THE CASE OF PEOPLE V. MONTENEGRO (1939) - 20 PJP 21 (2024)

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The case of People v. Montenegro (1939)[1]

In the case of People v. Montenegro, in 1932, accused was charged for violating a United States (“US”) federal law prohibiting excessive attorney’s fees for pension claims. Note that, in the US, each state is a country in itself but, owing to its federal system of government, the federal government maintains an overarching authority over states on certain matters such as immigration and foreign relations. Thus, during the time when the Philippines was under US occupation, certain federal laws were made to apply within the Philippines Islands.

Specifically, he was charged in the Court of First Instance (CFI) of Oriental Negros with collecting an exorbitant fee of $700 (equivalent to Php1,400) from Valentina Calugcugan who was a pension benefit claimant. At present, the CFI is now the Regional Trial Court (RTC).

Calugcugan had retained the defendant to represent her in a pension claim stemming from the death of her husband, a soldier in the Philippine Scouts. The alleged overcharge occurred when the US government issued an initial pension payment of $1,386.60. The accused’s actions reportedly went unnoticed until August 1937.

The defendant initially contested the case in the justice of the peace court (the predecessor of the now Municipal Trial Court [MTC]), arguing that the local court lacked jurisdiction and that the alleged crime had already lapsed under the statute of limitations. Both arguments were rejected.

Subsequently, as a result of the Philippines’ completion of its transition period and its eventual “cutting of its umbilical cord” from the US, the prosecution amended the information to change the name of the plaintiff from “Government of the United States” to “People of the Philippines.” The trial court, faced with the amended charges, granted the accused’s demurrer motion. Ultimately, the lower court determined that, while the court possessed jurisdiction to hear the case, the action was time-barred due to the statute of limitations. Consequently, the case was dismissed. The prosecution appealed the dismissal, arguing that the statute of limitations under Philippine laws should govern, not the shorter law on prescription under US laws.

The Supreme Court ruled that the statute of limitations for the crime charged should be determined by a US federal law, rather than Philippine laws. The Court reasoned that, since the Philippines was not yet independent from the US at the time of the crime, and the crime was defined and penalized by a US federal statute, it was logical to apply the corresponding US statute of limitations. Applying a different statute of limitations would result in an unjust situation where the same crime would have different consequences depending on the location of the offense. Therefore, the Court upheld the lower court’s decision to dismiss the case due to the statute of limitations under Philippine laws.

Moreover, the Supreme Court said that the rules on lex fori, lex domicilii and lex loci were not applicable to the case as the Philippines was not yet a state independent of the US at the time of the commission of the alleged crime. In other words, the Court did not find it necessary to discuss these lex loci principles as the crime was committed and tried in the Philippines and the only issue was whether US law on prescription or that of the Philippines should apply.

The rules on lex fori, lex domicilii, and lex loci will be discussed in other journal submissions.

[1] 68 Phil. 659 [ G.R. No. 46728. September 30, 1939 ] THE PEOPLE OF THE PHILIPPINES, PLAINTIFF AND APPELLANT, VS. EDUARDO MONTENEGRO, DEFENDANT AND APPELLEE.