Is our Insolvency Law constitutional?

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Part of The American Chamber of Commerce Journal

Title: Is our Insolvency Law constitutional?
Language: English
Source: The American Chamber of Commerce Journal Volume 6 (No. 7) July 1926
Year: 1926
Rights
Fulltext: 14 THE AMERICAN CHAMBER OF COMMERCE JOURNAL July, 1926 Amoyese Inxiks. The Amoyese may be naught but a porter when he arrives: he becomes a peddler, then he has a small store and a fixed abode, and from then on, according to his connections, character and ability, it is anything from a shop on Ro sario to importing, exporting and operating steamships from an establishment on Juan Luna or somewhere in San Nicolas. Or he may go to the provinces, retaining his Manila connections. The Cantonese are tailors, laundrymen and keepers of restaurants and grocer shops. The craftsmen are from Amoy. It is the Amoyese who dominate the lumber industry and who enter most extensively into manufacturing. The bureau of health still classifies Jap anese with “other foreigners,” so they can not be traced so easily as the Chinese. The figures on movement of Japanese to and from the Philippines are from the bureau of customs: Year Entering Leaving 1919 1,645 1,579 1920 952 1,222 Is Our Insolvency Law Constitutional? & 2% & & Question Raised in Current Litigation The question of the constitutionality of the Philippine insolvency act has been raised ir. the case pending in the court of first instance of Manila concerning the involuntaiy insolvency of Mariano Velasco and Company. The insolvency act dates from 1909, when the legislature was made up of the Philippine Assembly and Philippine Commission. It is therefore one of the acts continued in force by the Jones Act of 1916, the present organic act of the territory. This of course does not establish the vali dity of the act questioned: it merely gives it the force of law, or continues its force as law, until competent authority deter mines its validity. Naturally this validitj; may be questioned, in the same manner as that of other acts subsequent or prior to the organic act. It is argued that the local insolvency act is not valid because the government of the Philippines is and has been from its in ception one of enumerated powers; it is a government established over a territory by 1921 874 1,137 1922 584 1,564 1923 799 1,115 1924 932 968 1925 2,225 1,081 Totals 8,011 8,666 These figures show that since 1918 the Japanese population has decreased 655, but births, were the records available, would more than offset this. Without doubt there has been some actual increase, though nothing in comparison with the increase among the Chinese. Figures about the American community n ay be added. In 1918 they numbered 5,771. Since that time 28,217 have come to the islands and 27,169 have gone away, making an increase from migration of 1,048. In Manila the excess of births over deaths has been 600. The figures for the provinces are not compiled. Numerically the American community has increased by possibly 1,700, but it is unquestionably of a more transient character than the earlier community whose advent dates the period of the empire. Congress under these enumerated powers, which do not, it is contended, include the power or function of enacting insolvency statutes. That particular power rests in Congress and may not be susceptible of delegation to an agency of that body. The national or Federal insolvency act dates from 1898. It seems that the local act is not on all fours with the Federal act. It is not a mere local reiteration of the Fede ral act, but conflicts with it in certain par ticulars. The question arises, which shall prevail? Which is law; which an illegal fiat? The Philippine act may also be, in a very real sense, a regulation of trade between the Philippines and the United States. This is something which Congress restrains the local government from undertaking and re serves specifically to itself. Section 10 of the Jones Act says: “That while this act provides that the Philippine government shall have the authority to en<ct a tariff law the trade regulations be tween the islands and the United States shall continue to be governed cxclusivelv by laws of the Congress of ;he United States.” The local insolvency act might not be valid as to many creditors. If creditors resided in the United States they might not be bound by the discharge of a debtor grant ed by a court in the Philippines under the local act; and if the act is invalid in res pect to certain creditors there is precedent for declaring it invalid altogether. The Federal income tax law of 1894 was declared xoid because some of its provisions were unconstitutional, although others were va lid. The courts have the question to de termine as to whether the legislature could possibly have had the intention of enacting a law that in many of its aspects would affect citizens of the Philippines adversely —one that might relieve a debtor of his obligations to them while it would not ab solve him from debts to other creditors. Two of the enumerated powers of the Congress of the United States are contained in paragraphs 3 and 1 of Section 8. Article 1, of the Constitution: “3. Commerce. To regulate commerce with foreign nations, and among the several States, and with the Indian tribes; “4. Naturalization, etc. To establish an uniform rule of naturalization, and uniform laws on the subject of bankruptcies, throughout the United States.” Where everybody goes, and the doors never close CTom’s Dixie Kitchen FINDLATER DRY GIN THE BIGGEST SELLER AT LEADING MANILA CLUBS AND HOTELS Sole Distributors:— FILMA MERCANTILE COMPANY, Inc. IN RESPONDING TO ADVERTISEMENTS PLEASE MENTION THE AMERICAN CHAMBER OF COMMERCE JOURNAL July, 192C THE AMERICAN CHAMBER OF COMMERCE JOURNAL 15 It may he mentioned that bankruptcies were a subject of immediate and paramount interest when the Constitution was being written. Everything relating to banking, inter-state commerce and allied matters was disorganized and chaotic. The power to enact a universal bankruptcy law was not casually bestowed upon Congress, but was by very deliberate intent. Numerous decisions of the Federal sup reme court proclaim the Philippines a part of the United States. The power of Con gress to legislate for the islands is the same as that to legislate for Porto Rico, though exercised in a somewhat different way. Con gress has delegated certain powers of legis lation to the Philippine government, its creature, and under the Jones Act has even given the local legislature general legisla tive authority. But dees this include power to legislate in respect to bankruptcy or in solvency, a power that under the Constitu tion itself is specifically rested in Congress? Under the powers it has, the legislature may pass many acts conflicting with acts of Congress. May it, however, with the important volume of trade existing between many States and the territory, pass a valid insolvency act? ‘‘The insolvency law of the Philippine Islands,” states a brief we are reviewing, “gives debtors a discharge from their obligations, with certain exceptions; the bankruptcy law of the United States gives debtors a discharge from their obliga tions, but under different conditions: and it cannot be gains aid that both of these laws are derived from the same source of legislative power.” The two acts can hardly occupy the same plane. One directly derives from Congress, the other indirectly; and the second con flicts with the first. Both affect the in terests of Americans, on national soil; both affect national commerce and may be con strued as regulations of trade. The picture has its obverse. The Phil ippine government has been held, by the local supreme court, to be one of general legislative powers with specific limitations. Section 8 of the Jones Act: “General legis lative power, except as otherwise herein provided, is hereby granted to the Philip pine Legislature, authorized by this Act.” Arid Section 7 authorizes the legislature to “amend, alter, modify or repeal any law, civd or criminal, continued in force by this act as it may from time to time see fit.” Still, whether the insolvency act is void, and therefore not law, has never been determin ed and it now appears that the Supreme Court of the United States will one day have the problem laid before it. Among the States themselves, sovereign, with the people, in all things wherein they have not bestowed authority upon the Fe deral government, insolvency laws remain without force while Federal legislation remains in force. Is the creature position of the Philippine government paramount in this respect to that of State? That is the nut to be cracked by some mighty legal hammer. NEW SHEET METAL COMPANY A new American enterprise of no little importance to the islands has recently opened for business and is rapidly install ing everything essential in the most mod ern equipment necessary for first rate manufacturing. It is the Philippine Sheet Metal Company, A. II. Dahlke being the general manager and the new factory being at 506 Tanduay. The plant will manu facture everything in metal, in the line of containers, from cocoa tins to oil tanks. Enamel will be applied by the baking process, precisely the process utilized in the best known plants of the United States. No expense is being spared in the adapta tion of machinery to jobs, so as to eliminate hand work and bring the output of the fac tory within the convenient reach of the popular purse. These goods will be on the market not only in Manila but throughout the provinces. Arrangements are being made with several leading American mer cantile companies of Manila to handle the distribution of the company’s standard pro ducts. Aside from the company’s manu facturing plant, it is fully equipping an in dustrial job department to handle out side contracts, several of which it has already obtained. The company stamps out auto Giant Oil-Burning Locomotives Speed You Across America The Oriental Limited a sootless, cinderless trip in the finest train between Seattle, Vancouver, Victoria, and Minneapolis, St. Paul and Chicago. No Extra Fare. Through Some of the Finest Scenery in the United States past the lofty peaks of the Great Northern Cascades and Rockies alongside Glacier National Park. 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