FACTS:Contributions were collected during the Spanish regime for the relief of the victims of an

earthquake. The Monte de Piedad, a charitable institution, in need for more working capital, petitioned the
Governor-General for the transfer of $80,000 as a loan. In June 1893, the Department of Finance called
upon the Monte de Piedad to return the $80,000. The Monte declined to comply with this order upon the
ground that only the Governor-General of the Philippine Islands and not the Department of Finance had
the right to order the reimbursement. On account of various petitions of the persons, the Philippine
Islands, through the Attorney-General, bring suit against the Monte de Piedad for a recover of the
$80,000, together with interest, for the benefit of those persons or their heirs. After due trial, judgment was
entered in favor of the plaintiff for the sum of $80,000 gold or its equivalent in Philippine currency,
together with legal interest from February 28, 1912, and the costs of the cause. The defendant appealed.
One of the assignment of errors made by the defendant was to question the competence of the plaintiff
(government) to bring the action, contending that the suit could be instituted only by the intended
beneficiaries themselves or by their heirs.
ISSUE:
Who may sue to recover the loan?
HELD:The Supreme Court affirmed the judgment appealed from and upheld the right of the Government
to file the case as parens patriae in representation of the legitimate claimants. The legislature or
government of the State, as parens patriae, has the right to enforce all charities of public nature, by virtue
of its general superintending authority over the public interests, where no other person is entrusted with it.
This prerogative of parens patriae is inherent in the supreme power of every State, whether that power is
lodged in a royal person or in the legislature. It is a most beneficient functions, and often necessary to be
exercised in the interest of humanity, and for the prevention of injury to those who cannot protect
themselves. The beneficiaries of charities, who are often in capable of vindicating their rights, and justly
look for protection to the sovereign authority, acting as parens patriae. They show that this beneficient
functions has not ceased to exist under the change of government from a monarchy to a republic; but that
it now resides in the legislative department, ready to be called into exercise whenever required for the
purposes of justice and right, and is a clearly capable of being exercised in cases of charities as in any
other cases whatever.
Besides, the beneficiaries, consisting of the original sufferers and their heirs, are quite numerous. It would
be impracticable for them to institute an action or actions either individually or collectively to recover the
$80,000. The only course that can be satisfactorily pursued is for the Government to again assume
control of the fund and devote it to the object for which it was originally destined. The impracticability of
pursuing a different course, however, is not the true ground upon which the right of the Government to
maintain the action rests. The true ground is that the money being given to a charity became, in a
measure, public property, only applicable, it is true, to the specific purposes to which it was intended to be
devoted, but within those limits consecrated to the public use, and became part of the public resources for
promoting the happiness and welfare of the Philippine Government. To deny the Government's right to
maintain this action would be contrary to sound public policy.
The Philippine government, as a trustee towards the funds could maintain the action since there has been
no change of sovereignty. The state, as a sovereign, is the parens patriae of the people. These principles
are based upon public policy. The Philippine Government is not a mere nominal party because it was
exercising its sovereign functions or powers and was merely seeking to carry out a trust developed upon

it when the Philippine Islands was ceded to the United States. Finally, if said loan was for ecclesiastical
pious work, then Spain would not exercise its civil capacities