent territorial sea. Archipelagic sealanes passage may be exercised through the routes normally used for international navigation [Art. 53, UNCLOS].
  
  

• [iv] Contiguous zone and exclusive economic zone. 

• UNCLOS provides for:

1. a Contiguous Zone of 12 miles; and

2. an Exclusive Economic Zone (EEZ) of 200 miles.

• The coastal State shall have sovereign rights over all economic resources of the sea, seabed, and subsoil in these areas. 

• However, in the EEZ, other States enjoy freedom of navigation and overflight, freedom to lay submarine cables and pipelines, and other internationally recognized lawful uses of the sea in relation to these freedoms. See also P.D. 1599 (1978).
  
  

• [g] Validity of R.A. 9522.

• Magallona v. Ermita, G.R. No. 187167, August 16, 2011:

• The Supreme Court upheld the constitutionality of R.A. 9522, which is a statutory tool to demarcate the country's maritime zone and continental shelf under UNCLOS III.
  
  The Court also validated as not inconsistent with the Philippine claim of sovereignty the use of the Framework of Regime of Islands to determine the maritime zone of the Kalayaan Island Group (KIG) and the Scarborough Shoal.
  
  It added that the country's statutory claim over Sabah under R.A. 5446 is retained because R.A. 9522 does not repeal R.A. 5446.

Finally, the Court declared that UNCLOS III and R.A. 9522 are not incompatible with the Constitution's delineation of internal waters, because under current norms of international law, the right of innocent passage is recognized over archipelagic waters or internal waters, however they may be denominated.

Additional Assignment — Philippine Maritime Zones Act or RA 12064.

II. Maritime Zones Declared (Sec. 2)

• In line with 1987 Constitution & UNCLOS (1982)

(a) Philippine Archipelago

1. Internal Waters

2. Archipelagic Waters

3. Territorial Sea

4. Contiguous Zone

5. Exclusive Economic Zone (EEZ)

6. Continental Shelf
   
   

(b) Other Territories

• Territories under Philippine sovereignty or jurisdiction have their own maritime zones.

• West Philippine Sea –  maritime zones of the Philippines on the western side of the Philippine archipelago, including:

• Luzon Sea

• Bajo de Masinloc

• Kalayaan Island Group

III. Baselines (Sec. 3)

• RA 9522 defines Philippine baselines.

• Archipelagic baselines → for the Philippine archipelago (Art. 47, UNCLOS).

• Normal/Straight baselines → for other territories (Arts. 5, 6, 7, 13, 121, UNCLOS).
  
  

IV. Waters Inside Baselines (Sec. 4)

• Philippines has sovereignty over:

1. All waters inside archipelagic baselines (RA 9522).

2. Waters on the landward side of baselines of territories outside the archipelagic baselines.

3. Includes airspace above and seabed/subsoil beneath these waters.

• Sovereignty subject to UNCLOS and treaty obligations.

• (a) Archipelagic Waters

• Waters inside archipelagic baselines are archipelagic waters, except bays, estuaries, and other internal waters per UNCLOS Art. 50.

• Archipelagic sea lanes passage applies, through lanes designated by law or Presidential issuance.

• NAMRIA to separate archipelagic vs. internal waters.

• Sea lanes and delimitations to be marked on official Philippine charts.

• Charts deposited with UN Secretary-General per UNCLOS Arts. 16 & 53.

• (b) Internal Waters

• Internal waters consist of:

1. Areas delimited by NAMRIA from archipelagic waters.

2. Waters landward of baselines of territories outside archipelagic baselines.

• Foreign vessels have no navigational rights in internal waters.

• Passage allowed only if expressly authorized by the government.

• ⚖️ Key Point for Recit:

• Archipelagic waters → sovereignty + limited passage rights (innocent/sea lanes).

• Internal waters → absolute sovereignty, no passage rights for foreign vessels unless authorized.

V. Territorial Sea (Sec. 5)

• Refers to the 12-nautical mile belt of sea measured from the baselines.

• The Philippines exercises sovereignty over:

1. The territorial sea,

2. The airspace above it, and

3. The seabed and subsoil.

• Sovereignty is subject to UNCLOS and other treaties, with due regard for rights of other states (e.g., innocent passage).

• Kalayaan Island Group high-tide features each has a 12-nautical mile territorial sea.

VI. Contiguous Zone (Sec. 6)

• Extends up to 24 nautical miles from the baselines, beyond and adjacent to the territorial sea.

• The Philippines exercises control necessary to:

1. Prevent infringement of customs, fiscal, immigration, or sanitary laws.

2. Punish violations of said laws within its territory or territorial sea.

3. Regulate removal of archaeological and historic objects from the seabed.
   
   

VII. Exclusive Economic Zone (EEZ) (Sec. 7)

• Refers to waters beyond and adjacent to the territorial sea, up to 200 nautical miles from the baselines.

• Includes low-tide elevations within 200 nautical miles from archipelagic baselines.

• Within the EEZ, the Philippines has:

1. Sovereign rights to:

1. Explore, exploit, conserve, and manage natural resources (living & nonliving).

2. Conduct economic activities (e.g., energy production from sun, water, currents, winds).

2. Jurisdiction over:

1. Artificial islands, installations, and structures.

2. Marine scientific research.

3. Protection and preservation of the marine environment.

3. Other UNCLOS rights and duties.

• Exclusive right to construct, authorize, and regulate artificial islands and structures.

• Violations of this exclusive right are subject to Sec. 15 of this Act, UNCLOS, and other international conventions.
  
  

VIII. Continental Shelf (Sec. 8)

• Seabed and subsoil beyond territorial sea to 200 nautical mile, or further if natural prolongation exists.

• Extended Continental Shelf (ECS):

• Talampas ng Pilipinas (Philippine Rise/Benham Rise) (2012)

• Possible submissions in West Palawan Region and others.

• Philippines has sovereign rights to:

• Explore and exploit mineral, petroleum, nonliving resources, and sedentary species.

• Philippines exercise jurisdiction over:

• artificial islands, installations, structures, marine research, drilling, tunneling, etc.

IX. Areas Beyond National Jurisdiction (Sec. 9)

• Philippines retains rights and privileges in:

1. High seas, and

2. International seabed area

• As recognized under UNCLOS and other laws/treaties.
  
  

X. Other Important Provisions

• Marine Scientific Research (Sec. 10): 

• Conducted per UNCLOS Part XIII + existing laws/treaties.

• Must benefit the Filipino people, regardless of whether research is local or foreign.

• Marine Environmental Protection (Sec. 11): 

• All States must protect & preserve the marine environment.

• Philippines enforces laws/regulations in line with UNCLOS Part XII.

• Delimitation (Sec. 12): 

• If maritime zones overlap with another state:

1. Boundaries set by agreement under international law.

2. If no agreement reached in reasonable time → resort to UNCLOS Part XV dispute settlement.

• Due Regard & Mutual Respect (Sec. 13):

• Philippines must give due regard to rights/duties of foreign states.

• Foreign states must respect Philippine rights in return.

• Philippine recognizes foreign vessels/aircraft rights in its maritime zones under reciprocity.

• The Philippines may take legal/diplomatic action vs. states violating UNCLOS/international law.

• Other Maritime Rights (Sec. 14): 

• Philippines exercises all other maritime rights under:

1. UNCLOS,

2. South China Sea Arbitration ruling (PCA Case 2013-19),

3. International law,

4. Philippine laws/regulations.

• Penal Sanctions (Sec. 15): 

• Violations of Philippine maritime rights penalized under existing laws.

• If no law applies → administrative fine:

• US $600,000 – $1,000,000 (or PHP equivalent).

• Joint Congressional Oversight Committee (Sec. 16): 

• Composed of:

1. 12 members → 6 Senators + 6 House members.

2. Minority guaranteed at least 1 seat each in Senate & House.

• Duties:

1. Conduct hearings at least quarterly.

2. Review Act’s implementation.

3. Recommend necessary legislation.
   
   

XI. Repeals & Amendments (Sec. 18)

• Repeals parts of RA 3046 (old baselines law).

• Amends:

• PD 1596 (Kalayaan Islands)

• PD 1599 (EEZ Law)
  RA 7942 (Philippine Mining Act) – specific sections.

Government

[a] Defined.

The agency or instrumentality through which 

the will of the State is formulated, expressed, and realized.

See U.S. v. Dorr, 2 Phil. 332.

• Fred L. Dorr and Edward F. O'Brien were charged with libel for publishing allegedly false and malicious statements against Señor Benito Legarda in the "Manila Freedom" newspaper. The accused filed a demurrer, arguing that the complaint did not state a public offense, and also moved for a trial by jury, invoking the U.S. Constitution. The Court held that the right to trial by jury is not one of those rights automatically applicable in the Philippines. The Philippine Commission, as established by Congress, had the authority to legislate, including the passage of the libel law under which the accused were prosecuted. The Court explained that the agency or instrumentality through which the will of the State is formulated, expressed, and realized in the Philippines is the governmental body or authority established by Congress (i.e., the Philippine Commission).

[i] Government of the Philippines

• is "the corporate governmental entity through which the functions of government are exercised throughout the Philippines, including, save as the contrary appears from the context, the various arms through which political authority is made effective in the Philippines, whether pertaining to the autonomous regions, the provincial, city, municipal or barangay subdivisions or other forms of local government."
  [Sec. 2 (1), Administrative Code of 1987]

[b] Functions:

[i] Traditionally, the functions of government have been classified into:

• Constituent functions

• mandatory for the Government to perform because they constitute the very bonds of society, such as the maintenance of peace and order, regulation of property and property rights, the administration of justice, etc.
  
  

• Ministrant functions

• intended to promote the welfare, progress, and prosperity of the people, and which are merely optional for the Government to perform.
  
  

[ii] Romualdez-Yap v. Civil Service Commission, G.R. No. 104226, August 12, 1993: 

• The Court declared that a distinction can be made on the validity of the reorganization between:

• a government bureau or office performing constituent functions (like the Bureau of Customs), and

• a government-owned or -controlled corporation performing ministrant functions (like the PNB).

• Commercial or universal banking is, ideally, not governmental, but a private sector endeavor. It is an optional function of government.  [However, reorganization in either must meet a common test — the test of good faith.]

• Conchita Romualdez-Yap was a Senior Vice President (SVP) at the Philippine National Bank (PNB), a government-owned and controlled corporation (GOCC). PNB underwent a reorganization, resulting in the abolition of the Fund Transfer Department (FTD), where Romualdez-Yap was assigned. The Court held that reorganizations are valid if pursued in good faith, especially if aimed at achieving economy or efficiency in government operations. Commercial or universal banking is not inherently a governmental function but an optional activity that the government may undertake for public welfare. Regardless of the nature of the function, the common test for the validity of a reorganization is good faith.

Fontanilla v. Mallaman, G.R. No. L-55963, December 1, 1989:

• The Supreme Court said that the functions of government are classified into:

• Governmental/constituent – involves the exercise of sovereignty, therefore compulsory.

• Proprietary/ministrant – involves the exercise of proprietary functions, considered optional.

• Spouses Jose and Virginia Fontanilla sued the National Irrigation Administration (NIA) for damages to their crops, allegedly caused by water seeping and escaping from NIA’s irrigation canal. The NIA argued it was not liable for damages because it was performing governmental functions and its driver was not a special agent. The Supreme Court held that the NIA, in constructing and operating irrigation canals, is performing proprietary functions, not governmental functions. Proprietary (Ministrant) functions involve activities that are optional and for the benefit of the community (e.g., business-like services such as water supply, irrigation, public utilities). Even if the purpose is public welfare, the nature of the activity (business-like, optional) makes it proprietary. As a result, the NIA can be held liable for damages arising from the negligent operation of its irrigation canals.

[iii] Shipside, Inc. v. Court of Appeals, G.R. No. 143377, February 20, 2001:

• It was held that the Bases Conversion Development Authority (BCDA), created under R.A. 7227, performs functions that are basically proprietary in nature.

• The promotion of economic and social development of Central Luzon, in particular, and the country's goal for enhancement, in general, do not make BCDA equivalent to Government.

• Other corporations, such as SSS, GSIS, NIA, although performing functions aimed at promoting public interest and welfare, are not invested with government attributes.

• [With the transfer to BCDA of Camp Wallace, the government no longer had a right or interest to protect; the real party in interest to recover the property is, thus, the BCDA, not the Republic of the Philippines.]

• The Office of the Solicitor General (OSG), on behalf of the Republic of the Philippines, filed a complaint to cancel land titles held by Shipside, Inc. over property allegedly part of Camp Wallace (Wallace Air Station). The Supreme Court held that, with the transfer of Camp Wallace to the BCDA, the Republic was no longer the real party-in-interest. The BCDA, as the owner and administrator, is the proper party to file actions regarding the property. The Court clarified that the BCDA, created under RA 7227 (1992), is a government-owned or controlled corporation (GOCC) with a distinct and separate personality from the government. Its functions are “basically proprietary in nature.” The BCDA’s role in promoting economic and social development, especially in Central Luzon, does not make it equivalent to the government itself.

[iv] Edu v. Ericta, G.R. No. L-32096, October 24, 1970:

• The Supreme Court declared that, as early as the 1935 Constitution, we had already repudiated the laissez-faire doctrine.

• With this repudiation, the Supreme Court in PVTA v. CIR, G.R. No. L-32052, July 25, 1975, said that the growing complexities of modern society have rendered the traditional classification of government functions unrealistic, if not obsolete.

• Thus, there is no constitutional obstacle to the government pursuing endeavors formerly reserved for private enterprise.

• Romeo Edu, the Land Transportation Commissioner, issued Administrative Order No. 2 implementing the Reflector Law (Republic Act No. 5715) which required motor vehicles to be equipped with reflectors for public safety.  The Supreme Court upheld the constitutionality of the Reflector Law and the administrative order. The law and order were valid exercises of the State’s police power for public safety. The Court rejected the argument that the law unduly interfered with property rights, emphasizing that the government has the authority to regulate for the general welfare.

• The laissez-faire principle, which advocates minimal government interference in economic matters, was expressly rejected by the framers of the 1935 Constitution.

• Philippine Virginia Tobacco Administration (PVTA) v. CIR, G.R. No. L-32052, July 25, 1975:

• Employees of the Philippine Virginia Tobacco Administration (PVTA), a government agency, filed a labor dispute before the Court of Industrial Relations (CIR), seeking overtime compensation under Commonwealth Act No. 444 (Eight-Hour Labor Law). PVTA argued it was performing governmental (not proprietary) functions and was thus exempt from the Eight-Hour Labor Law, which it claimed applied only to private enterprises. The Supreme Court upheld the CIR's jurisdiction and ruled that the Eight-Hour Labor Law applies to all employees, including those in government agencies, unless expressly exempted by law. The Court rejected the rigid distinction between constituent and ministrant functions, emphasizing that modern realities have blurred these lines. The government is no longer limited to traditional sovereign functions but may engage in activities previously reserved for private enterprise, especially to address social and economic needs.

Association of Philippine Coconut Desiccators v. Philippine Coconut Authority, G.R. No. 110526, February 10, 1998:

• The Supreme Court reiterated this repudiation when it held that although the 1987 Constitution enshrines free enterprise as a policy, it nevertheless reserves to the Government the power to intervene whenever necessary to promote the general welfare, as reflected in Secs. 6 and 19, Art. XII.

• The Philippine Coconut Authority (PCA) issued Board Resolution No. 018-93, declaring it would no longer require licenses or permits for coconut processing plants. The Association of Philippine Coconut Desiccators (APCD) sought to invalidate the resolution and the certificates of registration issued under it. The Supreme Court ruled in favor of the APCD, declaring the PCA’s resolution invalid. The Court held that the PCA exceeded its authority by abdicating its regulatory function, which was mandated by law. The PCA’s power to regulate the coconut industry is statutory and cannot be withdrawn by mere administrative resolution. The Court emphasized that the 1987 Constitution, while recognizing free enterprise, allows government intervention to promote the general welfare.

[c] Doctrine of Parens Patriae.

• Literally, "parent of the people." 

• The Government may act as guardian of the rights of people who may be disadvantaged or are suffering from some disability or misfortune.

See: Government of the Philippine Islands v. Monte de Piedad, 35 Phil. 728:

• After the 1863 Manila earthquake, Spain raised relief funds and remitted them to the Philippines, with ₱80,000 loaned to Monte de Piedad under the expectation of repayment. When the Philippine Government later demanded their return for the intended beneficiaries, Monte de Piedad refused, claiming the action had already prescribed. The Supreme Court ruled in favor of the Government. The statute of limitations does not run against the Government in this case, as it is acting in its sovereign capacity. The Government may act as parens patriae (literally, "parent of the people"), meaning it can act as the guardian of persons who are disadvantaged, under disability, or unable to protect their own interests. 

Cabanas v. Pilapil, G.R. No. L-25843, July 25, 1974.

• The mother, Melchora Cabanas, and the uncle, Francisco Pilapil, disputed over who should administer the insurance proceeds left for the minor child, Millian Pilapil. Although the policy named the uncle as trustee, the Court held that under Articles 320 and 321 of the Civil Code, the parent with parental authority—in this case, the mother—was the legal administrator of the child’s property. The Court emphasized that the welfare of the child is the paramount consideration. The State, as parens patriae, may act as guardian of the rights of those who are disadvantaged or suffering from disability or misfortune, such as minors. The Court found that, absent evidence of unfitness, a parent (here, the mother) is naturally preferred over other relatives for the care and administration of a minor’s property.

Gonzales v. Marcos, 65 SCRA 624 (1975)

• Ramon A. Gonzales challenged the constitutionality of Executive Order No. 30, which created the Cultural Center of the Philippines (CCP). The CCP was funded through donations and foreign contributions, not taxes, and administered by a Board of Trustees chaired by then First Lady Imelda Marcos. The Supreme Court upheld the validity of Executive Order No. 30. The Court emphasized that the President, as head of state, acted in his capacity as parens patriae—the guardian of the people’s welfare—when he created a trust to administer cultural funds for public benefit.

[d] Classification of governments:

[i] De jure vs. De facto.

• De jure government

• Latin: “by law”

• A government that is legally established, founded on constitutional or legal procedures, recognized domestically and internationally, and endowed with lawful authority.

• De facto government

• Latin: “in reality”

• A government that exerts actual control over territory or governance without having legal or constitutional legitimacy.

1. Japanese Occupation (Second Republic, 1942–1945)

• During WWII, Japan set up a puppet government in the Philippines. Though it claimed authority, it lacked legal legitimacy under Philippine or international law, making it a de facto regime. 

• The acts under this regime remained valid for purposes of continuity and stability. 

2. People Power Revolution & Cory Aquino (1986)

• After the 1986 ouster of Ferdinand Marcos, Corazon Aquino issued Proclamation No. 1 and then the “Freedom Constitution” during a provisional government phase (1986–1987). Initially, the government had de facto control, later ratified as lawful. 

Co Kim Chan v. Tan Keh, 75 Phil. 113;

• Co Kim Cham, filed a mandamus petition to compel Judge Arsenio Dizon to continue proceedings in a civil case originally initiated under the Japanese-occupied Philippine Republic. Judge Dizon refused to proceed, citing General Douglas MacArthur’s 1944 proclamation that nullified laws and processes of governments other than the Commonwealth. The Supreme Court held that the Philippine Executive Commission and the Republic of the Philippines during the Japanese occupation were de facto governments. Acts and proceedings of a de facto government, especially those not of a political nature (e.g., judicial acts, private transactions), are valid and remain valid even after the restoration of the de jure government.

• The principle of postliminy in international law applies: acts done by the de facto government (except those of political complexion) are not wiped out upon the return of the legitimate government.

Lawyers League for a Better Philippines v. Aquino, supra.

• After the February 1986 EDSA Revolution ousted President Ferdinand Marcos, Corazon Aquino assumed the presidency. Petitioners challenged the legitimacy of President Aquino’s government, arguing it was not established in accordance with the 1973 Constitution. President Aquino’s government was not only de facto (in actual control) but also de jure (legally recognized).

• It exercised effective control over the entire country.

• It was accepted by the Filipino people.

• It was recognized by the international community.

[ia] Kinds of de facto government:

1. That which usurps, by force or by majority voice, the rightful legal government and maintains itself against the will of the latter.
   
   

2. That which is established by the inhabitants of a territory who rise in insurrection against the parent state.
   
   

3. That which is established by the invading forces of an enemy who occupy a territory in the course of war — denominated a de facto government of paramount force.

[ii] Presidential vs. Parliamentary government.

• In a presidential government, there is separation of executive and legislative powers (the former in the President, the latter in Congress).
  
  

• In a parliamentary government, there is fusion of both executive and legislative powers in Parliament, although the actual exercise of executive powers is vested in a Prime Minister chosen by, and accountable to, Parliament.
  
  

[iii] Unitary vs. Federal government.

• A unitary government is a single, centralized government, exercising powers over both the internal and external affairs of the State.
  
  

• A federal government consists of autonomous state (local) government units merged into a single State, with the national government exercising limited power over domestic affairs but generally full direction of external affairs.
  
  

Sovereignty

[a] Defined.

The supreme and uncontrollable power inherent in a State 

by which that State is governed.

[b] Kinds:

[i] Legal – the power to issue final commands.
Political – the sum total of all influences behind the law.

[ii] Internal – supreme power over everything within its territory.
External (independence) – freedom from external control.

[c] Characteristics.

PECA-III

1. Permanence

2. Exclusiveness

3. Comprehensiveness

4. Absoluteness

5. Indivisibility

6. Inalienability

7. Imprescriptibility.

Laurel v. Misa, 77 Phil. 856

• During the Japanese occupation of the Philippines in World War II, Anastacio Laurel was detained for alleged acts of treason. Laurel filed a petition for habeas corpus, arguing that he could not be prosecuted for treason because, during the occupation, the sovereignty of the Commonwealth government was suspended, and thus, his allegiance was also suspended. The Court ruled that allegiance to the legitimate government is absolute and permanent. Sovereignty of the legitimate government is not abrogated or transferred by occupation; only the exercise of sovereignty may be suspended, not sovereignty itself.

• General Rule: 

• Political laws (those governing the relationship between the government and its citizens) are suspended during enemy occupation.

• Exception: 

• The law on treason is not suspended. 

• Treason can still be committed against the legitimate government by its citizens, even during occupation.

• Characteristics of Sovereignty:

• Permanence — not temporary; it endures regardless of changes in government or occupation.

• Exclusiveness —  owed solely to the legitimate government.

• Comprehensiveness — covers all aspects of fidelity and obedience to the government.

• Absoluteness — not subject to conditions or exceptions.

• Indivisibility — cannot be divided between two governments.

• Inalienability —  cannot be transferred or renounced at will.

• Imprescriptibility — does not expire with the passage of time.

[d] Effects of change in sovereignty.

1. Political laws are abrogated.

• People v. Perfecto, 43 Phil. 887:

• Gregorio Perfecto was charged under Article 256 of the Spanish Penal Code, which criminalized insults or defamation against ministers or persons in authority. The Supreme Court acquitted Perfecto. The Court held that Article 256 of the Spanish Penal Code was no longer in force. Political laws of the former sovereign are abrogated upon a change in sovereignty, especially if they are inconsistent with the new government’s institutions and constitution. The Court explained that only municipal laws (those governing private relations) remain in force unless repealed or inconsistent with the new sovereign’s laws.

• Macariola v. Asuncion, A.M. No. 133-J, May 31, 1982]:

• Judge Elias Asuncion presided over a partition case involving the heirs of the late Francisco Reyes. Bernardita Macariola, one of the parties in the original partition case, filed an administrative complaint against Judge Asuncion alleging violations of Article 14 of the Code of Commerce, which prohibits judges from engaging in commerce, by acquiring such shares. The Court ruled that Article 14 no longer had legal effect after Spain ceded sovereignty. Article 14 of the Code of Commerce partakes more of the nature of an administrative law because it regulates the conduct of certain public officers and employees with respect to engaging in business: hence, political in essence. Under public international law principles, political laws of the former sovereign are automatically abrogated upon change of sovereignty, unless expressly re-enacted by the new sovereign. Since no enabling act of the U.S. or the Philippine government continued Article 14 in force, it ceased to have legal effect after the transfer of sovereignty from Spain.
  
  

2. Municipal laws remain in force.

• Vilas v. City of Manila, 229 U.S. 345:

• Before the Treaty of Paris (1898), Manila incurred debts as a municipal corporation under Spain. After cession to the U.S., officials denied liability, and the Philippine Supreme Court held the new city was a different entity. The U.S. Supreme Court reversed, ruling that municipal laws and ordinances remain in force after a change in sovereignty, unless they are inconsistent with the new sovereign’s laws, policy, or have been expressly repealed. As a general principle of public law, local laws and regulations continue to operate for the preservation of order and protection of rights until the new sovereign changes them. Municipal corporations have a dual character: governmental and private. While governmental functions may be suspended during occupation or cession, the corporate entity and its private obligations persist.
  
  

[e] Effects of belligerent occupation.

• No change in sovereignty.

• Peralta v. Director of Prisons, 75 Phil. 285; 

• William F. Peralta, a member of the Metropolitan Constabulary of Manila, was prosecuted and convicted for robbery by a Court of Special and Exclusive Criminal Jurisdiction established during the Japanese military occupation of the Philippines.  After the liberation and restoration of the Commonwealth Government, Peralta filed a petition for habeas corpus, arguing that his conviction and sentence were no longer valid. The Supreme Court held that sovereignty of the legitimate government is not transferred to the belligerent occupant during occupation. The occupant merely exercises de facto control, but the de jure sovereignty remains with the legitimate government. Occupation suspends the exercise of sovereignty but does not transfer it. The Court ruled that punitive sentences imposed by the courts of the belligerent occupant, while valid during occupation, cease to be valid upon the restoration of the legitimate government.

• Upon reoccupation and restoration of the legitimate government, the principle of postliminy applies: the authority and laws of the legitimate government are restored, and acts of the occupant lose their force.

• Alcantara v. Director of Prisons, 75 Phil. 749;

• Aniceto Alcantara was convicted of illegal discharge of firearms with less serious physical injuries by the Court of First Instance of Ilocos Sur. Alcantara filed a petition for habeas corpus, questioning the validity of his conviction and sentence, arguing that the court which rendered the decision was created by the Japanese-sponsored government. The Court held that the acts and decisions of courts during the Japanese occupation are valid and remain enforceable after liberation, except those of a political complexion. Only judgments involving crimes of a political complexion (i.e., acts penalized for public rather than private reasons, aiding the enemy, or directed against the welfare of the occupier) are invalidated upon liberation. Alcantara’s offense was a common crime under the Revised Penal Code, not a political offense. 

• Ruffy v. Chief of Staff, 75 Phil. 875.

• The petitioners, former Philippine Army officers and recognized guerrilla members, were tried by court-martial for the alleged murder of a superior officer during the Japanese occupation. They argued that military law did not apply since the National Defense Act and Articles of War were supposedly suspended under belligerent occupation. The Supreme Court rejected this, ruling that sovereignty of the legitimate government subsists despite occupation, with only political laws affecting civilians suspended—not military laws governing armed forces. The fall of Bataan and Corregidor did not extinguish the Philippine Army’s existence, and guerrilla units organized under the Commonwealth and U.S. remained lawful military forces. Thus, by serving as officers in a recognized guerrilla unit, petitioners remained bound by military law and discipline, regardless of the Japanese refusal to recognize them as legitimate troops.
  
  

• [i] However, political laws (except the law on treason) are suspended [Laurel v. Misa, 77 Phil. 856]; 

• Municipal laws remain in force unless repealed by the occupant.

• At the end of occupation, suspended political laws automatically revive under the doctrine of jus postliminium.

[f] Dominium v. Imperium.

1. Dominium

• the capacity to own or acquire property, including lands held by the State in its proprietary capacity.

• The State, in its dominium capacity, can enter into contracts, buy or sell, and sue or be sued in the same way private persons can.
  
  

2. Imperium 

• the authority possessed by the State, embraced in the concept of sovereignty.

• The State, in its imperium capacity, acts as a sovereign authority and not as a mere property owner.

Act of State 

• An act of State is an act done by the sovereign power of a country, or by its delegate, within the limits of the power vested in him. 

• An act of State cannot be questioned or made the subject of legal proceedings in a court of law.  With particular reference to Political Law, an act of State is an act done by the political departments of the government and not subject to judicial review.

• An illustration is the decision of the President, in the exercise of his diplomatic power, to extend recognition to a newly-established foreign State or government.

[g] Jurisdiction.  TPE

[i] Territorial 

• power of the State over persons and things within its territory.

• Exemptions: FFA-FFI

• Foreign states, heads of state, diplomatic representatives, and consuls (to a certain degree).

• Foreign state property (embassies, consulates, public vessels in non-commercial use).

• Acts of state

• Foreign merchant vessels exercising innocent passage or involuntary entry.

• Foreign armies passing through or stationed with permission.

• International organizations like the United Nations, by agreement.

See: Convention on Privileges and Immunities of the United Nations;

Convention on Privileges and Immunities of Specialized Agencies of the United Nations;

World Health Organization v. Aquino, G.R. No. L-35131, Nov. 29, 1972

• A local judge issued a search warrant against Dr. Leonce Verstuyft, a WHO official in the Philippines, despite the Department of Foreign Affairs (DFA) and the Solicitor General affirming his entitlement to diplomatic immunity. The Supreme Court nullified the search warrant. Diplomatic immunity is a principle of international law and a political question, binding courts to the executive’s recognition. Under RA 75, any writ or process against diplomatic officials or their property is void. The Philippines, as a party to the UN Convention on Privileges and Immunities of Specialized Agencies, must uphold treaty obligations.

Southeast Asian Fisheries Development Center v. NLRC, G.R. No. 82631, Aug. 20, 1987

• SEAFDEC-AQD, an international organization created by treaty among Southeast Asian states (including the Philippines), dismissed Yong Chan Kim, a Korean employee, who then filed an illegal dismissal case before the NLRC. The Supreme Court held International organizations like SEAFDEC enjoy immunity from local jurisdiction, unless expressly waived. This immunity prevents host state interference that could compromise the neutrality and effectiveness of such organizations.

[ii] Personal

• power of the State over its nationals, exercised even outside its territory.

[iii] Extraterritorial –

• power exercised beyond territory, including: NRL-EE-HC

• Assertion of jurisdiction over nationals abroad, or punishment of offenses against national interests.

• Relations with other states (protectorate, condominium, trust territory, wartime occupation).

• Local state waiving jurisdiction (e.g., foreign army remains under sending state).

• Principle of extraterritoriality (e.g., head of state immunities)

• Easements or servitudes (innocent passage, arrival under stress).

• High seas jurisdiction (state vessels, pirates, right of visit/search, hot pursuit).

• Limited jurisdiction over contiguous zone and patrimonial sea to enforce customs, fiscal, immigration, or sanitary regulations.

SYLLABUS

IV. THE PHILIPPINES AS A STATE

A. Concept and Definition; Distinguished from nation

CIR v. Campos Rueda, 42 SCRA 23 (1971)

B. Territory

1. Definition

2. Components

3. The Philippine Archipelago - Article I

a. Article III, Treaty of Paris

b. The US-Spain November 7, 1900 Treaty

c. The US-Great Britain January 2, 1930 Treaty

d. R.A. 3046 (June 17, 1961)

e. R.A. 5446 (September 8, 1968)

f. P.D. No. 1596, June 11, 1978 (other territories)

g. P.D. No. 1599, June 11, 1978 (200 Mile EEZ)

h. U.N. Convention on Law of the Sea

i. New baseline Law (RA 9522)

Magallona vs. Ermita, July 16, 2011

C. People

D. Government

1. Functions: Constituent vs. Ministrant Functions

2. Parens Patriae 

Government vs. Monte de Piedad, 35 Phil. 728 (1916)

Cabanas vs. Pilapil, 58 SCRA 94 (1974)

Gonzales v. Marcos, 65 SCRA 624 (1975)

3. De Jure vs. De Facto governments

Co Kim Cham vs. Valdez, 75 Phil 113, 371 (1946)

Lawyer's League v. Aquino, G.R. no. 73748, May 22, 1986

4. Government distinguished from Administration

5. Other classifications of Governments

E. Sovereignty

CASES

A. Definition of a State

• Collector of Internal Revenue v. Campos Rueda, G.R. No. L-13250, October 29, 1971

• Estrella Soriano Vda. de Cerdeira, a Spanish national, lived in Tangier, Morocco from 1931 until her death in 1955.

• She left intangible personal properties in the Philippines (e.g., shares of stock).

• Under Sec. 122, NIRC (Tax Code), such intangibles are exempt from estate/inheritance tax if there is reciprocity (i.e., the foreign country where the decedent was a resident does not tax intangibles of Filipinos not residing there).

• CIR: Denied the exemption, arguing that:

1. Tangier was not a “foreign country” because it was only a “principality” and allegedly lacked the full requisites of statehood.

2. Reciprocity was absent.

• CTA: Ruled in favor of the estate, holding that Tangier’s laws did grant reciprocity and that international personality/statehood is not required for the term “foreign country” under Sec. 122.

• CIR appealed to the Supreme Court.

• Whether a “foreign country” under Sec. 122 of the Tax Code requires full statehood or international personality to qualify for the tax exemption. (NO)

• A foreign country need not be a fully sovereign state with international personality.

• What matters is whether the laws of that government/territory grant reciprocity in tax treatment.

• The Court affirmed CTA’s decision.

• Tangier’s laws exempted intangibles of foreigners; therefore, reciprocity existed.

• Hence, the estate was entitled to exemption from Philippine estate and inheritance taxes.

• Relevance:

• The Court explained the classical definition of a State: A politically organized sovereign community, independent of external control, occupying a definite territory, with a government exercising sovereignty (legal/juristic concept).

• However, the Court clarified that for domestic statutory purposes (like Sec. 122, NIRC), the term “foreign country” is broader than “state.”

• Even territories or political entities without full international personality (e.g., Tangier, Liechtenstein, California as a U.S. state) may be considered a “foreign country.”

• Nation, in contrast, is an ethnic/racial concept, not a legal one.]A nation may exist without statehood (e.g., the Kurds).

• Thus, the case illustrates that “State” is a legal concept tied to sovereignty, while “Nation” refers to people bound by culture/ethnicity.

B. Elements of a State

2. Territory

• Magallona v. Ermita, G.R. No. 187167, August 16, 2011

• Whether Republic Act No. 9522 is unconstitutional. (NO)

• RA 9522 is Constitutional.

• On reducing Philippine maritime territory

• Petitioners claim that RA 9522 “dismembers a large portion of national territory” by discarding the Treaty of Paris rectangular demarcation. They argue the constitutional definition of national territory (1935, 1973, 1987 Constitutions) overrides UNCLOS III and RA 9522.

• UNCLOS III does not deal with territorial acquisition or loss, only regulates maritime use rights (territorial sea, contiguous zone, EEZ, continental shelf).

• Baseline laws like RA 9522 are statutory tools to implement UNCLOS III, not to define or diminish territory.

• Territory is acquired by occupation, accretion, cession, or prescription—not by UNCLOS or baseline laws.

• The purpose of Baselines laws is to measure maritime zones, notify the international community, and assert treaty-based rights.

• Even if the Treaty of Paris rectangular area were accepted, baselines must still comply with UNCLOS III.

• On allowing foreign passage through internal waters.

• Whether called “internal waters” (Constitution, Art. I) or “archipelagic waters” (UNCLOS III, Art. 49), the Philippines exercises full sovereignty over waters landward of the baselines, including airspace, seabed, and subsoil.

• Passage rights are limited: Innocent passage is a customary international law norm → automatically part of Philippine law.

• Sea lanes passage does not diminish sovereignty; routes can be regulated through domestic legislation.

• Passage rights are burdens imposed on all coastal/archipelagic States to ensure freedom of navigation.

• Recognition of archipelagic waters prevents islands from being treated separately (which would reduce sovereignty over waters between islands >24 nm apart).

• Thus, UNCLOS III strengthens, not weakens, sovereignty.

• On exclusion of the Kalayaan Island Group (KIG) and Scarborough Shoal from the archipelagic baselines.

• RA 9522 did not renounce Philippine claims—Section 2 expressly reaffirms sovereignty over KIG and Scarborough Shoal as “regime of islands” under Article 121, UNCLOS III.

• Both RA 3046 and RA 9522 already placed KIG and Scarborough outside archipelagic baselines—there was no change.

• Instead of reducing, RA 9522 increased Philippine maritime space by 145,216 sq. nautical miles through optimized basepoints.

• Including KIG and Scarborough in archipelagic baselines would violate UNCLOS III (Art. 47):

• Art. 47(3): Baselines must not depart from general configuration of archipelago.

• Art. 47(2): Baseline length ≤ 100 nm (only 3% allowed up to 125 nm).

• RA 9522’s approach shows good faith observance of pacta sunt servanda under UNCLOS III while preserving sovereignty claims.

• As “regime of islands,” these features can generate their own maritime zones.

• Most Rev. Pedro Arigo v. Scott Swift, G.R. No. 206510, September 16, 2014

• The USS Guardian, a U.S. Navy warship, ran aground on the Tubbataha Reefs, a UNESCO World Heritage Site and protected marine park in the Philippines, on January 17, 2013.

• Environmental advocates and public figures filed a petition for a Writ of Kalikasan and Temporary Environmental Protection Order (TEPO), citing violations of environmental laws under R.A. No. 10067 (Tubbataha Reefs Natural Park Act).\

• Whether the U.S. violated Philippine environmental laws and international obligations under the United Nations Convention on the Law of the Sea (UNCLOS).

• The case directly engages the law of the sea, defined as: “A branch of public international law regulating the relations of states with respect to the uses of the oceans.”

• Key UNCLOS provisions cited:

• Article 30: Coastal states may require warships to leave territorial seas if they violate laws.

• Article 31: Flag states bear international responsibility for damage caused by warships.

• Article 32: Warships retain immunity except as provided in Articles 30 and 31.

• Justice Carpio emphasized that even though the U.S. has not ratified UNCLOS, it adheres to its principles as customary international law. Thus, the U.S. is expected to bear responsibility for the damage caused by the USS Guardian.

• The Supreme Court denied the petition for a Writ of Kalikasan.

• The U.S. officials were immune from suit under the doctrine of sovereign immunity.

• The Visiting Forces Agreement (VFA) did not waive immunity for civil environmental actions.

• Compensation and rehabilitation measures should be pursued through diplomatic channels, not judicial mandates.

• However, the Court affirmed the right to a balanced and healthful ecology and encouraged the Philippine government to pursue environmental accountability and restoration efforts.

B. Elements of a State – 3. Government

• U.S. v. Dorr, 2 Phil. 332

• Fred L. Dorr and Edward F. O'Brien were charged with libel for publishing allegedly false and malicious statements against Señor Benito Legarda in the "Manila Freedom" newspaper.

• The accused filed a demurrer, arguing that the complaint did not state a public offense, and also moved for a trial by jury, invoking the U.S. Constitution.

• The trial court denied both motions.

• Whether or not the U.S. Constitution, specifically the right to trial by jury, applies in the Philippine Islands. (NO)

• Whether or not the governmental agency or instrumentality through which the will of the State is formulated, expressed, and realized in the Philippines is the Philippine Commission. (YES)

• On the Applicability of the U.S. Constitution:

• The Supreme Court held that the U.S. Constitution was not automatically extended to the Philippines by the Treaty of Paris.

• Only those fundamental rights that are inherent or expressly extended by Congress apply.

• The right to trial by jury is not one of those rights automatically applicable in the Philippines.

• The Philippine Commission, as established by Congress, had the authority to legislate, including the passage of the libel law under which the accused were prosecuted.

• On the Agency or Instrumentality of the State:

• The Court explained that the agency or instrumentality through which the will of the State is formulated, expressed, and realized in the Philippines is the governmental body or authority established by Congress (i.e., the Philippine Commission).

• This body is empowered to enact laws and administer justice, acting as the arm of the sovereign (the United States at the time) in the territory.

• The Court cited U.S. constitutional doctrine: Congress, in legislating for territories, acts as both the general and state government, and may create legislative courts and agencies to carry out its will.

• "We also reach the conclusion that the Philippine Commission is a body expressly recognized and sanctioned by act of Congress, having the power to pass laws, and has the power to pass the libel law under which the defendants were convicted."

• Romualdez-Yap v. Civil Service Commission, G.R. No. 104226, August 12, 1993

• Conchita Romualdez-Yap was a Senior Vice President (SVP) at the Philippine National Bank (PNB), a government-owned and controlled corporation (GOCC).

• PNB underwent a reorganization, resulting in the abolition of the Fund Transfer Department (FTD), where Romualdez-Yap was assigned, and the merging of its functions with another department.

• Romualdez-Yap was separated from service due to the abolition of her position.

• She challenged her separation, alleging it was done in bad faith and due to her association with the previous regime. She also claimed she was not given preference for appointment to other positions.

• CSC: Upheld her separation, finding the reorganization was in good faith for efficiency and economy.

• Whether or not there is a distinction between the validity of reorganizations in government bureaus/offices and GOCCs. (YES)

• The Supreme Court affirmed the CSC’s decision and dismissed the petition.

• The Court held that reorganizations are valid if pursued in good faith, especially if aimed at achieving economy or efficiency in government operations.

• The test of good faith applies to both government bureaus/offices (performing constituent functions) and GOCCs (performing ministrant functions).

• The Court distinguished between:

• Constituent functions: Essential, compulsory functions of government (e.g., Bureau of Customs).

• Ministrant functions: Optional, non-essential functions, often proprietary or commercial in nature (e.g., PNB).

• Commercial or universal banking is not inherently a governmental function but an optional activity that the government may undertake for public welfare.

• Regardless of the nature of the function, the common test for the validity of a reorganization is good faith.

• The Court found that PNB’s reorganization was done in good faith, as evidenced by substantial restructuring, reduction of personnel, and consolidation of offices.

• Romualdez-Yap failed to assert her right to continued employment in a timely manner and did not avail of the separation benefits offered.

• The Court emphasized that security of tenure does not protect employees from separation due to the bona fide abolition of positions in a valid reorganization.

• "A distinction can be made in ruling on the validity of a reorganization between a government bureau or office performing constituent functions (like the Customs) and a government-owned or controlled corporation performing ministrant functions (like the PNB). ... But a reorganization whether in a government bureau performing constituent functions or in a government-owned or controlled corporation performing ministrant functions must meet a common test, the test of good faith."

• Fontanilla v. Mallaman, G.R. No. L-55963, December 1, 1989

• Spouses Jose and Virginia Fontanilla sued the National Irrigation Administration (NIA) for damages to their crops, allegedly caused by water seeping and escaping from NIA’s irrigation canal.

• The NIA argued it was not liable for damages because it was performing governmental functions and its driver was not a special agent.

• CFI-Nueva Ecija: Ruled in favor of the Fontanillas, awarding them damages.

• NIA appealed, insisting its functions were governmental and thus immune from suit for torts committed by its employees.

• Whether or not the NIA is performing governmental or proprietary functions in the operation of its irrigation canals.

• The Supreme Court held that the NIA, in constructing and operating irrigation canals, is performing proprietary functions, not governmental functions.

• The Court explained the distinction:

• Governmental (Constituent) Functions: Involve the exercise of sovereignty (e.g., administration of justice, maintenance of peace and order, defense). These are compulsory for the State.

• Proprietary (Ministrant) Functions: Involve activities that are optional and for the benefit of the community (e.g., business-like services such as water supply, irrigation, public utilities).

• The Court cited previous rulings, emphasizing that even if the purpose is public welfare, the nature of the activity (business-like, optional) makes it proprietary.

• As a result, the NIA can be held liable for damages arising from the negligent operation of its irrigation canals.

• “It may not be amiss to state at this point that the functions of government have been classified into governmental or constituent and proprietary or ministrant. The former involves the exercise of sovereignty and considered as compulsory; the latter connotes merely the exercise of proprietary functions and thus considered as optional.”

• Shipside, Inc. v. Court of Appeals, G.R. No. 143377, February 20, 2001

• The Office of the Solicitor General (OSG), on behalf of the Republic of the Philippines, filed a complaint to cancel land titles held by Shipside, Inc. over property allegedly part of Camp Wallace (Wallace Air Station).

• Shipside, Inc. moved to dismiss, arguing:

1. The complaint stated no cause of action (only final and executory judgments may be revived).

2. The Republic was not the real party-in-interest, as the property was already under the Bases Conversion and Development Authority (BCDA) per RA 7227 (1992).

3. The action was barred by prescription (filed beyond the 10-year period for revival of judgment).

• RTC: Denied the motion to dismiss.

• CA: Affirmed.

• Whether or not the BCDA performs governmental or proprietary functions.

• Real Party-in-Interest:

• The Supreme Court held that, with the transfer of Camp Wallace to the BCDA, the Republic was no longer the real party-in-interest. The BCDA, as the owner and administrator, is the proper party to file actions regarding the property.

• The Court explained that under Section 2 of Rule 3 of the Rules of Court, every action must be prosecuted in the name of the real party-in-interest—i.e., the party who stands to benefit or be injured by the judgment.

• The Republic could not invoke imprescriptibility, as it no longer had a direct interest in the property.

• Nature of BCDA’s Functions:

• The Court clarified that the BCDA, created under RA 7227 (1992), is a government-owned or controlled corporation (GOCC) with a distinct and separate personality from the government.

• Its functions are “basically proprietary in nature.” 

• The BCDA’s role in promoting economic and social development, especially in Central Luzon, does not make it equivalent to the government itself.

• The Court likened the BCDA to other GOCCs (e.g., SSS, GSIS, NIA), which, while serving public welfare, are not invested with governmental attributes.

• "While public benefit and public welfare, particularly, the promotion of the economic and social development of Central Luzon, may be attributable to the operation of the BCDA, yet it is certain that the functions performed by the BCDA are basically proprietary in nature. The promotion of economic and social development of Central Luzon, in particular, and the country's goal for enhancement, in general, do not make the BCDA equivalent to the Government. Other corporations have been created by government to act as its agents for the realization of its programs, the SSS, GSIS, NAWASA and the NIA, to count a few, and yet, the Court has ruled that these entities, although performing functions aimed at promoting public interest and public welfare, are not government-function corporations invested with governmental attributes. It may thus be said that the BCDA is not a mere agency of the Government but a corporate body performing proprietary functions." 

• Prescription:

• The action for revival of judgment was filed beyond the 10-year prescriptive period under Article 1144 of the Civil Code. Thus, the action was barred by prescription.

• Disposition:

• The Supreme Court dismissed the complaint, but without prejudice to the BCDA filing the appropriate action as the real party-in-interest.

• Edu v. Ericta, G.R. No. L-32096, October 24, 1970

• Romeo Edu, the Land Transportation Commissioner, issued Administrative Order No. 2 implementing the Reflector Law (Republic Act No. 5715) which required motor vehicles to be equipped with reflectors for public safety.

• Teddy Galo challenged the constitutionality of the law and administrative order, claiming they violated due process and involved undue delegation of legislative power.

• Whether or not the Philippine Constitution, particularly the 1935 Constitution, has repudiated the laissez-faire doctrine (the principle of minimal government interference in economic affairs). 

• The Supreme Court upheld the constitutionality of the Reflector Law and the administrative order. The law and order were valid exercises of the State’s police power for public safety.

• The Court rejected the argument that the law unduly interfered with property rights, emphasizing that the government has the authority to regulate for the general welfare.

• Key Ruling on Laissez-Faire Doctrine:

• The Supreme Court categorically declared that the 1935 Constitution repudiated the laissez-faire doctrine.

• The Court explained that the Constitution entrusted the government with the responsibility and power to address social and economic problems, including the regulation of economic affairs, to promote the general welfare.

• The laissez-faire principle, which advocates minimal government interference in economic matters, was expressly rejected by the framers of the 1935 Constitution.

• The Court cited statements from the Constitutional Convention and previous jurisprudence to support this position.

• "To repeat, our Constitution which took effect in 1935 erased whatever doubts there might be on that score. Its philosophy is a repudiation of laissez-faire. ... If in this Constitution the gentleman will find declarations of economic policy they are there because they are necessary to safeguard the interests and welfare of the Filipino people because we believe that the days have come when in self-defense, a nation may provide in its constitution those safeguards, the patrimony, the freedom to grow, the freedom to develop national aspirations and national interests, not to be hampered by the artificial boundaries which a constitutional provision automatically imposes." 

• The Court further noted that, since the 1935 Constitution, the Philippine government has validly enacted laws regulating labor, tenancy, trade, and other economic activities, all consistent with the repudiation of laissez-faire.

• Philippine Virginia Tobacco Administration (PVTA) v. CIR, G.R. No. L-32052, July 25, 1975

• Employees of the Philippine Virginia Tobacco Administration (PVTA), a government agency, filed a labor dispute before the Court of Industrial Relations (CIR), seeking overtime compensation under Commonwealth Act No. 444 (Eight-Hour Labor Law).

• PVTA argued it was performing governmental (not proprietary) functions and was thus exempt from the Eight-Hour Labor Law, which it claimed applied only to private enterprises.

• CIR: Ruled in favor of the employees, holding that the law applied to all persons employed in any industry or occupation, whether public or private.

• Whether or not the Eight-Hour Labor Law applies to employees of a government agency performing governmental functions.

• Whether or not the traditional distinction between "constituent" (sovereign) and "ministrant" (optional/welfare) functions of government is still controlling in determining the scope of government activity.

• On the applicability of the Eight-Hour Labor Law:

• The Supreme Court upheld the CIR's jurisdiction and ruled that the Eight-Hour Labor Law applies to all employees, including those in government agencies, unless expressly exempted by law.

• On the classification of government functions:

• The Court rejected the rigid distinction between constituent and ministrant functions, emphasizing that modern realities have blurred these lines. The government is no longer limited to traditional sovereign functions but may engage in activities previously reserved for private enterprise, especially to address social and economic needs.

• "The growing complexities of modern society, however, have rendered this traditional classification of the functions of government quite unrealistic, not to say obsolete. The areas which used to be left to private enterprise and initiative and which the government was called upon to enter optionally, and only 'because it was better equipped to administer for the public welfare than is any private individual or group of individuals,' continue to lose their well-defined boundaries and to be absorbed within activities that the government must undertake in its sovereign capacity if it is to meet the increasing social challenges of the times.” 

• The Court thus found no constitutional obstacle to the government engaging in activities or enterprises formerly reserved for the private sector.

• Association of Philippine Coconut Desiccators v. Philippine Coconut Authority, G.R. No. 110526, February 10, 1998

• The Philippine Coconut Authority (PCA) issued Board Resolution No. 018-93, declaring it would no longer require licenses or permits for coconut processing plants.

• The Association of Philippine Coconut Desiccators (APCD) challenged this, arguing the PCA exceeded its authority and violated laws regulating the coconut industry.

• The APCD sought to invalidate the resolution and the certificates of registration issued under it, and to compel the PCA to comply with mandatory regulatory provisions.

• Whether the PCA abdicated its regulatory function and acted beyond its powers.

• Whether the government can intervene in economic activities despite the policy of free enterprise under the 1987 Constitution.

• The Supreme Court ruled in favor of the APCD, declaring the PCA’s resolution invalid.

• The Court held that the PCA exceeded its authority by abdicating its regulatory function, which was mandated by law.

• The PCA’s power to regulate the coconut industry is statutory and cannot be withdrawn by mere administrative resolution.

• The Court emphasized that the 1987 Constitution, while recognizing free enterprise, allows government intervention to promote the general welfare.

• The Court cited Article XII, Sections 6 and 19 of the Constitution, which empower the State to regulate or intervene in economic activities when necessary for the common good.

• “Our Constitutions, beginning with the 1935 document, have repudiated laissez-faire as an economic principle. Although the present Constitution enshrines free enterprise as a policy, it nonetheless reserves to the government the power to intervene whenever necessary to promote the general welfare. This is clear from the following provisions of Art. XII of the Constitution which, so far as pertinent, state: Sec. 6. . . . Individuals and private groups, including corporations, cooperatives, and similar collective organizations, shall have the right to own, establish, and operate economic enterprises, subject to the duty of the State to promote distributive justice and to intervene when the common good so demands.”

• Government of the Philippine Islands v. Monte de Piedad, 35 Phil. 728 (December 13, 1916) 

• After the 1863 earthquake in Manila, a national subscription was raised in Spain for the relief of the victims. 

• The Spanish Government remitted the funds to the Philippines, to be distributed by a Central Relief Board. Part of the funds (₱80,000) was loaned to Monte de Piedad, a charitable institution, with the expectation of repayment.

• The funds were not returned; instead, they were transferred to a different account and used by Monte de Piedad.

• The Philippine Government, as successor to the Spanish Government, demanded the return of the funds for the benefit of the intended beneficiaries (earthquake victims or their heirs).

• Monte de Piedad refused, arguing, among others, that the action had prescribed.

• Whether or not the Government has the authority to act as guardian or representative of the beneficiaries. (YES)

• The Supreme Court ruled in favor of the Government.

• The Government, as the successor of the Spanish Government, is the proper party to recover the funds.

• The statute of limitations does not run against the Government in this case, as it is acting in its sovereign capacity.

• The Government may act as parens patriae (literally, "parent of the people"), meaning it can act as the guardian of persons who are disadvantaged, under disability, or unable to protect their own interests.

• The Court emphasized that the Government’s role as parens patriae is a beneficent function, necessary for the protection of those who cannot protect themselves, such as the beneficiaries of charitable trusts.

• The Court cited foreign jurisprudence to support the doctrine that the State, through its officers (e.g., the Attorney-General), may intervene to protect public interests and enforce charitable trusts.

• "This prerogative of parens patriae is inherent in the supreme power of every State, whether that power is lodged in a royal person or in the legislature, and has no affinity to those arbitrary powers which are sometimes exerted by irresponsible monarchs to the great detriment of the people and the destruction of their liberties. On the contrary, it is a most beneficient function, and often necessary to be exercised in the interest of humanity, and for the prevention of injury to those who cannot protect themselves."

• Cabanas v. Pilapil, G.R. No. L-25843, July 25, 1974 

• The case involved a dispute over who should act as trustee for the insurance proceeds left by Florentino Pilapil for his minor child, Millian Pilapil.

• The mother (Melchora Cabanas) and the uncle (Francisco Pilapil) both claimed the right to administer the proceeds.

• The insurance policy named the uncle as trustee, but the child was living with her mother, who had parental authority.

• Whether or not the mother (with parental authority) or the uncle (named as trustee in the policy) is entitled to act as trustee of the insurance proceeds for the minor beneficiary.

• The Supreme Court ruled in favor of the mother.

• The Court relied on Articles 320 and 321 of the Civil Code, which state that the father, or in his absence the mother, is the legal administrator of the child’s property under parental authority.

• The Court emphasized that the welfare of the child is the paramount consideration.

• The Court noted that the judiciary, as an agency of the State acting as parens patriae (literally, "parent of the people"), must prioritize the best interests of minors in such disputes.

• The Court explained that the State, as parens patriae, may act as guardian of the rights of those who are disadvantaged or suffering from disability or misfortune, such as minors.

• The Court found that, absent evidence of unfitness, a parent (here, the mother) is naturally preferred over other relatives for the care and administration of a minor’s property.

• The trust provision in the insurance policy, insofar as it conflicted with the Civil Code, was declared pro tanto (to that extent) null and void.

• "It is not to be lost sight of either that the judiciary pursuant to its role as an agency of the State as parens patriae, with an even greater stress on family unity under the present Constitution, did weigh in the balance the opposing claims and did come to the conclusion that the welfare of the child called for the mother to be entrusted with such responsibility."

• "This prerogative of parens patriae is inherent in the supreme power of every State... and has no affinity to those arbitrary powers which are sometimes exerted by irresponsible monarchs to the great detriment of the people and the destruction of their liberties."

• Gonzales v. Marcos, 65 SCRA 624 (1975):

• Ramon A. Gonzales challenged the constitutionality of Executive Order No. 30, which created the Cultural Center of the Philippines (CCP).

• He argued that the President had usurped legislative powers by establishing the CCP without congressional authorization.

• The CCP was funded through donations and foreign contributions, not taxes, and administered by a Board of Trustees chaired by then First Lady Imelda Marcos.

• Does the doctrine of parens patriae justify the President’s actions in administering a cultural trust for the Filipino people.

• The Supreme Court upheld the validity of Executive Order No. 30.

• The Court emphasized that the President, as head of state, acted in his capacity as parens patriae—the guardian of the people’s welfare—when he created a trust to administer cultural funds for public benefit.

• The ruling also noted that the CCP was later formalized through Presidential Decrees Nos. 15 and 179, rendering the constitutional challenge moot.

• “As head of the State, as chief executive, as spokesman in domestic and foreign affairs, in behalf of the estate as parens patriae, it cannot be successfully questioned that the President has authority to implement for the benefit of the Filipino people by creating the Cultural Center consisting of private citizens to administer the private contributions and donations given not only by the United States government but also by private persons.”

• Co Kim Chan v. Tan Keh, 75 Phil. 113:

• In 1942, the Japanese forces occupied Manila; the next day, their Commander-in-Chief proclaimed Military Administration over occupied areas.

• Philippine Executive Commission (PEC) was created, headed by Jorge B. Vargas, to coordinate existing civil and judicial institutions under Japanese supervision.

• In 1943, Japanese-sponsored Republic of the Philippines inaugurated, replacing PEC.

• Co Kim Cham filed a petition for mandamus to compel a judge to continue proceedings in a civil case initiated during the Japanese occupation.

• After liberation in 1944, Gen. MacArthur proclaimed all laws, regulations, and processes of any other government in the Philippines (other than the Commonwealth) null and void in areas free from enemy control.

• Respondent judge refused to continue the case, arguing:

• MacArthur’s proclamation invalidated all judicial acts of the occupation governments.

• No enabling law allowed continuation of such cases.

• The Japanese-sponsored governments were not de facto governments

• Whether or not the governments established in these Islands under the names of the Philippine Executive Commission and Republic of the Philippines during the Japanese military occupation or regime were de facto governments.

• De Jure vs. De Facto Government:

• De jure government: The legitimate, lawful government recognized by law.

• De facto government: A government that actually exercises power and control, even if not lawfully established.

• The Supreme Court held that the Philippine Executive Commission and the Republic of the Philippines during the Japanese occupation were de facto governments.

• Acts and proceedings of a de facto government, especially those not of a political nature (e.g., judicial acts, private transactions), are valid and remain valid even after the restoration of the de jure government.

• The principle of postliminy in international law applies: acts done by the de facto government (except those of political complexion) are not wiped out upon the return of the legitimate government.

• The Court ordered the judge to continue the proceedings, recognizing the validity of judicial acts under the Japanese regime.

• "It is a legal truism in political and international law that all acts and proceedings of the legislative, executive, and judicial departments of a de facto government are good and valid. ... The governments by the Philippine Executive Commission and the Republic of the Philippines during the Japanese military occupation being de facto governments, it necessarily follows that the judicial acts and proceedings of the courts of justice of those governments, which are not of a political complexion, were good and valid, and, by virtue of the well-known principle of postliminy (postliminium) in international law, remained good and valid after the liberation or reoccupation of the Philippines..."

• Lawyers League for a Better Philippines v. Aquino, G.R. No. 73748, May 22, 1986 

• After the February 1986 EDSA Revolution ousted President Ferdinand Marcos, Corazon Aquino assumed the presidency.

• Petitioners challenged the legitimacy of President Aquino’s government, arguing it was not established in accordance with the 1973 Constitution.

• Whether the Aquino government was legally constituted under the 1973 Constitution.

• The Court dismissed all three petitions for lack of merit.

• President Aquino’s government was not only de facto (in actual control) but also de jure (legally recognized).

1. It exercised effective control over the entire country.

2. It was accepted by the Filipino people.

3. It was recognized by the international community.

• All members of the reorganized Supreme Court had sworn allegiance to the new government.

• “For the legitimacy of the Aquino government is not a justiciable matter. It belongs to the realm of politics where only the people of the Philippines are the judge. And the people have made the judgment; they have accepted the government of President Corazon C. Aquino which is in effective control of the entire country so that it is not merely a de facto government but in fact and law a de jure government. Moreover, the community of nations has recognized the legitimacy of the present government. All the eleven members of this Court, as reorganized, have sworn to uphold the fundamental law of the Republic under her government.”

C. Sovereignty

• Laurel v. Misa, 77 Phil. 856

• During the Japanese occupation of the Philippines in World War II, Anastacio Laurel was detained for alleged acts of treason.

• Laurel filed a petition for habeas corpus, arguing that he could not be prosecuted for treason because, during the occupation, the sovereignty of the Commonwealth government was suspended, and thus, his allegiance was also suspended.

• He also argued that the change in sovereignty (from the United States/Commonwealth to the Japanese-sponsored government) meant that treason could not be committed against the ousted government.

• Whether or not a Filipino citizen can be prosecuted for treason committed during the Japanese occupation, considering the alleged suspension or change of sovereignty.

• Allegiance to the legitimate government is absolute and permanent.

• It is not suspended by enemy occupation.

• Sovereignty of the legitimate government is not abrogated or transferred by occupation; only the exercise of sovereignty may be suspended, not sovereignty itself.

• The laws of the legitimate government remain operative unless expressly repealed or inconsistent with the new Constitution.

• General Rule: Political laws (those governing the relationship between the government and its citizens) are suspended during enemy occupation.

• Exception: The law on treason is not suspended. 

• Treason can still be committed against the legitimate government by its citizens, even during occupation.

• Characteristics of Sovereignty (as discussed by the Court):

• Permanence — not temporary; it endures regardless of changes in government or occupation.

• Exclusiveness —  owed solely to the legitimate government.

• Comprehensiveness — covers all aspects of fidelity and obedience to the government.

• Absoluteness — not subject to conditions or exceptions.

• Indivisibility — cannot be divided between two governments.

• Inalienability —  cannot be transferred or renounced at will.

• Imprescriptibility — does not expire with the passage of time.

• “Considering that a citizen or subject owes, not a qualified and temporary, but an absolute and permanent allegiance, which consists in the obligation of fidelity and obedience to his government or sovereign... the absolute and permanent allegiance of the inhabitants of a territory occupied by the enemy to their legitimate government or sovereign is not abrogated or severed by the enemy occupation, because the sovereignty of the government or sovereign de jure is not transferred thereby to the occupier...”

• "...the crimes against national security, such as treason... are also suspended or become inapplicable as against the occupant... yet article 114 of the said Revised Penal Code, was applicable to treason committed against the national security of the legitimate government, because the inhabitants of the occupied territory were still bound by their allegiance to the latter during the enemy occupation;”

• People v. Perfecto, 43 Phil. 887

• Gregorio Perfecto, editor of La Nacion, published an editorial criticizing the Philippine Senate regarding missing documents from an investigation. The article implied that the Senators were involved in corruption and electoral fraud. Perfecto was charged under Article 256 of the Spanish Penal Code, which criminalized insults or defamation against ministers or persons in authority.

• Whether or not Article 256 of the Spanish Penal Code is still in force in the Philippines after the change in sovereignty.

• The Supreme Court acquitted Perfecto.

• The Court held that Article 256 of the Spanish Penal Code was no longer in force.

• Political laws of the former sovereign are abrogated upon a change in sovereignty, especially if they are inconsistent with the new government’s institutions and constitution.

• The Court explained that only municipal laws (those governing private relations) remain in force unless repealed or inconsistent with the new sovereign’s laws.

• "It is a general principle of the public law that on acquisition of territory the previous political relations of the ceded region are totally abrogated. 'Political' is here used to denominate the laws regulating the relations sustained by the inhabitants to the sovereign."

• Macariola v. Asuncion, A.M. No. 133-J, May 31, 1982

• Judge Elias Asuncion presided over a partition case involving the heirs of the late Francisco Reyes. After rendering a final decision and approving a project of partition, portions of lot once part of the estate were sold and eventually purchased by Judge Asuncion and his wife. Later, Judge Asuncion and his wife transferred their interest in the property to a corporation in which both were officers and shareholders.

• Bernardita Macariola, one of the parties in the original partition case, filed an administrative complaint against Judge Asuncion alleging violations of Article 14 of the Code of Commerce, which prohibits judges from engaging in commerce, by acquiring such shares.

• Whether Article 14 of the Code of Commerce was still in effect after the change of sovereignty from Spain to the United States and then to the Republic of the Philippines.  (NO)

• Article 14 no longer had legal effect after Spain ceded sovereignty.

• Article 14 of the Code of Commerce partakes more of the nature of an administrative law because it regulates the conduct of certain public officers and employees with respect to engaging in business: hence, political in essence.

• Under public international law principles, political laws of the former sovereign are automatically abrogated upon change of sovereignty, unless expressly re-enacted by the new sovereign.

• Since no enabling act of the U.S. or the Philippine government continued Article 14 in force, it ceased to have legal effect after the transfer of sovereignty from Spain.

• Vilas v. City of Manila, 220 U.S. 345

• Before the Treaty of Paris (1898), Manila, as a municipal corporation under Spain, incurred valid contractual debts to creditors like Vilas. 

• After Spain ceded the Philippines to the U.S., Manila retained the same territory, population, name, purposes, and property under its 1901 charter, but city officials denied liability, claiming the Spanish-era corporation was dissolved. 

• Philippine Supreme Court: Denied relief, arguing that the new city was a different legal entity and not liable for the obligations of the old city.

• Whether municipal laws and ordinances enacted under the previous (Spanish) sovereignty remained valid and enforceable after the change in sovereignty to the United States.

• The U.S. Supreme Court held that municipal laws and ordinances remain in force after a change in sovereignty, unless they are inconsistent with the new sovereign’s laws, policy, or have been expressly repealed.

• As a general principle of public law, local laws and regulations continue to operate for the preservation of order and protection of rights until the new sovereign changes them.

• Municipal corporations have a dual character: governmental and private. While governmental functions may be suspended during occupation or cession, the corporate entity and its private obligations persist.

• The new city charter explicitly continued the legal existence of Manila and transferred its property and rights to the new entity.

• Therefore, the new City of Manila was liable for the debts of the old city.

• Peralta v. Director of Prisons, 75 Phil. 285

• William F. Peralta, a member of the Metropolitan Constabulary of Manila, was prosecuted and convicted for robbery by a Court of Special and Exclusive Criminal Jurisdiction established during the Japanese military occupation of the Philippines.

• He was sentenced to life imprisonment under laws and courts created by the Japanese-sponsored government. After the liberation and restoration of the Commonwealth Government, Peralta filed a petition for habeas corpus, arguing that his conviction and sentence were no longer valid.

• Whether or not punitive sentences imposed by courts established by the belligerent occupant are still valid after the restoration of the legitimate government.

• On Sovereignty:

• The Supreme Court held that sovereignty of the legitimate government is not transferred to the belligerent occupant during occupation. The occupant merely exercises de facto control, but the de jure sovereignty remains with the legitimate government.

• The Court cited international law authorities (Oppenheim, Hyde) and the United States Supreme Court in United States v. Rice, emphasizing that occupation suspends the exercise of sovereignty but does not transfer it.

• The laws and courts established by the occupant are based on martial law and military necessity, not on the constitution or laws of the legitimate government.

• Upon reoccupation and restoration of the legitimate government, the principle of postliminy applies: the authority and laws of the legitimate government are restored, and acts of the occupant lose their force.

• On Punitive Sentences:

• The Court ruled that punitive sentences imposed by the courts of the belligerent occupant, while valid during occupation, cease to be valid upon the restoration of the legitimate government.

• Peralta’s continued imprisonment under such a sentence became illegal after the Commonwealth was restored, and he was ordered released.

• Alcantara v. Director of Prisons, 75 Phil. 749

• Aniceto Alcantara was convicted of illegal discharge of firearms with less serious physical injuries by the Court of First Instance of Ilocos Sur.

• The conviction was affirmed by the Court of Appeals of Northern Luzon, which operated during the Japanese occupation.

• Alcantara filed a petition for habeas corpus, questioning the validity of his conviction and sentence, arguing that the court which rendered the decision was created by the Japanese-sponsored government.

• Whether or not the judicial acts and decisions of courts established during the Japanese occupation are valid and enforceable after the restoration of the Commonwealth government.

• The acts and decisions of courts during the Japanese occupation are valid and remain enforceable after liberation, except those of a political complexion.

• The Court clarified that belligerent occupation does not transfer sovereignty to the occupying power. 

• The sovereignty of the legitimate government remains, even if its exercise is suspended.

• Political vs. Non-Political Offenses: 

• Only judgments involving crimes of a political complexion (i.e., acts penalized for public rather than private reasons, aiding the enemy, or directed against the welfare of the occupier) are invalidated upon liberation. Alcantara’s offense was a common crime under the Revised Penal Code, not a political offense.

• The Court cited the doctrine that the judicial acts of a de facto government established by a belligerent occupant are valid, provided they do not pertain to political offenses.

• "A punitive or penal sentence is said to be of a political complexion when it penalizes either a new act not defined in the municipal laws, or acts already penalized by the latter as a crime against the legitimate government, but taken out of the territorial law and penalized as new offenses committed against the belligerent occupant, incident to a state of war and necessary for the control of the occupied territory and the protection of the army of the occupier. They are acts penalized for public rather than private reasons, acts which tend, directly or indirectly, to aid or favor the enemy and are directed against the welfare, safety and security of the belligerent occupant." 

• Ruffy v. Chief of Staff, 75 Phil. 875,  (G.R. No. L-533, August 20, 1946):

• Petitioners (Ruffy et al.) were former officers of the Philippine Army and members of a recognized guerrilla unit during World War II.

• They were tried by a General Court-Martial for the alleged murder of a superior officer during the Japanese occupation.

• Petitioners argued they were not subject to military law at the time of the offense, claiming that the National Defense Act and the Articles of War were suspended during the Japanese occupation (belligerent occupation).

• They also questioned the constitutionality of the 93rd Article of War.

• Whether the laws creating and governing the Philippine Army, including the Articles of War, were suspended during the Japanese occupation.

• The Supreme Court held that belligerent occupation does not result in a change of sovereignty. 

• The sovereignty of the legitimate government remains, even if its exercise is temporarily suspended.

• "The rule invoked by counsel, namely, that laws of political nature or affecting political relations are considered superseded or in abeyance during the military occupation, is intended for the governing of the civil inhabitants of the occupied territory. It is not intended for and does not bind the enemies in arms. This is Self-evident from the very, nature of things."

• The Court clarified that the suspension of certain laws during occupation applies only to civil inhabitants, not to military forces or resistance fighters.

• The fall of Bataan and Corregidor did not end the war or the existence of the Philippine Army; the Commonwealth government and the U.S. could still organize military forces, including guerrillas.

• Petitioners, by accepting appointments as officers in a recognized guerrilla unit, remained subject to military law and discipline.

• The enemy’s refusal to recognize guerrillas as legitimate troops did not affect their status under Philippine and U.S. military law.

D. Jurisdiction

• World Health Organization v. Aquino, G.R. No. L-35131, November 29, 1972

• Dr. Leonce Verstuyft, a WHO official, was assigned to the Philippines and entitled to diplomatic immunity.

• A search warrant was issued by a local judge for the search and seizure of Dr. Verstuyft’s personal effects, allegedly for violation of customs laws.

• The Department of Foreign Affairs (DFA) and the Secretary of Foreign Affairs formally advised the judge that Dr. Verstuyft was entitled to immunity and requested the suspension and quashal of the search warrant.

• Despite the DFA’s position and the Solicitor General’s support for quashal, the judge refused to lift the search warrant.

• The World Health Organization and Dr. Verstuyft filed a petition before the Supreme Court to set aside the search warrant.

• Whether the Philippine courts have jurisdiction to issue and enforce a search warrant against a person entitled to diplomatic immunity.

• The Supreme Court granted the petition, nullifying the search warrant and ordering the cessation of further proceedings.

• The Court emphasized that diplomatic immunity is a recognized principle of international law and is essentially a political question. 

• Courts must defer to the executive branch’s determination of diplomatic immunity.

• When the executive branch recognizes a person’s diplomatic immunity, courts are bound to accept this determination and must not exercise jurisdiction in a manner that would embarrass the executive in foreign relations.

• The Court cited Republic Act No. 75, which declares as null and void any writ or process against diplomatic officials or their property and penalizes those who obtain or enforce such writs.

• The Court also referenced the Convention on the Privileges and Immunities of the Specialized Agencies of the United Nations, which the Philippines is bound to observe as a treaty commitment with the force and effect of law.

• The Court underscored the importance of coordination among government agencies to avoid international embarrassment and uphold treaty obligations.

• General rule: A State has jurisdiction over persons and things within its territory.

• Exception:

• Foreign states, heads of state, diplomatic representatives, and consuls (to a certain degree) are exempt from local jurisdiction.

• Foreign state property, such as embassies and consulates, and public vessels engaged in noncommercial activities, are also exempt.

• Acts of state, foreign merchant vessels exercising innocent passage or involuntary entry, foreign armies with permission, and international organizations like the United Nations (by agreement) may also be exempt.

• Southeast Asian Fisheries Development Center v. NLRC, G.R. No. 82631, August 20, 1987

• SEAFDEC‑AQD is an international organization established by treaty among several Southeast Asian states (including the Philippines) to promote fisheries development through mutual cooperation.

• Yong Chan Kim, a Korean national employed by SEAFDEC‑AQD in Iloilo, was dismissed. Kim filed an illegal dismissal case before the NLRC Arbitration Branch.

• LA: Ordered reinstatement with backwages plus moral damages.

• NLRC: Affirmed reinstatement; increased moral damages; added exemplary damages and attorney’s fees.

• SEAFDEC argued lack of jurisdiction. As an international agency, it enjoys immunity from suit under the principle of territorial jurisdiction exemptions.

• Whether the NLRC has jurisdiction over SEAFDEC, an international organization, in a labor dispute. 

• The Supreme Court ruled in favor of SEAFDEC, holding that the NLRC does not have jurisdiction over it.

• SEAFDEC is an international agency established by several Southeast Asian countries, including the Philippines, and enjoys diplomatic immunity.

• The Court reiterated that international organizations like SEAFDEC are generally immune from the jurisdiction of local courts unless such immunity is expressly waived.

• The rationale is to prevent interference by the host government in the operations and policies of international organizations, which could compromise their impartiality and effectiveness.

• "One of the basic immunities of an international organization is immunity from local jurisdiction, i.e., that it is immune from the legal writs and processes issued by the tribunals of the country where it is found... It is precisely to forestall these possibilities that in cases where the extent of the immunity is specified in the enabling instruments of international organizations, jurisdictional immunity from the host country is invariably among the first accorded."

• The Court also clarified that estoppel does not apply to confer jurisdiction where none exists, especially in cases involving entities with sovereign or diplomatic immunity.