GR L 4263; (March, 1953) (Digest)
G.R. No. L-4263; March 12, 1953
Amado B. Parreño, plaintiff-appellant, vs. Hon. James P. McGranery, Attorney General of the United States, defendant-appellant.
FACTS
The plaintiff-appellant, Amado B. Parreño, filed a suit to collect the sum of P13,063 for legal services rendered to Kokichi Ishiwata, a Japanese national, before the outbreak of World War II. The properties of Ishiwata had been vested in and transferred to the Philippine Alien Property Administrator (later substituted by the Attorney General of the United States) under the Trading with the Enemy Act. The complaint included a request for a writ of attachment, which was issued and levied on one of the vested lots. The Court of First Instance of Negros Occidental dismissed the complaint on the grounds of lack of jurisdiction over the person of the defendant and the subject matter of the action. The plaintiff appealed, contending the suit was not against the United States and that Philippine courts had jurisdiction under the Philippine Property Act of 1946.
ISSUE
Whether the court a quo correctly dismissed the complaint for lack of jurisdiction, specifically: (1) if the suit is, in effect, a suit against the United States, which is immune from suit without its consent; and (2) if the jurisdiction granted to Philippine courts by the Philippine Property Act of 1946 was subsequently withdrawn or superseded by an amendment to the Trading with the Enemy Act.
RULING
The Supreme Court affirmed the order dismissing the complaint.
1. The suit is effectively a suit against the United States and is barred by the doctrine of state immunity. The principle of international law, recognized under the Philippine Constitution, is that a foreign state may not be sued without its consent. Citing U.S. and Philippine jurisprudence (e.g., Banco Mexicano vs. Deutsche Bank; Miguel Socco Reyes vs. Philippine Alien Property Administrator), the Court held that a suit against the Attorney General to establish a claim under the Trading with the Enemy Act falls within this rule. The vested properties and their proceeds belonged to the U.S. Government, and a successful claim would constitute a charge against its treasury.
2. The jurisdiction initially conferred on Philippine courts by Section 3 of the Philippine Property Act of 1946 (U.S. Public Law No. 485) was superseded by Section 34 of the Trading with the Enemy Act (U.S. Public Law No. 671, enacted August 8, 1946). Section 34 established an exclusive procedure for debt claims, requiring review by the U.S. District Court for the District of Columbia and prohibiting suits in any other court. This amendment was intended to create an orderly scheme for the equitable distribution of assets among creditors. The Court found that the Philippine government, through agreements and joint statements with the U.S. government following independence, implicitly accepted this centralized procedure. The right of the U.S. government to withdraw its consent to be sued in Philippine courts was upheld. Therefore, the Court of First Instance correctly ruled it had no jurisdiction over the subject matter. Costs were imposed on the plaintiff-appellant.