LOTUS CASE (SUMMARY)

Name of the Case: The Lotus Case (France vs Turkey); Year of the decision:
1927; and Court: PCIJ.
Overview: A collision occurred on the high seas between a French vessel and
a Turkish vessel. Victims were Turkish nationals and the alleged offender was
French. Could Turkey exercise its jurisdiction over the French national under
international law?
Facts of the Case:
A collision occurred on the high seas between a French vessel Lotus and
a Turkish vessel Boz-Kourt. The Boz-Kourt sank and killed eight Turkish
nationals on board the Turkish vessel. The 10 survivors of the BozKourt (including its captain) were taken to Turkey on board the Lotus. In
Turkey, the officer on watch of the Lotus (Demons), and the captain of the
Turkish ship were charged with manslaughter. Demons, a French national, was
sentenced to 80 days of imprisonment and a fine. The French government
protested, demanding the release of Demons or the transfer of his case to
the French Courts. Turkey and France agreed to refer this dispute on the
jurisdiction to the Permanent Court of International Justice (PCIJ).
Questions before the Court:
Did Turkey violate international law when Turkish courts exercised jurisdiction
over a crime committed by a French national, outside Turkey? If yes, should
Turkey pay compensation to France?
The Courts Decision:
Turkey, by instituting criminal proceedings against Demons, did not violate
international law.
Relevant Findings of the Court:
Establishing Jurisdiction: Does Turkey need to support its assertion of
jurisdiction using an existing rule of international law or is the mere absence
of a prohibition preventing the exercise of jurisdiction enough?

The first principle of the Lotus case said that jurisdiction is territorial: A State
cannot exercise its jurisdiction outside its territory unless an international
treaty or customary law permits it to do so. This is what we called the first
Lotus Principle.
Now the first and foremost restriction imposed by international law upon a
State is that failing the existence of a permissive rule to the contrary it
may not exercise its power in any form in the territory of another State. In
this sense jurisdiction is certainly territorial; it cannot be exercised by a State
outside its territory except by virtue of a permissive rule derived from
international custom or from a convention. (para 45)
The second
exercise its
international
measure of
international

principle of the Lotus case: Within its territory, a State may

jurisdiction, on any matter, even if there is no specific rule of
law permitting it to do so. In these instances, States have a wide
discretion, which is only limited by the prohibitive rules of
law.

It does not, however, follow that international law prohibits a State from
exercising jurisdiction in its own territory, in respect of any case which relates
to acts which have taken place abroad, and in which it cannot rely on some
permissive rule of international law. Such a view would only be tenable if
international law contained a general prohibition to States to extend the
application of their laws and the jurisdiction of their courts to persons,
property and acts outside their territory, and if, as an exception to this
general prohibition, it allowed States to do so in certain specific cases. But
this is certainly not the case under international law as it stands at present.
Far from laying down a general prohibition to the effect that States may not
extend the application of their laws and the jurisdiction of their courts to
persons, property and acts outside their territory, it leaves them in this
respect a wide measure of discretion, which is only limited in certain cases by
prohibitive rules; as regards other cases, every State remains free to adopt
the principles which it regards as best and most suitable. This discretion left
to States by international law explains the great variety of rules which they
have been able to adopt without objections or complaints on the part
of other States In these circumstances all that can be required of a State is
that it should not overstep the limits which international law places upon its
jurisdiction; within these limits, its title to exercise jurisdiction rests in its
sovereignty. (paras 46 and 47)
This applied to civil and criminal cases. If the existence of a specific rule was
a pre-requisite to exercise jurisdiction, PCIJ argued, then it wouldin many

cases result in paralysing the action of the courts, owing to the impossibility
of citing a universally accepted rule on which to support the exercise of their
[States] jurisdiction (para 48).

conclusion must therefore be drawn that there is no rule of international law

prohibiting the State to which the ship on which the effects of the offence
have taken place belongs, from regarding the offence as having been
committed in its territory and prosecuting, accordingly, the delinquent.

The PCIJ based this finding on the sovereign will of States.

International law governs relations between independent States. The rules of
law binding upon States therefor emanate from their own free will as
expressed in conventions or by usages generally accepted as expressing
principles of law and established in order to regulate the relations between
these co-existing independent communities or with a view to the achievement
of common aims. Restrictions upon the independence of States cannot
therefore be presumed
[NB: This was one of the more debated aspects of the judgement. Some
argued that the Court placed too much emphasis on sovereignty and consent
of States (i.e. took a strong positivist view)].
Criminal Jurisdiction: Territorial Jurisdiction
France alleged that the flag State of a vessel would have exclusive jurisdiction
over offences committed on board the ship in high seas. The PCIJ disagreed.
It held that France, as the flag State, did not enjoy exclusive territorial
jurisdiction in the high seas in respect of a collision with a vessel carrying the
flag of another State (paras 71 84). The Court held that Turkey and France
both have jurisdiction in respect of the whole incident: i.e. there is concurrent
jurisdiction.
The PCIJ held that a ship in the high seas is assimilated to the territory of
the flag State. This State may exercise its jurisdiction over the ship, in the
same way as it exercises its jurisdiction over its land, to the exclusion of all
other States. In this case, the Court equated the Turkish vessel to Turkish
territory. In this case, the PCIJ held that the offence produced its effects
on the Turkish vessel and consequently in a place assimilated to Turkish
territory in which the application of Turkish criminal law cannot be challenged,
even in regard to offences committed there by foreigners. Turkey had
jurisdiction over this case.
If, therefore, a guilty act committed on the high seas produces its effects
on a vessel flying another flag or in foreign territory, the same principles must
be applied as if the territories of two different States were concerned, and the

The Lotus Case was also significant in that the PCIJ said that a State would
have territorial jurisdiction, even if the crime was committed outside its
territory, so long as a constitutive element of the crime was committed in that
State. Today, we call this subjective territorial jurisdiction. In order for
subjective territorial jurisdiction to be established, one must prove that the
element of the crime and the actual crime are entirely inseparable; i.e., if the
constituent element was absent the crime would not have happened.
The offence for which Lieutenant Demons appears to have been
prosecuted was an act of negligence or imprudence having its origin on
board the Lotus, whilst its effects made themselves felt on board the BozKourt. These two elements are, legally, entirely inseparable, so much so that
their separation renders the offence non-existent It is only natural that each
should be able to exercise jurisdiction and to do so in respect of the incident
as a whole. It is therefore a case of concurrent jurisdiction.
Customary International Law
The Lotus case gives an important dictum on creating customary international
law. France alleged that jurisdictional questions on collision cases are rarely
heard in criminal cases because States tend to prosecute only before the flag
State. France argued that this absence of prosecutions points to a positive
rule in customary law on collisions.The Court held that this would merely

show that States had often, in practice, abstained from instituting criminal
proceedings, and not that they recognized themselves as being obliged to do
so; for only if such abstention were based on their being conscious of having
a duty to abstain would it be possible to speak of an international custom.
The alleged fact does not allow one to infer that States have been conscious
of having such a duty; on the other hand, as will presently be seen, there are
other circumstances calculated to show that the contrary is true. In other
words, opinio juris is reflected in acts of States (Nicaragua Case) or in
omissions (Lotus case) in so far as those acts or omissions are
done following a belief that the said State is obligated by law to act or
refrain from acting in a particular way. (For more on opinio juris click here)

Subsequent ICJ Decisions and Separate Opinions That Referred to Principles

of the Lotus Case
1. Advisory Opinion on the Unilateral Declaration of Kosovo (2010)
In the Kosovo Advisory Opinion the Court had to decide if the unilateral
declaration of Kosovo of February 2008 was in accordance with international
law. The Court inquired and concluded that the applicable international law
did not prohibit an unilateral declaration of independence. Based on this
finding, the Court decided that the adoption of the declaration of
independence did not violate any applicable rule of international law.
Judge Simma disagrees, inter alia, with Courts methodology in arriving at
this conclusion. He imputes the method to the principle established in the
Lotus case: that which is not prohibited is permitted under international law.
He criticises the Lotus dictum as an out dated, 19th century positivist
approach that is excessively differential towards State consent. He says that
the Court should have considered the possibility that international law can be
deliberately neutral or silent on the international lawfulness of certain acts.
Instead of concluding that an the absence of prohibition ipso facto meant
that a unilateral declaration of independence is permitted under international
law, the
court should have inquired whether under certain conditions
international law permits or tolerates unilateral declarations of independence.

including the master, and no commission or license. She was stopped by the
United States steamship Cincinnati, and was warned not to go into Havana,
but was told that she would be allowed to land at Bahia Honda. She then set
for Bahia Honda, but on the next morning, when near that port, was captured
by the United States steamship Dolphin.
Both the fishing vessels were brought by their captors into Key West. A libel
for the condemnation of each vessel and her cargo as prize of war was filed.
Each vessel was sold by auction (the Paquete Habana for the sum of $490
and the Lola for the sum of $800). There was no other evidence in the
record

of

the

value

of

either

vessel

or

of

her

cargo.

THE PAQUETE HABANA, 175 U.S. 677 (1900)

Issue:

Facts:

Whether or not the fishing smacks were subject to capture during the war

These are two appeals from decrees of the district court of the United States
for the southern district of Florida condemning two fishing vessels and their
cargoes

as

prize

of

war.

Each vessel was a fishing smack, running in and out of Havana, and regularly
engaged in fishing on the coast of Cuba. It sailed under the Spanish flag and
was owned by a Spanish subject of Cuban birth, living in the city of Havana.
It was commanded by a subject of Spain, also residing in Havana. Her master
and crew had no interest in the vessel, but were entitled to share her catch.
Her cargo consisted of fresh fish, caught by her crew from the sea, put on
board as they were caught, and kept and sold alive. Until stopped by the
blockading squadron she had no knowledge of the existence of the war or of
any blockade. She had no arms or ammunition on board, and made on
attempt to run the blockade after she knew of its existence, nor any
resistance

at

the

time

of

the

capture.

The Paquete Habana (1st vessel) was a sloop and had a crew of three
Cubans, including the master, who had a fishing license from the Spanish
government, and no other commission or license. She left Havana and was
captured

by

the

United

States

gunboat

Castine.

with

Spain.

Held:
No. By an ancient usage among civilized nations, beginning centuries ago, and
gradually ripening into a rule of international law, coast fishing vessels,
pursuing their vocation of catching and bringing in fresh fish, have been
recognized as exempt, with their cargoes and crews, from capture as prize of
war. (The case then discussed instances throughout history where fishing

vessels

were

captured.)

It will be convenient to refer to some leading French treatises on international

law

as

determined

by

the

general

consent

of

civilized

nations.

'Enemy ships,' say Pistoye and Duverdy, in their Treatise on Maritime Prizes,
published in 1855, 'are good prize. Not all, however; for it results from the
unanimous accord of the maritime powers that an exception should be made
in favor of coast fishermen. Such fishermen are respected by the enemy so
long as they devote themselves exclusively to fishing.'
De Cussy, in his work on the Phases and Leading Cases of the Maritime Law
of Nations, affirms in the clearest language the exemption from capture of

The Lola (2nd vessel) was a schooner and had a crew of six Cubans,

fishing boats, saying, that 'in time of war the freedom of fishing is respected

by belligerents; fishing boats are considered as neutral; in law, as in principle,

information to the enemy; nor when military or naval operations create a

they

necessity

are

not

subject

either

to

capture

or

to

confiscation.

to

which

all

private

interests

must

give

way.

Ortolan, in the fourth edition of his Regles Internationales et Diplomatie de la

Nor has the exemption been extended to ships or vessels employed on the

Mer, after stating the general rule that the vessels and cargoes of subjects of

high sea in taking whales or seals or cod or other fish which are not brought

the enemy are lawful prize, says: 'Nevertheless, custom admits an exception in

fresh to market, but are salted or otherwise cured and made a regular article

favor of boats engaged in the coast fishery; these boats, as well as their

of

commerce.

crews, are free from capture and exempt from all hostilities. The coast-fishing
industry is, in truth, wholly pacific, and of much less importance in regard to

This rule of international law is one which prize courts administering the law

the national wealth that it may produce than maritime commerce or the great

of nations are bound to take judicial notice of, and to give effect to, in the

fisheries. Peaceful and wholly inoffensive, those who carry it on, may be called

absence of any treaty or other public act of their own government in relation

the harvesters of the territorial seas, since they confine themselves to

to

the

matter.

gathering in the products thereof; they are for the most part poor families
who seek in this calling hardly more than the means of gaining their

By the practice of all civilized nations, vessels employed only for the purposes

livelihood.' Again, after observing that there are very few solemn public

of discovery or science are considered as exempt from the contingencies of

treaties which make mention of the immunity of fishing boats in time of war,

war, and therefore not subject to capture. It has been usual for the

he says: 'From another point of view the custom which sanctions this

government sending out such an expedition to give notice to other powers;

immunity is not so general that it can be considered as making an absolute

but

it

is

not

essential.

international rule; but it has been so often put in practice, and, besides, it
accords so well with the rule in use in wars on land, in regard to peasants

To this subject in more than one aspect are singularly applicable the words

and husbandmen, to whom coast fishermen may be likened, that it will

uttered by Mr. Justice Strong, speaking for this court: 'Undoubtedly no single

doubtless continue to be followed in maritime wars to come. (A lot of

nation can change the law of the sea. The law is of universal obligation and

opinions of other writers were also included which will not be mentioned in
this
digest)

no statute of one or two nations can create obligations for the world. Like all
the

laws

of

nations,

it

rests

upon

the

common

consent

of

civilized

communities. It is of force, not because it was prescribed by any superior

This review of the precedents and authorities on the subject appears to us

power, but because it has been generally accepted as a rule of conduct.

abundantly to demonstrate that at the present day, by the general consent of

Whatever may have been its origin, whether in the usages of navigation, or in

the civilized nations of the world, and independently of any express treaty or

the ordinances of maritime states, or in both, it has become the law of the

other public act, it is an established rule of international law, founded on

sea only by the concurrent sanction of those nations who may be said to

considerations of humanity to a poor and industrious order of men, and of

constitute the commercial world. Many of the usages which prevail, and which

the mutual convenience of belligerent states, that coast fishing vessels, with

have the force of law, doubtless originated in the positive prescriptions of

their implements and supplies, cargoes and crews, unarmed and honestly

some single state, which were at first of limited effect, but which, when

pursuing their peaceful calling of catching and bringing in fresh fish, are

generally

exempt

from

capture

as

prize

of

accepted,

became

of

universal

obligation.'

war.
In the case, each vessel was of a moderate size, such as is not unusual in

The exemption, of course, does not apply to coast fishermen or their vessels

coast fishing smacks, and was regularly engaged in fishing on the coast of

if employed for a warlike purpose, or in such a way as to give aid or

Cuba. The crew of each were few in number, had no interest in the vessel,

and received, in return for their toil and enterprise, two thirds of her catch,

the jurisprudence was diminished because these declarations lacked in-depth

the other third going to her owner by way of compensation for her use. Each

discussion.

vessel went out from Havana to her fishing ground, and was captured when
returning along the coast of Cuba. The cargo of each consisted of fresh fish,
caught by her crew from the sea, and kept alive on board. Although one of
the vessels extended her fishing trip, we cannot doubt that each was engaged
in the coast fishery, and not in a commercial adventure, within the rule of
international

law.

The case was adjudged that the capture was unlawful and without probable
cause ordered that the proceeds of the sale of the vessel, together with the
proceeds of any sale of her cargo, be restored to the claimant, with damages
and costs.

Background to the case

The United Kingdom requested the court to decide if Norway had used a
legally acceptable method in drawing the baseline from which it measured its
territorial

sea. The

United Kingdom

argued

that

customary

international

law did not allow the length of a baseline drawn across abay to be longer
than ten miles. Norway argued that its delimitation method was consistent
with general principles of international law.
Formation of customary law
The court consistently referred to positive (1) state practice and (2) lack of
objections of other states on that practice as a confirmation of an existing
rule of customary international law (see p. 17 and 18). There was no mention
of opinio juris in this early judgment.
In the following passage, the court considered that expressed state dissent
regarding a particular practice was detrimental to the existence of an alleged
general rule. It did not elaborate whether these states adopted a contrary
practice because it was claiming an exception to the rule (see the Nicaragua
jurisprudence) or because it believed that the said rule did not possess the
character of customary law.
In these circumstances the Court deems it necessary to point out that

ANGLO

NORWEGIAN

FISHERIES

CASE

(SUMMARY

ON

CUSTOMARY

INTERNATIONAL LAW)
Case: Anglo Norwegian Fisheries Case (UK vs Norway)

Year of Decision: 1951. Court: ICJ.

The Court was asked to decide, inter-alia, the validity, under international
law, of the methods used to delimit Norways territorial sea/ fisheries zone.
We would not discuss the technical aspects of the judgment. The judgment
contained declarations on customary international law. However, the value of

although the ten-mile rule has been adopted by certain States both in their
national law and in their treaties and conventions, and although certain
arbitral decisions have applied it as between these States, other States have
adopted a different limit. Consequently, the ten-mile rule has not acquired the
authority of a general rule of international law.
Persistent objector rule
The court in its judgment held that even if a customary law rule existed on
the ten-mile rule,

the ten-mile rule would appear to be inapplicable as against Norway

contrary to international law. To do so, the court referred to state practice

inasmuch as she has always opposed any attempt to apply it to the

once more.

Norwegian coast.

The general toleration of foreign States with regard to the Norwegian practice

In this case, the court appears to support the idea that an existing customary

is an unchallenged fact. For a period of more than sixty years the United

law rule would not apply to a state if it objected to any outside attempts to

Kingdom Government itself in no way contested it The Court notes that in

apply the rule to itself, at the initial stages and in a consistent manner, and if

respect of a situation which could only be strengthened with the passage of

other states did not object to her resistance. In this manner, the Anglo

time, the United Kingdom Government refrained from formulating reservations.

Norwegian fisheries case joined the asylum case (Peru vs Colombia) in

articulating what we now call the persistent objector rule.
Initial objection
In the present case, the court pointed out that the Norwegian Minister of

Contrary practice
In this case, Norway adopted a contrary practice a practice that was the
subject of litigation.

Foreign Affairs, in 1870, stated that, in spite of the adoption in some treaties

However, interestingly, Norway was clear that it was not claiming an exception

of the quite arbitrary distance of 10 sea miles, this distance would not appear
to me to have acquired the force of international law. Still less would it
appear to have any foundation in reality

rather it claimed that its practice was in conformity with international law (see

The court held that Language of this kind can only be construed as the

considered expression of a legal conception regarded by the Norwegian

Government as compatible with international law.The court held that Norway
had refused to accept the rule as regards to it by 1870.
Sustained objection
The court also went on to hold that Norway followed the principles of
delimitation that it considers a part of its system in a consistent and
uninterrupted manner from 1869 until the time of the dispute. In establishing

to the rule (i.e. that its practice was not contrary to international law) but
page 21).
In its (Norways) view, these rules of international law take into account the
diversity of facts and, therefore, concede that the drawing of base-lines must
be adapted to the special conditions obtaining in different regions. In its view,
the system of delimitation applied in 1935, a system characterized by the use
of straight lines, does not therefore infringe the general law; it is an
adaptation rendered necessary by local conditions.
Conclusion
The court held that the fact that this consistent and sufficiently long practice

consistent practice, the court held that too much importance need not be

took place without any objection to the practice from other states (until the

attached to the few uncertainties or contradictions, real or apparent, which

the United Kingdom Government claims to have discovered in Norwegian
practice.

to be contrary to international law.

No objection

time of dispute) indicated that states did not consider the Norwegian system

The notoriety of the facts, the general toleration of the international

community, Great Britains position in the North Sea, her own interest in the
question, and her prolonged abstention would in any case warrant Norways

After the court held that the 10-mile rule did not form a part of the general

enforcement of her system against the United Kingdom. The Court is thus led

law and, in any event, could not bind Norway because of its objections, the

to conclude that the method of straight lines, established in the Norwegian

court inquired whether the Norwegian system of delimitation, itself, was

system, was imposed by the peculiar geography of the Norwegian coast; that

even before the dispute arose, this method had been consolidated by a
consistent and sufficiently long practice, in the face of which the attitude of
governments bears witness to the fact that they did not consider it to be
contrary to international law.
Relationship between international and national law
The court alluded to the relationship between national and international law in

G.R. No. L-2662

March 26, 1949

SHIGENORI KURODA, petitioner, vs. Major General RAFAEL JALANDONI,

Brigadier General CALIXTO DUQUE, Colonel MARGARITO TORALBA, Colonel

delimitation of maritime boundaries. In delimitation cases, states must be

IRENEO BUENCONSEJO, Colonel PEDRO TABUENA, Major FEDERICO ARANAS,

allowed the latitude necessary in order to be able to adapt its delimitation to

practical
needs
and
local
requirements The
court
would
also
consider certain economic interests peculiar to a region, the reality and
importance of which are clearly evidenced by a long usage. However, while

MORAN, C.J.:

the act of delimitation can be undertaken by the State, its legal validity
depends on international law.
The delimitation of sea areas has always an international aspect; it cannot
be dependent merely upon the will of the coastal State as expressed in its
municipal law. Although it is true that the act of delimitation is necessarily a
unilateral act, because only the coastal State is competent to undertake it,
the validity of the delimitation with regard to other States depends upon
international law. (p. 20)

MELVILLE S. HUSSEY and ROBERT PORT, respondents.

Shigenori Kuroda, formerly a Lieutenant-General of the Japanese Imperial Army

and Commanding General of the Japanese Imperial Forces in The Philippines
during a period covering 19433 and 19444 who is now charged before a
military Commission convened by the Chief of Staff of the Armed forces of
the Philippines with having unlawfully disregarded and failed "to discharge his
duties as such command, permitting them to commit brutal atrocities and
other high crimes against noncombatant civilians and prisoners of the Imperial
Japanese Forces in violation of the laws and customs of war" comes
before this Court seeking to establish the illegality of Executive Order No. 68
of the President of the Philippines: to enjoin and prohibit respondents Melville
S. Hussey and Robert Port from participating in the prosecution of petitioner's
case before the Military Commission and to permanently prohibit respondents
from proceeding with the case of petitioners.
In support of his case petitioner tenders the following principal arguments.

First. "That Executive Order No. 68 is illegal on the ground that it violates
not only the provision of our constitutional law but also our local laws to say
nothing of the fact (that) the Philippines is not a signatory nor an adherent to
the Hague Convention on Rules and Regulations covering Land Warfare and
therefore petitioners is charged of 'crimes' not based on law, national and
international." Hence petitioner argues "That in view off the fact that this
commission has been empanelled by virtue of an unconstitutional law an
illegal order this commission is without jurisdiction to try herein petitioner."

Second. That the participation in the prosecution of the case against

War is not ended simply because hostilities have ceased. After cessation of

petitioner before the Commission in behalf of the United State of America of

armed hostilities incident of war may remain pending which should be

attorneys Melville Hussey and Robert Port who are not attorneys authorized

disposed of as in time of war. An importance incident to a conduct of war is

by the Supreme Court to practice law in the Philippines is a diminution of our

the adoption of measure by the military command not only to repel and

personality as an independent state and their appointment as prosecutor are

defeat the enemies but to seize and subject to disciplinary measure those

a violation of our Constitution for the reason that they are not qualified to

enemies who in their attempt to thwart or impede our military effort have

practice law in the Philippines.

violated the law of war. (Ex parte Quirin 317 U.S., 1; 63 Sup. Ct., 2.) Indeed

Third. That Attorneys Hussey and Port have no personality as prosecution

the United State not being a party in interest in the case.
Executive Order No. 68, establishing a National War Crimes Office prescribing
rule and regulation governing the trial of accused war criminals, was issued by
the President of the Philippines on the 29th days of July, 1947 This Court
holds that this order is valid and constitutional. Article 2 of our Constitution
provides in its section 3, that
The Philippines renounces war as an instrument of national policy and adopts
the generally accepted principles of international law as part of the of the
nation.
In accordance with the generally accepted principle of international law of the
present day including the Hague Convention the Geneva Convention and
significant precedents of international jurisprudence established by the United
Nation all those person military or civilian who have been guilty of planning
preparing or waging a war of aggression and of the commission of crimes
and offenses consequential and incidental thereto in violation of the laws and
customs of war, of humanity and civilization are held accountable therefor.
Consequently in the promulgation and enforcement of Execution Order No. 68
the President of the Philippines has acted in conformity with the generally
accepted and policies of international law which are part of the our
Constitution.
The promulgation of said executive order is an exercise by the President of
his power as Commander in chief of all our armed forces as upheld by this
Court in the case of Yamashita vs. Styer (L-129, 42 Off. Gaz., 664) 1when we
said

the power to create a military commission for the trial and punishment of war
criminals is an aspect of waging war. And in the language of a writer a
military commission has jurisdiction so long as a technical state of war
continues. This includes the period of an armistice or military occupation up
to the effective of a treaty of peace and may extend beyond by treaty
agreement. (Cowles Trial of War Criminals by Military Tribunals, America Bar
Association Journal June, 1944.)
Consequently, the President as Commander in Chief is fully empowered to
consummate this unfinished aspect of war namely the trial and punishment of
war criminal through the issuance and enforcement of Executive Order No. 68.
Petitioner argues that respondent Military Commission has no Jurisdiction to
try petitioner for acts committed in violation of the Hague Convention and the
Geneva Convention because the Philippines is not a signatory to the first and
signed the second only in 1947. It cannot be denied that the rules and
regulation of the Hague and Geneva conventions form, part of and are wholly
based on the generally accepted principals of international law. In facts these
rules and principles were accepted by the two belligerent nation the United
State and Japan who were signatories to the two Convention, Such rule and
principles therefore form part of the law of our nation even if the Philippines
was not a signatory to the conventions embodying them for our Constitution
has been deliberately general and extensive in its scope and is not confined
to the recognition of rule and principle of international law as continued inn
treaties to which our government may have been or shall be a signatory.
Furthermore

when

the

crimes

charged against

petitioner

were allegedly

committed the Philippines was under the sovereignty of United States and
thus we were equally bound together with the United States and with Japan
to the right and obligation contained in the treaties between the belligerent
countries. These rights and obligation were not erased by our assumption of

full sovereignty. If at all our emergency as a free state entitles us to enforce

yielded to us the trial and punishment of her enemies. The least that we

the right on our own of trying and punishing those who committed crimes

could do in the spirit of comity is to allow them representation in said trials.

against crimes against our people. In this connection it is well to remember

what we have said in the case of Laurel vs. Misa (76 Phil., 372):

Alleging that the United State is not a party in interest in the case petitioner

. . . The change of our form government from Commonwealth to Republic

of common knowledge that the United State and its people have been equally

does not affect the prosecution of those charged with the crime of treason

if not more greatly aggrieved by the crimes with which petitioner stands

committed during then Commonwealth because it is an offense against the

charged before the Military Commission. It can be considered a privilege for

same sovereign people. . . .

our Republic that a leader nation should submit the vindication of the honor

By the same token war crimes committed against our people and our

challenges the personality of attorneys Hussey and Port as prosecutors. It is

of its citizens and its government to a military tribunal of our country.

government while we were a Commonwealth are triable and punishable by our

The Military Commission having been convened by virtue of a valid law with

present Republic.

jurisdiction over the crimes charged which fall under the provisions of

Petitioner challenges the participation of two American attorneys namely

Melville S. Hussey and Robert Port in the prosecution of his case on the
ground that said attorney's are not qualified to practice law in Philippines in
accordance with our Rules of court and the appointment of said attorneys as
prosecutors is violative of our national sovereignty.

Executive Order No. 68, and having said petitioner in its custody, this Court
will not interfere with the due process of such Military commission.
For all the foregoing the petition is denied with costs de oficio.

Paras, Feria, Pablo, Bengzon, Tuason, Montemayor and Reyes, JJ., concur.

In the first place respondent Military Commission is a special military tribunal

governed by a special law and not by the Rules of court which govern
ordinary civil court. It has already been shown that Executive Order No. 68
which provides for the organization of such military commission is a valid and
constitutional law. There is nothing in said executive order which requires that
counsel appearing before said commission must be attorneys qualified to
practice law in the Philippines in accordance with the Rules of Court. In facts
it is common in military tribunals that counsel for the parties are usually
military personnel who are neither attorneys nor even possessed of legal
training.

G.R. No. L-2852

June 30, 1949

VICTOR A. BOROVSKY, petitioner, vs. THE COMMISSIONER OF IMMIGRATION

and THE DIRECTOR OF PRISONS, respondents.
BENGZON, J.:
Victor A. Borovsky, a stateless citizen though a Russian by birth according to

Secondly the appointment of the two American attorneys is not violative of

his allegations, prays for release from the custody of the Director of Prisons,

our nation sovereignty. It is only fair and proper that United States, which has

who holds him for purposes of deportation.

submitted the vindication of crimes against her government and her people to
a tribunal of our nation should be allowed representation in the trial of those
very crimes. If there has been any relinquishment of sovereignty it has not
been by our government but by the United State Government which has

In December, 1946, the President of the Philippines ordered petitioner's

deportation

as

undesirable

alien,

after

proper

investigation

by

the

Deportation Board upon charges of being a vagrant and habitual drunkard,

engaged in espionage activities, whose presence and conduct endangered the

public interest. Pursuant to such order, Borovsky was placed aboard a vessel

In the United States there were at least two instances in which courts fixed a

bound for Shanghai; but the authorities there declined to admit him for lack

time limit within which the imprisoned aliens should be deported 5 otherwise

of the proper visa, which the Chinese Consulate in this country had refused to

their release would be ordered by writ of habeas corpus. Nevertheless,

give. Wherefore he was brought back to the Philippines. Thereafter he was

supposing such precedents apply in this jurisdiction, still we have no sufficient

temporarily released pending further arrangements for his banishment. And

data fairly to fix a definite deadline. Petition denied. No costs.

when subsequently a Russian boat called at Cebu, Borovsky was re-arrested

and transported to Cebu for deportation; however, the captain of the boat
declined take him, explaining he had no permission from his government to

Moran,
C.J.,
Ozaeta,
Montemayor
and
Reyes,
JJ., concur.
Moran, C.J., I hereby certify that Mr. Justice Pablo voted to deny the petition.

do so. Wherefore the petitioner the petitioner is now confined in the premises
of the New Bilibid Prisonnot exactly as the prisonerwhile the Government is
exerting efforts to ship him to a foreign country.
There is no question as to the validity of the deportation decree. It must be
admitted that temporary detention is a necessary step in the process of
exclusion or expulsion of undesirable aliens and that pending arrangement for
his deportation, the Government has the right to hold the undesirable alien
under confinement for a reasonable length of time. However, under established
precedents, too long a detention may justify the issuance of a writ of habeas

corpus.1
The meaning of "reasonable time" depends upon the circumstances, specially
the difficulties of obtaining a passport, the availability of transportation, the
diplomatic

arrangements

of

the

government

concerned

and

the

efforts

displayed to send the deportee away.2 Considering that this Government

desires to expel the alien, and does not relish keeping him at the people's
expense, we presume it is making efforts in making efforts to carry out the
decree of exclusion by the highest officer of the land. On top of this
presumption assurances were made during the oral argument that the
Government is really trying to expedite the expulsion of this petitioner. On the
other

hand,

the record fails

to

show

how

long

he has

been

under

confinement since the last time he was apprehended. Neither does he indicate
neglected opportunities to send him abroad. And unless it is shown that the
deportee is being indefinitely imprisoned under the pretense of awaiting a
chance for deportation3 or unless the Government admits that it cannot
deport him4 or unless the detainee is being held for too long a period our
courts will not interfere.

G.R. No. L-2855

July 30, 1949

BORIS MEJOFF, petitioner, vs. DIRECTOR OF PRISONS, respondent.

BENGZON, J.:
The petitioner Boris Mejoff is an alien of Russian descent who was brought to
this country from Shanghai as a secret operative by the Japanese forces
during the latter's regime in these Islands. Upon liberation he was arrested aa

a Japanese spy, by U. S. Army Counter Intelligence Corps. Later he was

arrangements for his deportation, the Government has the right to hold the

handed to the Commonwealth Government for disposition in accordance with

undesirable alien under confinement for a reasonable lenght of time. However,

Commonwealth Act No. 682. Thereafter the People's Court ordered his release.

under established precedents, too long a detention may justify the issuance of

But the deportation board taking his case up, found that having no travel

a writ of habeas corpus.1

documents Mejoff was illegally in this country, and consequently refferd the
matter to the immigration authorities. After the corresponding investigation, the
Board oF Commissioners of Immigration on April 5, 1948, declared that Mejoff
had entered the Philippines illegally in 1944, withoutinspection and admission
by the immigration officials at a designated port of entry and, therefore, it
ordered that he be deported on the first available transportation to Russia.
The petitioner was then under custody, he having been arrested on March 18,
1948. In May, 1948, he was transferred to the Cebu Provincial Jail together
with three other Russians to await the arrival of some Russian vessels. In July
and in August of that year two boats of Russian nationality called at the
Cebu Port. But their masters refused to take petitioner and his companions
alleging lack of authority to do so. In October, 1948, after repeated failures
to ship this deportee abroad, the authorities removed him to Bilibid Prison at
Muntinglupa where he has been confined up to the present time, inasmuch as
the Commissioner of Immigration believes it is for the best interest of the
country to keep him under detention while arrangements for his deportation
are being made.
It is contended on behalf of petitioner that having been brought to the
Philippines legally by the Japanese forces, he may not now be deported. It is
enough to say that the argument would deny to this Government the power
and the authority to eject from the Islands any and all of that members of
the Nipponese Army of occupation who may still be found hiding in remote
places. Which is absurd. Petitioner likewise contends that he may not be
deported because the statutory period to do that under the laws has long
expired. The proposition has no basis. Under section 37 of the Philippine
Immigration Act of 1940 any alien who enters this country "without inspection
and admission by the immigration authorities at a designated point of entry"
is subject to deportation within five years. In a recent decision of a similar
litigation (Borovsky vs. Commissioner of Immigration) we denied the request for
habeas corpus, saying:
"It must be admitted that temporary detention is a necessary step in the
process of exclusion or expulsion of undesirable aliens and that pending

"The meaning of "reasonable time" depends upon the circumstances, specially

the difficulties of obtaining a passport, the availability of transfortation, the
diplomatic arrangements concerned and the efforts displayed to send the
deportee away.2 Considering that this Government desires to expel the alien,
and does not relish keeping him at the people's expense, we must presume it
is making efforts to carry out the decree of exclusion by the highest officer of
the land. On top of this presumption assurances were made during the oral
argument that the Government is really trying to expedite the expulsion of this
petitioner. On the other hand, the record fails to show how long he has been
under confinement since the last time he was apprehended. Neither does he
indicate neglected opportunities to send him abroad. And unless it is shown
that the deportee is being indefinitely imprisoned under the pretense of
awaiting a chance for deportation3 or unless the Government admits that itcan
not deport him4 or unless the detainee is being held for too long a period
our courts will not interfere.
"In the United States there were at least two instances in which courts fixed a
time limit within which the imprisoned aliens should be deported 5 otherwise
their release would be ordered by writ of habeas corpus. Nevertheless,
supposing such precedents apply in this jurisdiction, still we have no sufficient
data fairly to fix a definite deadline."
The difference between this and the Borovsky case lies in the fact that the
record shows this petitioner has been detained since March, 1948. However,
considering that in the United States (where transportation facilities are much
greater and diplomatic arrangements are easier to make) a delay of twenty
months in carrying out an order of deportation has not been held sufficient
to justify the issuance of the writ of habeas corpus,6 this petition must be,
and it is hereby denied. So ordered.

HAW PIA, plaintiff-appellant, vs. THE CHINA BANKING

interests within the period of 90 days from and after the above mentioned

CORPORATION, defendant-appellee.

Executive Order No. 32 had been repealed or set aside, and ordered that, if

FERIA, J.:
Plaintiff-appellant instituted this action in the Court of First Instance of Manila
against the defendant-appellee, China Banking Corporation, to compel the
latter to execute a deed of cancellation of the mortgage on the property
described in the complaint, and to deliver to the said plaintiff the Transfer
Certificate of Title No. 47634 of the Register of Deeds of Manila, with the
mortgage annotated therein already cancelled, as well as to pay the plaintiff
the sum of P1,000.00 for damages as attorney's fees and to pay the costs of
the suit. The cause of action is that the plaintiff's indebtedness to the China
Banking Corporation in the sum of P5,103.35 by way of overdraft in current
account payable on demand together with its interests, has been completely

the plaintiff failed to pay it within the said period, the property mortgaged
shall be sold at public auction and the proceeds of the sale applied to the
payment of said obligations. The plaintiff appealed from the decision to this
Court.
The appellant's assignments of error may be reduced to two, to wit: First,
whether or not the Japanese Military Administration had authority to order the
liquidation or winding up of the business of defendant-appellee China Banking
Corporation, and to appoint the Bank of Taiwan liquidator authorized as such
to accept the payment by the plaintiff-appellant to said defendant-appellee;
and second, whether or not such payment by the plaintiff-appellant has
extinguished her obligation to said defendant-appellee.

paid, on different occasions, from October 7, 1942, to August 29, 1944, to

(1) As to the first question, we are Japanese military opinion, and therefore

the defendant Bank China Banking Corporation through the defendant Bank of

hold, that the Japanese military authorities had power, under the international

Taiwan, Ltd., that was appointed by the Japanese Military authorities as

law, to order the liquidation of the China Banking Corporation and to appoint

liquidator of the China Banking Corporation.

and authorize the Bank of Taiwan as liquidator to accept the payment in

Upon having been served with summons the defendant-appellee China Banking
Corporation made a demand from the plaintiff-appellant for the payment of
the sum of P5,103.35 with interests representing the debt of the said
appellant, and in the answer it set up a counter claim against the plaintiffappellant demanding the payment, within 90 days from the latter to the
former by way of overdraft together with its interests at the rate of 9
additional sum of P1,500 as attorney's fees and the costs of the suits.
After the hearing of the case, the trial court rendered a decision holding that,
as there was no evidence presented to show that the defendant China
Banking Corporation had authorized the Bank of Taiwan, Ltd., to accept the
payment of the plaintiff's debt to the said defendant, and said Bank of
Taiwan, as an agency of the Japanese invading army, was not authorized
under the international law to liquidate the business of the China Banking
Corporation, the payment has not extinguished the indebtedness of the
plaintiff to the said defendant under article 1162 of the Civil Code. The court
absolved the defendant China Banking Corporation from the complaint of the
plaintiff, and sentenced the latter to pay the former the sum of P5,103.35 with

question, because such liquidation is not confiscation of the properties of the

bank appellee, but a mere sequestration of its assets which required the
liquidation or winding up of the business of said bank. All the arguments to
the contrary in support of the decision appealed from the predicated upon
the erroneous assumption that the liquidation or winding up of the affairs of
the China Banking Corporation, in order to determine its liabilities and net
assets to be sequestrated or controlled, was an act of confiscation or
appropriation of private property contrary to Article 46, section III of the
Hague Regulations of 1907.
The provisions of the Hague Regulations, section III, on Military Authority over
Hostile Territory, which is a part of the Hague Convention respecting the laws
and customs of war on land, are intended to serve as general rule of
conduct for the belligerents in their relations with each other and with the
inhabitants, but as it had not been found possible then to concert regulations
covering all the circumstances which occur in practice, and on the other hand
it could not have been intended by the High Contracting Parties that the
unforeseen cases should, in the absence of a written undertaking, be left to
the arbitrary judgment of military commanders, it was agreed that "Until a

complete code of the laws of war has been issued, the High Contracting

without prospect of reimbursement, or whether those efforts constitute an

Parties deem it expedient to declare that in cases not included in the

assumption of control which, regardless of any transfer of title, is not

Regulations adopted by them, the inhabitants and the belligerents remain

designated to produce such a deprivation. The character of the belligerent

under the protection and the rule of the principles of international law, as

acts in the two situations is not identical. To refer to both as confiscatory is

they result for the usages established among civilized peoples, from the laws

not productive of clearness of thought, unless a loose and broad signification

of humanity, and the dictates of public conscience."

be attached to the term "confiscation." The point to be noted is that a

Before the Hague Convention, it was the usage or practice to allow or permit
the confiscation or appropriation by the belligerent occupant not only of
public but also of private property of the enemy in a territory occupied by the
belligerent hostile army; and as such usage or practice was allowed, a fortiori,
any other act short of confiscation was necessarily permitted. Section III of
the Hague Regulations only prohibits the confiscation of private property,
article 53 provides that cash funds, and property liable to requisition and all
other movable property belonging to the State susceptible of military use or

belligerent may in fact deprive an alien enemy owner of property by process

that are into essentially confiscatory, even though the taking and retention
may cause him severe loss and hardship. Recourse to such non-confiscatory
retentions or deprivations has marked the conduct of belligerents since the
beginning of the World War in 1914. They may perhaps be appropriately
referred to as sequestrations. The propriety of what they have involved is,
therefore, hardly discernible by reference to objections directed against
confiscatory action as such, and must be tested by other means or standards.

operation, may be confiscated or taken possession of as a booty and utilized

A belligerent may fairly endeavor to prevent enemy property of any kind

for the benefit of the invader's government (II Oppenheim, 8th ed. section 137;

within its territory (or elsewhere within its reach) from being so employed as

320 & 321, War Department; Basic Field Manual, Rules of Land Warfare FM

to afford direct military aid to its foe. Measures of prevention may, in a

27-10). The belligerents in their effort to control enemy property within their

particular case, assume a confiscatory aspect. In such a situation the question

jurisdiction or in territories occupied by their armed forces in order to avoid

may arise whether those aspect. In such a situation the question may arise

their use in aid of the enemy and to increase their own resources, after the

whether those measures are, nevertheless, excusable. It is believed that they

Hague Convention and specially during the first World War, had to resort to

may be, and that they are not invariably unlawful despite the absence of

such measures of prevention which do not amount to a straight confiscation,

efforts to compensate the owners.

as freezing, blocking, placing under custody and sequestrating the enemy

private property. Such acts are recognized as not repugnant to the Hague
Regulations by well-known writers on International Law, and are authorized in
the Army and Navy Manual of Military Government and Civil Affairs not only of
the United States, but also in tries, as well as in the Trading with the Enemy
Acts of said countries.
Hyde in his International Law chiefly as interpreted and applied by the United

And in the footnote of the same page, said author adds:

This analysis differs sharply from that of those who would regard almost all
uncompensated deprivations of property as essentially confiscatory, and as,
therefore,

internationally

illegal

because

of

the

further

assumption

or

conclusion that confiscatory action must inevitably be so regarded. Belligerent

States have not, however, generally acted on such a theory. They have in fact

States, Vol. 3, 6th ed., p. 1727, has the following to say:

proceeded, especially since 1914, to exercise varying degrees of control over

In examining the efforts of a belligerent to control in various ways property

from which they have felt no sense of legal obligation to abstain. In so doing

within its domain that has such a connection with nationals of the enemy that

they have been creative of relatively fresh practices which logic has ordained

it may be fairly regarded as enemy property, it is important to inquire whether

and war-terminating treaties have sanctioned. Thus it happens that proper

the attempt is made to appropriate property without compensation, divesting

estimation of the place of confiscation of enemy private property in the law

him not only of title, but also of any right or interest in what is taken,

of nations has become of less importance than formerly, because both of the

vast amounts of enemy private property by strictly non-confiscatory processes

reluctance of States and notably of the United States to have recourse to

to said passage, "Nor may the occupant liquidate the business of enemy

it, and of their preference for no-confiscatory measures exemplified in

subject in occupied territories," he means "confiscate" by the word "liquidate".

sequestrations as a desirable and sufficient means of utilizing such property.

And Oppenheim in his International Law, Vol. 2, 6th ed., by Lauterpacht, says:
But the desire to eliminate the financial and commercial influence of the
enemy, and other motives, presently led in most States to exceptional war
measures against the businesses and property of enemies, which though not
confiscation, implicated great loss and injury. Sometimes these measures
stopped short of divesting the enemy ownership of the property; but in other
cases the businesses or property were liquidated, and were represented at the
close of hostilities by nothing else than the proceeds of their realization, often
enough out of all proportion to their value. In the Trading with the Enemy Act,
1939, provisions was made for the appointment of custodians of enemy

Ernest K. Feildchenfeld in his "The International Economic Law of Belligerent

Occupation (1942)" supports the foregoing conclusion of Hyde, when he says
that "According to Article 46 of the Hague Regulations, private property must
be respected and cannot be confiscated. This rule affords protection against
the loss of property, through outright confiscation, but not against losses
under lawful requisition, contribution, seizure, fines, taxes, and expropriation"
(Par. 208, p. 51). And later on the adds: "A complete nationalization of a
corporation for the benefit of the occupant could not be anything but a
permanent

measure

involving

final

effects

beyond

the

duration

of

the

occupation. There is no military need for it because the same practical results
can be achieved by temporary sequestration," (par. 385, p. 107).

property in order to prevent the payment of money to enemies and preserve

Martin Domke in his Trading with the Enemy in World War II, pp. 4 and 5,

enemy property in contemplation of arrangements to be made at the

speaking of Warfare on Economic and military fronts, says that "Freezing

conclusion of peace.

Control is but one phase of the present war effort; it is but one weapon on

The readjustment of rights of private property on land was provided for by

the Treaties of Peace. The general principles underlying their complicated
arrangements were that the validity of all completed war measures was
reciprocally

confirmed;

but

that

while

uncompleted

liquidations

on

the

territories of the Central Powers were to be discontinued, and the subjects of

the victorious Powers were to receive compensation for the loss or damage
inflicted on their property by the emergency war measures, the property of
subjects of the vanquished Powers on the territories of the Allied and
Associated Powers might be retained and liquidated, and the owner was to

the total war which is now being waged on both economic and military fronts.
Coupled with Freezing Control as a part of this nation's program of economic
warfare are to be found export control, the promulgation of a Black List,
censorship, seizure of enemy-owned property, and financial and lend-lease aid
to allied and friendly nations. As to Japan, no official information is available
as yet on steps taken by the Japanese Government. As a Commentary of
April 11, 1942, points out, the Japanese Trading with the Enemy legislation
enacted during the last war against Germany might throw some light on the
views adopted by Japan in this matter."

look for compensation to his own State. The proceeds of the realization of

The sequestration or liquidation of enemy banks in occupied territories is

such property were not to be handed over to him, or to his State, but were

authorized expressly by the United States Army and Navy Manual of Military

to be credited to his State as payment on account of the sums payable by it

Government and Civil Affairs F.M. 2710 OPNAV 50-E-3, which, mandatory and

under the treaties.

controlling upon the theatre commanders of the U. S. forces in said

In paragraph 143 (p. 313) of the same work, Oppenheim states that "Private

territories, provides in its paragraph 12 the following:

personal property which does not consist of war materials or means of

Functions of Civil Affairs Officers. In the occupation of such territories for a

transport serviceable for military operations may not be as a rule seized". It is

considerable period of time, the civil affairs officers will in most cases be

obvious that the word "seized" used therein signifies "confiscated" in view of

concerned with the following and other activities:

the above quoted paragraph, and therefore when Oppenheim says, in footnote

1. MONEY AND BANKING. Closing, if necessary and guarding of banks, bank

The Combined Directive of April 28, 1944, for Military government in Germany

funds, safe deposit boxes, securities and records; providing interim banking

Prior to Defeat or Surrender, provided that the Allied Forces "Upon entering

and credit needs; liquidation; reorganization, and reopening of banks at

the area of Germany will take the following steps and put into effect only

appropriate times; regulations and supervisions of credit cooperatives and

such further financial measures as they deem necessary from a strictly

other financial agencies and organizations; execution of policies on currency

military standpoint. (b) "Banks should be placed under such control as

fixed by higher authority, such as the designation of types of currency to be

deemed necessary by them in order that adequate facilities or military needs

used and rates of exchange supervision of the issue and use of all types of

may be provided and to insure that instructions and regulations issued by the

money and credit; declaration of debt moratoria; prevention of financial

military authorities will be fully complied with." (c) "Pending determination of

transactions with enemy occupied territory.

future disposition, all gold, foreign currencies, foreign securities, accounts in

The civil affairs officers are concerned, that is, entrusted with the performance
of the functions enumerated above, when so directed by the chief commander
of the occupant military forces.
Not only the United States Army and Navy Manual of Military Government and
Civil Affairs but similar manuals of other countries authorize the liquidation or
impounding of the assets of enemy banks or the freezing, blocking and
impounding of enemy properties in the occupied hostile territories without
violating article 46 or other articles of the Hague Regulations. They do not
amount to an outright confiscation of private property, and were put into
effect by the Allied Army in the occupied hostile territories in Europe during
World War II.
The Combined Chiefs of Staff, in their Directive of May 31, 1943, on Military
Government in Sicily, Italy, addressed to the Supreme Allied Commander,
Mediterranean Theater, ordered: "(h) An Allied Military Financial Agency
under the control of the Military Government shall be established with such
sub-agencies as considered necessary," "(i) Military authorities on occupying
an area shall immediately take the following steps: '(1) All financial institutions
and banks shall be closed and put under the custody of the military forces',"
(2) a general moratorium shall be declared. (j) ... all papers of value, foreign
securities, gold and foreign currencies shall be impounded with receipts
granted to recognized owners. (k) "The Allied Military Financial Agency or any
appointed agency by the MG will take into immediate custody all foreign
securities and currencies, holding of gold, national funds and holding of
Fascist organizations for deposit." (Appendix on American Military Government,
its Organization and Policies, by Hajo Holborn, 1947, pp. 116, 117.)

financial institutions, credits, valuable papers, and all similar assets held by or
on behalf of the following, will be impounded or blocked and will be used or
otherwise dealt with only as permitted under licenses or other instructions
which

you may

issue:

(1) German national

state,

provincial

and local

governments and agencies and instrumentalities thereof." (4) "Nazi party

organizations

including

the

party

formations,

affiliates

and

supervised

associations, and the officials, leading members and supporters thereof; and
(5) Persons under detention or other types of custody by Allied Military
authorities and other persons whose activities are hostile to the interest of
military government" (Holborn, supra, p. 141)
In the Allied Directive of June 27, 1945, to the Commander in Chief of the
United States forces of occupation regarding the military government of
Austria, the Commanding General of the United States forces of occupation in
Austria, serving as United States members of the Allied Council of the Allied
Commission for Austria, was authorized, subject to agreed policies of the
Allied Council to close banks, insurance companies, and other financial
institutions for a period long enough to introduce satisfactory control to
ascertain their cash position and to issue instructions for the determination of
accounts and assets to be blocked under paragraph 55 which authorized him
to impound or block all gold, silver, currencies, securities accounts in financial
institutions, credits, valuable papers, and all other assets falling within the
following categories; a. Property owned or controlled, directly or indirectly, in
whole or in part, by any of the following: (1) the governments, nationals or
residents of the German Reich, Italy, Bulgaria, Rumania, Hungary, Finland and
Japan, including those of territories occupied by them; (3) the Nazi Party, its
formations, affiliated associations and supervised organizations, its officials,
leading members and supporters; (4) all organizations, clubs and other

associations prohibited or dissolved by military government; (5) absentee

stocks

owners, including United nations and neutral governments; (7) persons subject

licensed, business enterprises must be operated and liquidated, and foreign

to arrest under the provisions of paragraph 7, and all other persons specified

interest must be represented in court actions. The number of decisions to be

by military government by inclusion in lists or otherwise, (Holborn, supra, p.

made in connection with property is in fact multiplied by a state of war, which

192).

requires that productive resources be shifted from one use to another so as

On the other hand, the provisions of the Trading with the Enemy Acts

of

material

and

equipment

must

be

sold;

patents

must

be

to conform with the requirements of a war economy."

enacted by the United States and almost all the principal nations since the

The defendant-appellee, China Banking Corporation, comes within the meaning

first World War, including England, Germany, France and other European

of the word "enemy" as used in the Trading with Enemy Act of civilized

countries, as well as Japan, confirms that the assets of enemy corporations,

countries, because not only it was controlled by Japan's enemies, but it was,

specially banks incorporated under the laws of the country at war with the

besides, incorporated under the laws of a country with which Japan was at

occupant and doing business in the occupied territory, may be legally

war.

sequestered,

and

the

business

thereof

wound

up

or

liquidated.

Such

sequestration or seizure of the properties is not an act for the confiscation of

enemy property, but for the conservation of it, subject to further disposition
by treaty between the belligerents at the end of the war. Section 12 of the
Trading with the Enemy Act of the United States provides that "after the end
of the war any claim of enemy or ally of an enemy to any money or other
property received and held by the Alien Custodian or deposited in the United

Section 2 (1) of the Trading with the Enemy Act of Great Britain provides that
the expression "enemy" means: "any body of persons (whether corporate or
incorporate) carrying on business in any place, if and so long as the body is
controlled by a person who, under this section, is an "enemy". The control
test has also been expressly adopted in the French Trading with the Enemy
Act. The Italian Act regards as enemies "legal persons when enemy subject

States Treasury, shall be settled as Congress shall direct."

have any prevalent interest whatever in them." The Decree of the Dutch

The purpose of such sequestration is well expounded in the Annual Report of

including in the term enemy subjects "legal persons in which interest of an

the Office of the Alien Custodian for a period from March 11, 1943 to June

enemy state or enemy subjects are predominantly involved." (Domke Trading

30, 1943. "In the absence of effective measures of control, enemy-owned

with the Enemy Act, pp. 127-130.)

Government-in-exile of June 7, 1940, also adopted the control test by

property can be used to further the interest of the enemy and to impede our
own

war

effort.

All

enemy-controlled

assets

can

be

used

to

finance

propaganda, epionage, and sabotage in this country or in countries friendly to

our cause. They can be used to acquire stocks of strategic materials and

In the United States, the Trading with the Enemy Act has not adopted the
control theory. But section 2-a of the said Act says that the word enemy
shall be deemed to mean any "corporation incorporated within such territory

supplies ... use to the enemy, they will be diverted from our own war effort.

of any nation with which the United States is at war." And the same definition

The national safety requires the prohibition of all unlicensed communication,

above-named countries. The British Act in Section 2 (1) defines as enemy "any

direct or indirect, with enemy and enemy-owned territories. To the extent that

body of persons constituted or incorporated in or under the laws of a state

this prohibition is effective, the residents of such territory are prevented from

at war with his Majesty," it being immaterial that they are under the control of

exercising the rights and responsibilities of ownership over property located in

allied or neutral stockholders. Similarly the French Act regards as enemies,

the United States. Meanwhile, decisions affecting the utilization of such

corporations incorporated in conformity with the laws of an enemy state. The

property must be made and carried out. Houses must be maintained and

decree of the Dutch Government-in-exile on June 7, 1940, considers as

rents collected; payments of principal and interest on mortgages must be

enemies legal persons "organized or existing according to or governed by the

made for the account of foreign debtors and foreign creditors; stranded

law of an enemy state." The German Act of January 15, 1940, I section 3 (1)

is given to the word "enemy" by the Trading with the Enemy Act of the

3, deems enemies all corporations, "the original personality of which is based

obligation owed to an enemy or ally of enemy, deliver up any notes, bonds,

on the laws of an enemy state." The Italian Act of 1938, section 5, regards

or other evidences of indebtedness or obligation, ... with like effect as if he or

corporation as enemies if they are of enemy nationality under the law of the

they, respectively, were duly appointed by the enemy or ally of enemy,

enemy state. So too the Japanese Act, Chapter 1, No. 25, deems enemies "all

creditor, or obligee."

corporations belonging to enemy countries." (See Martin Domke, Trading with

the Enemy Act in World War II, pp. 120-122.)

It is evident that the Trading with the Enemy Act of the United States, like

Section 3-A of the Trading with the Enemy Act of the United Kingdom of

countries, may be applied and enforced in a hostile territory occupied by the

September 5, 1939, as amended up to April 1, 1943, provides that "Where

United States armed forces, because section 2 of said Act provides "That the

and business is being carried in the United Kingdom by, on behalf of, or

words 'United States', as used herein, shall be deemed to mean all land and

under the jurisdiction of, persons all or any of whom are enemies or enemy

water, continental or insular, in any way within the jurisdiction of the United

subjects or appear to the Board of Trade to be associated with enemies, the

States or occupied by the military or naval forces thereof." After the liberation

Board of Trade may, if they think it expedient so to do, make ...;" ( b) and

of the Philippines during World War II, properties belonging to Japanese

order (hereinafter in this section referred to as a winding up orders) requiring

Nationals located in this country were taken possession of by the Alien

the business to be wound up;" and section 14 (c) of the same Act (that

Property Custodian appointed by the President of the United States under the

obviously makes it applicable to enemy territories occupied by the United

Trading with the Enemy Act, because, although the Philippines was not a

Kingdoms armed forces) provides that "His Majesty may by order in council

territory or within the jurisdiction or national domain of the United States, it

direct that the provisions of this Act other than this section shall extend, with

was then occupied by the military and naval forces thereof.

that of the United Kingdom or Great Britain above quoted, and those of other

such exceptions, adaptations and modifications, if any, as may be prescribed

by or under the order ... (to the extent of His Majesty's jurisdiction therein) to

Of course it is obvious that the obligations assumed by the United States, in

any of the country or territory being a foreign country or territory, in which

for the time being His Majesty has jurisdiction." (The Trading with the Enemy

within her national domain, is different and distinct from those arising from

applying the Trading with the Enemy Act of the United States to properties

Act in World War II, p. 481, by Martin Domke.)

the application thereof to enemy properties located within the hostile territory

Section 5 (b) of the Trading with the Enemy Act of the United States provides

free to authorize the seizure, use, or appropriation of such properties without

that "during the time of war or during any period in which national

and compensation to the owners, for although section 2 of the Trading with

emergencies declared by the President, the President may under any agency

the Enemy Act provides that "at the end of the war any claim of an enemy

that he may designate or otherwise under such rule and regulation as he may

or of an ally of enemy to any money or other property received and held by

prescribe," and "any property or interest of any foreign country or national

the alien property custodian or deposited in the United States Treasury shall

thereof shall vest, when, as, and upon the terms, directed by the President, in

be settled by Congress," the owners of the properties seized within the

such agency or person as may be designated from time to time by the

national domain of the United States are not entitled to demand its release

President, and upon such terms and conditions as the President may

or compensation for its seizure, but what could ultimately come back to them,

occupied by her armed forces. In the first case, Congress is untramelled and

administered,

might be secured, not as a matter of right, but as matter of either grace to

liquidated, etc." and section 6 (e) of the same Act provides that "any

the vanquished or exacted by the victor, for the case is to be governed by

payment, ... of money or property made to the alien property custodian

the domestic laws of the United States, and not by the Hague Regulations or

hereunder shall be a full acquittance and discharge for all purposes of the

International

obligation of the person making the same to the extent of same. .. and shall,

States vs. S.S. White Dental Manufacturing Company, 274 U.S., 402). While in

in any case of payment to the alien, property custodian of any debt or

the latter case, when the properties are sequestered in a hostile occupied

prescribe,

such

interest

or

property

shall

be held,

used,

Law

(U.S.vs.

Chemical

Foundation Inc., 272 U.S.

1;

United

territory by the armed forces of the United States, Congress can not legally

but a mere sequestration of their assets during the duration of the war for

refuse to credit the compensation for them to the States of the owners as

the purposes already stated, is evidenced conclusively by the following

payment on the account of the sums payable by said States under treaties,

uncontroverted facts set forth in the briefs of both parties and amici curiae:

and the owners have to look for compensation to their States, otherwise, they
would violate article 46 of the Hague Regulations or their pledge of good

(1) Out of the sum of about P34,000,000 collected from the debtors by the

faith implied in the act of sequestering or taking control of such properties.

liquidator Bank of Taiwan, the latter paid out to the depositors or creditors of

It is to be presumed that Japan, in sequestering and liquidating the China

should not have been disbursed or taken out of the said amount of about

Banking Corporation, must have acted in accordance, either with her own

P34,000,000 had it been the intention of the Japanese Military Administration

Manual of the Army and Navy and Civil Affairs, or with her Trading with the

to confiscate this amount collected by the Bank of Taiwan.

Enemy Act, and even if not, it being permitted to the Allied Nations, specially
the United states and England, to sequestrate, impound, and block enemy
properties found within their own domain or in enemy territories occupied
during the war by their armed forces, and it not being contrary to the Hague
regulations or international law, Japan had also the right to do the same in
the Philippines by virtue of the international law principle that "what is

the same bank about P9,000,000; and its common sense that this last amount

(2) The members of Chinese Associations were permitted to withdraw from

their deposits with the China Banking Corporation a considerable amount of
money which was paid out of the sum collected from the debtors of said
bank, in order that they may pay the contribution legally exacted from them
by the military occupant in accordance with article 51 of the Hague

permitted to one belligerent is also allowed to the other."

Regulations. And this showed the intention of the belligerent occupant not to

Taking into consideration the acts of the Japanese Military Administration in

accordance with said Regulations; because otherwise the Japanese Military

treating the private properties of the so-called enemy banks, it appears

Administration

evident that Japan did not intend to confiscate or appropriate the assets of

contribution out of their own funds, without diminishing or reducing the

said banks or the debts due them from their debtors, and thus violate article

amounts collected by the Bank of Taiwan from the debtors of the China Bank.

46 or any other article of the Hague Regulations. It is true that as to private

personal properties of the enemy, freezing, blocking, or impounding thereof is
sufficient for the purpose of preventing their being used in aid of the enemy;
but with regard to the funds of commercial banks like the so-called enemy
banks, it was impossible or impracticable to attain the purpose for which the
freezing, blocking or impounding are intended, without liquidating the said
banks and collecting the loans given by then to the hundreds if not
thousands or persons scattered over the Islands. Without doing so, their
assets or money loaned to so many persons can not properly be impounded
or blocked, in order to prevent their being used in aid to the enemy through
the intervention of their very debtors, and successfully wage economic as well
as military war.
That the liquidation or winding up of the business of the China Banking
Corporation and other enemy banks did not constitute a confiscation or
appropriation of their properties or of the debts due them from their debtors,

confiscate the bank's assets and to act, at least in this respect, in

could

have

properly

required

the

Chinese

to

pay

the

(3) The collection of the aforementioned debts from the bank's debtors, as
well as the payment of withdrawal by the depositors, were regularly entered
into the books of said Banks, so that after liberation they could easily
determine the respective amounts and the persons who had made the
payments, which enabled all said banks to re-open and continue their
business; and the regular keeping of said books would have been unnecessary
or useless, were it the intention of the military occupant to close definitely
the enemy banks and appropriate all their resources.
(4) There was absolutely no reason for confiscating the funds of the banks
collected from their debtors, because by sequestrating or impounding their
assets or funds after the latter had been collected from their debtors, the
principal purpose of preventing the possible use of the funds of the banks in
aid of Japan's enemy was completely accomplished. Absolutely no other
benefit could be derived by Japan from confiscating or appropriating the

payments made in Japanese war military notes to the enemy banks by their

forces of liberation, following the readjustment of rights of private property on

debtors, because the Japanese Government could have them at will without

land seized by the enemy provided by the Treaty of Versailles and other

cost, except that of the ink, paper and labor necessary for printing and

peace treaties entered into at the close of the first World War, the general

issuing them.

principles underlying such arrangements are that the owners of properties

(5) The annual Report, 31st December, 1945, of the Chartered Bank of India,
Australia, and China (pp. 11-12), which had a branch in Manila liquidated by
Japanese Military authorities as one of enemy banks, clearly shows that the
liquidation of said branch was a mere sequestration, impounding or control of
its assets, and not a confiscation or appropriation thereof during the
occupation by the Japanese. It says that during the enemy occupation the

seized,
their
assets
realized and repayment of varying amounts, but up to 100 per cent in one
Branch at least, made to depositors. Said report reads, in its pertinent part,
cash

balance

of

our

Branches were

as follows:

ending 31st December, 1942, that we had reason to believe that accounts of
some of our occupied Branches had been partly or wholly liquidated, and that
the liquidation of such accounts would ultimately bring about shrinkage in
both Assets and Liabilities in the Balance Sheet figures. The information now
in our possession and the various changes in the Balance Sheet figures to
which I have referred to above, confirm the correctness of this statement, for
during the enemy occupation the cash balances of our Branches were
seized, their

assets realized where possible, and repayment of varying

amounts, but up to 100 per cent in one Branch at least, made to depositors.
Even so, the business of the offices of the Bank which remained under our
own control throughout the war was steadily increased and has offset to a
great extent decreases brought about by the partial liquidation of Branches

which were in Japanese control. (Emphasis supplied.)

inflicted on their property by the emergency war measures taken by the

enemy, through their respective States or Governments who may officially
intervene and demand the payment of he claim on behalf of their nationals
(VI Hackworth Digest of International Law, pages 232, 233; 11 Oppenheim,
sixth edition, page 263). Naturally, as the Japanese war notes were issued as
legal tender for payment of all kinds at par with the Philippine peso, by the
Japanese Imperial Government, which in its proclamations of January 3, 1942,
and February 1, 1942, "takes full responsibility for their usage having the

enemy banks the balance of the money collected by the Bank of Taiwan from
of

the

said

banks,

did

not

and

explanation, O.T. IMA, Vol, 1, pp. 39, 40), Japan is bound to indemnify the
aggrieved banks for the loss or damage on their property, in terms of
Philippine pesos or U.S. dollars at the rate of one dollar for two pesos.
(2) The second question is, we may say, corollary of the first. It having been
shown above that the Japanese Military Forces had power to sequestrate and
impound the assets or funds of the China Banking Corporation, and for that
purpose to liquidate it by collecting the debts due to said bank from its
debtors, and paying its creditors, and therefore to appoint the Bank of Taiwan
as liquidator with the consequent authority to make the collection, it follows
evidently that the payments by the debtors to the Bank of Taiwan of their
debts to the China Banking Corporation have extinguished their obligation to
the latter. Said payments were made to a person, the Bank of Taiwan,
authorized to receive them in the name of the bank creditor under article
1162, of the Civil Code. Because it is evident the words "a person authorized

It is obvious that the fact that Japanese Military authorities failed to pay the
debtors

belligerent are entitled to receive compensation for the loss or damage

correct amount to back them up" (See said Proclamations and their official

I informed you, when commenting upon the Balance Sheet figures for the year

the

seized, sequestrated or impounded who are nationals of the victorious

could

not

change

the

sequestration or impounding by them of the bank's assets during the war, into
an outright confiscation or appropriation thereof. Aside from the fact that it
was physically impossible for the Japanese Military authorities to do so
because they were forcibly driven out of the Philippines or annihilated by the

to receive it," as used therein, means not only a person authorized by the
same creditor, but also a person authorized by law to do so, such as
guardian, executor or administrator of estate of a deceased, and assignee or
liquidator of a partnership or corporation, as well as any other who may be
authorized to do so by law (Manresa, Civil Code, 4th ed. p. 254.)
The fact that the money with which that debts have been paid were Japanese
war notes doe not affect the validity of the payments. The provision of article

1170 of our Civil Code to the effect that "payment of debts of money must

but on military necessity as shown by the history of the use of money or

be made in the species stipulated and if it not to deliver such specie in silver

currency in wars.

or gold coins which is legal tender," in not applicable to the present case,
because the contract between the parties was to pay Philippine pesos and not
some specifically defined species of money. The Philippine peso and halfpesos including the Philippine Treasury Certificate was and is legal tender in
the Philippines under section 612 of the Administrative Code, as amended by
Act No. 4199. As well stated by the Supreme Court of the United States in
Knox vs. Lee and Parker (Legal Tender Cases, 12 Wall., 457-681, 20 Law. ed.,
287). "The expectation of the creditor and the anticipation of the debtor may
have been that the contract would be discharged by the payment of coined
metals, but neither the expectation of one party to the contract, respecting its
fruits, nor the anticipation of the other, constitutes its obligation. There is a
well-recognized distinction between the expectation of the parties to a
contract and the duty imposed by it. Aspdin vs. Austin, 5 Ad. & Bl. (N.S.)
671; Dunn vs. Sayles, Ibid. 685; Coffin vs. Landis, 46 Pa. 426. Were it not so,
the

expectation

of

results

would

be

always

equivalent

to

binding

engagement that they should follow. But the obligation of contract to pay
money is to pay that which the law shall recognize as money when the
payment is made. If there is anything settled by decision it is this, and we do
not understand it to be controverted." (Knox vs. Exchange Bank of Virginia, 12
Wall., 457; 20 U.S. Supreme Court Reports, 20 L. ed., 287, 311.) In said case
it was held that the legal tender for payment of debts contracted before and
after their passage were not inappropriate for carrying into execution the
legitimate purpose of the Government. And this Court, in Rogers vs. Smith Bell
(10 Phil., 319), held that "A debt of 12,000 pesos created in 1876 can now
(1908) be paid by 12,000 of the Philippine pesos authorized by the Act of
Congress of March 2, 1903, although at the time the loan was made which
created the debt, the creditor delivered to the debtor 12,000 pesos in gold
coin."
The power of the military governments established in occupied enemy territory
to issue military currency in the exercise of their governmental power has
never been seriously questioned. Such power is based, not only on the
occupant's general power to maintain law and order recognized in article 43
of the Hague Regulations (Feilchenfeld of Belligerent Occupation, paragraph 6),

As early as the year 1122, during the siege of Tyre, Doge Micheli paid his
troops in leather money which he promised to redeem when he returned to
Venice (Del Mar, Money and Civilization, 26), and when Frederick II besieged
Milan he also used leather money to pay his troops, as well as in payment of
wages (id. 33). When the French forces occupied the Ruhr in 1923, they
finished the printing of some Reichsbank notes in process and issued them.
(Nussbaum, Money in the Law, note 6, 158-59.) The British during the Boer
War issued receipts for requisitioned goods and made such receipts readily
negotiable, an arrangement very similar to the issuance of currency (Spaight,
War Rights on Land, 396). During the American Revolution, the Continental
Congress issued currency even before the issuance of the Declaration of
Independence, when the territory controlled by Congress was held in military
occupation against the then legitimate government. (Dewey, Financial History
of the United States, 37-38; Morrison and Commager, Growth of the American
Republic, 207; Nussbaum, op. cit. supra note, 6, 172-173.) The Confederacy
issued its own currency in Confederate territory (Thorington vs. Smith, 8 Wall.,
1) and also in northern areas occupied from time to time during the war.
(Spaight, op. cit. supra, note 19, 392.) The Japanese issued special occupation
currency in Korea and Manchuria during the Russo-Japanese War of 1905.
(Takahashi, International Law Applied to Russo-Japanese War, 1908, 260-61;
Spaight, op. cit. note 19,397; Ariga, La Guerre Rossu-Japanese, 1908, 450 et

seq.) The British also issued currency notes redeemable in Sterling in London
at a fixed rate of exchange, in their occupation of Archangel during and after
the first World War. (White, Currency of the Great War, 66; League of Nations,
Currency After the War, 100.)
During the World War II, the Germans had been using a variety of occupation
currencies as legal tenders on a large scale, the currency initially used in
most occupied areas being the Reichskroditkassa mark, a paper currency
printed in German and denominated in German monetary units, which
circulated side by side with the local currency at decreased rate of exchange.
And the Allies have introduced notes as legal currency in Sicily, Germany, and
Austria. The Combined Directive of the combined Chief of Staffs to the
Supreme Allied Commander issued on June 24, 1943, directed that the task
forces of the U.S. will use, besides regular U.S. coins, yellow seal dollars, and

the forces of Great Britain will use besides British coins, British Military Notes

the War of 1914-18, and "the local currency continues to be used, an

(BMA), to supplement the local lire currency then in use (Hajo Holborn,

occupant may reorganize the national currency by appropriate methods, such

American Military Government, 1947, pp. 115-116). The Combined directive for

as the creation of new types and supplies of coverage" (paragraph 272). (2)

Military Government in Germany, prior to defeat or surrender, of April 28,

The occupant may, and not infrequently, use his own currency, in the

1944, directed the United States, British and other Allied Forces to use Allied

occupied region. But this method may be found inconvenient if the coverage

military mark and Reichsmark currency in circulation in Germany as legal

for their national currency had already become inadequate, and for that

tender

the

reason authorities are afraid of exposing it to additional strain, and for that

Reichsmark currency at the rate of Allied Mark for Reichsmark; and that in the

reason an occupant may not replace the local currency by his own currency

event adequate supplies of them were not available, the United States forces

for all currency for all purposes, and enforce its use not only for his own

will use Yellow seal dollars and the British forces will use British Military

payment but also for payments among inhabitants (paragraph 285). (3) Where

Authority (BMN) notes. (Holborn, op. cit. supra, p. 140.) And the American

the regional currency has become inadequate and it is deemed inadvisable by

Directive on the Military Government of Austria of June 27, 1945, ordered that

the occupant to expose his own currency to further strain, new types of

the United States forces and other Allied forces within Austria will use only

money may be created by the occupant. Such new currency may have anew

Allied Military Schillings for pay of troops and other military requirements,

name and may be issued by institution created for that purpose (paragraph

declaring it legal tender in Austria interchangeably with Reichsmarks at a rate

296). This last method was the one adopted by Japan in this country,

of one Allied military schilling for one Reichsmarks. (Holborn, op. cit. supra, p.

because the coverage of the Philippine Treasury Certificate of the territory

192.)

occupied had become inadequate, for most if not all of the said coverage

and

the

Allied

Military

Marks

will

be

interchangeable

with

In the above cited case of Thorington vs. Smith, the Supreme Court of the
United States said:
. . . While the war lasted, however, they had a certain contingent value, and
were used as money in nearly all business transactions of many millions of
people. They must be regarded, therefore, as a currency, imposed on the
community by irresistible force.
It seems to follows as a necessary consequence from this actual supremacy
of the insurgent government, as a belligerent, within the territory where it
circulated, and from the necessity of civil obedience on the part of all who
remained in it, that this currency must be considered in courts of law in the
same light as it has been issued by a foreign government, temporarily
occupying a part of the territory of the United States."
According to Feilchenfeld in his book "The International Economic Law of
Belligerent Occupation," the occupant in exercising his powers in regard to
money and currency, may adopt one of the following methods according to
circumstances: (1) When the coverage of the currency of the territory
occupied has become inadequate as found in several Balkan countries during

had been taken to the United States and many millions of silver pesos were
buried or thrown into the sea near Corregidor, and Japan did not want to
use her national currency, and expose it to additional strains.
But be that as it may, whatever might have been the intrinsic or extrinsic
worth of the Japanese war-notes which the Bank of Taiwan has received as
full satisfaction of the obligations of the appellee's debtors to it, is of no
consequence in the present case. As we have already stated, the Japanese
war-notes were issued as legal tender at par with the Philippine peso, and
guaranteed by Japanese Government "which takes full responsibility for their
usage having the correct amount to back them up (Proclamation of January
3, 1942). Now that the outcome of the war has turned against Japan, the
enemy banks have the right to demand from Japan, through their States or
Governments, payments or compensation in Philippine peso or U.S. dollars as
the case may be, for the loss or damage inflicted on the property by the
emergency war measure taken by the enemy. If Japan had won the war of
were the victor, the property or money of said banks sequestrated or
impounded by her might be retained by Japan and credited to the respective
State of which the owners of said banks were nationals, as a payment on the
account of the sums payable by them as indemnity under the treaties, and

the said owners were to look for compensation in Philippine pesos or U.S.
dollars to their respective States. (Treaty of Versailles and other peace
treaties entered at the close of the first world war; VI Hackworth Digest of
International

Law,

p.

232.)

And

if

they

cannot

et

any

or

sufficient

compensation either from the enemy or from their States, because of their
insolvency or impossibility to pay, they have naturally to suffer, as everyone
else, the losses incident to all wars.
In view of all the foregoing, the judgement appealed from is reversed, and the
defendant-appellee is sentenced to execute the deed of cancellation of
mortgage of the property described in the complaint, and to deliver to the
plaintiff-appellant the Transfer Certificate of Title No. 47634 of the Register of
Deeds in Manila with the annotation of mortgage therein already cancelled,
without pronouncement as to costs. So ordered.

Moran, C.J., Paras, Pablo, and Bengzon, JJ., concur.

NICARAGUA

VS

UNITED

STATES:

AN

ANALYSIS

OF

JURISPRUDENCE

ON

CUSTOMARY INTERNATIONAL LAW

Customary

international

law

status

of

the

principle

of

non-

intervention.

Case: Case Concerning the Military and Paramilitary Activities In and Against

The competence of the ICJ to give its determination based on customary

Nicaragua (Nicaragua vs United States)

international law

Year of Decision: 1986. Court: ICJ.

1. The United States when accepting the compulsory jurisdiction of the

Overview: The case involved military and paramilitary activities conducted by,
or with the assistance of, the United States against Nicaragua from 1981 to
1984. Due to a multilateral treaty reservation of the United States (hereinafter
called the Vandenberg reservation), the Court was compelled to base its
findings only on customary and general principles of international law. As a
result, the Nicaragua case developed significant jurisprudence on clarifying
customary international law on the use of force and non-intervention,
elements necessary to form customary international law and the relationship
between the latter and treaty law. Controversial aspects of the decision
included the courts methodology used to determine that the principle of nonintervention had attained customary law status, the courts reliance on
UN resolutions as a source of opinio juris and the courts reliance on
multilateral treaties to determine customary international law in face of
the Vandenberg reservation.
Recommendation: The Nicaragua case contains in-depth discussions on the
relationship between treaty and customary international law. Students may
wish to read this post on the relationship before reading the synopsis of the
case.
In the Nicaragua case, the ICJ discussed:

The competence of the ICJ to give its determination based on

customary

international

law

in

the

face

of

the

Vandenberg

ICJ (under Article 36(2) of the ICJ Statute) entered into the Vandenberg
reservation. This reservation barred the ICJ from using certain multilateral
treaties in the adjudication of the dispute.
2. The United States held that this reservation barred the Court from
determining the case even on the basis of customary and general principles
of international law because customary law provisions, on which Nicaragua
relied on, were identical to provisions in treaties sought to be excluded.
Because of the identical content, the United States argued, treaty provisions
supervene and subsume the parallel customary law provision (see below).
3. The Court disagreed. It held that multilateral treaty reservations could not
preclude the Court from determining cases relying customary international law
because the latter exists independently of treaty law.

NB: The United States disagreed with the Courts determination to proceed
with the case and refused to participate further, including at the merits stage
(see the declaration made by the United States in this regard). Although the
Court was barred from resorting to multilateral treaties, it referred to the
latter, including the UN Charter, to identify the existence, nature and scope of
various customary law principles. Commentators criticised the Court for
circumventing the multilateral reservation in this manner.
Relationship between treaty law and customary international law

reservation of the United States.

4. As we noted before, the United States argued that when customary

The relationship between treaty law and customary international law.

subsumes and supervenes customary international law. In other words, the

Elements of customary international law.

The prohibition on the use of force as a jus cogens norm.

international law and treaty law contain the same content; the treaty law
existence of principles in the United Nations Charter precludes the possibility
that similar rules might exist independently in customary international law,
either because existing customary rules had been incorporated into the

Charter, or because the Charter influenced the later adoption of customary

9. Rules containing the same content could be treated differently in customary

rules with a corresponding content (para 174).

international law and in treaty law. For example, treaty law may contain
institutions or mechanisms to ensure the effective implementation of its

5. In its response, the Court distinguished two situations:

(a)

provisions, including those that reflect customary law. One could take the

Situations where the customary law principles were identical to treaty

provisions; and
(b)

Courts reading of Article 51 as an example. A State that exercises the right

of self-defence under Article 51, according to the UN Charter, has an
obligation to report the use of force immediately to the Security Council. The

Situations where customary law and treaty law rights and obligations

differed in respect of the same subject matter.

Court held that this was a treaty requirement and one that did not exist
under customary law. Interestingly, although the failure to report did not result
in a breach of customary international law, the Court indicated that the

6. In situations where customary law principles were identical to treaty

provisions (reflected as (a) above), the Court, quite correctly, disagreed with
the view of the United States. It held that even if principles of customary
international law are codified into treaties, the former continues to exist side
by side with the latter. For treaty parties, both customary and treaty law apply
and if, for some reason, the treaty ceases to apply the identical customary
law provision continues to apply between them unaffected (see more on para
178).

United States failure to observe this requirement contradicted her claim to be

acting in self defence (see paras 200, 235).
10. The Court discussed situations where customary international law and
treaty law provisions were not identical (see point (b) above). For example, the
Court

referred

to

the

fact

that

concepts

such

and

necessity

and

proportionality, or the definition of what constitutes an armed attack, are not

found under Article 51, or the UN Charter, but in customary law. The Court
concluded that (1) this proves that customary international law continues to

7. The fact that customary international law exists alongside treaty law was an
argument brought by Norway and Denmark in the North Sea Continental Shelf

Cases. In these cases, the two countries having failed to attribute an

exist alongside treaty law and that (2) areas governed by the two sources of
law do not (always) overlap and the rules do not (always) have the same
content.

obligation under Article 6 of the Geneva Conventions of 1958 to Germany,

sought to bind Germany via customary international law. In this case the
Court determined that Article 6 neither reflected customary law at the time of
the

codification,

nor

had

it

attained

that

status

at

the

time

of

the

determination. In the Nicaragua case, the Court relied on the North Sea

Continental Shelf Cases to support the assertion that principles of customary

international law can exist side by side with identical treaty law provisions and
the latter does not supervene the former in a manner where the former
ceases to exist (para 177).
8. The Court also relied on Article 51 of the UN Charter to show that a
treaty itself can recognise the existence of customary international law on the
same subject matter. The term inherent in Article 51 recognised that
customary law rights of self-defense existed alongside treaty provisions.

the Charter, having itself recognized the existence of this right (inherent
customary law right of self-defence under A. 51 of the UN Charter), does not
go on to regulate directly all aspects of its content. For example, it does not
contain any specific rule whereby self-defence would warrant only measures
which are proportional to the armed attack and necessary to respond to it, a
rule well established in customary international law. Moreover, a definition of
the armed attack which, if found to exist, authorises the exercise of the
inherent right of self-defence, is not provided in the Charter, and is not part
of treaty law. It cannot therefore be held that Article 51 is a provision which
subsumes and supervenes customary international law.
11. In case of a divergence between treaty law and customary international
law, for the parties to the treaty, amongst themselves, the treaty provisions
apply as lex specialis. The courts support for this principle can be found in

paras 180 and 181. The Court, in conclusion, explained the relationship

It is not to be expected that in the practice of States the application of the

between the UN Charter and customary international law in the following

rules in question should have been perfect, in the sense that States should

manner:

have refrained, with complete consistency, from the use of force or from

However, so far from having constituted a marked departure from a

intervention in each others internal affairs.

customary international law which still exists unmodified, the Charter gave

The Court does not consider that, for a rule to be established as customary,

expression in this field (on the use of force and self defence) to principles

the corresponding practice must be in absolutely rigorous conformity with the

already present in customary international law, and that law has in the

rule.

subsequent four decades developed under the influence of the Charter, to

it sufficient that the conduct of States should, in general, be consistent with

such an extent that a number of rules contained in the Charter have acquired

such rules, and that instances of State conduct inconsistent with a given rule

a status independent of it. The essential consideration is that both the

should generally have been treated as breaches of that rule, not as

Charter and the customary international law flow from a common fundamental

indications of the recognition of a new rule.

principle outlawing the use of force in international relations. The differences

which may exist between the specific content of each are not, in the Courts
view, such as to cause a judgment confined to the field of customary
international law to be ineffective or inappropriate (to the parties of the
Charter who are bound by the Charter) (text in brackets added)(para 181).
The relationship between customary international law and jus cogens

In order to deduce the existence of customary rules, the Court deems

If a State acts in a way prima facie incompatible with a recognized rule, but
defends its conduct by appealing to exceptions or justifications contained
within the rule itself, then whether or not the States conduct is in fact
justifiable on that basis, the significance of that attitude is to confirm rather
than to weaken the rule. (para 186)
15. The Nicaragua jurisprudence explained how one could deduct opinio

13. The court cited material presented by Nicaragua, the United States and

juris from acts of State. The Court held that opinio juris could be deduced

the International Law Commission to argue that the prohibition on the use of

from:

force contained in Article 2(4) of the UN Charter has attained the status of a
jus cogens norm.

The Court found this to be A further confirmation of the

validity as customary international law of the principle of the prohibition of

the use of force expressed in Article 2, paragraph 4, of the Charter of the

the attitude of States towards certain General Assembly resolutions. For

example, the Declaration on Principles of

International Law

concerning

Friendly Relations (hereafter called the Declaration on Friendly Relations).

United Nations (para 190).

The Court held that:

The necessary elements to determine the existence of customary international

The effect of consent to the text of such resolutions cannot be understood

law

as merely that of a reiteration or elucidation of the treaty commitment

14. The Court, similar to the North Sea Continental Shelf Case, considered

acceptance of the validity of the rule or set of rules declared by the

both the subjective element (opinio juris) and the objective element (State

resolution by themselvesIt would therefore seem apparent that the attitude

practice) as essential pre-requisites to the formation and elucidation of a

referred to expresses an opinio juris respecting such rule (or set of rules), to

customary international law norm (para 207). The jurisprudence of the

be thenceforth treated separately from the provisions, especially those of an

Nicaragua case contained an important clarification inconsistent State

institutional kind, to which it is subject on the treaty-law plane of the

practice does not affect the formation or continued existence of a customary

Charter

principle so long as the inconsistency is justified as a breach of the rule.

undertaken in the Charter. On the contrary, it may be understood as an

Statements by State representatives.

Obligations undertaken by participating States in international forums (the

Court provided the example of the Conference on Security and Co-operation

in Europe, Helsinki)
-

The International Law Commissions findings that a concept amounts to a

customary law principle.

-

Multilateral conventions.

NB: The fact that the Court relied on resolutions of the United Nations to
deduct opinio juris was subject to criticism. As you know, opinio juris is the
subjective element necessary to form customary law. Opinio juris is reflected
in instances where the State undertakes a particular practice because it
believes that it is legally bound to do so. Voting patterns in the United
Nations are often guided by policy considerations over legal merits. The
General Assemblys subject matter is more policy oriented than legal (for
which we have the 6th Committee). For example, when the United States voted
for the Friendly Relations Declaration it stated on record its belief that the
Declaration was only a statement of political intention and not an expression
of the law. This is not to say that provisions on General Assembly
Resolutions that guide the international community to act in a certain way
may not eventually become binding international law (either by attaining
customary law status or becoming codified into treaty law). It can, if there is
adequate State practice and opinio juris. The argument is that opinio juris
cannot be said to exist based merely on a vote in favour of a non-binding
resolution in the absence of an examination of subsequent consistent and
general State practice (which, in turn, reflects or confirms opinio juris).
Customary international law relating to principles of non-intervention
16. The Court held that Principles such as those of the non-use of force

(para 191), non-intervention (para 192), respect for the independence and
territorial integrity of States, right of collective self defence (para 193) and the
freedom of navigation, continue to be binding as part of customary
international law, despite the operation of provisions of conventional law in
which they have been incorporated (text in brackets added).

17.

The Courts finding that principle of non-intervention formed a part of

customary

international

law

invited

criticism

from

commentators,

partly

because they disagreed that the principle formed customary international law
and partly because of the Courts own contradictions in coming to its
conclusions and inadequacy of analysis (see below). The Courts contradiction
stems from this statement: The principle of non-intervention involves the

right of every sovereign State to conduct its affairs without outside

interference; though examples of trespass against this principle are not
infrequent, the Court considers that it is part and parcel of customary
international law(emphasis added. Para 202).
18.

The Court began its analysis with two questions: Notwithstanding the

multiplicity

of

declarations

by

States

accepting

the principle

of

non-

intervention, there remain two questions: first, what is the exact content of the
principle so accepted, and secondly, is the practice sufficiently in conformity
with it for this to be a rule of customary international law? The first question
was discussed in a previous post and will not be discussed here.
18. Although the question seemed to direct the Court towards identifying an
existing custom, in its response the Court seemed to have already determined
that the customary law prohibition of non-intervention existed. In the following
passage the Court deliberates if, in contrast, a customary law right to
intervention had evolved.
There have

been

in recent

years

number

of

instances

of

foreign

intervention for the benefit of forces opposed to the government of another

State. The Court is not here concerned with the process of decolonisation It
has to consider whether there might be indications of a practice illustrative of
belief in a kind of general right for States to intervene, directly or indirectly,
with or without armed force, in support of an internal opposition in another
State, whose cause appeared particularly worthy by reason of the political and
moral values with which it was identified. For such a general right to come
into existence would involve a fundamental modification of the customary law
principle of non-intervention. (paras 206, 207).
19. The Court went on to hold, as before, that for a new customary rule to
be formed, not only must the acts concerned amount to a settled practice,
but they must be accompanied by the opinio juris sive necessitates.

The significance for the Court of cases of State conduct prima facie

armed attack for example, the threat to use force). The Court, then,

inconsistent with the principle of non-intervention lies in the nature of the

restricted the right of self-defense to a situation where there had been a

ground offered as justification. Reliance by a State on a novel right or an

grave use of force (or an armed attack, as defined by the Court). If one were

unprecedented exception to the principle might, if shared in principle by other

to

States, tend towards a modification of customary international law. In fact

unambiguous, one could say this divorced interpretation could result in

however the Court finds that States have not justified their conduct by

customary law developing in a manner that is not in line with the Charter and

reference to a new right of intervention or a new exception to the principle of

thereby creating separate rights/ regimes of law that govern the same subject

its prohibition. The United States authorities have on some occasions clearly

matter. This is because, then, the two regimes would be irreconcilable.

stated their grounds for intervening in the affairs of a foreign State for

However, the fact remains that the Charter does leave room for interpretation

reasons connected with, for example, the domestic policies of that country, its

for example, on the definition of an armed attack or on the use of force. In

ideology, the level of its armaments, or the direction of its foreign policy. But

cases of ambiguity, Article 31 of the Vienna Convention on the Law of

these were statements of international policy, and not an assertion of rules of

Treaties directs us to look at, inter alia, subsequent practice and any relevant

existing international law.

rules of international law that maybe applicable. In other words, a treaty can

20.

The Court also noted that the United States has not sought to justify its

intervention in Nicaragua on legal grounds, but had only justified it at a

political level.

The United States had not asserted for itself

legal right of

intervention in these circumstances. The Court, without further analysis into

State practice, almost immediately proceeded to find that no such general
right of intervention, in support of an opposition within another State, exists in
contemporary international law. The Court concludes that acts constituting a
breach of the customary principle of non-intervention will also, if they directly
or indirectly involve the use of force, constitute a breach of the principle of
non-use of force in international relations (para 209).

hold

that

the

relevant

Article 2(4) of the UN Charter prohibits the threat or use of force against
another State. The Court held that the same prohibition on the use of force
could be found under customary international law and as a jus cogens norm.
The Court then went on to categorize the use of force under customary law
as either a grave use of force (i.e. use of force amounting to an armed
attack) or a less grave use of force (i.e. use of force that falls short of an

precise

and

of treaty and customary law provisions.

Material on the Nicaragua case

The following contains a list of scholarly articles and other material that
discuss the Nicaragua case. If you would like to add to the list, please note
your suggestions in the comment box.
The judgment including separate opinions of individual judges and summaries

The

law it developed certain principles independently of the treaty. For example,

clear,

mean a potential development of ambiguous treaty law and a reconciliation

In addition to the comments made above in italics, another interesting aspect

to consider multilateral treaties. In its consideration of customary international

were

international law. In this case, the development of customary law would also

of the judgment and orders

obligation from the identical treaty obligation because of the jurisdictional bar

principles

be interpreted with the assistance of customary and general principles of

Development of a parallel customary international law?

of the judgment is that it sought to divorce customary international law

Charter

World

Court

and

Jus

Cogens,

Christenson. Christenson argues that

81

AMJIL

93,

Gorden

A.

an independent development of the

customary law right divorced from the treaty can have wider consequences:
We have then a double irony. The Court uses the United States position
accepting the treaty norm against the threat or use of force also as a
customary norm possibly having jus cogens quality, in part, to justify taking
jurisdiction as a matter quite independent of the norm that otherwise falls
under the multilateral treaty reservation. Since there are two separate sources
of the law, the choice of the one source rather than the other means that
the norm relied upon survives the jurisdictional bar to the use of the other.

Yet the two norms are not different enough to undermine completely the

Protecting the Courts institutional interests: Why not the Marbury approach?

content of the Charter norm. This formalism simply masks the more interesting

Michael J. Glennon, 81 AMJIL 121 (discusses reservations before the ICJ and

question of the Courts institutional claim, given the ineffectiveness of the UN

the Courts prerogative to determine its own jurisdiction)

Security system, to develop an international public order case by case, by

breaking away form the strictures of the Charter and treaty norms. The Court
untied the treaty norms from their constraints within the United Nations or
regional collective security systems, a potentially destabilizing decision, one
whose consequences are unforeseen.

The decision based on the validity of

an autonomous norm of customary international law free from the Charter is

a constitutive one of potential great significance (81 AMJIL 100, 1987).
Trashing

customary

international

law,

Antony

DAmato,

81

AMJIL

102

by the international court of justice before concluding that the principle nonintervention formed part of customary international law. He argues that the
acceptance of General Assembly resolutions do not manifest opinio juris. He
states that the Court failed to consider that Article 2(4) continued to evolve
through the years.)

jurisdiction at the merit stages).

The Nicaragua judgment and the future of the law of force and self-defense,
John

Lawrence

Hargrove

81AMJIL

135 (Hargrove

criticizes

the

ICJs

countermeasures).
Somber reflections on the compulsory jurisdiction of the international court,
Mark Weston Janis, 81 AMJIL 144
Custom on a sliding scale, Frederic L. Kirgis 81 AMJIL 146 (Kirgis discusses
the relationship between State practice and opinio juris, criticizes the methods
(or lack thereof) of the Court in determining the customary law nature of

The World Courts Achievement, Richard Falk, 81 AMJIL 106 (Falk takes a
generally positive approach to the judgment, gives a good overview of the
case and Judge Shwebels dissent)

contextual approach to the judgment and supports the Courts narrow view of
an armed attack and self defence).
Some observations on the ICJs procedural and substantive innovations,
Thomas M. Franck, 81 AMJIL 116 (criticizes the determination of relevant State
practice in relation to non-intervention and the reliance on UN resolutions to
alleges that

Article

2(4)

of

the

Charter.

Points

out

that

actual

State

practice

on

intervention did not support the Courts findings).

The International Court lives unto its name, Herbert W. Briggs, 81 AMJIL 78.

Drawing the right line, Tom J. Farer, 81 AMJIL 112 (Farer takes a cold-war

the Court sought to harden soft law

prematurely). Frank points out that the interventions falling short of armed
attacks would not allow States to target rebel groups in another States
territory even if the insurgency is planned, trained, armed and directed from
that territory).

129 (discusses the discretionary power of the court to decline to exercise its

construction of the notion of collective self defense, armed attack and forcible

(1987) (full text): (DAmato discusses the paucity of State practice examined

illicit opinio juris (it

Discretion to decline to exercise jurisdiction, Edward Gorden, 81 AMJIL

Determining US responsibility for contra operations under international law,

Francis V. Boyle
Customary international law in the Nicaragua Case, Rijpkema. (Abstract: On 27

June 1986 the International Court of Justice passed judgment in the case
concerning military and paramilitary activities in and against Nicaragua.
Because of a reservation that the United States had made when it accepted
the jurisdiction of the Court, the Court could not pronounce a decision
regarding the dispute insofar as it concerned multilateral convertions. As a
resuld of this, the Court was compelled to base its judgment largely on rules
of customary international law and general principles of law. The rules of
customary law which were relevant for the judgment corresponded to a
significant extent, as regards their content, to the rules of treaty law which
the Court was unable to apply, such as the prohibition on the use of force of
Article 2, paragraph 4 of the Charter of the United Nations. This led the Court

to indicate in precise terms how rules of treaty law and rules of customary
law which have a corressponding content can co-exist and how the existence
of rules of customary international law can be established in general. In
addition, the Court examined in some detail the existence and content of
certain specific rules of customary international law.)

withdrew from participation in the Nicaragua case at the International Court of

Justice, the US government expressed concern that the course on which the
Court may now be embarked could do enormous harm to it as an institution
and to the cause of international law. This essay examines whether or to
what extent the anticipated negative effects came to pass. It concludes that
dire predictions of harm to the Court were overstated. Twenty-five years later,
the rate at which states accept the Courts jurisdiction has held steady. Only
added

jurisdictional

reservations

concerning

military

activities. The mix of cases being brought to the Court has shifted towards a
more representative distribution. States are generally complying with the
Courts decisions, though some compliance problems remain. The most serious
negative impact has been on the willingness of the United States (still the
Courts most active litigant) to participate fully in international dispute
settlement.)
LJIL Symposium: The Nicaragua Case: Its Impact, John Dugard
LJIL Symposium: Response of Lori F. Damrosch to Comments by John
Dugard, Lori F. Damrosch
The Principle of Non-Intervention 25 Years after the Nicaragua Judgment, by
Marcelo

Kohen(Abstract: This

article

focuses

on

the

the collective security regime on the other. The 1986 judgment helped to

as well as state practice in violation of this principle, in no way led to

or In Between?, Lori Fisler Damrosch (Abstract: At the time the United States

have

human rights on the one hand and the safeguard of state sovereignty and

subsequently adopted. The controversial doctrine of humanitarian intervention,

The Impact of the Nicaragua Case on the Court and Its Role: Harmful, Helpful,

states

particularly the case with regard to the relationship between the protection of

for the development of this concept in a series of GA resolutions that were

LJIL Symposium: Discussion of the ICJ Nicaragua Judgment

few

a precursor to legal developments that have since taken place. This is

clarify the content of humanitarian assistance. It constituted the starting point

Le peuple, cest moi!The world court and human rights, 81 AMJIL 173

Courts 1986 analysis not only remains of actuality today, but also constitutes

analysis

by

the

International Court of Justice of the principle of non-intervention in domestic

affairs in its judgment of 27 June 1986 in the case concerning Military and
Paramilitary Activities in and against Nicaragua and contrasts it with the
evolution of international law and practice in this field. It is proposed that the

modifying existing international law. Similarly, the new concept of responsibility

to protect, which places emphasis on collective security and discounts
unilateral action, has not led to the disappearance of the principle of nonintervention either.)