G.R. No. 27637 , November 17, 1927
THE PEOPLE OF THE PHILIPPINE ISLANDS, plaintiff-appellee, vs. CARLOS S. TAN, defendant-appellant.

FACTS

Carlos S. Tan was convicted by the Court of First Instance of Leyte for violating Section 2 of the Act of the United States Congress of July 16, 1918. The law prohibited agents or attorneys from charging more than $10 for services related to pension claims under that Act. Tan was sentenced to pay a fine of P10, with subsidiary imprisonment in case of insolvency, and to pay the costs.

ISSUE

1. Whether the Act of Congress of July 16, 1918 (the Pension Act) is applicable to the Philippine Islands.
2. Whether the trial court erred in imposing subsidiary imprisonment and in not ordering the return of the excess fee charged by the appellant.

RULING

1. Yes, the Act of Congress of July 16, 1918 is applicable to the Philippine Islands. The Supreme Court held that the law, which grants pensions to widows and minor children of officers and enlisted men who served in the War with Spain, the Philippine Insurrection, or the China Relief Expedition, is a law relating to the maintenance of the Army and Navy. Citing the doctrine in *Tan Te vs. Franklin Bell* (27 Phil. 354), laws for the creation, regulation, and maintenance of the Army, unless specifically limited, are of nationwide application and extend to all territory under U.S. jurisdiction. The Act’s reference to the “Philippine insurrection” indicates its applicability to the Islands. Therefore, its penal provision (Section 2) is also enforceable therein.

2. The trial court erred in imposing subsidiary imprisonment but should have ordered the return of the illegal fee.
* On Subsidiary Imprisonment: The Act of Congress does not provide for subsidiary imprisonment. Neither Article 50 of the Penal Code (applicable to penalties under the Code) nor Act No. 1732 (applicable to penalties under Acts of the Philippine Legislature) applies to violations of this U.S. Act. Therefore, the imposition of subsidiary imprisonment was without legal basis and was ordered eliminated.
* On the Return of the Excess Fee: The difference between the legal fee ($10) and the amount Tan charged constitutes an illegal exaction. The court has the inherent power to order its restitution to prevent unjust enrichment. The Supreme Court modified the judgment to order Tan to return the sum of $15 (equivalent to P30) to the claimant, Rufina Bañez.

DISPOSITIVE PORTION:
The appealed judgment was AFFIRMED with modifications: (1) the order for subsidiary imprisonment was eliminated, and (2) the appellant was ordered to return P30 to Rufina Bañez. Costs were imposed on the appellant.