HERBERT BROWNELL, JR., as Attorney General of the United States vs.

SUN L!E ASSURAN"E "O#$AN% O! "ANA&A

G.R. No. L'()*+, J-ne .., +/(0
PONENTE: J. LABRA&OR
!A"TS1 This is a petition instituted in the Court of the First Instance of Manila under the
provisions of the Philippine Property Act of the United States against the Sun Life Assurance
Company of Canada, to compel the latter to comply ith the demand of the former to pay him
the sum of P!"#$"#, hich represents one%half of the proceeds of an endoment policy &'o$
()("**+ hich matured on August ,#, "*-., and hich is paya/le to one 'aogiro Aihara, a
0apanese national$
Under the policy Aihara and his ife, Filomena 1ayapan, ere insured 2ointly for the sum of
P",###, and upon its maturity the proceeds thereof ere paya/le to said insured, share and share
ali3e, or P!"#$"# each$
The defenses set up in the court of origin are4
(1) that the immunities provided in section 5 (b) (2) of the Trading With the Enemy Act of
the United States are of doubtfu appication in the !hiippines" and have never been
adopted by any a# of the !hiippines as appicabe here or obigatory on the oca
courts$
(2) that the defendant is a trustee of the funds and is under a ega obigation to see it to
that it is paid to the person or persons entited thereto" and uness the petitioner e%ecutes
a suitabe discharge and an ade&uate guarantee to indemnify and 'eep it free and
harmess from any further iabiity under the poicy" it may not be compeed to ma'e the
payment demanded( The )ourt of *irst +nstance of ,ania having approved and granted
the petition" the respondent has appeaed to this )ourt" contending that the )ourt of
origin erred in hoding that the Trading With the Enemy Act of the United States is
binding upon the inhabitants of this country" not#ithstanding the attainment of compete
independence on -uy ." 1/.0" and in ordering the payment prayed for(
5n 0uly !, "*-., the Congress of the United States passed Pu/lic La -6)%(*th Congress,
3non as the Philippine Property Act of "*-.$ Section ! thereof provides that 7The Trading ith
the 8nemy Act of 5cto/er ., "*"( &-# Stat$ -""+, as amended, shall continue in force in the
Philippines after 0uly -, "*-., $$$$7 To implement the provisions of the act, the President of the
United States on 0uly !, "*-., promulgated 89ecutive 5rder 'o$ *(-(, 7continuing the functions
of the Alien Property Custodian and the :epartment of the Treasury in the Philippines$7 Prior to
and preparatory to the approval of said Philippine Property Act of "*-., an agreement as
entered into /eteen President Manuel ;o9as of the Commonealth and U$ S$ Commissioner
Paul <$ Mc'utt here/y title to enemy agricultural lands and other properties as to /e
conveyed /y the United States to the Philippines in order to help the reha/ilitation of the latter,
/ut that in order to avoid comple9 legal pro/lems in relation to said enemy properties, the Alien
Property Custodian of the United States as to continue operations in the Philippines even after
the latter=s independence, that he may settle all claims that may e9ist or arise against the a/ove%
mentioned enemy properties, in accordance ith the Trading >ith the 8nemy Act of the United
States$ &;eport of the Committee on Insural Affairs 'o$ ,,*. and Senate ;eport 'o$ ")(6 from
the Committee on Territories and Insular Affairs, to accompany S$ ,!-), accompanying ?$ ;$
.6#", (*th Congress, ,nd Session$+ This purpose of conveying enemy properties to the
Philippines after all claims against them shall have /een settled is e9pressly em/odied in the
Philippine Property Act of "*-.$
S8C$ !$ The Trading >ith the 8nemy Act of 5cto/er ., "*"( &-# Stat$ -""+ as amended, shall
continue in force in the Philippines after 0uly -, "*-., and all poers and authority conferred
upon the President of the United States or the Alien Property Custodian /y the terms of the said
Trading >ith the 8nemy Act, as amended, ith respect to the Philippines, shall continue
thereafter to /e e9ercised /y the President of the United States, or such officer or agency as he
may designate4 Provided, That all property vested in or transferred to the President of the United
States, the Alien Property Custodian, or any such officer or agency as the President of the United
States may designate under the Trading >ith the 8nemy Act, as amended, hich as located in
the Philippines at the time of such vesting, or the proceeds thereof, and hich shall remain after
the satisfaction of any claim paya/le under the Trading >ith the 8nemy Act, as amended, and
after the payment of such costs and e9penses of administration as may /e la /e charged against
such property or proceeds, shall /e transferred /y the President of the United States to the
;epu/lic of the Philippines4 Provided further, That such property, or proceeds thereof, may /e
transferred /y the President of the United States to the ;epu/lic of the Philippines upon
indemnification accepta/le to the President of the United States /y the ;epu/lic of the
Philippines for such claims, costs, and e9penses of administration as may /y la /e charged
against such property or proceeds thereof /efore final ad2udication of such claims, costs and
e9penses of administration$ Provided further, That the courts of first instance of the ;epu/lic of
the Philippines are here/y given 2urisdiction to ma3e and enter all such rules as to notice or
otherise, and all such orders and decrees and to issue such process as may /e necessary and
proper in the premises to enforce any orders, rules, and regulations issued /y the President of the
United States, the Alien Property Custodian, or such officer or agency designated /y the
President of the United States pursuant to the Trading >ith the 8nemy Act, as amended, ith
such right of appeal therefrom as may /e provided /y la4 And provided further, That any suit
authori@ed under the Trading >ith the 8nemy Act, as amended, ith respect to property vested
in or transferred to the President of the United States, the Alien Property Custodian, or any
officer or agency designated /y the President of the United States hereunder, hich at the time of
such vesting or transfer as located ith the Philippines, shall after 0uly -, "*-., /e /rought in
the appropriate court of first instance of the ;epu/lic of the Philippines, against the officer or
agency hereunder designated /y the President of the United States ith right of appeal therefrom
as may /e provided /y la$ In any litigation authori@ed under this section, the officer or
administrative head of the agency designated hereunder may appear personally, or through
attorneys appointed /y him, ithout regard to the reAuirements of la other than this section$
And hen the proclamation of the independence of the Philippines /y President Truman as
made, said independence as granted 7in accordance ith the su/2ect to the reservations
provided in the applica/le statutes of the Unites States$7 The enforcement of the Trading >ith
the 8nemy Act of the United States as contemplated to /e made applica/le after independence,
ithin the meaning of the reservations$
5n the part of the Philippines, conformity to the enactment of the Philippine Property Act of
"*-. of the United States as announced /y President Manuel ;o9as in a 2oint statement signed
/y him and /y Commissioner Mcnutt$ Am/assador ;omulo also formally e9pressed the
conformity of the Philippines 1overnment to the approval of said act to the American Senate
prior to its approval$ And after the grant of independence, the Congress of the Philippines
approved ;epu/lic Act 'o$ 6, entitled$
A' ACT T5 AUT?5;IB8 T?8 P;8SI:8'T 5F T?8 P?LIPPI'8S T5 8'T8; I'T5
SUC? C5'T;ACT 5; U':8;TACI'1S AS MAD E8 '8C8SSA;D T5 8FF8CTUAT8
T?8 T;A'SF8; T5 T?8 ;8PUELIC 5F T?8 P?ILIPPI'8S U':8; T?8 P?ILIPPI'8S
P;5P8;TD ACT 5F 'I'8T88' ?U':;8: A': F5;TD%SIF 5F A'D P;5P8;TD 5;
P;5P8;TD ;I1?TS 5; T?8 P;5C88:S T?8;85F AUT?5;IB8: T5 E8
T;A'SF8;;8: U':8; SAI: ACTG P;5<I:I'1 F5; T?8 A:MI'IST;ATI5' A':
:ISP5SITI5' 5F SUC? P;5P8;TI8S 5'C8 ;8C8I<8:G A': APP;5P;IATI'1 T?8
'8C8SSA;D FU': T?8;8F5;$
The Congress of the Philippines also approved ;epu/lic Act 'o$ (, hich esta/lished a !orei2n
!-nds "ontrol Offi3e$ After the approval of the Philippine Property Act of "*-. of the United
States, the Philippine 1overnment also formally e9pressed, through the Secretary of Foreign
Affairs, conformity thereto$ &See letters of Secretary dated August ,,, "*-., and 0une !, "*-($+
The Congress of the Philippines has also approved ;epu/lic Act 'o$ -((, hich provides for the
administration and disposition of properties hich have /een or may hereafter /e transferred to
the ;epu/lic of the Philippines in accordance ith the Philippines Property Act of "*-. of the
United States$
t is evident, therefore, that the 3onsent of the $hili44ine Govern5ent to the a44li3ation of
the $hili44ine $ro4erty A3t of +/06 to the $hili44ines after inde4enden3e 7as 2iven, not
only 8y the E9e3-tive &e4art5ent of the $hili44ines Govern5ent, 8-t also 8y the
"on2ress, 7hi3h ena3ted the la7s that 7o-ld i54le5ent or 3arry o-t the 8enefits a33r-in2
fro5 the o4eration of the United States la7. The respondent%appellant, hoever, contends that
the operation of the la after independence could not have actually ta3en, or may not ta3e place,
/ecause /oth ;epu/lic Act 'o$ 6 and ;epu/lic Act 'o$ -(( do not contain any specific provision
here/y the Philippine Property Act of "*-. or its provisions is made applica/le to the
Philippines$ It is also contended that in the a/sence of such e9press provision in any of the las
passed /y the Philippine Congress, said Philippine Property Act of "*-. does not form part of
our las and is not /inding upon the courts and inha/itants of the country$
There is no Auestion that a foreign la may have e9traterritorial effect in a country other than the
country of origin, provided the latter, in hich it is sought to /e made operative, gives its consent
thereto$ This principle is supported /y the unAuestioned authority$
The 2urisdiction of the nation ithin its territory is necessarily e9clusive and a/solute$ It is
suscepti/le of no limitation not imposed /y itself$ Any restriction upon it, deriving validity from
an e9ternal source, ould imply a diminution of its sovereignty to the e9tent of the restriction,
and an investment of that sovereignty to the same e9tent in that poer in hich ould impose
such restriction$ All e9ceptions, therefore, to the full and complete poer of a nation ithin its
on territories, must /e traced up to the consent of the nation itself$ They can flo from no other
legitimate source$ This consent may /e either e9press or implied$ &Philippine Political La /y
Sinco, pp$ ,(%,6, citing Chief 0ustice Marshall=s statement in the 89change, ( Cranch "".+ In the
course of his dissenting opinion in the case of S$ S$ Lotus, decided /y the Permanent Court of
International 0ustice, 0ohn Eassett Moore said4
"$ It is an admitted principle of International La that a nation possesses and e9ercises
ithin its on territory an a/solute and e9clusive 2urisdiction, and that any e9ception to
this right must /e traced to the consent of the nation, either e9press or implied &Schooner
89change vs$ McFadden H6",I, ( Cranch ""., "!.+$ The /enefit of this principle eAually
enures to all independent and sovereign States, and is attended ith a corresponding
responsi/ility for hat ta3es place ithin the national territory$ &:igest of International
La, /y Eac3orth, <ol$ II, pp$ "%,+
The a/ove principle is not denied /y respondent%appellant$ Eut its argument on this appeal is that
hile the acts enacted /y the Philippine Congress impliedly accept the /enefits of the operation
of the United States la &Philippine Property Act of "*-.+, no provision in the said acts of the
Philippine Congress ma3es said United States la e9pressly applica/le$ In anser to this
contention, it must /e stated that the consent of a Senate to the operation of a foreign la ithin
its territory does not need to /e e9pressG it is enough that said consent /e implied from its
conduct or from that of its authori@ed officers$
RULNG1 ')")$ 1o rue of +nternationa 2a# e%ists #hich prescribe a necessary form of
ratification$ J ;atification can, therefore, /e given tacitly as ell as e9pressly$ Tacit ratification
ta3es place hen a State /egins the e9ecution of a treaty ithout e9pressly ratifying it$ It is usual
for ratification to ta3e the form of a document duly signed /y the ?eads of the States concerned
and their Secretaries for Foreign Affairs$ It is usual to draft as many documents as there are
parties to the Convention, and to e9change these documents /eteen the parties$ 5ccasionally
the hole of the treaty is recited ver/atim in the ratifying documents, /ut sometimes only the
title, pream/le, and date of the treaty, and the names of the signatory representatives are cited$ As
ratification is only the confirmation of an already e9isting treaty, the essential reAuirements in a
ratifying document is merely that it should refer clearly and unmista3a/ly to the treaty to /e
ratified$ The citation of title, pream/le, date, and names of the representatives is, therefore Auite
sufficient to satisfy that reAuirements$ &5ppenheim, pp$ 6"6%6"*G emphasis ours$+
International La does not reAuire that agreements /eteen nations must /e concluded in any
particular form or style$ The la of nations is much more interested in the faithful performance
of international o/ligations than in prescri/ing procedural reAuirements$ &Treaties and 89ecutive
Agreements, /y Myers S$ Mc:ougal and Asher Lands, Dale La 0ournal, <ol$ )-, pp$ !"6%!"*+
In the case at /ar, our ratification of or concurrence to the agreement for the e9tension of the
Philippine Property Act of "*-. is clearly implied from the acts of the President of the
Philippines and of the Secretary of Foreign Affairs, as ell as /y the enactment of ;epu/lic Acts
'os$ (, 6, and -(($
>e must emphasi@e the fact that the operation of the Philippine Property Act of "*-. in the
Philippines is not derived from the unilateral act of the United States Congress, hich made it
e9pressly applica/le, or from the saving provision contained in the proclamation of
independence$ It is ell%settled in the United States that its las have no e9traterritorial effect$
The application of said la in the Philippines is /ased concurrently on said act &Philippine
Property Act of "*-.+ and on the tacit consent thereto and the conduct of the Philippine
1overnment itself in receiving the /enefits of its provisions$
It is also claimed /y the respondent%appellant that the trial court erred in ordering it to pay the
petitioner the amount demanded, ithout the e9ecution /y the petitioner of a deed of discharge
and indemnity for its protection$ The Trading >ith the 8nemy Act of the United States, the
application of hich as e9tended to the Philippines /y mutual agreement of the to
1overnments, contains an e9press provision to the effect that delivery of property or interest
therein made to or for the account of the United States in pursuance of the provision of the la,
shall /e considered as a full acAuittance and discharge for purposes of the o/ligation of the
person ma3ing the delivery or payment$ &Section )&/+ &,+, Trading >ith the 8nemy Act$+ This
e9press provision of the United States la saves the respondent%appellant from any further
lia/ility for the amount ordered to /e paid to the petitioner, and fully protects it from any further
claim ith respect thereto$ The reAuest of the respondent%appellant that a security /e granted it
for the payment to /e made under the la is, therefore, unnecessary, /ecause the 2udgment
rendered in this case is sufficient to prove such acAuittance and discharge$
&S$OST:E $ORTON1 The decision appealed from should /e as it is here/y affirmed, ith
costs against the respondent%appellant$