Professional Documents
Culture Documents
L-19190
MALCOLM, J.:
By telegrams and a letter of confirmation to the manager of the
Aparri branch of the Philippine National Bank, Venancio Concepcion,
President of the Philippine National Bank, between April 10, 1919,
and May 7, 1919, authorized an extension of credit in favor of "Puno
y Concepcion, S. en C." in the amount of P300,000. This special
authorization was essential in view of the memorandum order of
President Concepcion dated May 17, 1918, limiting the discretional
power of the local manager at Aparri, Cagayan, to grant loans and
discount negotiable documents to P5,000, which, in certain cases,
could be increased to P10,000. Pursuant to this authorization, credit
aggregating P300,000, was granted the firm of "Puno y Concepcion,
S. en C.," the only security required consisting of six demand notes.
The notes, together with the interest, were taken up and paid by July
17, 1919.
"Puno y Concepcion, S. en C." was a copartnership capitalized
at P100,000. Anacleto Concepcion contributed P5,000; Clara Vda.
de Concepcion, P5,000; Miguel S. Concepcion, P20,000; Clemente
Puno, P20,000; and Rosario San Agustin, "casada con Gral.
Venancio Concepcion," P50,000. Member Miguel S. Concepcion was
the administrator of the company.
On the facts recounted, Venancio Concepcion, as President of
the Philippine National Bank and as member of the board of directors
of this bank, was charged in the Court of First Instance of Cagayan
with a violation of section 35 of Act No. 2747. He was found guilty by
the Honorable Enrique V. Filamor, Judge of First Instance, and was
sentenced to imprisonment for one year and six months, to pay a
and the receipt by the other party of a given sum of money, upon an
agreement, express or implied, to repay the sum loaned, with or
without interest. (Payne vs. Gardiner [1864], 29 N. Y., 146, 167.) The
concession of a "credit" necessarily involves the granting of "loans"
up to the limit of the amount fixed in the "credit,"
Fok vs. United States ([1910], 218 U. S., 272; 40 Phil., 1046). In
other words, it has been the holding, and it must again be the
holding, that where an Act of the Legislature which penalizes an
offense, such repeals a former Act which penalized the same
offense, such repeal does not have the effect of thereafter depriving
the courts of jurisdiction to try, convict, and sentenced offenders
charged with violations of the old law.
V. Was the granting of a credit of P300,000 to the copartnership
"Puno y Concepcion, S. en C." by Venancio Concepcion, President
of the Philippine National Bank, in violation of section 35 of Act No.
2747, penalized by this law?
Counsel argue that since the prohibition contained in section
35 of Act No. 2747 is on the bank, and since section 49 of said Act
provides a punishment not on the bank when it violates any
provisions of the law, but on a person violating any provisions of the
same, and imposing imprisonment as a part of the penalty, the
prohibition contained in said section 35 is without penal
sanction.lawph!l.net
The answer is that when the corporation itself is forbidden to
do an act, the prohibition extends to the board of directors, and to
each director separately and individually. (People vs. Concepcion,
supra.)
VI. Does the alleged good faith of Venancio Concepcion, President
of the Philippine National Bank, in extending the credit of P300,000
to the copartnership "Puno y Concepcion, S. en C." constitute a legal
defense?
Counsel argue that if defendant committed the acts of which
he was convicted, it was because he was misled by rulings coming
from the Insular Auditor. It is furthermore stated that since the loans
made to the copartnership "Puno y Concepcion, S. en C." have been
paid, no loss has been suffered by the Philippine National Bank.
Neither argument, even if conceded to be true, is conclusive.
Under the statute which the defendant has violated, criminal intent is
not necessarily material. The doing of the inhibited act, inhibited on
T O T A L P500,000.00
4. That Mr. & Mrs. Ramon E. Saura, Inocencia Arellano, Aniceto
Caolboy and Gregoria Estabillo and China Engineers, Ltd. shall sign
the promissory notes jointly with the borrower-corporation;
5. That release shall be made at the discretion of the Rehabilitation
Finance Corporation, subject to availability of funds, and as the
construction of the factory buildings progresses, to be certified to by
an appraiser of this Corporation;"
Saura, Inc. was officially notified of the resolution on January 9,
1954. The day before, however, evidently having otherwise been
informed of its approval, Saura, Inc. wrote a letter to RFC, requesting
a modification of the terms laid down by it, namely: that in lieu of
having China Engineers, Ltd. (which was willing to assume liability
only to the extent of its stock subscription with Saura, Inc.) sign as
co-maker on the corresponding promissory notes, Saura, Inc. would
put up a bond for P123,500.00, an amount equivalent to such
subscription; and that Maria S. Roca would be substituted for
Inocencia Arellano as one of the other co-makers, having acquired
the latter's shares in Saura, Inc.
a) For the payment of the receipt for jute mill machineries with the
Prudential Bank &
rely on the importation of jute and your request that we give you
assurance that your company will be able to bring in sufficient jute
materials as may be necessary for the operation of your factory,
would not be in line with our principle in approving the loan.
With the foregoing letter the negotiations came to a standstill. Saura,
Inc. did not pursue the matter further. Instead, it requested RFC to
cancel the mortgage, and so, on June 17, 1955 RFC executed the
corresponding deed of cancellation and delivered it to Ramon F.
Saura himself as president of Saura, Inc.
It appears that the cancellation was requested to make way for the
registration of a mortgage contract, executed on August 6, 1954,
over the same property in favor of the Prudential Bank and Trust Co.,
under which contract Saura, Inc. had up to December 31 of the same
year within which to pay its obligation on the trust receipt heretofore
mentioned. It appears further that for failure to pay the said obligation
the Prudential Bank and Trust Co. sued Saura, Inc. on May 15, 1955.
On January 9, 1964, ahnost 9 years after the mortgage in favor of
RFC was cancelled at the request of Saura, Inc., the latter
commenced the present suit for damages, alleging failure of RFC (as
predecessor of the defendant DBP) to comply with its obligation to
release the proceeds of the loan applied for and approved, thereby
preventing the plaintiff from completing or paying contractual
commitments it had entered into, in connection with its jute mill
project.
The trial court rendered judgment for the plaintiff, ruling that there
was a perfected contract between the parties and that the defendant
was guilty of breach thereof. The defendant pleaded below, and
reiterates in this appeal: (1) that the plaintiff's cause of action had
prescribed, or that its claim had been waived or abandoned; (2) that
there was no perfected contract; and (3) that assuming there was,
the plaintiff itself did not comply with the terms thereof.
We hold that there was indeed a perfected consensual contract, as
recognized in Article 1934 of the Civil Code, which provides:
ART. 1954. An accepted promise to deliver something, by way of
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The original period of the loan was from 8 May 1948 to 7 May 1949.
The loan of one bull was renewed for another period of one year to
end on 8 May 1950. But the appellant kept and used the bull until
November 1953 when during a Huk raid it was killed by stray bullets.
Furthermore, when lent and delivered to the deceased husband of
the appellant the bulls had each an appraised book value, to with:
the Sindhi, at P1,176.46, the Bhagnari at P1,320.56 and the
Sahiniwal at P744.46. It was not stipulated that in case of loss of the
bull due to fortuitous event the late husband of the appellant would
be exempt from liability.
The appellant's contention that the demand or prayer by the appellee
for the return of the bull or the payment of its value being a money
claim should be presented or filed in the intestate proceedings of the
defendant who died on 23 October 1951, is not altogether without
merit. However, the claim that his civil personality having ceased to
exist the trial court lost jurisdiction over the case against him, is
untenable, because section 17 of Rule 3 of the Rules of Court
provides that
After a party dies and the claim is not thereby extinguished, the court
shall order, upon proper notice, the legal representative of the
deceased to appear and to be substituted for the deceased, within a
period of thirty (30) days, or within such time as may be granted. . . .
and after the defendant's death on 23 October 1951 his counsel
failed to comply with section 16 of Rule 3 which provides that
Whenever a party to a pending case dies . . . it shall be the duty of
his attorney to inform the court promptly of such death . . . and to
give the name and residence of the executory administrator,
guardian, or other legal representative of the deceased . . . .
The notice by the probate court and its publication in the Voz de
Manila that Felicidad M. Bagtas had been issue letters of
administration of the estate of the late Jose Bagtas and that "all
persons having claims for monopoly against the deceased Jose V.
Bagtas, arising from contract express or implied, whether the same
be due, not due, or contingent, for funeral expenses and expenses of
the last sickness of the said decedent, and judgment for monopoly
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against him, to file said claims with the Clerk of this Court at the City
Hall Bldg., Highway 54, Quezon City, within six (6) months from the
date of the first publication of this order, serving a copy thereof upon
the aforementioned Felicidad M. Bagtas, the appointed administratrix
of the estate of the said deceased," is not a notice to the court and
the appellee who were to be notified of the defendant's death in
accordance with the above-quoted rule, and there was no reason for
such failure to notify, because the attorney who appeared for the
defendant was the same who represented the administratrix in the
special proceedings instituted for the administration and settlement
of his estate. The appellee or its attorney or representative could not
be expected to know of the death of the defendant or of the
administration proceedings of his estate instituted in another court
that if the attorney for the deceased defendant did not notify the
plaintiff or its attorney of such death as required by the rule.
As the appellant already had returned the two bulls to the appellee,
the estate of the late defendant is only liable for the sum of P859.63,
the value of the bull which has not been returned to the appellee,
because it was killed while in the custody of the administratrix of his
estate. This is the amount prayed for by the appellee in its objection
on 31 January 1959 to the motion filed on 7 January 1959 by the
appellant for the quashing of the writ of execution.
Special proceedings for the administration and settlement of the
estate of the deceased Jose V. Bagtas having been instituted in the
Court of First Instance of Rizal (Q-200), the money judgment
rendered in favor of the appellee cannot be enforced by means of a
writ of execution but must be presented to the probate court for
payment by the appellant, the administratrix appointed by the court.
ACCORDINGLY, the writ of execution appealed from is set aside,
without pronouncement as to costs.
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November 3, 1939
IMPERIAL, J.:
The plaintiff brought this action to compel the defendant to
return her certain furniture which she lent him for his use. She
appealed from the judgment of the Court of First Instance of Manila
which ordered that the defendant return to her the three has heaters
and the four electric lamps found in the possession of the Sheriff of
said city, that she call for the other furniture from the said sheriff of
Manila at her own expense, and that the fees which the Sheriff may
charge for the deposit of the furniture be paid pro rata by both
parties, without pronouncement as to the costs.
The defendant was a tenant of the plaintiff and as such
occupied the latter's house on M. H. del Pilar street, No. 1175. On
January 14, 1936, upon the novation of the contract of lease
between the plaintiff and the defendant, the former gratuitously
granted to the latter the use of the furniture described in the third
paragraph of the stipulation of facts, subject to the condition that the
defendant would return them to the plaintiff upon the latter's demand.
The plaintiff sold the property to Maria Lopez and Rosario Lopez and
on September 14, 1936, these three notified the defendant of the
conveyance, giving him sixty days to vacate the premises under one
of the clauses of the contract of lease. There after the plaintiff
required the defendant to return all the furniture transferred to him for
them in the house where they were found. On
November 5,
1936, the defendant, through another person, wrote to the plaintiff
reiterating that she may call for the furniture in the ground floor of the
house. On the 7th of the same month, the defendant wrote another
letter to the plaintiff informing her that he could not give up the three
gas heaters and the four electric lamps because he would use them
until the 15th of the same month when the lease in due to expire.
The plaintiff refused to get the furniture in view of the fact that the
defendant had declined to make delivery of all of them. On
November 15th, before vacating the house, the defendant deposited
with the Sheriff all the furniture belonging to the plaintiff and they are
now on deposit in the warehouse situated at No. 1521, Rizal Avenue,
in the custody of the said sheriff.
In their seven assigned errors the plaintiffs contend that the
trial court incorrectly applied the law: in holding that they violated the
contract by not calling for all the furniture on November 5, 1936,
when the defendant placed them at their disposal; in not ordering the
defendant to pay them the value of the furniture in case they are not
delivered; in holding that they should get all the furniture from the
Sheriff at their expenses; in ordering them to pay-half of the
expenses claimed by the Sheriff for the deposit of the furniture; in
ruling that both parties should pay their respective legal expenses or
the costs; and in denying pay their respective legal expenses or the
costs; and in denying the motions for reconsideration and new trial.
To dispose of the case, it is only necessary to decide whether the
defendant complied with his obligation to return the furniture upon
the plaintiff's demand; whether the latter is bound to bear the deposit
fees thereof, and whether she is entitled to the costs of
litigation.lawphi1.net
The contract entered into between the parties is one of
commadatum, because under it the plaintiff gratuitously granted the
use of the furniture to the defendant, reserving for herself the
ownership thereof; by this contract the defendant bound himself to
return the furniture to the plaintiff, upon the latters demand (clause 7
of the contract, Exhibit A; articles 1740, paragraph 1, and 1741 of the
Civil Code). The obligation voluntarily assumed by the defendant to
return the furniture upon the plaintiff's demand, means that he should
return all of them to the plaintiff at the latter's residence or house.
The defendant did not comply with this obligation when he merely
placed them at the disposal of the plaintiff, retaining for his benefit
the three gas heaters and the four eletric lamps. The provisions of
article 1169 of the Civil Code cited by counsel for the parties are not
squarely applicable. The trial court, therefore, erred when it came to
the legal conclusion that the plaintiff failed to comply with her
obligation to get the furniture when they were offered to her.
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of Civil Procedure). The defendant was the one who breached the
contract of commodatum, and without any reason he refused to
return and deliver all the furniture upon the plaintiff's demand. In
these circumstances, it is just and equitable that he pay the legal
expenses and other judicial costs which the plaintiff would not have
otherwise defrayed.
The appealed judgment is modified and the defendant is
ordered to return and deliver to the plaintiff, in the residence to return
and deliver to the plaintiff, in the residence or house of the latter, all
the furniture described in paragraph 3 of the stipulation of facts
Exhibit A. The expenses which may be occasioned by the delivery to
and deposit of the furniture with the Sheriff shall be for the account of
the defendant. the defendant shall pay the costs in both instances.
So ordered.
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