Title
Brownell, Jr. vs. Sun Life Assurance Co. of Canada
Case
G.R. No. L-5731
Decision Date
Jun 22, 1954
U.S. sought policy proceeds from Sun Life under Trading With the Enemy Act; Philippine courts upheld U.S. law's enforceability post-independence, affirming implied consent.
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Case Digest (G.R. No. L-5731)

Facts:

  1. Parties Involved:

    • Petitioner/Appellee: Herbert Brownell, Jr., as Attorney General of the United States.
    • Respondent/Appellant: Sun Life Assurance Company of Canada.
  2. Subject Matter:

    • The case involves an endowment policy (No. 757199) issued by Sun Life Assurance Company of Canada, which matured on August 20, 1946. The policy insured Naogiro Aihara (a Japanese national) and his wife, Filomena Gayapan, jointly for the sum of P1,000. Upon maturity, the proceeds were to be paid to the insured parties, share and share alike, amounting to P310.10 each.
  3. Legal Basis:

    • The petition was filed under the Philippine Property Act of 1946 (a U.S. law) and the Trading With the Enemy Act of 1917 (as amended). The petitioner sought to compel Sun Life to pay one-half of the policy proceeds (P310.10) to the U.S. government, as Naogiro Aihara was considered an "enemy" under the Trading With the Enemy Act.
  4. Defenses Raised by Sun Life:

    • Sun Life argued that:
      (1) The immunities under the Trading With the Enemy Act were not adopted by Philippine law and were not binding on Philippine courts.
      (2) Sun Life, as a trustee of the funds, could not release the money without a suitable discharge and indemnity to protect itself from future liability.
  5. Lower Court Decision:

    • The Court of First Instance of Manila granted the petition, ordering Sun Life to pay the demanded amount. Sun Life appealed, contending that the Trading With the Enemy Act was not binding in the Philippines after its independence on July 4, 1946.
  6. Historical Context:

    • The Philippine Property Act of 1946 was enacted by the U.S. Congress to continue the application of the Trading With the Enemy Act in the Philippines after independence. This was part of an agreement between the U.S. and the Philippines to settle claims related to enemy properties.
    • The Philippine government, through President Manuel Roxas and Ambassador Romulo, expressed conformity to the act. The Philippine Congress also passed laws (Republic Acts Nos. 7, 8, and 477) to implement the provisions of the U.S. law.

Issue:

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Ruling:

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Ratio:

  1. Extraterritorial Effect of Foreign Laws:

    • A foreign law may have extraterritorial effect in another country if the latter consents to its application. Consent may be express or implied. In this case, the Philippine government’s consent was implied through its conduct and legislative actions.
  2. Implied Consent in International Law:

    • Under international law, ratification of an agreement or treaty does not need to be express. Tacit ratification occurs when a state begins executing the terms of an agreement without formal ratification.
  3. Binding Nature of the Trading With the Enemy Act:

    • The application of the Trading With the Enemy Act in the Philippines was based on the mutual agreement between the U.S. and the Philippines, as well as the Philippine government’s acceptance of the benefits of the act.
  4. Protection of Sun Life from Liability:

    • The act explicitly provides that payment to the U.S. government constitutes a full discharge of liability. Therefore, Sun Life is protected from further claims once the payment is made.


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