1. T H E R O M A N C A T H O L I C B I S H O P O F J A R O vs.

GREGORIO DE LA PEÑA F A C T S : T h e p l a i n t i f f i s t h e t r u s t e e o f a c h a r i t a b l e bequest made for the construction of a leper hospital andthat f ather Agustin de la Peña was the duly authorizedrepresentative of the plaintiff to receive the legacy. The defendant is the administrator of the estate of Father Dela Peña.I n t h e y e a r 1 8 9 8 t h e b o o k s F a t h e r D e l a P e ñ a , a s trus tee, showed that he had on hand as such trustee thes u m o f P 6 , 6 4 1 , c o l l e c t e d b y h i m f o r t h e c h a r i t a b l e purposes aforesaid. In the same year he deposited in hisp e r s o n a l a c c o u n t P 1 9 , 0 0 0 i n t h e H o n g k o n g a n d Shanghai Bank at Iloilo. Shortly thereafter and during thewar of the revolution, Father De la Peña was arrested bythe military authorities as a po litical prisoner, and while thus detained made an order on said bank in favor of theUnited States Army officer under whose charge he thenwas f or the sum thus deposited in said bank. The arrest of Father De la Peña and the confiscation of the funds int h e b a n k w e r e t h e r e s u l t o f t h e c l a i m o f t h e m i l i t a r y authorities that he was an insurgent and that the fundst h u s d e p o s i t e d h a d b e e n c o l l e c t e d b y h i m f o r revolutionary purposes. The money was taken from thebank by the military authorities by virtue of such order, was confiscated and turned over to the Government.W hile there is considerable dispute in the case over the question whether the P6,641 of trust funds was includedin the P19,000 deposited as aforesaid, nevertheless, ac a r e f u l e x a m i n a t i o n o f t h e c a s e l e a d s u s t o t h e c onclusion that said trust f unds were a part of the fundsdeposited and which were removed and conf iscated by the military authorities of the United States. ISSUE : W hether or not Father de la Peña is liable for the loss of the money under his trust? RULINGS : The court, therefore, finds and declares thatthe money which is the subject matter of this action wasd e p o s i t e d b y F a t h e r D e l a P e ñ a i n t h e H o n g k o n g a n d Shanghai Banking Corporation of Iloilo; that said moneywas f orcibly taken from the bank by the armed f orces of the United States during the war of the insurrection; andthat said Father De la Peña was not responsible for itsloss.F a t h e r D e l a P e ñ a ' s l i a b i l i t y i s d e t e r m i n e d b y t h o s e p o r t i o n s o f t h e C i v i l C o d e w h i c h r e l a t e t o o b l i g a t i o n s . (Book 4, Title 1.)Although the Civil Code states that "a person obliged to g i v e s o m e t h i n g is also bound to preserve it with thediligence pertaining to a good father of a family" (art.1094), it also provides, following the principle of theRoman law, m a j o r c a s u s e s t , c u i h u m a n a i n f i r m i t a s resistere non potest , t h a t " n o o n e s h a l l b e l i a b l e f o r events which could not b e f o r e s e e n , o r w h i c h h a v i n g been foreseen were inevitable, with the exception of

is deposited with a person and the latter is authorized by the depositor to use and dispose of the same. money from plaintiff-appellee and agreed upon a date when they will return the money. from April 9 to June 8. because on that date his counsel demanded of the defendants. 1898. Where money. it is clear that under t h e p r o v i s i o n s o f t h e C i v i l C o d e h e w o u l d h a v e b e e n exempt from responsibility. JAVELLANA VS. 1905. their partnership having been dissolved. without interest. 2. . The defendants were not able to pay the full amount of their indebtedness notwithstanding the request made by plaintiffappellee. ISSUE: Whether the agreement entered into by the parties is one of loan or of deposit? HELD: The document executed was a contract of loan. with the agreement of payment them 10 centimos for each cavan and to have returned in the rice one-half the amount received as paddy. OBLIGATION NOT TO MAKE USE OF THING DEPOSITED UNLESS AUTHORIZED. but a loan. The fact that he placed thetrust f und in the bank in his personal account does notadd to his responsibility. (day) of (month). Vicente Delgado undertook to deliver to them paddy for this purpose to be cleaned and returned to him as rice. with the interest thereon at 6 percent a year reckoning from. 1977. to which the plaintiff-appellee acceded. The plaintiff asked that the interest run from November 21. and the costs. If the had been forcibly taken from his pocket or f r o m h i s h o u s e b y t h e m i l i t a r y f o r c e s o f o n e o f t h e combatants during a state of war. does not constitute a renewal of an agreement of deposit. Such deposit did not make him a debtor who must respond at all hazards ART. until complete payment. VICENTE DELGADO vs." (Art.)By placing the money in the bank and mixing it with hispersonal f unds De la Peña did not thereby assume an obligation different from that under which he would havel a i n i f s u c h d e p o s i t h a d n o t b e e n m a d e . the agreement is not a contract of deposit. defendants asked for an extension to pay and binding themselves to pay 15% interest per annum on the amount of their indebtedness. Upon the stipulated due date. consisting of coins of legal tender. LIM FACTS: Defendants executed a document in favor of plaintiff-appellee wherein it states that they have received.thecases expressly mentioned in the law or t hose in whichthe obligation so declares. The paddy received for this purpose was credited by receipts made out in this way: "Receipt for (number) cavanes of paddy in favor of (owner of the paddy). 1905. demanding return of the said 2. November 21." And they issued to Vicente Delgado receipts Nos. but it is the best evidence that the original contract entered into between therein was for a loan under the guise of a deposit. 1898. Nueva Caceres. 1105. Vicente Delgado appeared in the Court of First Instance of Ambos Camarines with said receipts.003 cavanes and a half of paddy. Bonnevie and Arandez.003 and a half cavanes of paddy. a regular general partnership for engaging in the business of threshing paddy. Ambos Camarines. 86-99 for a total of 2. that they settle the accounts in this matter. The lower court ruled in favor of plaintiff-appellee for the recovery of the amount due. n o r d i d h e t h e r e b y m a k e h i m s e l f l i a b l e t o r e p a y t h e m o n e y a t a l l hazards. PEDRO BONNEVIE When Pedro Bonnevie and Francisco Arandez formed in Nueva Caceres. A subsequent agreement between the parties as to interest on the amount said to have been deposited. On February 6. 1909. or in the absence thereof. because the same could not be returned at the time fixed therefor.009 pesos and 50 centimos. of the price of said article at the rate of 3 pesos the cavan of 6. as a deposit.

after the object of the hire of services had been fulfilled. but they are. coupons. notes. the value of 2. prescribes by uninterrupted possession for six years. not a commercial act. but of six years. and the amounts of the amortization of obligations issued in accordance with said code. With reference to the first assignment of error it is alleged that the receipts in question. and this is true. therefore. They are documents such as would be issued by the thousand so-called rice-mills scattered throughout the Islands. the only grounds of error assigned are: (1) Violation of articles 532 and 950 of the Code of Commerce. commission.The court decided the case by sentencing the defendant. and the rules and provisions applicable to the commercial loans. 1905. The contract whereby one person receives from another a quantity of unhulled rice to return it hulled. for a fixed compensation or renumeration. wherein a few poor women of the people in like manner clean the paddy by pounding it with a pestle and return hulled rice. This conclusion is not admissible. in accordance with article 950 of the Code of Commerce. the actions arising therefrom do not extinguish three years from their date (that. (2) violation of articles 309 of the Code of Commerce and 1955 and 1962 of the Civil Code. actions arising from bills of exchange. nor the revolutionary movement of a political character that seems to have occurred in 1898. Neither are articles 309 of the Code of Commerce and 1955 and 1962 of the Civil Code applicable. and (3) violation of section 296 of the Code of Civil Procedure. as the appellant say.003 �cavanes of paddy at the rate of 11 reales the cavan and 6 percent interest on said sum reckoned from November 21. which is nothing more than purely for industrial. as the appellants acknowledge. according to article 1955 of the Civil Code. neither the dissolution of the partnership that united them. It is true that paragraph 2 of article 950 also mentions. without necessity of any other condition. The appellants say that. "other instruments of draft or exchange. drafts. and nothing has relieved them of this obligation. or rather mere documents evidencing the receipt of some cavanes of paddy for the purpose already stated. it is. with the consent of the depositor. not for a period of three years. in virtue whereof they could change it by returning rice instead of paddy and a half less than the quantity received. 1898. they do not fall due)." but it is also true that the receipts in this case are not documents of draft or exchange.754. Two questions are presented in these allegations: One regarding the nature of the obligation contracted by the appellants. it is acknowledged that the obligation of the appellants arose primarily out of the contract of deposit. according to the article 950 of the Code of Commerce. to pay to Vicente Delgado two thousand seven hundred and fifty-four pesos and 81 centimos (2. and the costs. Articles 532 and 950 of the Code of Commerce have not. but this deposit was later converted into a contract of hire of services. On appeal to this Supreme Court. It is true that. besides those already stated.81). simple promises to pay. the depositary disposes of the articles on deposit either for himself or for his business. checks. been violated. securities. and in accordance with article 1962 of the same Code real actions. or contract which took place of the deposit shall be observed. shall extinguish three years after they have fallen due. But it is also true that. in accordance with this legal provision. prescribe after the lapse of six years from the loss of possession. for they are not applicable to the case at bar. The first of these articles reads thus: Whenever. with regard to personal property. With reference to the first. is an industrial. 1901. the puddy received on deposit ceased to continue under such character in order to remain in their possession under the contract of hire of services. Pedro Bonnevie and Francisco Arandez. for there is nothing about the operation of washing clothes. after all. the rice in every way remained as a deposit in the possession of the appellants for them to return to the depositor at any time they might be required to do so. the rights and obligations of the depositary and of the depositor shall cease. dividends. the form whereof has been set forth. the right of action arising therefrom prescribed before July 11. and not for mercantile exchange. nor the fact that they may at some time have lost possession of the rice. They further say that the ownership of personal property. . were all issued before July 11. but it is also true that as the receipts in question are not documents of any kinds enumerated in said article. and being credit paper as defined in paragraph 2 of article 532 of the Code of Commerce. a hire of services without mercantile character. or for transactions intrusted to him by the former. they are not drafts payable to order. and the other regarding prescription.

1768.chanroblesvirtualawlibrary chanrobles virtual law library The trial judge confined himself to sentencing the defendants to payment of the price of the paddy. it has happened that the depositaries have. since for every prescription of ownership the possession must be in the capacity of an owner." and that in lieu of the deposit there has been a hire of services. and the appellants could not possess the rice in the capacity of owners. because they are not drafts payable to order or anything but receipts that any warehouseman would sign. but merely the care of the thing on deposit and the use or profit thereof. The consequence of this is that the rules and regulations for contract of hire of services must be applied to the case. so the legal interest can be owed.) . 309. becomes a mutual loan. and the other that the action for claiming the thing leased. one of which is that the thing must be returned after the operation entrusted and payment of compensation. which is one entered into between the parties to the end that one should return in rice half of the quantity of paddy delivered by the other. being bound by no fixed terms. taking into consideration the legal interruptions of the running of the period of prescription. public.With reference to the second question. wherein it is said that the court violated article 296 of the Code of Civil Procedure in admitting as proven facts not alleged in the complaint. with the costs of this instance against the appellants. (Civil Code. it is useless to talk of interruption of the period for the prescription. if prescription of any kind can in no way be held. or at any time. with the consent of the depositor. return whereof ought to have been the subject of judgment in the first place. or under title of deposit or hire of services. In fact. because by eliminating such period of time and comparing such and such date the action has been brought in due time. But in the present case neither was there for authorization of the depositor nor did the depositaries intend to make use of the rice for their own consumption or profit. which is expressed in legal terms by saying that the possession of the depositary or of the lessee is not adverse to that of the depositor or lessor. as does that from bills of exchange. by reason of the authorization which the depositary may have from the depositor to make use of the goods deposited. the possession of the appellants can in no way amount to prescription. but only of fifteen years. does not prescribe for fifteen years under article 1964 of the Civil Code. they were merely released from the obligation of returning the same thing and contracted in lieu thereof the obligation of delivering something similar to the half of it. But the assigning of legal interest from November 21. The judgment appealed from is affirmed. only since then. when it is of fungible goods received by weight. 1905. which is what is proper to oppose to the exercise of a right of action arising from hire of services and even of deposit or mutual loan. and uninterrupted (Civil Code. ignoring the thing itself. justas if by admitting them there would have been a finding with regard to the computation of the period for timely exercise of the action. Legal interest on delinquent debts can only be owed from the time the principal amount constitutes a clear and certain debt. can have no other ground than the demand made by plaintiff's counsel upon the defendants to settle this matter. if the possession of the paddy on the part of those who received it for threshing is not in the capacity of owner but only in that of depositary or lessor of services and under such character ownership thereof could not prescribe in six years. the opposite of what happens in a mutual loan. because the thing itself appears to have been extinguished and its price has taken its place. taking for granted that the depositor or lessor never could have believed that he had transferred to them ownership of the thing deposited or leased. except that the legal interest shall be understood to be owed from the date thereof. being personal. with the obligation on the latter's part of paying 10 centimos for each cavan of hulled rice. whether common or mercantile. to which tends the third assignment of error.chanroblesvirtualawlibrary chanrobles virtual law library If the action arising from the receipts in question does not prescribe in three years. as provided in article 309 of the Code of Commerce. . and in the present case the principal debt has only been clear and certain since the date of the judgment of the lower court. and Code of Commerce. if the action to recover the paddy so delivered is not real with regard to personal property. and therefore the action has not prescribed. peaceful. 1941). In strict law. because adverse possession and not mere holding in trust is required prescription. possession whereof has been lost. disposed of the paddy "for transactions he intrusted to them. who continues to be the owner of the thing which is merely held in trust by the depositary or lessee. but a personal obligation arising from contract of lease for recovery of possession that has not been lost but maintained in the lessee in the name of the lessor. in conformity with articles 943 of the Code of Commerce and 1964 of the Civil Code. number or measurement. only because there could not have been either beginning or end of a fixed period for the prescription. the deposit. to make the delivery or return when and how it might please the depositor. and such is the prescription considered possible by the trial court. Prescription of three or six years cannot be presupposed in the terms alleged. for the thing received on deposit or for hire of services could not prescribe. The court has made no finding in the sense that this or that period of time during which these or those facts occured must be counted out.

June 26. 1921. — Jose Igpuara. Nor is the liability of the defendant in any wise affected by the circumstance that. - - - - . plaintiff-appellant. The case does not depend precisely upon this explicit alternative.498 .UNITED STATES. In this connection we wholly reject the defendant's pretense that the palay delivered by the plaintiffs or any part of it was actually consumed in the fire of January. Igpuara used the said amount for his own ends. D also contended that in order for the plaintiffs to recover. igpuara was charged and convicted with estafa. Igpuara was sentenced to pay Juana Montilla P2. a fire occurred that destroyed the mill and its contents. by a custom prevailing among rice millers in this country. subject to future sale or withdrawal at plaintiffs' election. 1911. the defendant should prove that the delivery was made in the character of deposit. on the contrary.GUILLERMO BARON. for even supposing that the palay may have been delivered in the character of deposit. defendant-appellant.498 by Montilla and Veraguth. Without the consent of Montilla and Veraguth however. On January 17. Thus. Silvestra Baron (P1) and Guillermo Baron (P2) each filed an action for the recovery of the value of palay from the defendant (D). The permission shall not be presumed. and its existence must be proved.498). PABLO DAVID. - ISSUE: WoN there was deposit SC: NO Art. the defendant should be absolved. he is of course bound to account for its value. FACTS: The defendant owns a rice mill. persons placing palay with them without special agreement as to price are at liberty to withdraw it later. the contract loses the concept of a deposit and becomes a loan or commodatum. with a promise of compensation at the highest price per cavan D claims that the palay was deposited subject to future withdrawal by the depositors or to some future sale. When the depositary has permission to use the thing deposited. 1978. 1921. which was well patronized by the rice growers of the vicinity. proper allowance being made for storage and shrinkage.498 which he had taken as deposit from the former to be at the his disposal. except where safekeeping is still the principal purpose of the contract. vs. which was never effected. vs. — Iloilo. for having swindled Juana Montilla and Eugenio Veraguth out of P2. The instrument for the deposit reads: We hold at the disposal of Eugenio Veraguth the sum of two thousand four hundred and ninety-eight pesos (P2. it is necessary that they should be able to establish that the plaintiffs' palay was delivered in the character of a sale. alleged that: o The palay have been sold by both plaintiffs to the D in the year 1920 o Palay was delivered to D at his special request. a thing that is sometimes done. IGPUARA Facts: The defendant Jose igpuara was entrusted with the amount of P2. the balance from Juana Montilla's sugar. and that if. though rarely. for Ramirez and Co . and it was some time before the mill could be rebuilt and put in operation again. nevertheless if it was understood that the defendant might mill the palay and he has in fact appropriated it to his own use.

Failure to claim at once or delay for sometime in demanding restitution of the things deposited. or signify anything except the intention not to press it. City Fiscal Flaminiano Tags: criminal procedure. If assuming that it was deposit. On March 1981. Judgment appealed from is affirmed . there was no transfer or delivery of the P2. upon David’s request. city fiscal. ASST. rule 112 TEOFISTO GUINGONA.498. Hence. does not imply such permission to use the thing deposited as would convert the deposit into a loan. the defendant drew up a document declaring that they remained in his possession. so David filed claims for his and his sister’s investments. David received a report that only a portion of his investments was entered in the NSLA records. for it has no other purpose. commission. does not operate against the depositor. flaminiano. 1758. City Fiscal Lota for preliminary investigation.) “ His contention is without merit because firstly. and TERESITA SANTOS v. CITY FISCAL FLAMINIANO. this instrument not being to order but to bearer. He said that he was induced into making said investments by an Australian national who was a close associate of the petitioners [NSLA officials]. guingona v. the depositor's consent is required thus. David charged petitioners withestafa and violation of Central Bank Circular No. “A deposit is constituted from the time a person receives a thing belonging to another with the obligation of keeping and returning it. it is not negotiable.Guingona v. Guingona and Martin. With the understanding that he would. 364 and related regulations on foreign exchange transactions. JR. The certificate of deposit in question is not negotiable because only instruments payable to order are negotiable. 81-31938 in the Office of the City Fiscal. assumed the bank’s obligation to David by executing a joint promissory note. Igpuara however has shown no authorization whatsoever or the consent of the depositary for using or disposing of the P2. - - - . David filed I. Held: No. which case was assigned to Asst. ANTONIO MARTIN. As for the argument that the depositary may use or dispose oft he things deposited. Issues: Whether or not it is necessary that there be transfer or delivery in order to constitute a deposit.- - - - Igpuara contended that the amount was not deposit for there was no certificate of deposit. guingona v. NSLA was placed under receivership by the Central Bank. the rights and obligations of the depositary and of the depositor shall cease and the rules and provisions applicable to commercial loans. or contract which took the place of the deposit shall be observed. On July 1981. No. (Art.. CITY FISCAL LOTA and CLEMENT DAVID 1984 / Makasiar David invested several deposits with the Nation Savings and Loan Association [NSLA].S. That there was not demand on the same or the next day after the certificate was signed.498 and what transpired was a loan. this is negotiable. Civil Code. On June 1981. which was immediately due. On December 1981.

81-31938. TRO CORRECTLY ISSUED. A TRO was issued ordering the respondents to refrain from proceeding with the preliminary investigation in I. NSLA’s failure to return the amount deposited will not constitute estafa through misappropriation . No. The relationship between David and NSLA is that of creditor and debtor. David's principal witness testified that the duplicate originals of the instruments of indebtedness were all on file with NSLA. the contract that was perfected was a contract of simple loan or mutuum and not a contract of deposit. petitioners filed this petition for prohibition and injunction because: a. While the Bank has the obligation to return the amount deposited. In proper cases. To prevent the use of the strong arm of the law in an oppressive and vindictive manner 3. it has no obligation to return or deliver the same money that was deposited. but the motion was denied. Petitioners’ liability is civil in nature. public respondents acted without jurisdiction when they investigated the charges against the petitioners. After the presentation of David's principal witness. GENERAL RULE: Criminal prosecution may not be blocked by court prohibition or injunction. so respondents have no jurisdiction over the estafa charge. To avoid multiplicity of actions 4. For the orderly administration of justice 2.S. Public respondents should be restrained from further proceeding with the criminal case for to - .- - - Petitioners moved to dismiss the charges against them for lack of jurisdiction becauseDavid's claims allegedly comprised a purely civil obligation. To afford adequate protection to constitutional rights 5. The production of various documents showed that the transactions between David and NSLA were simple loans (civil obligations which were novated when Guingona and Martin assumed them) b. but it will only give rise to civil liability over which the public respondents have no jurisdiction. Considering that petitioners’ liability is purely civil in nature and that there is no clear showing that they engaged in foreign exchange transactions. because the statute relied upon is unconstitutional or was held invalid When David invested his money on time and savings deposits with NSLA. EXCEPTIONS 1.

Cordero instituted an action before the CFI Manila. suits and damages. Cordero Facts: Private respondent opened a 1-year time deposit with petitioner bank amounting to P80.000. the bank was unable to pay.840. The lower court. Neither can respondent Cordero recover attorney’s fees. it was found that the respondent’s brother has no SPA. paragraph 1(b). While it is true that novation does not extinguish criminal liability. Upon further examination.- allow the case to continue would work great injustice to petitioners and would render meaningless the proper administration of justice. Issue: Whether respondent is entitled to interest and attorney’s fees Held: The obligation to pay interest on the deposit ceases the moment the operation of the bank is completely suspended by the Central Bank. and another manifestation for P73. not to interest and attorney’s fees. it may prevent the rise of criminal liability as long as it occurs prior to the filing of the criminal information in court. The original trust relationbetween NSLA and David was converted into an ordinary debtor-creditor relation between the petitioners and David. the instant petition for review on certiorari. thereby resulting in the novation of the original contractual obligation. Petitioner raised the defenses of insolvency and prejudice to other depositors. Certain supervening events rendered the issue moot and academic.000. ruled in favor of Cordero. Hence. Guingona and Martin assumed the obligation to David. When NSLA was placed under receivership. Respondent’s brother and attorney-in-fact sent a letter to the Commercial Bank of Manila (petitioner’s successor-in-interest). Even granting that NSLA’s failure to pay the time and savings deposits would constitute a violation of RPC 315. any incipient criminal liability was deemed avoided. and the Court of Appeals. with explanatory comment that the waiver applies only to third party claims. Respondent’s brother submitted the SPA.a. Petitioner’s refusal to pay was not . Due to its distressed financial condition. Overseas Bank of Manila vs. acknowledging receipt of P10. with waiver of damages. with interest of 6% p.

due to a willful and dishonest refusal to comply with its obligation but to restrictions imposed by Central Bank. .

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