The  Government of  the  Philippine  Islands demands of The Standard  Oil Company of New York the payment of P38,433.76, together with  the interest  thereon  due from October 28, 1901, and the costs and expenses  occasioned by this suit, by reason of the  customs duties payable by the defendant company, the cause of the indebtedness being that contained in the following facts  as set forth  in the complaint:

On or about the 27th of July, 1901, the defendant company imported into the Philippine Islands 30,000 cases of refined petroleum which contained approximately 300,000  gallons. (Fact VI,)   That same day, July 27, 1901, the defendant company presented to  the Bureau of Customs of this city an affidavit setting forth that the said 30,000 cases of refined petroleum had been sold by  the former to the  commissary department of the  United States Army  in Manila, and that the said company retained no interest therein.   (Fact VII.)

Through this affidavit and application for free entry made by the chief of the commissary department of the United States Army in  Manila, the  customs authorities of Manila issued a permit for the introduction into the Islands of the 30,000 cases of refined petroleum which were  taken from the ship, then in the port of Manila, to the bonded warehouse of the defendant company where  they  were to remain in bond until they should  be withdrawn and  delivered to the commissary  department of  the United States Army in Manila, under the  free entry privilege.  (Facts VIII  and IX.)

From August 7 to October 28, 1901, the  defendant company removed  from its warehouse the  30,000  cases there deposited, which it did with, the authorization of the customs authorities of the port of Manila,  upon  the express representation of the  duly authorized agents of the defendant that the withdrawal of the said cases was for their delivery to the commissary department of the United States Army and for the exclusive use of the said Army, in  conformity with the terms of the privilege of free entry granted thereto. (Facts X and XI.)

But,  of the 30,000 cases,  only 10,679   were actually delivered  to  the  commissary department  of the United States Army, and the remaining 19,321  cases, which contamed 193,210  gallons of refined petroleum,  equivalent to 608,321.685 kilograms, were, free of customs duties, sold to private parties; the Government of the Philippine Islands, as alleged  by the  plaintiff,  being, by these  deceitful and fraudulent  means,  defrauded of the tax or duty which the defendant company should have paid upon the said cases. (Facts XII and XIII.)

As  prescribed by section 30 of the Provisional Customs Tariff, then in  force in  the Philippine Islands, the  duty chargeable  was  6.318 pesos Mexican currency for each 100 kilogrems;  so that, for the 608,321.685 kilograms, the defendant company was indebted in the sum of 38,433.76 pesos Mexican currency which, at  the exchange of one dollar for each 2 pesos  in Mexican  currency, make exactly 38,433.76 pesos  in Philippine currency.  (Facts IV, V, and XIV.)

To  this complaint the  defendant company  interposed a demurrer upon  the ground  that sufficient facts  were not alleged therein to constitute a cause of action, for the reason that, during the period  of time  when it is alleged in the complaint that the defendant company had imported petroleum into the Philippine Islands without paying the customs duties due thereon, there was no law whatever in existence that authorized the collection  of duty on petroleum imported into the Philippine Islands from the United States.

Such demurrer was overruled, to  which ruling an exception was taken by the defendant and, having been allowed a delay of five days within which to answer the complaint, the company waived such  right and insisted upon the demurrer.   The following stipulation was then agreed to by the plaintiff and the defendant:

"It  is hereby stipulated by both parties, through their attorneys, that as, in harmony with section 101 of the Code of Civil Procedure the defendant's demurrer was overruled and  it refused to answer  the complaint, they submit the case to the decision of the court upon the allegations of the complaint which, for the purposes of the demurrer and pursuant to section 91 of the aforesaid code, have been admitted by the defendant; and  that the  latter shall stand by its demurrer and the exception taken by it before the court: for which reason there is no need of taking any testimony." (B. of E., p. 10,)

As a consequence, the Court of First Instance of the city of Manila rendered judgment and sentenced the defendant company to the payment of the  amount demanded in the complaint with interest thereon at 6 per cent per annum from October 28, 1901, and to pay the costs.

The defendant appealed to this court, by bill of exceptions, and,  after a hearing  on the appeal,  it is found that the appellant sets up the following assignments of error: 

1. The overruling of the demurrer;     
2.  
3. The judgment rendered against the defendant;   
   
4.  
5. The holding that the Act of Congress of June 30, 1906, was retroactive in effect and thus brought into force the ineffective military order which was invalid at the time of its issuance; and
   
6.  
7. That this method of construing the said Act  is contrary to the Amendments V and XIV of the Constitution of the United States.

Entering into details with reference to these assignments of error, the appellant puts  the first proposition in the following terms:

Did there exist in  the Philippines any law or regulation whatever  legally in force and effect, under the provisions of which  the payment of tariff or customs duties  on  the merchandise  concerned,  imported  into this country from the United States on  July 27, 1901, could be exacted?  And then answers the same in the negative, grounded on four decisions of the Supreme Court of the United States:  Dooley vs. U. S.  (182 U. S., 222); De Lima vs. Bidwell (182 U. S., 1); Fourteen Diamond Rings  vs.   U. S. (183 U. S., 176); and Warner, Barnes &  Company vs.  U, S. (197 U. S., 419).

That there was such  a  law in force in the Philippines on the date mentioned, is a fact that can not be denied, nor is it denied by the appellant, who, on page 8 of his brief, says that "subsequent to  November 10,  1898, the payment of tariff duties at the custom house at Manila was required pursuant to the order issued by President  McKinley that served as a rule of action until November 15,  1901, when the Act  of the Philippine Commission went  into  effect." What is denied and  co

With respect to this point under consideration, the legislative history of this  period, August 13, 1898 to November 15, 1901, pertinent to the facts of the complaint, is the following: A customs service had been established in the Philippines by the  Spanish Government.  Upon the occupation of Manila  by the American army on the  13th of August, 1898, the military government that was established found such service in operation and continued it,  keeping the Manila custom-house open.  On  July 12, 1898, President McKinley, in  his capacity of Commander-in-Chief of the Army, issued  a military order  in which he provided a schedule of tariff duties which were  to be imposed and collected in all the posts and places occupied and  held  by troops of the United States.  This military order was not, however, immediately applied to the custom-house at Manila, which  continued to levy and collect duties  in  accordance with the Spanish tariff until November 10, 1898; but from this date it began to enter into full and absolute force and effect and continued  to govern until November 15, 1901, when the tariff established by Act No. 230 of the Philippine Commission, became operative.

So that, from the time of the establishment of the military government of  occupation, there was continuously, without any intermission, a tariff law under which customs duties were levied and collected in the Manila  custom-house until the Philippine  Commission,  to which  all the legislative, executive and judicial powers  in the Islands were transferred, enacted on September 17, 1901, Act  No. 230, made effective  on November 15 of the same year an Act which continued in force until Congress passed the Act of March 8, 1902, as to the entire force and effect of which, as well as to that of the previous Act of the Philippine Commission, not a word need be said, inasmuch as they are both entirely outside of the facts of the complaint.

The military order of July  12, 1898, under  which the privilege of free entry was granted and the removal free of duty of the 30,000 cases of petroleum in question was effected, is the one that the appellant says "was still born," that is to say, that it never had nor could have any legal existence, and rests its assertion on  the four decisions, above cited, of the Supreme Court of the United States.

It should be remembered that the  exchange  and ratification of the Treaty of Paris took place on April 11, 1899.

The cases of De Lima vs. Bidwell, and Dooley vs. U. S. were for exportation from Porto Rico to the United States and for importation from the United States into Porto Rico, respectively, subsequent to April 11, 1899.  The duties were paid under protest; and  suit being brought to obtain their refund,  the Supreme  Court of the United States decided that it was proper to return them, on the sole ground that the appellant  company, on page 9 of  its brief, argues in these  terms:  "because  the  powers of the President,  as Commander-in-Chief of  the Army and Navy,  to  impose customs duties in Porto  Rico, ceased with the ratification of the Treaty of Paris, whereby Porto Rico was ceded to the United States," and  "ceased to be a foreign country," as stated in the second of the said decisions, or in other terms, according to the  first of them, "because Porto Rico had ceased to be a foreign country within the meaning of the customs laws, so that the Dingley  Tariff, which treats of importations from foreign  countries,  could  no longer be applicable  in the matter of importations  from Porto Rico."

In the case  of the Fourteen Diamond Rings (183 U.  S., 176) the Supreme Court referred entirely to the case of De Lima vs. Bidwell (182 U. S., 1), and said: 

"No reason is perceived for any different ruling as to the Philippines.   By the third  article  of the treaty Spain ceded  to the United  States the archipelago known as the Philippine Islands,'   *   *   *.   The treaty was ratified *   *   *.   The Philippines thereby ceased, in the language of the treaty 'to be  Spanish.'  Ceasing to be  Spanish, it ceased to be a foreign country."

And in the case of Wainer, Barnes & Co. vs. IL S.  (197 U.  S., 419), what that high tribunal said, as transcribed by the appellant company itself,  is the following: 

"It  will be observed that the  President's order relied upon  was an order issued during the war with Spain, nine months before the treaty of peace was concluded.   It was a measure taken with reference to that war alone, and not with reference to the insurrection of the native inhabitants of the Philippines, which did  not arise until much later *   *   *.   The natural view would be that  the order expired by its own terms when the war with Spain was at an end.  The order directs that upon the  occupation of any forts and places in the Philippine Islands by the forces of the United States' the  duties shall be levied and collected 'as a military contribution.'   *   *   *  It was a regulation for and during an existing war, referred to as definitely as if it had been named."

In none of these decisions is the military order of  July 12,  1898, considered as "stillborn/' for it is not denied that it was effective  up to the exchange  or  ratification of the treaty of peace  of April 11, 1899, and only subsequent to this date is it considered that it became inoperative because the object for which it was created no longer existed.   This is all that may be said.

Continuing the history of the last  case, it must be  kept in mind that if the Philippine Commission went on applying the customs tariff established by the  President  in  that military  order, it was because,  on June 8,  1901, the  Secretary of War  had cabled  to the Philippine Commission the following:

"The most obvious distinction between  the status of Porto Rico and the Philippines, after the cession, indicated in the opinions of the  court, is in the fact  that Porto Rico was, at the time of cession, in full peaceable possession, while a  state of war has continued  in the Philippines.  As the question of the President's power to impose duties in the Philippine Islands under the existing conditions of military occupation has not been decided by the court, the President has determined to continue to impose duties as heretofore." (See Lincoln vs.  U. S., 202 U. S., 484, 497.)

As may be seen, the  matter treated in  the  paragraph above quoted is referred to by the words transcribed from the preceding decision  (Warner Barnes & Co. vs. U.  S., 197 U. S., 419, 429) "the fact [it is furthermore stated in the said decision]  that there was an insurrection of natives not recognized as  belligerents in another part  of the Islands, or even just outside the walls of the  city of Manila, did not give the President power to impose duties on imports from a country no longer foreign."   (Id.)

The Government of the United States asked for an annulment of this decision and a rehearing and invoked the ratification of the acts of the President, contained in the Act of Congress of July 1,1902, called the "Philippine Bill;" but in a decision of May 28, 1906,  that high tribunal re-affirmed its decision and held that  the ratification of the executive acts under  the President's order of July 12, 1898, contained  in the  Act of July  1, 1902, was confined to actions taken in accordance  with its  provisions; but that the exaction  of duties on goods from the United States, after April 11,  1899,  was not in  accordance with those provisions and was not ratified by the said  Act.   (Lincoln vs. U.  S.,  and  Warner, Barnes &  Co. vs. U.  S., supra. )

Warner, Barnes & Co, succeeded  in recovering the customs duties paid  under protest on goods imported into the Islands from the United States.  And if nothing further had been  done in this matter, the present litigation would have had  no reason for existence. The same ground upon which  that commercial  firm  obtained the  reimbursement of what it had unduly paid, could effectively be advanced by the present appellant as a bar against its being compelled to pay what would have been also unduly demanded.

But something further was done: there was subsequently an Act of Congress and a new decision by the same Supreme Court bearing on a case exactly  identical with that of Warner, Barnes  & Co.,  which Act and decision  make it appear that what is demanded of  the appellant company is in no wise  improper.

On June 30, 1906, Congress passed the following Act:

"That the tariff duties  both import and export imposed by the authorities of the United States or of the provisional military government thereof in the Philippine Islands prior to March eighth, nineteen hundred and two, at all ports and places in  said Islands upon all goods, wares, and merchandise imported into said Islands from the United States, or from foreign  countries, or exported from said islands, are hereby legalized and  ratified, and the collection of all such  duties prior to March eighth, nineteen hundred  and two, is hereby legalized and ratified and confirmed as fully to all intents and purposes as if the same had by prior  Act of Congress been  specifically authorized and directed."   (34 Stat. at L.  636.)

The case which gave  rise to the  new decision of  the Supreme Court was that  of United States vs. Heinszen & Co. (206 U. S., 370), wherein demand was made for a  like return of customs duties  paid during the same period of time as those  claimed by Warner, Barnes &  Co., and when those demanded in this suit are understood to have been assessable.

Under this new phase of the matter, there was said what appears to be the last word in the same, with respect to the duties that were already levied and collected that  the order of the President of July 12, 1898, was  not a law that had legal existence, in an absolute sense, inasmuch as  the President had  no  power to create a law of this nature, such power being an exclusive one of the legislative branch, and that Congress  neither issued such order nor  authorized  the President to do so.

And the Supreme Court said  that  it must be acknowledged that when the goods were introduced into the Philippine Islands there existed a customs tariff by virtue whereof duties were imposed in the name of the United States (that of the President's order) ; and although the duties fixed in this tariff were illegally exacted  at that time, that is, after the exchange of the treaty of peace, such illegality was not the result of an inherent want of power in the United States to have authorized their imposition, but simply arose from  the failure to delegate to the public official the authority essential to give immediate validity to his acts in enforcing the  payment of the  said duties; and since what is done by the agent without express power from the beginning  on the part of the principal, may subsequently by the latter be confirmed by  his  ratifying his agent's action,  hence Congress, by its said Act of June 30, 1906, confirmed, ratified, and gave such duties,  levied and  collected,  legal subsistence  in giving legal existence  to  the customs tariff, as though  it had been passed by Congress itself, and  the fallacy the court adds "becomes yet more obvious when it is observed  that the  contention can  not even be formulated without misstating the nature of the Act of  Congress; in other words, without treating that act as retrospective legislation enacting  a  tariff,  when on its very face, the act is but an exercise of the conceded power dependent  upon  the law of agency to  ratify an act done on behalf of the United States which the United States could have originally  authorized."  (U.  S. vs. Heinszen &  Co., 206 U.  S.,  370.)

The foregoing is a complete statement of all the essential points of fact and of law which are strictly legal precedents with respect to the question now under discussion, to wit:

Should the  appellant company  pay the customs  duties demanded of it at the present time?

The company  maintains that it should not. 

1. Because the President's order, together with the tariff of July  12, 1898, under which  such duties are demanded, is null and void and of no value and effect.   
   
2.  
3. Because the Act of Congress of June 30, 1906, did not confirm nor resuscitate that  order,  and was  confined to approving and ratifying acts already consummated under the authority thereof, that is, to  legalizing the collection of the duties imposed in that tariff and already received; but it did not authorize duties to be collected on goods that had been imported or exported without the payment of any tax.
   
4.  
5. Because it could not have been the intention  of  Congress to direct the levy of duties on goods imported under free entry in previous years, or during the period in question, as would be the case if the confirmation had a wider scope than that before indicated.
     
   
6. Because, as in the case of an agent who, lacking the power to sell, purchase,  and mortgage, substitutes  another in his agency with such  power to sell, purchase,  and mortgage, if his substitute sells, purchases, and mortgages, and the principal, on being informed of what was thus illegally done by the substitute, chooses to ratify it, such ratification would not  authorize the substitute again to sell, purchase, or mortgage; so, likewise, in the  case of the President, the agent of the United States, who, lacking power  to impose customs  duties, delegated such power  to his agents of the Government of these Islands, and subsequently the Congress of the United States chose to ratify the collections made by such agents of the Government of  these Islands: this  does not authorize such agents again to make similar collections.
   
7.  
8. Because in the case of United States vs. Heinszen & Co. (206 U. S.,  370)  the  conclusion arrived at from the decision  of the Supreme Court appears  to be that  its sole basis is the power to confirm, since it completely repudiates the argument  that  the  law established a tariff for the imposition  and collection of duties on goods which, escaping the illegal  exactions,  could  enter the country without the payment of  duties,  and holds that the right to confirm sprung immediately from, and as a result of,  the payment of the money, that is, from the performance of the operation in behalf of the principal,  the United  States.   (Brief, pp. 22 and 23.)
   
9.  
10. Because there are two rules of  construction:  One  is that every law must be understood and construed as future in its operation, unless  its language be incompatible with such  a conclusion; and the other, that the laws on taxation must be strictly interpreted against the Government, and in favor of the citizens or  subjects, for no charges should be imposed, nor may their  imposition be presumed, in excess of what the law expressly and clearly requires: hence, if the sense of  the words  employed in the  Act of June 30, 1906, may be satisfied by restricting its scope to the duties already levied and  collected, its effects must be limited to this point and not  be  allowed  to embrace other cases. (Brief, p.  34.)

But, in the first place, it is not correct to affirm that the President's order was originally null  and void.  Its force and validity  from November 10,  1898 to April 11, 1899 is beyond question. If, since this last date, it was unduly applied  and, as a result thereof, there were illegal collections of the duties levied from then to  November 15, 1901, when the Act of the Philippine Commission went into effect, and even also, it may be granted, until March 8, 1902, when the Act of Congress began to be operative, it was not,  as the Supreme Court  of the United States  has  already held, for an original want of power in  the United  States in  whose name such duties were exacted, but was merely through an overreaching of power on the part of the agent a defect which, if it really vitiated those  collections,  certainly was adoptable  and was  adopted by the general law of agency which authorizes the constituent or principal to ratify and make as of his own the act of the delegate or agent as if he himself, instead of the latter, had performed it, "as if such collection," the  words of the Act, "had  been specifically authorized and directed," by a prior Act of Congress.

In the second place: The  intention and  will of the legislator  being so clear, so explicit,  to approve, confirm, and ratify as by an act of his own prior to April 11,  1899, and even also to  July 12, 1898  (the  date  of the order of the President), the acts of the latter  and  of the officials  of the Government of these Islands, with respect to "the collection of all the said duties prior to March 8, 1902," and also with regard  to  "the import  and export  duties  levied by  the authorities of the United States or of the provisional military government of the same in the Philippine Islands prior to March 8,  1902"  two subjects that  are the  purpose of the said Act, it being an axiom of law, that the  ratification is equivalent to a mandate (ratikabitio sequiparatur mandato), the conclusion can not be avoided that, by the legislator's will, the tariff duties demandable during the period mentioned in the complaint, are so, not by a null and void order of the  President, but by an Act of Congress.   Such, and no other, is for the courts the status, of the established law in this matter, be whatever it may, in abstract law, the legality of the legislative act  concerned, for there  is no question pending before  us with respect to its constitutionality,  "We do not treat of the question in this brief," says the appellant, "as we do not consider it necessary to do so." (Brief,  p. 15.)

In the third place: If, as the said Act provides, "the tariff duties both import and  export imposed by the  authorities of the United States or of the provisional military government thereof in the Philippine Islands prior to March 8, 1902,  *  *   *   upon all goods,  wares, and merchandise imported into said Islands from the United States  *  *  * are  hereby legalized  and  ratified  *   *  *;"  if the  refined petroleum concerned in the complaint, was one of the articles imported into these Islands from the United States prior to March  8, 1902; if the import duty  imposed upon it by section 30 of the tariff established by authority of the United  States  (the President), was 6.318 pesos Mexican currency for  each 100 kilograms; if the total  amount of this duty, aggregating, according to the facts set forth, the sum specified in the complaint, has been owing since  October 28, 1901; if the action for its collection  has arisen, and has not  prescribed in accordance with section 206 of Act No. 355, by reason of the  fraud committed and which has justly given ground for the levying of duty  then why should the customs officials and the prosecuting officers of the Government remain inactive and not comply with their duty to exact, collect or demand the payment of such duties? And how can the courts, in view of an explicit  law, appraised duties, an importation effected and an action arisen and not  prescribed, fail  to grant what  is asked in a complaint based on such grounds?

In the fourth place: It is to beg the question to affirm that an  attempt is now being made again to collect the duties on  certain merchandise which already, several years ago, was entered free of duty because of the absolute lack of any law that may  have validly  imposed them.   Neither was there a lack of such a law, nor did the goods in  question enter absolutely free of duty, but  their importation was merely allowed conditionally,  upon the  declaration that they fell under an exemption, in accordance with  the free entry clause contained in the  same law, the existence of which is now denied.  Had  not the privilege of exemption from  duty granted by the law been utilized,  the duties now demanded would have been collected in July, 1901, and the most that could have happened is that the appellant would have found itself in the same situation as that of  Warner, Barnes & Co., and Heinszen & Co., sharing with both these firms  the uncertain  results that might be attained by assailing the order of July 12, 1898; but now  the appellant's situation  is parallel to that of those two  firms  only  in respect to the fact of the importation of merchandise during the much discussed  period,  and differs therefrom in that the two  companies above cited paid under  protest, being resolved  to maintain a theory of law, while the appellant was thoroughly convinced of the validity of the tariff and chose  to avail itself of a privilege  of  exemption therein provided for, which, according to an admitted fact of the complaint, it abused by the commission of fraud.

This court would willingly overlook the fact enunciated in the last sentence just above expressed, and accept the third  proposition  stated by the appellant in  its brief; but our desire is strongly opposed by section 91 of the Code of Civil Procedure and the agreement of the parties themselves above transcribed,  according to  which agreement "the allegations of the complaint have been admitted by the defendant," one of them, to wit, the 13th, being that:

"The said 19,321 cases of petroleum were withdrawn  by the defendant company through deceit and fraud and with the definite purpose of defrauding the Government of the Philippine Islands of the customs duties owing to the same." (B.  of E., p.  5,)

In  the  fifth  place: The  appellant's a pari  argument is not,  in this case, conclusive; it would be  so, had an exact parity been established; for example, were it said that the constituent or principal had conferred power upon his agent in the United States, up to a certain period of time; that the agent  had  to  confer the said power  upon another in the Philippines for the purpose of the latter's exercising the same until the time fixed; that at a time considerably beyond that fixed, the substitute in the Philippines continued  to exercise such power, let us say, for instance by collecting the rentals from several of the  principal's tenants; that one of the latter alleged an exemption from payment, with very  apparent  proof that convinced the  substitute  who, therefore, desisted from requiring payment; that another tenant paid under protest and accordingly brought suit and obtained an acquittance from the payment, for the reason that it had been demanded of him  without power, when the power had already lapsed; that thereupon the principal, having learned of this case, ratified the power and the acts of the substitute; that another  of  the tenants, upon whom a demand  to pay was made in the same manner as upon the previous one, also alleged the lapse of the power and the illegality of the requirement of the substitute, but,  as the principal had already  declared his intention to ratify the acts and the power of the substitute, the tenant did not succeed in obtaining a release  from the payment; that,  upon the discovery by the substitute that the  first  of the said tenants had falsely made it appear that such tenant had a cause for exemption from payment, suit was brought against the latter.  If such first  tenant could be, through his fraud or without fraud whatever, in a better situation than the third one and should be released from the payment of the rental which was not collected from him for a false reason,  then the argument would be, by parity,  conclusive that neither may the appellant be  required to make the payment which, in 1901, would have been demanded of it, had it not brought forward that free entry privilege which afterwards turned out to be a false reason for exemption.

Neither could this first tenant above referred to, nor can the appellant, in  our  opinion, say that they knew how to elude, in one way or  another, at  a given time, a payment which they deemed devoid of good grounds, as was stated with reference to the second tenant mentioned in the example, and that the judgment rendered with respect to the third  tenant could not warrant that, at some subsequent time, action might again be taken in the matter of the payment  previously eluded, on the grounds that the non-payment  was an acquired right and the ratification made by the principal could not, without its being given a retroactive effect, have any bearing except on future acts and not on those  already past.

The admission, free of duty, of the  appellant's petroleum, could  not constitute an acquired right, since this exception was not  absolute, but conditional; the exemption was  not the result of a right of its own, but simply one granted as a favor to a third party and of which, as the  Government averred and the appellant admitted,  it made an improper use; therefore this exemption can not be considered,  not even by the lapse of time, as  a mode of  extinguishing an obligation.

The obligation to pay, therefore, still exists.

By reason of the foregoing, the judgment appealed from is affirmed, and the costs are assessed against the appellant. So  ordered.

Torres, Mapa, Johnson, and Carson, JJ., concur.

 

---

DISSENTING
 

MORELAND, J.,

In this case the Insular Government seeks to recover from the defendant the sum of P38,433.76, together with interest due thereon from the 28th day of October, 1901.

It is alleged in the complaint in substance : 

"1.  That on June 26, 1901, the defendant company entered into  a contract with the quartermaster's department of the United States Army at Manila whereby the former agreed to deliver to the latter at Manila 250,000 gallons of refined 'Comet' oil.

"2.  That at the time of making said contract said oil  was subject to the imposition of a customs duty of P6.318 Mexican currency per 100 kilos under section 30 of the United States Provisional  Customs Tariff in force in the Philippine Islands.

"3.  That at said time merchandise imported into the Philippine Islands for the use of the United States Army  was exempt from customs duties.

"4. That on  the 27th  day of  July, 1901, the defendant, for the purpose of complying with the  terms of said contract with  the quartermaster's department, imported  into the Philippines from the United States  30,000 cases of refined petroleum containing approximately 300,000  gallons; that upon the arrival of the said shipment in the harbor of Manila, the defendant applied to the quartermaster's department and obtained a free entry certificate covering the entry of  the said petroleum.

"5. That for the purpose of securing said free entry certificate, the defendant made an affidavit that the said 30,000 cases had been sold to the quartermaster's department.

"6.  That subsequently, and by  means of said affidavit and application, the defendant secured the admission of the 30,000 cases free of duty, to be delivered to  the quarter-master's  department whenever the latter-desired to withdraw them from the bonded warehouse.

"7.  That between the 7th day of August, 1901, and  the 28th day of October, 1901, the defendant company removed from said bonded warehouse the 30,000 cases of oil; that permission to  so  remove was obtained from the customs authorities by reason of the certificate of free entry and the affidavit stating that the oil was intended for the quarter-master's  department.

"8. That of the said 30,000 cases of petroleum the defendant delivered  to  the quartermaster's department 10,679 cases; and that the remaining 19,321 cases, containing approximately 193,210 gallons, equivalent to 608,321.685 kilos, were sold to  private individuals  within the  Philippine Islands and were not used by  the Army.

"9. That the said 19,321 cases were obtained by the defendant company by deceit and by misrepresentation practiced for the express purpose of defrauding the Government of  the  Philippine  Islands  of the  customs duties thereon."

The defendant demurred to the complaint upon the ground that it did not state facts sufficient to constitute a cause of action for the reason that, during the period of time in which it  is  alleged that  the  defendant imported refined petroleum into the Philippines  from the United States without payment of customs duties thereon, there did not exist any law authorizing the levy or collection of customs duties on refined petroleum imported from the United States  into the Philippine  Islands.

The demurrer was overruled, defendant duly  excepted, and declining to answer, having  elected  to stand on its demurrer, judgment was rendered against it for the amount claimed in the complaint.  Defendant thereupon excepted to said judgment and  filed notice of appeal.

In this court defendant makes the following assignment of errors:

"I.  The court erred in overruling  defendant's demurrer to the complaint.

"II. The court erred in rendering  judgment against the defendant  company.

"III. The court erred in holding that the Act of Congress of June 30, 1906, had retroactive effect, thus reviving a void and still born military order.

"IV. The construction given by the court to the Act of Congress of June 30,  1906,  is in conflict with the fifth and fourteenth amendments  to  the  Constitution of  the United States."

The first proposition which I think must be laid down under the law is that,  during the whole  period covered by the allegations  of the complaint, the Insular Government had no right to exact from defendant the payment of customs duties  on the petroleum imported by it from  the United States.

Prior to the  Act of September 17, 1901, which went into effect November 15 of the same year, which was subsequent to the time of the  importation complained of in this action, customs duties were exacted at the port of Manila under and by virtue of an order issued by President McKinley as Commander-in-Chief of the Army.   This order is dated "Executive Mansion, July 12, 1898," and the material part thereof reads as follows:

"By virtue of the authority vested in me as Commander-in-Chief of the Army and  Navy  of the United States of America, I do  hereby  order and  direct that upon the  occupation  and  possession of any ports and  places in the Philippine Islands by the forces of the United States, the following tariff of duties and taxes, to be levied and collected  as a military contribution,  and regulations for the administration thereof, shall take effect  and be in force in the  ports and  places  so occupied.  Questions arising under  said tariff and regulations  shall be decided  by the General in command of the United States forces in those Islands.   Necessary and authorized  expenses for  the administration of said tariff  and regulations  shall  be  paid from the  collections  thereunder.   Accurate accounts  of collections and  expenditures shall be kept and rendered to the Secretary of War."

Manila was occupied  by the military forces of the United States, August 13,  1898, and the next day the custom-house was  opened.   Customs  duties  were levied  and collected, however, according to the old Spanish tariff up to the 10th Of November, 1898, said order of July 12,1898, having been suspended during the time intervening between said  dates. After the last mentioned date customs duties were collected by virtue of said order  of President McKinley, which continued in force until November 15, 1901, when the Act of the Philippine Commission took effect.   (See Act No. 230.)

In my judgment the question whether there was in the Philippines any law or regulation legally in force between the 28th of July, 1901,  the date of the arrival of the petroleum, and the 28th of October, 1901, when the defendant, according to the complaint, finally disposed  of all the oil in question, under which there could be levied and collected customs duties upon  the said oil with or without the free entry certificate, has  been  fully resolved by the Supreme Court of the United  States in  several cases.

In the case of Dooley vs.  United States (182 U. S.,  222), it was held that the power of the President as Commander-in-Chief of the Army and Navy to impose customs duties on goods imported into  Porto  Rico ceased upon the ratification of the treaty of Paris  by  which Porto Rico was ceded to the United States.  The court  said:

"We have no doubt, however, that,  from the necessities of the case, the right to administer the government of Porto Roco continued in the military commander after the ratification of the treaty and until further action by Congress.  (Cross  vs. Harrison, 16 How., 182,  14 L. Ed., 896 above cited.)   At the same time,  while the  right to administer the government continued, the conclusion of the treaty of  peace and the cession of the Island to the United States were  not without their significance.  By that act Porto Rico ceased to be a foreign country, and the right to collect duties upon imports from that island  ceased.  We think the correlative  right  to  exact duties  upon importations  from  New York  to  Porto Rico  also ceased.   The spirit as well as the letter of the tariff laws admit of duties being levied by a military commander only  upon importations  from  foreign  countries;  and,  while  his power is necessarily despotic, this must be understood rather in an administrative than in a legislative sense.  While in legislating for a conquered country he may disregard the laws of that country, he is not wholly above the laws of his own. For instance,  it is clear that while a military  commander during the civil war was in the  occupation of a southern port he could impose duties upon merchandise arriving from abroad, it would  hardly be contended that he could also impose  duties upon merchandise arriving from ports of his own country.  His power to administer would be absolute, but  his power to legislate  would not  be without certain  restrictions,  in  other words, they  would not extend beyond the necessities of the case."

In De L:ma vs. Bidwell (182 U. S., 1) it  was held that, by  the treaty of  Paris, Porto Rico ceased to be  a foreign country within the meaning of the  tariff laws, so that the Dingley  Tariff,  applicable  solely  to importations  from foreign  countries, could not  be applied to shipments to the United States  from that Island.

In Fourteen Diamond Rings (183 U. S., 176, 185), an attempt was made to distinguish between cases of shipments from the Philippine Islands and those from Porto Rico, the basis  of the distinction being the existence of  an insurrection in the former.  This effort  of the Government,  however,  was overruled by the Supreme Court and it was held that the principle governing  the case of De Lima vs. Bidwell should be applied to importations from the Philippines.  It was accordingly resolved that diamond rings imported into the United States from the Island of Luzon, in the Philippine Islands, after the ratification of the Treaty of Paris, were  not imported from a  foreign country.   The learned Chief Justice wrote the  opinion.  In  it  is  found the following;

"In De Lima vs. Bidwell the question was  whether goods imported into New York from Porto Rico, after the cession, were  subject  to  duties imposed  by  the Act  of 1897  on 'articles  imported from foreign countries/ and this court held that they were not.  That  Act regulated commerce with  foreign  nations, and  Porto Rico had ceased to be within that category; nor could territory be foreign and domestic at the same time.

*      *       *       *       *      *       *

"No reason is perceived  for any  different  ruling as to the Philippines.  By the third article of  the treaty Spain ceded to the  United States  'the archipelago known as the Philippine Islands and the United States agreed to pay Spain the sum of $20,000,000, within three months.   The treaty was ratified; Congress appropriated the money; the ratification was proclaimed.   The treaty-making power, the executive power, the legislative  power,  concurred in the completion of the  transaction. 

"The Philippines thereby  ceased, in the language of the treaty 'to be Spanish.'  Ceasing to be Spanish they ceased to be  foreign country.   They came under  the complete and absolute sovereignty and dominion  of the United States, and so became territory of the United States over which civil government could be established.  The result was the same  although there was no stipulation that the native inhabitants should be incorporated  into the body politic, and none securing to  them the right to  choose their nationality.  Their allegiance became due to the United States, and they became entitled to  its protection."

In the case of Warner, Barnes & Company vs. The United States (197 U. S., 419, Lawyers'  edition, book 49,  p. 816), the action was to recover duties imposed and paid at Manila at various times between the 13th of December, 1898, and the 25th of October, 1901.  These duties  were exacted by certain  military officers who had been designated by the President to act  as collectors of customs in accordance with the order of  July 12,  1898, above quoted.  The  Supreme Court among other things said:

"It will  be observed that the President's  order relied upon was an order issued during the war  with Spain, nine months before the treaty of peace was  made.  It was a measure taken with  reference to that war alone,  and not with reference to the insurrection of the native inhabitants of the Philippines, which did not happen until much later. Aguinaldo declared hostilities on  February 4, 1899.  The natural view would be that the order expired by its own terms when the war with Spain was at an end.  The order directs that 'upon the occupation  of any ports and places in the Philippine  Islands by the  forces of the  United States' the duties shall be levied and collected 'as a military contribution.'   Of course, this was not  a power in  blank for any  military occasion which  might turn  up in  the future.   It was a regulation  for  and during an existing war, referred  to as  definitely as  if it  had  been  named. (See Dooley vs.  United States, 182  U.  S., 222,  234, 235, 45 L. ed., 1074, 1082, 1083; 21 Sup. Ct.  Rep., 762.)

*    *    *    *    *    *    * 

"Apart from the question  of the duration  of the President's order it plainly was an order intended to deal with imports from foreign countries only and Philippine ports not in the actual military control  of the United  States. But even had it  been intended to have a wider scope, we do not perceive any ground  on which it could have been extended to imports from the United States to Manila a port which was continuously  in the possession as  well as ownership of the  United States from the time of the treaty with  Spain.  Manila was not like Nashville during the Civil .War, a part of a  state recognized  as belligerent and as having impressed a hostile status upon its entire  territory.   (Hamilton vs. Dillin, 21 Wall, 73, 94-96, 22 L. ed. 528,  533, 534.)   The fact that there was an insurrection of natives not  recognized as  belligerents in  another part of the island, or  even just outside its walls,  did not give the President power to impose duties on imports  from a country no longer foreign."   (Citing many authorities.)

The Attorney-General of the United States made a motion for a re-argument.  It was granted for the purpose of hearing argument upon the question of the reach and effect of the alleged ratification  of the collection of customs  duties on merchandise shipped from the United States to the Philippine Islands by the Act of Congress approved July 1, 1902. The opinion of the court on the re-argument is reported in 202 U. S. Rep., at pages 484-500.  The court in holding that the collection of the duties had not been ratified by Congress said, among other things:

"These are suits to recover duties exacted from plaintiffs in error and appellants upon  merchandise shipped by them from  New York to Manila, and landed at the latter port between April 11,1899, the date when the ratifications of the treaty with Spain were exchanged and the treaty proclaimed [30 Stat. at L., 1754], and October 25, 1901.  The duties were levied under an order of the President, dated July 12,' 1898.   The cases were argued in this court March 3, 1905, and the  judgments reversed April 3,  1905.   (197 U. S., 429, 49 L. ed., 819, 25 Sup. Ct. Rep., 455.)

"We ruled that the order of July 12, 1898, was a  regulation for and during the then existing war  with Spain, referred to as definitely as if it had been  named, and that the right  to levy duties thereunder on goods  brought from the United States  ceased  on the exchange of  ratifications. (Dooley vs. United States, 182 U.  S., 222.) 

"And that after title passed, April  11, 1899,  there was nothing in the  Philippine insurrection  of sufficient gravity to give to the  islands the character of  foreign  countries within the meaning of a tariff act.  Fourteen  Diamond Rings vs. United States, 183 U. S., 176,  46 L. ed. 138, 22 Sup. Ct. Rep., 59.  As to the  subsidiary point that whether the exaction of the duties was lawful  or not, it had been ratified by the Act of July 1, 1902 (32 Stat. at L., 691, 692; chap.  1369, U. S. Comp. Stat. Supp., 1905,  p. 391),  section 2, we were of opinion that the ratification of 'the  actions of the authorities taken in accordance with the  provisions of said order and subsequent amendments'  was confined.to actions which were taken in accordance with the provisions of the order and amendments,  which these exactions were not.  May 29, 1905,  we allowed petitions for  rehearing to be filed addressed  solely to the matter of ratification, and subsequently (November  13) a rehearing was granted 'as to.the question whether Congress ratified the collection of the sums sought to be recovered in these suits.'

*    *    *    *    *    *    *

"Notwithstanding the able argument  of the Attorney-General, we adhere to the conclusion previously announced."

The foregoing authorities constrain me to the conclusion that there was in the Philippines at the time of the importation in question in this  case no valid law authorizing the Collector of Customs or  any other public official to impose customs duties on the merchandise imported, whether imported with or without a free entry certificate.  In  other words, the defendant unquestionably had the right to import into Manila at that time, free of duty, any amount of refined petroleum it desired to import, and the free entry certificate was legally superfluous.

The second proposition which in my judgment must be laid down as the law of the case is that the Act of Congress of June 30, 1906, was not intended to affect and did  not affect cases like the one at bar.

That portion of said Act which is  deemed to have had that result is as follows:

"That the tariff duties, both import and export, imposed by the authorities of the United States or of the  provisional military government thereof in the Philippine Islands prior to March 8, 1902, at all ports and places in said Islands upon all goods, wares, and merchandise imported into said Islands  from the United States or from foreign countries, or exported from said Islands, are hereby legalized and ratified, and the collection of all such duties prior to March 8, 1902,  is hereby legalized and ratified and confirmed as fully to all intents and purposes as if the same had by prior Act of Congress been specifically authorized and directed."

I believe that it is evident that  the  only purpose of this Act was to legalize the imposition and collection of duties actually imposed and collected during the period in question, and not to authorize the imposition and collection of new duties on goods imported or exported free of duty. There are many reasons which lead to this conclusion.

The Act in question makes no mention of the military order issued by the President under which said duties were exacted.  It does not say that the dead order is revived and put in force retroactively.  It merely confirms and ratifies all that had already been done in connection with the imposition and collection of customs duties.  Although we know that  the  Act refers to duties which  were imposed and collected  in accordance with  the  military  order  already quoted, we do not, however, gather this information from the terms of the Act itself but from the history of the case; and as Congress did not intend to pass a retroactive law but, rather, one to ratify exactions and collections already made, the Act contained only what was absolutely necessary to  accomplish that  purpose.

If  the Act in  question had attempted to revive retro-actively the military order,  Congress would have been met with  the  very  serious  question whether  such an attempt would not have been  in  violation  of the  Constitution.   I shall  not,  however,  undertake to  discuss  this question. From the view I take of this case it is unnecessary to do so. I content myself with calling attention to the fact that it is to be presumed that Congress, in enacting the law in question, had in mind the provisions of the Constitution to which I have referred, and that, not desiring to pass  any legislation of doubtful validity, it confined itself to confirming and ratifying what had already been done during the time that collections were made under the President's military order.

At the  time the ratification Act was  passed demands were being made upon the Government of the United States for the return of large sums of money for duties which had been illegally levied and collected under said military order, and the Government found that, unless a ratification act were  passed, it would be obliged to refund millions which had been so collected at the port of Manila and elsewhere in the Philippine Islands.  The decisions above cited made this obligation to refund very evident.  Under those decisions it is undoubted that the Government would have been compelled to return many millions of dollars Collected on importations into the Philippine Islands from the United States during the years intervening between the ratification of the treaty of Paris and  the 15th of November, 1901, the date on which a valid tariff law duly authorized by Congress for the imposition of such  customs duties became  effective. These decisions swept the whole field, leaving no vantage ground from which the Government could resist the demands for the return of the sums thus illegally drawn from the commerce of the  two countries.

One of the most important of the rules for the interpretation of a statute is to ascertain what evil such statute was intended to remedy and the method adopted to remedy it. In this case it is clear that  the evil which the Government sought to escape was the return of the vast sum of money which had been mistakenly collected by its officials.  The real purpose of the Act, then, was not to collect duties which had not been levied or imposed at the time of the entry of the merchandise, or  to impose new duties;  but, rather, to avert the  calamity  of returning the  enormous  amounts already collected, something which would have embarrassed the public treasury and given cause for charging the government  with maladministration in the customs affairs of the Philippine Islands.  All that was necessary, then, in order to retain the money already collected, was a bare ratification.

If Congress had intended to levy duties on merchandise previously imported, it would have provided some method whereby such retroactive imposition and collection could have  been made and enforced.   It  would not seem  that Congress intended to impose duties on merchandise which had been imported  free  during the period in question, thereby compelling the Government, in the ports  of  the Philippine Islands, as well as in those of the United States, to institute judicial  proceedings for the recovery of said duties on the innumerable shipments of goods, wares, and merchandise  passing between  the two  countries.  Such would be the  result  if the  ratification  had greater reach than I attribute to it.

It is apparent, therefore,  that the intention  of Congress was to maintain, rather than disturb, the statu quo; that is to say, to leave  things as they were, ratifying what had already been done, instead of undoing what had previously been done, and thereby opening an  endless series of litigation of which  that at bar is one.

It should not be forgotten that  this is a case in which acts performed by an agent in the name of his principal, without  authority, are  subsequently  ratified.  An agent, believing himself sufficiently authorized to delegate to another the power to perform certain acts, executes a power of attorney to a third person to buy, sell, mortgage, etc. property, thereby  greatly exceeding  his powers.  Subsequently  the  principal,  upon  discovering what  had been done in  his name without authority, elects to ratify such acts, and accordingly executes a document in which he says: "I hereby ratify  and confirm all things done  by so and so (the third person) in my name, all acts performed by him to have  the  same  effect as  though previously authorized by me."   In the case under consideration the order of July 12, 1898, was the power of  attorney which the President executed to his representatives in the Philippines, and afterwards Congress,  the principal, in order to avoid the disastrous results that would have followed, elected to ratify the acts  of said  representatives.   It  seems  to me that no one will  contend  that the ratification  in the example given had the effect of reviving the power of attorney in question as an authority for new transactions; the substitute  could not pretend, by virtue of said ratification, to do or perform other acts of a similar nature.

The illustration given above may be carried still further by adding this feature:  The principal in  the  meantime executes  a new power of attorney  without reference whatever to the former agent who undertook to represent him, covering the  same  subject  and  providing other  means, methods  and forms for  carrying  out his will.   Who will contend that by virtue  of the ratification referred to the old power of attorney was revived in the face of the new one executed by the same principal, making the old power effective as to new transactions?  Would it not be  said, rather, that the ratification in such case had the effect only of confirming acts which had already been performed, and that for all other purposes the first power of attorney had become  null and void?  The Government of the Philippine Islands, acting under the authority conferred  upon it  by Congress, the principal, passed a new law  on November 15, 1901; that is to  say, Congress executed  a new power of attorney to its agents  in  the Philippines providing new conditions and establishing a new basis for the imposition of customs  duties.  But, notwithstanding this  new power of attorney, an evil  existed  which threatened a  serious shrinkage in the public funds.  This condition  was caused by the  lack of authority  on  the part  of  the President to delegate to his agents in the Philippines the power to collect customs duties upon goods and merchandise imported from the United  States during the period intervening between the treaty of raris and the passage of the new Tarriff Act. It became  necessary to meet the conditions thus created so as to prevent the Treasury, not of the Philippine Islands, but of the United States, from being depleted.  Now,  although  it be admitted that the military order of the President, the former power of attorney, was  valid, yet it was completely abrogated and superseded by the new law, power of attorney, covering the same subject.   It would appear, therefore, that the ratification of the old law could  have no other effect than to prevent suits against the Government for the  return of  the duties collected  thereunder. The Government accordingly confined itself simply to ratifying the collection of the duties already turned into the treasury by its customs officials.

In my judgment, the Supreme Court of the United States has thus interpreted the ratification act in question in the case of United States vs. Heinszen & Co. (206 U. S., 370, 382).   In that case Heinszen sued for the return of certain duties paid during the period covered  by the complaint in this case, and  the Supreme Court,  speaking through Mr. Justice  White,  now Chief Justice, after first referring to the various decisions above mentioned, said:

"Applying the doctrine settled by  this court in the cases to which we have referred, concerning the  power to levy tariff duties under the authority of the President, on goods taken from  the  United States into Porto  Rico and  the Philippine  Islands, or brought into the United States from either of such  countries subsequent to the  ratification of the treaty and prior to the levy by Congress of tariff duties, it is obvious that  the court below correctly held that such tariff exactions were  illegal.  It follows, therefore,  that the only question  open  for consideration is whether  the court below erred in refusing to give effect to the  Act of Congress of June  30, 1906, which ratified  the collection of the duties levied under the order of  the President.

"As the  text of  the Act of Congress is unambiguous and manifests as explicitly as can be done the  purpose of Congress to ratify,  the case  comes to the  simple question whether Congress possessed the power to ratify which it assumed to exercise.  When the controversy is thus reduced to its ultimate  issue we  think the error committed  by the court below, both in reason and  authority,  is  readily demonstrable.

"That where an agent, without precedent  authority, has exercised in  the name of  a principal a power which  the principal had the  capacity to bestow, the principal may ratify and affirm  the unauthorized  act, and thus retroactively give it validity  when rights  of  third persons have not intervened, is so elementary as to need  but a statement. That  the power of ratification as to matters within their authority  may be exercised by Congress,  State governments or municipal corporations,  is also elementary.   We shall  not stop to review the whole subject or cite the numerous  cases contained in the books dealing with the matter, but content  ourselves  with referring to two  cases as  to the power of Congress, which are apposite and illustrative."

The  court then proceeds to  analyze certain decision relative of the power of Congress to ratify acts performed without authority and enters upon an examination of the case before it for the purpose  of determining whether any exception existed which would prevent the application of the  doctrine, arriving finally  to  a consideration  of the reasons advanced by the adverse  party in support of  its contention that Congress had  no pow£r to make the ratification.   Coming to the second reason thus advanced, it says :

"Second.  As the duties collected were illegal, it is insisted that, for the purpose of testing the validity of the Act of Congress  the fact  of such collection must be  put out of view, and  the  act ratifying the exaction must be  treated as if it were solely an original  exercise by Congress of the taxing power.  This being done, it is said, reduces the case to the inquiry, had Congress power, years after goods which  were entitled to free entry had been brought into the Philippine Islands, to retroactively impose tariff duties upon the consummated act of bringing the goods  into that country?  But the  proposition begs the question  for decision, by shutting out from view  the potential fact that when the goods  were brought into the Philippine Islands there was  a tariff in existence under which duties were exacted in  the  name  of the United  States.  Indeed, the contention  goes further even  than this, since  it entirely disregards the important consideration that  although the duties  were illegally  exacted  the illegality  was  not  the result  of an inherent want of power  in the United States to have authorized the imposition of the duties  but simply arose from the failure to delegate to the official the authority essential to give immediate validity to his  conduct in enforcing the  payment  of the duties.  And when these misconceptions are borne in mind it  results  that the unsoundness of the proposition relied upon  is demonstrated by the application of the elementary  principle  of ratification to which we have previously referred.  Moreover, the fallacy which the proposition  involves  becomes yet more obvious when it is observed that  the contention can  not even  be formulated without misstating  the  nature  of the Act of Congress;  in other  words,  without treating that act as retrospective legislation enacting a tariff, when on its  very face the act  is but an  exercise of the conceded power dependent upon the law of agency to ratify  an act done on behalf of the United States which the United States could have originally authorized."

In further demonstration of the fact that the purpose of the Act was to  ratify collections already made and  not to revive the former  military order so as to authorize new impositions thereunder,  the court  said: 

"Third.  It is urged that the ratifying statute can not be given effect without violating the fifth amendment  to the Constitution, since to give efficacy to the  Act would deprive the claimants of their property without due process of law, or would appropriate the same for public use without just compensation.   This rests  upon these two contentions: It is said that the money paid to discharge the illegally exacted duties after  payment,  as before, 'justly and equitably belonged' to the claimants, and that the title thereto continued in them as a vested right of property.   It is consequently insisted that the right to recover the money could  not be taken away without violating the fifth amendment, as  stated. But here, again,  the argument disregards the fact that when the duties were  illegally exacted in the name of the United States Congress possessed the power to have authorized their  imposition in the mode in which they were enforced, and hence from the very moment of collection a right in Congress to ratify the transaction,  if it saw fit to  do  so, was engendered.  In other words, as a necessary result of the power to ratify, it followed that the right to recover the duties in question was subject to the exercise by Congress of its undoubted power to ratify,"

It is thus clearly seen not only that the Act in question had no other purpose than to ratify the collections already made under the  military order, but also that  the only  right of the Act to exist  at all was the power of Congress to ratify said collections,  since the court completely disapproves and overrules the contention that the Act retroactively provided a tariff for the imposition and collection of duties on goods which had escaped the  illegal  exaction and  which  were imported into the country without the payment of  duty, holding  that  the right of Congress to ratify  arose immediately upon and as a result of the payment of the money, that is to say, the performance of the acts in behalf of and in the name of  the principal.

Reduced as it is to one of ratification, the question seems simple.  If an agent,  acting in the name of his principal, but without authority, should sell property, it  is  certain that,  immediately upon such sale, that is to say, upon the complete performance of the act, the principal would have the right to disavow or ratify the act.  But if, as in the case at bar, the agent did not  actually  sell  the property or perform any other act unauthorized, the right never arose in favor  of the principal, the United States or the Philippine Islands,  either to ratify or repudiate the transaction.  As nothing  was done, there was  nothing to repudiate or to ratify.   As the goods imported by the defendant  in this case escaped not only without the payment of duties illegally demanded, but also the imposition as well, there was nothing to ratify except  perhaps the free entry.  We thus arrive at the same conclusion as before, that is to say, that the purpose  of the act under consideration was  to maintain the statu  quo and to avoid disturbing or undoing acts which had already been performed.  In other words, the intention of Congress was to close the old books completely and  with new and ample powers  to its  agent, open a new set for current  operations only.

This interpretation of this Act of Congress appears to be the logical one.   Any other interpretation, it seems  to me, would give it  a  retroactive effect, something which  the courts always  endeavor to avoid.  It is a well-known principle  of  statutory construction,  of universal application, that, constitutional questions excepted, a law will not be so construed as to affect transactions already consummated, unless it  clearly appears that the legislature intended to the contrary.  It is incumbent upon the party urging such interpretation to show some  legal  provision  which so directs; for the declaration contained in article 3 of the Civil Code to the effect that "laws shall not have a retroactive effect unless otherwise provided therein" lays  down an unquestioned principle of American as  well as  Spanish  law.

Lewis Sutherland on Statutory Construction (vol. 2, p.   641), says:

"To avoid injustice and unconstitutionally, it  is always laid down as a rule of construction that  a statute is to be taken  or construed as prospective, unless its language is inconsistent with that interpretation."

In support  of  this  proposition many cases are cited. The same author in the same volume at  page  1157, section 641, says:

"Retrospective statutes relate  to  past  acts and transactions.   Retroactive statutes are those which operate on such acts and transactions and change their legal  character or effect.   (This would be the effect of the act in question when applied  to  the case  under  consideration.)  *   *  *  As retrospective laws are generally unjust and in many cases oppressive, they are not looked upon with favor.  Says the court in Montpelier vs. Senter (72 Vt., 112, 47 Atl., 392), 'Retrospective  legislation is not favored,  and is prohibited by the constitution of some of the states, as being highly injurious, oppressive and unjust; and nowhere will retrospective effect  be given to a statute unless it appears that it was the intent of the legislature that it should have such effect.'   And the supreme court of Minnesota says: 'Again, it is a well-settled rule that laws are not to be construed retrospectively, or to have a retrospective effect,  unless it shall clearly appear that it was so intended by  the enacting body, and unless such construction is  absolutely necessary to give meaning  to the language used.'"   (Citing Brown vs. Hughes, 89  Minn., 150, 153, 94 N. W.,  438.)

And again in  section 642: 

"The general rule is that statutes will be construed to operate prospectively only, unless an intent to the contrary clearly appears.  It is said 'that a law will not be given a retrospective operation unless that intention has been manifested by the  most  clear  and  unequivocal  expression/ (Citing State vs. Kearney, 49 Neb., 337, 339; 70 N. W., 255.) And in another case; 'The rule is that statutes are prospective and will not be construed to have retroactive operation unless the  language employed in the enactment is so clear that it will admit of no other construction (Citing Bauer Grocer Co.  vs. Zelle, 172 III,  407; 50 N. E. 238; Clearly vs. Hooble, 107 111., 97.)  The rule is supported by numerous cases."

So for instance,  although there is no vested right to an office which may not be disturbed by legislative enactment, yet, to deprive one of his rights thereto, the terms of  the statute which is claimed to have such purpose must be clear. (People vs. Green, 58 N. Y., 295.)

Statutes which change  the conditions under which public offices may be held (Green vs. Asheville, 114 N. C, 678; 19 S. E., 635; Farrel vs. Pingree, 5 Utah, 443; 16 Pac, 343), and those changing the emoluments of public officials are  not applicable to  those who at the time of their enactment were holding office.

So a statute  requiring clerks of courts of record and sheriffs, at the end of their terms of office, to pay all costs and fees collected and remaining in their hands to the county treasurer with a statement containing the  names of  the persons entitled thereto and the amount of each was held  not to be applicable to  costs and fees collected before the Act went into effect.  (People vs.  McClellan, 137 111., 352; 27 N. E., 181.)

A general statute required that property be assessed in  the name of the person who owned the same at  noon the first Monday in March,  An Act subsequent thereto was passed on March 14  providing for the taxation of property which was not previously taxable.  It was held that the Act could not be given retroactive effect so as to  authorize the assessment of such property for the fiscal year beginning in 1899. (Dodge vs. Nevada  National  Bank, 109 Fed. Rep., 726; 48 C. C. A., 626.)

There is another rule of statutory  construction which also seems applicable here.  It is that  statutes compelling a citizen to pay taxes must, in case  of doubt, be construed most strongly against the  government and in favor of the subjects or citizens,  and that their provisions should riot be extended by implication beyond the clear import of the language used.  (U.  S. vs. Wiggles worth, 2 Story  (U. S.) 369;  28 Fed Cas., p. 595.)

In  this case Mr. Justice Story said: 

"In the first place,  it is, as I conceive, the general rule in the interpretation of all statutes, levying taxes  or duties upon subjects or citizens, not to extend their provision, by implication, beyond the clear import of the language used, or to enlarge their operation so as to embrace matters, not specifically pointed out, although standing  upon  a close analogy.  In every case, therefore, of doubt, such statutes are construed most strongly against the government, and in favor of the subjects or citizens, because burdens are not to  be imposed, nor  presumed to be  imposed,  beyond what the statutes  expressly and clearly import,   *  *  * Hence in the present case, if it be a matter of real doubt, whether the  intention of  the act of 1841  was to levy  a permanent duty on indigo, that doubt will absolve  the importer from  paying the duty beyond the period,  when it would otherwise be free."

(See  also Kuenzle & Streiff vs. Collector of Customs, 18 Phil. Rep., 461.)

The Supreme Court of the United States took these rules Into consideration in De Lima vs. Bidwell (182 U. S., 1-199), and, after determining that the exaction of customs duties at the port of New York on merchandise brought into the United  States from Porto Rico  was illegal,  took  up the question of ratification raised by the Government  in that case and among other things said:

"It is insisted that an Act of Congress, passed on March 24, 1900 (31 Stat. at L., 51), applying for the benefit of Porto Rico the amount of the customs revenue received on importations by the United States from Porto Rico since the evacuation of Porto Rico by the Spanish forces, October 18, 1898, to January 1, 1900, together with any further customs revenues collected on importations from Porto Rico since January 1, 1900, or that shall hereafter be collected under existing law, is a recognition by Congress of the right to collect such duties as upon importations  from a foreign country,  and  a recognition  of  the fact that  Porto Rico continued to be a foreign country until Congress embraced it within the customs union.   It "may be seriously questioned whether  this is anything more  than a recognition  of the fact that there were moneys in the treasury not subject to existing  appropriation law.   Perhaps  we may go further, and say  that, so far as these duties were paid voluntarily and without protest,  the legality of the  payment was intended to be recognized;  *  *   *.   In any event, it (the Act of March 24, 1900) should not be interpreted so as to make it  retroactive."  (Citing: Kennett's Petition,  24 N. H., 139; Alter's  Appeal,  67  Pa., 341, 5 Am. Rep., 433; Norman  vs. Heist, 5 Watts & S., 171, 40 Am. Dec, 493; Donovan vs. Pitcher,  53 Ala., 411,  25 Am, Rep., 634; Palairet's Appeal, 67 Pa., 479, 5 Am. Rep., 450; State use of Methodist Episcopal Church vs. Warren, 28 Md., 338.)

The same tribunal in the  case of the United States vs. Heinszen & Co., above cited (206 U. S.,  at p.  389 et seq., L. ed., p. 1105), referring to what was held in the case of De Lima, said: 

"Now, considering the language just quoted in connection with the doubt expressed as to the import of the alleged ratifying statute,  it results  that the  reasoning employed stated two  considerations:  First, the  want of power in Congress to ratify after suit brought; and the second, the duty of  construing the statute relied  upon so as  not to produce  ratification, in  view of its  ambiguity.  As the question  of  construction was last stated and that question was declared to be 'in any event' decisive, we think the observations made concerning the want of power to ratify after suit brought must be regarded as  not  having been necessary to the decision rendered, and therefore must be treated as obiter.  And this interpretation was, we think, applied in the case of Lincoln vs. United States  and Warner, Barnes & Co, vs.  United States, supra.  In those cases, as we have  said, one of  the  defenses  insisted  upon  by the government was a ratification alleged to have been operated by the Act of Congress of July 1, 1902, which was passed after the  bringing of the actions to recover. It is patent on the face of the opinion announced  on the  original  hearing that the decision was exclusively based upon the ground that the Act of Congress was so ambiguous concerning the ratification relied upon that it should not be implied that such ratification was contemplated.  *   *   *   In the opinion on the rehearing, while the court reiterated the view previously expressed, that the act could not be treated as ratifying the collection of  the duties  sought to be recovered because of its ambiguity  *  *  *.  This is so, since, in the course of the opinion, in answering the argument that the  alleged ratifying statute would be meaningless  unless it was held applicable to  the  particular duties in controversy,  it was pointed out (202 U. S., p. 499, 50 L. ed., p. 1119; 26 Sup. Ct. Rep., p. 730) that there were duties which had been levied and collected other than those  in controversy to which the act clearly applied, and  'that question [as to them] was put at rest  by this ratification."  Further, in  calling attention to the ambiguity in the ratifying statute  relied  upon and the resulting doubt whether it embraced all duties, it was pointed out that the fact that actions were pending at the time of the passage of the ratifying act lent cogency to the view that if  Congress had intended by  the ratification to affect them, it would have explicitly so declared.  On this subject the court said (p. 498, L. ed., p. 1119; Sup. Ct. Rep., p. 730): 'This construction is favored by the consideration that the suits had been begun when the Act of July 1, 1902, was  passed,  and  that,  even  if Congress could deprive plaintiffs of their vested rights in process of being asserted (Hamilton vs. Dillin, 21 Wall., 73, 22 L. ed., 528), still it is not to be presumed to do so on language which, literally taken, has a  narrower  sense.'"

We have said before that  it is not to be inferred that Congress intended to revive a dead order for the purpose of instituting1 new proceedings under it to recover duties never assessed or collected, unless  there is a declaration in the statute to that effect in plain and unmistakable language. In the cases above referred to the Supreme Court undoubtedly had in mind the principle announced by Mr. Justice Story in Society, etc., vs. Wheeler (2 Call. (U. S.), 136) and approved in Sturgis vs. Carter (114 U. S., 519), in which the following rule was laid down: 

"Upon  principle,  every statute  which takes  away  or impairs  vested rights acquired under existing  laws,  or creates a new obligation, imposes a new duty,  or attaches a  new disability, in  respect to transactions or considerations already  past,  must  be deemed retrospective in  its operation and opposed to the principles of jurisprudence which have always been universally recognized as sound."

We must not lose sight of the fact that the Supreme Court of the United  States, in the case of Heinszen, distinguished between a law ratifying a past transaction and a retroactive statute creating a new obligation.   In the case of Heinszen duties were actually imposed and collected, whereas,  to render the defendant liable in the case at  bar to pay the duties in question, it  would be necessary to infuse new life into a dead order and, by reviving and transforming transactions already consummated, create  a new obligation  to pay  duties on  merchandise already imported free.

It seems to me sufficiently demonstrated that the ratification contained  in the Act of June 30,  1906, does not cover the case at bar, and  I do not, therefore, discuss, much less determine, the question  of the  constitutionality of an act which, going  beyond the limits of a  mere ratification  of transactions already completely terminated,  undertakes  to create an obligation which was not legally or  morally  in existence at the time the transactions occurred.  Nor, for the same reason, do I stop to discuss the effect on this case of section 206 of Act No. 355 of February 6,  1902, which, in so far as it has any bearing upon the question, reads as follows: 

"Whenever any goods, wares and merchandise shall have entered and passed free of duty,  *  *   *  such entry and passage free of  duty  *  *  *  after  the expiration of one year from  the time of entry, in the absence of fraud *  *  *  will be final and conclusive upon all parties." as that Act was interpreted and applied in the case of Beard, Collector of Customs, vs. Porter et al. (124 U. S., 437-444). It now remains to inquire into the  effect which the alleged fraud and misrepresentation imputed to the defendant may have upon the merits of this case.

As to this question, it would seem to me that, in a legal sense, no act can be fraudulent which does not violate a law or impair a right; and where the only effect of the act is to preserve and protect the rights of him who performs the act, it  would seem  to be clear that no legal fraud is committed.

It has been shown by the authorities  already cited that the action of the customs officials at Manila on and between the dates in question in exacting  duties on  merchandise brought from the United States was unwarranted, was a usurpation of authority and was in violation of the plain rights of the defendant company.  The defendant had the right to import its oil without any restriction or limitation whatever a right  which, according to elementary principles,  it could enforce to  the  extent  of using force, if necessary.   (See paragraphs 4 and 11, article 8 of the Penal Code.)   May it  be said  that one who misleads  a trespasser to avoid his property being unjustly and wrong-fully seized is  guilty of fraud?  Would one be guilty of fraud who deceived a burglar to avoid being robbed ?  Would one be guilty of fraud  who led a trespasser into error to prevent the latter  from forcibly entering his  premises? Is one to be charged with fraud who practices an evasion with the only  object of preventing the destruction  of  a right which pertains to him?  Does a subterfuge employed to deceive one who is about to commit a trespass upon admitted rights constitute the deceit which the law condemns? Would not this be rather the excusable deceit" which the law recognizes and approves?   (See  Escriche under the title of "Excusable Deceit,")  It would seem unnecessary to say that if there was any deceit employed in this case it violated no legal right and injured no one. In the case of  Ming vs. Woolfolk (116 U. S., 599), the court said at page 602: 

"So far, therefore, as the case made by the declaration is to be considered as an action to recover damages by a deceit practiced  by the  defendant, it  amounts to this: That the defendant, by his false representations, induced the plaintiffs to do something which they would have done anyhow, and by  which they sustained no loss, but on the contrary were greatly  advantaged.  'The requisites to sustain an action for deceit/ says Baron Parke, in Watson vs. Poulson  (15 Jurist, 1111),  are  'the telling  of an untruth, knowing it to be an untruth,  with intent to induce a man to alter his condition, and his altering his condition in consequence, whereby he sustains damage/  (See also Pasley  vs. Freeman, 3 T. R., 51; Polhill vs. Walter, 3 B. & Ad., 114; Levy vs. Langridge, 4  Mees. & Wels., 337; Brown vs. Castles, 11 Cush., 348; Tryon vs. Whitmarsh,  1 Met,, 1.) Considered,  therefore,  as an action for a deceit it is plain that the case must fail; for, conceding  the alleged  representation to have been made by  the defendant and to have been false, the plaintiffs were not induced thereby to change their condition, and, moreover,  have suffered no damage. (See also Marshall vs. Hubbard, 117 U. S., 415.)" In the case of Deobold vs. Oppermann (111 N.  Y., 531), the  court said at page 541:

"We are of the  opinion that the maxim has no application to the case in hand, for the reason that no actionable fraud has been shown to have been committed  upon the defendants in this transaction, nor has any loss occurred to them, in consequence of the surrender of the  money referred to. It is probably true that the defendants would  not have surrendered to the administratrix the funds of the estate in their possession, or have repaid to her the debt which they owed her, except for the decree produced for their inspection; but it is also very clear that they had no right to retain such funds by virtue of their contract  with the administratrix, and there was no  intention to commit a fraud upon them by the administratrix, in obtaining possession of property to which she was legally entitled.  She was entitled to the repayment of her  loan as a matter of course, for she  held a  promissory note therefor, payable on demand, and no possible defense could be made to its collection.   Neither, as  we have  seen,  could  they have resisted a claim made by  her, or others, for the reclamation of the money of the estate.

"They have done nothing, therefore, in consequence of the decree except what  they were under legal obligation to do, and have, therefore, suffered no legal loss  or injury from the transaction.   The surrender of the property in question  would not even have furnished  a good consideration for a promise made by the administratrix.   (Vanderbilt vs. Schreyer, 91 N. Y., 392.)   It is of the very essence of an action of fraud or deceit,  that  the same should be accompanied by damage,  and neither  damnum absque  injuria, or injuria absque damnum, by themselves constitute a good cause  of  action.   (Hutchins vs.  Hutchins,  7 Hill, 104; Michigan vs. Phoenix Bk., 33 N. Y., 9.)   Neither can a party claim to have been defrauded who has been induced by artifice to do that which the law would have otherwise compelled him to perform.   (Thompson vs. Menck, 2 Keyes, 82; Story vs. Conger, 36 N. Y., 673; Randall vs. Hazelton, 12 Allen, 412.)"   (See also Kountze vs. Kennedy, 147 N. Y., 124.)

In the case of Bartlett vs. Blaine  (83 111., 25)  the court made use of the following language:

"Again, a mere fraudulent representation is not actionable per se.  If  a man  utters  slanderous  words  of his neighbor, the neighbor may have his action,  though he be not  damaged  by the  words spoken.  If a man, upon  a valuable consideration, promise to another that he will do any given thing, and fail to perform his promise,  an action lies for the breach of promise, though no damage be done. Not so in an  action  for fraudulent representations.  In such action, the plaintiff must not only show that the representations were made, and that they were false and fraudulent, but he must also show, affirmatively, that he has been injured thereby that  he is, in some way, in a worse condition than he would have been had the words been true. 

"In this case, no such thing is shown.  Plaintiffs  have never been called upon to pay this note to Bullene,  nor could they be.  The existence of the note has in no way prevented them from getting promptly their 50 per cent upon  their claim, according to the terms of their contract.  It is said, however, that they were thereby induced to sign the  composition articles, but there is no attempt to prove  that they are in any worse condition than they would have been if they had not signed."

In the case  of Freeman  vs. Venner  (120 Mass.,  424), the court said: 

"The further objection is, that treating this as an action to recover damages for an alleged fraud, the plaintiff shows no damages sustained at the time his action was commenced. It was  then  uncertain and contingent  whether he would ever be called on to pay the note.  It was payable to the plaintiff or order in two years, and was dated in July, 1873, shortly  before  its transfer by his indorsement to the defendant.  The  liability of the plaintiff depended on the failure of the makers to pay and the giving of due notice to him as indorser.  No payment has in fact ever been made by him.  If the holder receives his pay from the makers through the mortgage security or otherwise, the  plaintiff will have suffered no actionable wrong.   There will  have been no concurrence of damage  with  fraud,  within the rule on which  such actions are  founded. And  as  there has been no invasion of the plaintiff's right,  no breach of promise, and no interference with his property, there can be no recovery  of even nominal damages in this action. (Pasley vs. Freeman, 3 T. R. 51; 2 Smith Lead. Cas.  (6th Am. ed.) 157, and notes.)"

In  the case of The Franklin Insurance Company of Indianapolis vs. Humphrey et al. (65 Ind., 549), the  court said: 

"5. The appellant discusses the question of fraud set up in the second paragraph of answer,  and insists, that although the facts offered to be  proved  might not amount to anything more than negligence which would not prevent Humphrey from recovering  on the  policy, yet, when a fraudulent purpose and corrupt design entered into his conduct by which he desired that the boat should be lost; 'in order that the insurance money might be recovered,'  they amount to fraud which will prevent him from recovering on the policy; but if Humphrey, as we have held, had a right to keep his boat at the wharf in the city of Evansville, his motive,  intention or purpose in doing so could not vitiate his acts.   Fraud can not be predicated upon acts which the party charged has a right by law to do, nor upon the  non-performance  of acts which by law he is not bound to do, whatever may be his motive, design or purpose, either  in doing or not doing the acts complained of."

In the case of Britton vs. Supreme  Council of the Royal Arcanum  (46 N. J. Eq., 102), the court said:

"Britton undoubtedly told a falsehood when he said Brennan was his cousin, but his falsehood did the defendant no harm. A falsehood or fraud that does not result in legal injury can neither be made the foundation of an action nor the ground of a  defense."

In the case of Atkinson vs. Sinnott (67 Miss., 502), the court said:

"Complainant seeks to avoid the  conveyance made by herself and husband on the ground that it was obtained by fraud.  But the only fraud averred, or sought to be proved, is that while she and her husband intended only to make a written  contract to convey,  the defendant put the  contract in the form of a deed, and knowing that the grantors therein  did not then intend to execute a deed, fraudulently secured the instrument to be executed, representing it to be only a contract to make a future conveyance.  There is no pretense that the instrument does not set out according to the understanding1 of all parties the land to be conveyed, the price at which it was to be sold, and the time at which the purchase-money was to be paid.  The sole complaint is, that by the fraud of the defendant, a contract to make a conveyance in the future, was made to take the form of a present conveyance.  It would  be a sufficient reply to this to say that, if a court of equity should afford to complainant all  the  relief it can. give in conformity  with its inherent principles, she would be left precisely in the  attitude in which she now stands.   Certainly she must do  equity as a condition  of receiving relief, and, according to  her own showing,  she can only vacate the deed she assails  upon condition  of executing another of precisely the same tenor. It is incontrovertibly shown that, within the time named in the writing given by him, Atkinson tendered the purchase price, and has continuously kept his tender good and has paid the money into court with his answer, where it now is subject to complainant's acceptance.  Under these circumstances there would be no shadow of right to relief on the ground now under consideration."

In the  case of Young vs. Bumpass et al. (1  Freeman (Miss.), 241), the court said:

"If a man is procured to do an act, even through fraud, yet  the  act will  be valid if  it  was such as  the  law would have compelled him to perform.  Where  fraud is charged, it must appear that the party was thereby misled to his prejudice or injury.   Courts of equity do not relieve against deceptive acts, which are  followed by no loss or injury (1 Story's Eq., 212)."

In the case of Story vs. Conger (36 N. Y., 673), the court said :

"Upon his own statement of the contract, the defendant has done no more than he was legally bound to do.  If unjust or immoral means have been resorted to to induce him to  perform that duty, there is no remedy.  In its results the case stands where and as it ought to stand.  (Hutchins vs. Hutchins, 7 Hill, 104; Story's Eq. Jur., sec. 203; Randall vs. Hazelton, 12 Allen, 412, 415.)"

In the case of Marsh vs. Cook  (32  N.  J. Eq., 262), the court said:
 
"These are the leading and material facts of this part of the case.  Do they show that the complainant has been inveigled into doing something whereby she has suffered injury or prejudice, which she did not mean to do, or which she had  not agreed to do?  The papers of themselves constitute a valid  and valuable security, which  the court can not destroy or impair except they are  shown, by clear and convincing proof, to be the offspring of fraud.  I think it is safe to say that it is impossible to frame a definition of fraud which will accurately define it in all of its multitudinous forms, but I think it may be said, with equal safety, that no deception or artifice will be considered an actionable fraud, so asto be the proper subject of judicial redress, which has  not been a cause of injury or prejudice to  the party seeking redress.   A  misrepresentation  or  concealment, which has not been the means of producing damage or injury, is not within the cognizance of human tribunals, for they do not  sit for the purpose  of  enforcing  moral obligations  or correcting unconscientious  acts which are followed by no loss or damage.   (Story's Eq. Jur., sees. 187, 203; Perry on Trusts, sec. 169.)

*    *    *    *    *

"But the decisive fact against the complainant's right to relief is, that  she has suffered no wrong.  She has  done nothing more than good faith and a proper observance of her promises made it her duty to do.  She was to  have three years' further time within which to pay her  debt, upon giving satisfactory  security.  She admits that  was the understanding.   Her part  of the bargain is secured to her; she has already enjoyed the advantage of the most of what she was to gain by the bargain; she has given the defendant nothing in return, but what she now asks to have taken from him.  Her claim, viewed  in its ultimate consequences, is most unrighteous.  She  does not allege that she agreed to give one  security,  and that  another was fraudulently substituted for it, but simply that she promised to give a security without specifying what, and then she says she gave the one she now seeks to overthrow, without knowing precisely what it was, and she now insists that it should, for that reason, be nullified.  Without suffering wrong herself, she asks the court to commit a wrong against the defendant, in  order that she may  escape  the payment of  an honest debt."

In  the case of Pheteplace vs. Eastman (26 Iowa, 446), the court said:

"Was there, then, fraud (for certainly there was no coercion) or false representations, producing damage to plaintiff?   If not, this judgment was wrong.  And here a plain proposition is, that if plaintiff paid no more than his contract required of  him  for this land, he was  not injured; there  was no damage, and his action must fail.  For it must be remembered that defendant is not seeking to recover the balance of the purchase money, but that plaintiff insists that defendant has so  much money 'received  to plaintiff's use,' under a promise (implied in law) to pay the same upon demand.

"If plaintiff was not injured, then it  makes no difference that defendant had the deed in his  possession  after its delivery; that the  deed was  altered; nor that plaintiff had the impression that  the vendor demanded the $112.  Nor, indeed, would any of the facts upon which the court  below seems to have predicated the conclusion of fraud, be of any moment.  For if plaintiff paid no more for the land than he was legally, or in equity bound to pay, he can not, because of defendant's supposed artifice or so-called fraud, demand the repayment.  It would be a most idle task to compel defendant to hand over this money, if  he, in an action tomorrow, could recover  it as the balance due upon the land.

"As we understand this case, plaintiff agreed to pay for this land at the rate of eight dollars per acre not $640, but whatever would be the amount at this rate  per  acre.  He got the land, 94 acres, anct paid for it in precise accordance with his contract.  Of this sum he says $112 was obtained by fraud.  Not in the original contract certainly; and, this being true,  it is of no moment that the deed was changed. If it had remained as at the time of its execution, he would have been no less bound to pay this money.  Nor is it.of any moment that the deed was, or was not, recorded, nor whether the vendor did, or did not, demand  the  additional $112.  Aside from these considerations, and  whether these representations were  true  or false, plaintiff,  in paying the money but discharged his debt, and complied with his contract.  And as plaintiff, before he can recover,  mtfst not only show fraud,  but also that which resulted in his injury, it follows "that the court  below erred in finding  against defendant."

In the case of Randall vs. Hazelton  (12 Allen,  412), the court said:

"The question  raised by the demurrer  is whether, upon the facts charged, the action can be maintained.   It is an ancient and well established legal principle that fraud without damage or damage without fraud gives no cause of action; yet when  the  two do concur, there an action lieth. (3 Bulst., 95.)  Actions like  the  one  under consideration are all based upon this proposition; but it can not safely be applied as a test  by which to  determine whether the facts in any case constitute an actionable wrong, without keeping in mind the meaning which the law, by a series of judicial decisions, has attached to the terms used.  It is well settled that every falsehood  is not necessarily a legal  fraud or false representation.  It is said that a false representation is an affirmation of that which the party knows to be false or does not  know to be true, to another's loss or his own gain.   (Lobdell vs. Baker, 1 Met., 201.)  So in  reference to the term damage, the law is that it must be  a loss brought upon the party complaining  by a violation of some legal right, or it will be considered  as merely damnum absque injuria.  There is a large class  of moral rights and duties, sometimes called imperfect rights and obligations,  which the law does not attempt to enforce or protect.  The refusal or discontinuance of a favor  gives no cause of action" If one trusts to  a mere  gratuitous promise of favor  from another and is disappointed,  the law will not protect him from the consequence of his undue confidence, nor encourage carelessness or want of prudence in  affairs.  Damages can never be recovered where they result from a lawful act  of the defendant. The exercise of a  right conferred  by a valid contract,  in the manner provided by its terms, can not be the ground  of an action.   The law will not inquire into the motives of the party exercising such right,  however unfriendly and selfish.   The trouble and  expense  and risk of loss  ought to and must be presumed to have been contemplated when the contract  was entered into.  The foreclosure  of a mortgage under a power of sale, for example, may be made at such time  and under such  circumstances as  to cause great distress and sacrifice to the mortgagor; but, whatever  the motive of the mortgagee, no remedy  is afforded for his oppressive conduct, if the requirements of the contract have been fulfilled.

"But  a more important consideration in this connection is,  that  the damage which this doctrine contemplates must not only be caused by the fraud and misconduct of the defendant, but it must be the  direct and immediate consequence of the wrongful act.  The law looks to the proximate and not the remote cause of the injury.  It were infinite, says Lord Bacon, to consider the causes of causes and their impulsion of each other; therefore it contenteth itself with the immediate cause,  and judgeth of acts  by that, without looking  to any  further degree.  This is the only practical rule which, in  view of the complication which surrounds this doctrine of causation, can be adopted in the administration  of justice by human  tribunals.  Where the fraud and damage sustain this intimate  relation of proximate cause and effect, and not otherwise, they are said to concur, in the sense of the proposition above stated.

"Applying the doctrine thus explained to the plaintiff's case as stated in the first count, we are of opinion that he sets forth no legal cause of  action.   The declaration shows no consideration for the alleged promise of the mortgagees to inform  the  plaintiff, in  case  the amount of the  debt should be wanted by them.  It was an agreement not legally binding  upon them. . There was nothing in it  to prevent them in  law from proceeding to do all  the acts  in relation to advertising and selling the property which were done by the defendants; nor did it prevent them from assigning the mortgage.   It can not be said to be an invasion of any legal right for the defendants to deprive the plaintiff  even by falsehood of the  benefit of this  gratuitous  undertaking. (Hutchins vs. Hutchins, 7 Hill, 104.)  It is not alleged that the defendants knew of the alleged promise of the mortgagees.  The false representation of  a material  existing fact for  the purpose of procuring the transfer might have enabled the mortgagees to avoid it, or  maintain an action for any loss sustained by them, but until avoided  the  title passed to the defendant.  If the declaration had contained averments of a good legal consideration for the promise to give notice  to the plaintiff, then it  would seem to follow that the plaintiff's  remedy would be  ample against  the mortgagees  for all loss suffered by him by reason of  the breach of their agreement, leaving them to whatever remedy they might have against the defendants  for the fraud practiced by them.  And this fact is said by Morton, J., in Lamb vs. Stone (11 Pick., 532), which was a case like this, to be good ground for  refusing relief; for if the plaintiff  'may have redress by any of the forms of actions now known and practiced, it would be unwise and unsafe to sanction an untried one, the  practical operation of which can not be fully  foreseen.'

"But the more important  fact is, that this specific act of obtaining the assignment in the manner stated in itself produced no direct and immediate damage to the plaintiff. The damage resulted solely from the foreclosure and forced sale of the premises, and would have been no more and no less if the mortgage had not been assigned, and the mortgagees had pursued precisely the course charged upon the defendants in regard to the sale.  It was undoubtedly a necessary step in order that the defendants might practice the alleged oppression; but it was not the  immediate cause of the injury.  The substantial, efficient and immediate cause  of the  loss  to the  plaintiff was the foreclosure and sale.   And we are not permitted to go behind and inquire into the antecedent causes, near  or remote.   (Marble vs. Worcester, 4  Gray,  395;  Tisdale vs. Norton, 8 Met., 388.) We lay out of the case, therefore, that part of it which rests upon the false representations made to procure the transfer of the mortgage. 

"The cases cited by the plaintiff  we think  ought not to control us in this result.  In Benton  vs. Pratt (2 Wend., 385), the court says:  'Here is the assertion of an unqualified falsehood with a fraudulent intent as to a present or existing fact, and a direct, positive and material injury  resulting therefrom to the plaintiff/  In the American note to Pasley vs. Freeman  (2 Smith's Lead. Cas., 153), this case, it is said, certainly goes very far; but whether open to criticism or not in its main doctrine, it differs in  the material point above  indicated from the present case.   So in Green  vs. Button (Tyrwh. & Grang., 118), it was held that the damage to the  plaintiff by delaying him.in his work and injuring his credit directly resulted from the defendant's act  In the Tun bridge Wells Dippers' case (2 Wils., 414), while the court remarked that there was a real damage in depriving the plaintiff  of some gratuity, they also say in  the same sentence that the injury was by disturbing the dippers in the exercise of their right or employment, which  it seems by some private statute they were entitled to."

Even under the authorities which  hold that the invasion of a legal right is actionable even though no actual damage results  (Webb vs. Portland Mfg. Co.,  3 Sumn., 189),  still the case of the government would not be improved.   The fact still remains that no legal  right  of the government was invaded  by  the defendant.  The defendant presents both defenses. First, that there was no invasion of a legal right; and second, that there was no damage.

The Government's contention in this case may be reduced to this:  A judge of whatever category, under a mistaken conception of the powers of his office, undertakes to impose fines on all persons arriving at Manila from Hongkong;  and accordingly orders the bailiff of the court to watch at the wharf and arrest and bring before him all persons coming from said pert.  The judge succeeds in imposing a number of fines; but some of the persons escaped the fines either by landing at  night or deceiving the court or the bailiff by asserting that they  came  from Singapore  and not from Hongkong.  The  illegal conduct of the judge finally comes to the knowledge of the Philippine Legislature, and  the latter, believing that of  two evils the  lesser would be  the ratification of  the acts of the judge, passes an act providing that all  fines thus imposed are legalized and their collection ratified  with the same force and effect as if  they had been previously authorized by the Legislature under a law enacted for that purpose.  Can it be successfully maintained that those who escaped or evaded the fines were guilty of fraud and are, therefore, by virtue of the ratifying statute, still subject  to  be  prosecuted and fined?   Can it be said that, notwithstanding the fact that they violated no law in coming to Manila from Hongkong, the deceit practiced on the court brought them,  nevertheless, within the provisions of the act ratifying and  legalizing the acts of the judge?  Or would it be more just and reasonable to say that the only purpose of the ratifying statute was to purge the proceedings from a fatal defect and not to authorize retroactively the imposition  of new fines?

While  I am  alone in  this dissent, I have the satisfaction of knowing that, while this cause was under discussion by the court in consultation,  Judge Trent, now on vacation, expressed views similar to my own.

For these reasons I think the demurrer should have been sustained.