G.R. No.

L-9959 December 13, 1916

The Government Of The Philippine Islands, represented by the Treasurer of the Philippine
Islands, plaintiff-appellee,
vs.
El Monte De Piedad Y Caja De Ahorras De Manila, defendant-appellant.

Facts:

When an earthquake occurred on June 3, 1863, about $400,000 were subscribed and paid into the
treasury of the Philippine for the relief of the damages. Then, a central relief board was
appointed to distribute the moneys. The relief board allotted $365,703.50 to the various sufferers
and the list of names of those entitled for the relief was published in the Official Gazette of
Manila. There was a distribution of only $30,299.65, leaving a balance of S365, 403.85 for
distribution. The Philippine Government, directed its treasurer to turn over to the Monte de
Piedad  as a loan the sum of $80,000 of the relief fund in installments of $20,000 each for more
working capital. In June 1893, the Department of Finance called upon the Monte de Piedad to
return the $80,000. The respondent bank declined to comply with this order upon the ground that
only the Governor-General of the Philippine Islands and not the Department of Finance/Treasury
(Intendecia) had the right to order the reimbursement. On account of various petitions, the
Philippine Islands brought a suit against the Monte de Piedad to recover the $80.000. After due
trial, judgment was entered in favor of the plaintiff for the sum of $80,000 gold with legal
interest from February 28, 1912, and the costs of the cause. The defendant appealed. One of the
assignment of errors made by the defendant was to question the competence of the plaintiff
(government) to bring the action, contending that the suit could be instituted only by the intended
beneficiaries themselves or by their heirs.

Issue:
Whether or not the Philippine government is competent to file a complaint against Monte de
Piedad for the reimbursement of the money of the intended beneficiaries?

Ruling:
Yes. the Supreme Court upheld the right of the Government to file the case. The State as a
sovereign, is the  parens patriae. It is the most beneficent function and often necessary to be
exercised in the interest of humanity, and for the prevention of injury to those who cannot protect
themselves. 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. In the case at bar, the Philippine Government is not
a mere nominal party because it is exercising its sovereign functions or powers which now
resides in the legislative department, ready to be called into exercise whenever required for the
purposes of justice and right, and is a clearly capable of being exercised in cases of charities as in
any other cases whatever.