The Concept of the State Philippine Islands vs.

Monte de Piedad, Dec 13, 1916 Ponente: Trent Facts: This case is one of trusteeship. $400,000 was paid into the treasury of the Philippine Islands by Spain for the relief of those damaged by an earthquake. Upon the petition of Monte de Piedad (institution under the control of the church), the Philippine Government directed its treasurer to give the former $80,000 of the relief fund in 4 installments. Petitions of various persons, including heirs of those entitled to allotments, prayed for the State to bring suit against Monte de Piedad, and to pay the same with interest. Defendant appealed as funds have been exhausted on jewelry loans. Issue: Whether the loan on Monte de Piedad was charity for an ecclesiastical pious work, and if the government is the proper authority to the cause of action towards this case (who may sue to recover this loan?). Held: If such loan was for ecclesiastical pious work, then Spain would not exercise its civil capacities. The Philippine government as a trustee towards the funds could maintain action for there has been no change of sovereignty. The state, as a sovereign, is the parens patriae. These principles based upon the foundation of a principle of public policy. The judgment appealed is affirmed.

On June 3, 1863 a devastating earthquake occurred in the Philippines. The Spanish Dominions then provided $400,000.00 as aid for the victims and it was received by the Philippine Treasury. Out of the aid, $80,000.00 was left untouched; it was then invested in the Monte de Piedad Bank which in turn invested the amount in jewelries. But when the Philippine government later tried to withdraw the said amount, the Bank cannot provide for the amount. The bank argued that the Philippine government is not an affected party hence has no right to institute a complaint. The bank argues that the government was not the intended beneficiary of the said amount. ISSUE: Whether or not the Philippine government is competent to file a complaint against the respondent bank? HELD: The Philippine government is competent to institute action against Monte de Piedad, this is in accordance with the doctrine of Parens Patriae. The government being the protector of the rights of the people has the inherent supreme power to enforce such laws that will promote the public interest. No other party has been entrusted with such right hence as parents of the people the government has the right to take back the money intended for the people.