GR L 8587; (March, 1960) (Digest)
G.R. No. L-8587; March 24, 1960
BENITO E. LIM, as administrator of the Intestate Estate of Arsenia Enriquez, plaintiff-appellant, vs. HERBERT BROWNELL, JR., Attorney General of the United States, and ASAICHI KAGAWA, defendants-appellee, REPUBLIC OF THE PHILIPPINES, intervenor-appellee.
FACTS
Benito E. Lim, as administrator of the intestate estate of Arsenia Enriquez, filed an action in the Court of First Instance of Manila to recover four parcels of land in Tondo, Manila. The properties were originally owned by Arsenia Enriquez but were foreclosed and sold at public auction during the Japanese occupation to Asaichi Kagawa, a Japanese national. After WWII, the U.S. Alien Property Custodian (later the Philippine Alien Property Administrator), acting under the U.S. Trading with the Enemy Act, issued vesting orders for the lots: Lots 1 and 2 on March 14, 1946, and Lots 3 and 4 on July 6, 1948. On August 3, 1948, these properties were transferred to the Republic of the Philippines via formal agreements. Lim filed a claim with the Philippine Alien Property Administrator, alleging the sale to Kagawa was invalid due to threats, intimidation, irregularities, and Kagawa’s constitutional ineligibility to own land. This claim was disallowed on March 7, 1950, and became final after no appeal was taken. Lim then filed a court complaint on November 13, 1950, seeking to nullify the sheriff’s sale, the vesting orders, and the transfer to the Republic, and to recover ownership and back rentals. The defendants raised affirmative defenses, including prescription under Section 33 of the Trading with the Enemy Act and lack of jurisdiction over the claim for rentals as a suit against the U.S. without its consent. After a preliminary hearing, the trial court dismissed the entire complaint for lack of jurisdiction over the subject matter, citing the requirements of the Trading with the Enemy Act.
ISSUE
Whether the trial court correctly dismissed the complaint in its entirety for lack of jurisdiction.
RULING
No. The order of dismissal is partially affirmed and partially revoked.
1. On Jurisdiction and Sovereign Immunity: An action against the U.S. Attorney General involving property vested under the Trading with the Enemy Act is, in substance, a suit against the United States. However, sovereign immunity does not apply in this case because the U.S. Congress, through Section 3 of the Philippine Property Act of 1946, has expressly consented to suits filed by persons (who are not enemies or allies of enemies) to establish their right, title, or interest in vested property and to recover ownership and possession. Therefore, the trial court has jurisdiction over the action for recovery of the property itself.
2. On Prescription under the Trading with the Enemy Act: The rights of the parties are governed by the terms of the Trading with the Enemy Act. Section 33 of the Act prescribes a period for filing suits for the recovery of vested property. The defense of prescription under this Act may be invoked by both the U.S. Attorney General and the Republic of the Philippines as transferee.
* As to Lots 1 and 2 (vested March 14, 1946): The action, filed on November 13, 1950, was not brought within the period prescribed in Section 33 of the Act. Therefore, the order dismissing the complaint regarding these lots is affirmed.
* As to Lots 3 and 4 (vested July 6, 1948): The complaint was filed within the prescriptive period for these lots. Therefore, the order dismissing the complaint regarding these lots is revoked, and the case is remanded to the trial court for further proceedings.
3. On the Claim for Damages/Rentals: The claim for back rentals against the U.S. Attorney General and the Republic of the Philippines constitutes a suit for money damages against the sovereign. The U.S. has not consented to such a suit. Therefore, the order dismissing the claim for damages/rentals is affirmed.
DISPOSITIVE:
The appealed order is AFFIRMED insofar as it dismisses the complaint with respect to Lots 1 and 2 and the claim for damages against the U.S. Attorney General and the Republic of the Philippines. It is REVOKED insofar as it dismisses the complaint with respect to Lots 3 and 4, and the case is REMANDED to the court of origin for further proceedings. No costs.