June 11, 1901, the Second Philippine Commission passed Act No. 136 entitled “An Act Providing for the Organization of Courts in the Philippine Islands.”
With the establishment of Civil Government, Act No. 136 of the Philippine Commission abolished the Audencia and established the present Supreme Court on June 11, 1901 with Cayetano Arellano as the first Chief Justice together with associate justices, the majority of whom were American. This Supreme court should composed of a Chief Justice and six Judges. This court was entire different from the Old Spanish system that the people were familiar with.
The Act also created the Courts of First Instance and Justices of the Peace Courts throughout the land. This judicial organization was conceived by the American lawyers in the Philippine Commission and was patterned in its basic structures after similar organizations in the United States.
The provincial governors and the sheriff of Manila were constituted officials of the court through whom process may be served. The court’s decision must be in writing, and it is required to appoint a reporter with the duty of compiling and publishing such opinions as the court deems of sufficient importance to be preserved in this manner.
In addition it left to the mayors of municipalities the powers conferred upon them by the municipal code to try offenses against municipal ordinances. Provost courts, with their special powers, were continued in existence where they were deemed necessary by the military governor.