Case Digest (G.R. No. 72969-70) Core Legal Reasoning Model
Core Legal Reasoning Model
Facts:
In People of the Philippine Islands v. Venancio Concepcion, decided on November 29, 1922, the appellant, Venancio Concepcion, then President of the Philippine National Bank, authorized by telegrams and letter between April 10 and May 7, 1919, an extension of credit amounting to ₱300,000 in favor of the copartnership Puno y Concepcion, S. en C., at the Aparri, Cagayan branch. This credit exceeded the manager’s discretionary loan limit of ₱5,000 (extendable to ₱10,000) established by Concepcion’s own memorandum of May 17, 1918. Security consisted solely of six demand notes, which were fully paid with interest by July 17, 1919. The partnership’s capital was ₱100,000, half of which was contributed by Rosario San Agustin, wife of Venancio Concepcion. In the Court of First Instance of Cagayan, Concepcion was charged under section 35 of Act No. 2747 (February 20, 1918) prohibiting loans to bank directors, and under section 49 of the same Act prescribing penalties for violations. He was Case Digest (G.R. No. 72969-70) Expanded Legal Reasoning Model
Expanded Legal Reasoning Model
Facts:
- Case Background
- Parties
- Plaintiff and Appellee: The People of the Philippine Islands
- Defendant and Appellant: Venancio Concepcion, President of the Philippine National Bank
- Transaction at Issue
- Between April 10 and May 7, 1919, President Concepcion authorized an extension of credit of ₱300,000 to the firm “Puno y Concepcion, S. en C.” at the Aparri branch.
- This exceeded the local manager’s discretionary limit (₱5,000, increasable to ₱10,000) under a May 17, 1918 memorandum by President Concepcion.
- Security consisted solely of six demand notes; all notes and interest were paid by July 17, 1919.
- Composition of the Borrower
- “Puno y Concepcion, S. en C.” was capitalized at ₱100,000 with contributions:
- Anacleto Concepcion: ₱5,000
- Clara Vda. de Concepcion: ₱5,000
- Miguel S. Concepcion: ₱20,000 (administrator of the firm)
- Clemente Puno: ₱20,000
- Rosario San Agustin (wife of Venancio Concepcion): ₱50,000
- Trial Court Proceedings
- Charge: Violation of Section 35, Act No. 2747 (1918), prohibiting loans by the National Bank to its directors or branch agents.
- Penal Provision: Section 49, Act No. 2747—fine up to ₱10,000, and/or imprisonment up to five years.
- Conviction and Sentence (Court of First Instance of Cagayan, Judge Enrique V. Filamor):
- Imprisonment for one year and six months
- Fine of ₱3,000 (with subsidiary imprisonment)
- Costs
- Repeal: Sections 35 and 49 were repealed by Act No. 2938 (January 30, 1921), before filing of information and judgment.
Issues:
- Whether the granting of a ₱300,000 “credit” was a “loan” under Section 35, Act No. 2747.
- Whether the transaction constituted a “loan” or merely a “discount.”
- Whether the credit to a partnership including the director’s wife was an “indirect loan.”
- Whether repeal of Sections 35 and 49 before prosecution deprived the court of jurisdiction.
- Whether the prohibition in Section 35 carried any personal penal sanction against the director.
- Whether the defendant’s good faith reliance on Insular Auditor rulings and absence of loss furnish a legal defense.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)