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Extent of Judicial Review: Question of Law

G.R. No. L-8987 (1957) – Japanese War Notes Claimants Association of the Phils. v. SEC
LABRADOR, J.

An investigation was conducted regarding misrepresentations made by the Japanese War Notes Claimants Association of
the Phils. in its publication stating the need to register Japanese War Notes for their value to be redeemed. SEC then orders
the association to stop the registration of war notes and collecting fees therefor and to desist accepting fees for reparation
claims by civilians. The association filed instant petition to review the above orders. SC ruled that it cannot examine the
correctness of Commissioner’s finding that petitioner made misrepresentations as this involves questions of fact. SC also
affirmed the SEC orders.

DOCTRINE
(1957 Case) The SC is not permitted to examine contentions involving questions of fact; only questions of law may be
raised in this case for review. (Case is a petition to review SEC order.)

IMPORTANT PEOPLE
Japanese War Notes Claimants Association of the Phils. - petitioner, Mr. Alfredo Abcede (President)
Securities and Exchange Commission (SEC) - respondent

FACTS
1. SEC Commissioner issued an order requiring the petitioner association and its President to show cause why it should
not be proceeded against for making misrepresentations to the public about the need of registering and depositing
Japanese war notes, for them to redeemed otherwise they would be valueless.
2. In the investigation, pet. tried to show that there were no misrepresentations in their publication and that their mistake
(that Pres. Magsaysay would soon address the US govt to have the notes redeemed) made in good faith and later
retracted.
3. After the investigation, the Commissioner made the ff. findings:
a) Pet has privilege to work for the redemption of the war notes of its members alone, but cannot offer its services to
the public for valuable consideration, since success of redemption is speculative
b) Under its Art. Of Incorporation, it is a civic and non non-stock corporation and should not engage in business for
profit
c) It has received war notes for deposit, upon payment of fees, despite having no authority under its articles
d) It has been ordered previously to desist in collecting fees from those registering war notes but continued to do so
4. Hence, commissioner ordered the association to:
a) stop immediately the registration of Japanese War Notes, receiving the same for deposit, and charging fees
therefor
b) desist forthwith from accepting and collecting fees for reparation claims for civilians’ casualties and other
injuries
5. Association filed this petition to review above orders of SEC, with prayer for preliminary injunction.

ISSUE with HOLDING


1. W/N the petitioner association’s contentions against the SEC orders have merit? NONE.
 Petitioner’s 1st contention: Commissioner erred in finding that petitioner made misrepresentations to the public
so as to induce holders of war notes to register them with petitioner.
- The SC is not permitted to examine the correctness of the first contention as above set forth as the same
involves questions of fact; only questions of law may be raised in this case for review (section 2, Rule 43
of the Rules of Court).
(Note: this is under old ROC. Court did not discuss questions of law/fact distinction.)

 Petitioner’s 2nd contention: assails the first order of ceasing registration of war notes (fact 4.a) as it was beside
the issue investigated
- SC: The order was germane to the subject matter of the investigation. While the issue has been the
misrepresentations made to the public, the order is based on the findings of fact in the investigation and the
prohibition in the order aims at the eradication of the source of the evil of the misrepresentations.
- The articles of incorporation authorize collection of fees from members; but do not authorize the corporation to
engage in the business of registering and accepting war notes for deposit and collecting fees from such services.
Thus petitioner is wrong in arguing that registration of war notes and collecting fees therefor were implied in its
articles.

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 Petitioner’s 3rd contention: assails 2nd order of desisting accepting fees for reparation claims (fact 4.b) saying it
has authority to do so
- SC: Such activities is beyond any of the powers of the association as embodied in its articles and have no relation
to the avowed purpose of the association to work for the redemption of war notes.

 SEC’s authority in issuing said orders is under section 1 (b) of Republic Act No. 1143:
“(b) To penalize any violation of or non-compliance with any terms of conditions of any certificate, license, or permit
issued by the Commission or of any order, decision, ruling or regulation thereof, by a fine of not exceeding two
hundred pesos per day for every day during which such violation or default continues; and the Commission is hereby
authorized and empowered to impose and collect such fine after due notice and hearing.”

DISPOSITIVE PORTION
Order sought to be reviewed is affirmed.

OTHER NOTES
Purposes of the association under its articles:
(1) To consecrate and sanctify in a strong and militant organization in the furtherance of the financial conditions of its
members, toward the attainment of their claims;
(2) To take a position which is only secondary and complimentary to that of our constituted government in campaigning for
the welfare of our people, especially when it is to demand redemption of currency from foreign country;
(3) To work for, and to make due representations with the United States and Japanese Governments, for the redemption
and, or, for the future payments of the Japanese War Notes (mickey mouse money);
(4) To instill the ties of comradeship through this and noble gesture of goodwill between our people and country with the
people and countries of the United States and Japan;
(5) To do any and all acts and things which are naturally incidental on arising out of the purpose or any others.

DIGESTER: Sophia Sy

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