In the 1939 landmark case of People v. Montenegro (G.R. No. 46728, September 30, 1939; 68 Phil. 659 [Per J. Imperial]), the Philippine Supreme Court grappled with a complex legal question arising from the unique historical relationship between the Philippines and the United States. The case, involving an American federal law allegedly violated within Philippine territory during the American occupation, presented a fascinating intersection of jurisdictional principles, criminal procedure, and the evolving legal identity of the Philippines. The central issue revolved around which statute of limitations – that of the United States or that of the Philippines – should govern the prosecution of Montenegro for collecting excessive attorney’s fees from a pension claimant.

Specifically, accused was charged for violating a United States federal law prohibiting excessive attorney’s fees for pension claims. Note that, in the United States, each state is a country in itself but, owing to its federal system of government, the federal government maintains an overarching authority over states on certain matters such as immigration and foreign relations. Thus, during the time when the Philippines was under US occupation, certain federal laws were made to apply within the Philippine Islands. He was charged in the Court of First Instance (CFI) of Negros Oriental with collecting an exorbitant fee of $700 (equivalent to Php1,400) from Valentina Calugcugan who was a pension benefit claimant. At present, the CFI is the Regional Trial Court (RTC).

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

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

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

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

The Supreme Court’s decision to apply the United States federal statute of limitations, rather than the Philippine counterpart, rested on the fundamental principle that the nature and consequences of a crime are intrinsically linked to the law that defines and punishes it. At the time of the alleged offense in 1932, the Philippines was not a fully sovereign nation but rather a territory under the dominion of the United States. Consequently, certain federal laws of the United States were extended to apply within the Philippine Islands. The prohibition against excessive attorney’s fees in pension claims was one such federal law. To subject this violation to a Philippine statute of limitations, the Court reasoned, would create an incongruous situation. The same act, defined as criminal and penalized under US law, would be subject to different prescriptive periods depending solely on the geographical location of its commission. This would lead to potential injustices and undermine the uniform application of the federal law within the territory where it was intended to operate.

The subsequent amendment of the information, changing the plaintiff from the “Government of the United States” to the “People of the Philippines” following the Philippines’ transition towards independence, did not alter the fundamental nature of the offense or the applicable law. The crime remained a violation of a United States federal statute, and the change in the prosecuting entity reflected the evolving political landscape rather than a transformation of the legal basis of the charge.

Furthermore, the Supreme Court correctly sidestepped a detailed discussion of the principles of lex fori, lex domicilii, and lex loci. These choice-of-law rules typically come into play when a case involves connecting factors pointing to different sovereign legal systems. In Montenegro, the alleged crime was committed and was being tried within the Philippines. The crux of the matter was not which sovereign’s substantive criminal law applied – that was clearly United States federal law – but rather which sovereign’s procedural law on prescription should govern the enforcement of that substantive law within Philippine courts. Given the unique historical context of the Philippines as a territory under US administration at the time of the offense, the Court’s focus on the origin and nature of the criminal law itself, rather than abstract choice-of-law principles applicable between independent states, was a pragmatic and legally sound approach.

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