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Showing posts with label 1922. Show all posts
Showing posts with label 1922. Show all posts

Crim Law 1 Case Digest: People v. Lol-lo & Saraw (1922)

People v. Lol-lo & Saraw, 43 Phil. 19
G.R. No. 17958 February 27, 1922.
MALCOLM, J.

FACTS:
•    2 boats of Dutch possession left matuta.  In 1 of the boats was 1 individual, a Dutch subject, and in the other boat 11 men, women, and children, subjects of Holland.  The 2nd boat arrived between the Islands of Buang and Bukid in the Dutch East Indies. There the boat was surrounded by 6 vintas manned by 24 Moros all armed. The Moros first asked for food, but once on the Dutch boat, too for themselves all of the cargo, attacked some of the men, and brutally violated 2 of the women. All of the persons on the Dutch boat, except the 2 young women, were again placed on it and holes were made in it, the idea that it would submerge.  The Moros finally arrived at Maruro, a Dutch possession. 2 of the Moro marauder were Lol-lo, who also raped one of the women, and Saraw. At Maruro the 2 women were able to escape.
•    Lol-lo and Saraw later returned to their home in South Ubian, Tawi-Tawi, Sulu, Philippine Islands. There they were arrested and were charged in the Court of First Instance of Sulu with the crime of piracy
•    All of the elements of the crime of piracy are present. Piracy is robbery or forcible depredation on the high seas, without lawful authority and done animo furandi, and in the spirit and intention of universal hostility.
•    Pirates are in law hostes humani generis.
•    Piracy is a crime not against any particular state but against all mankind. It may be punished in the competent tribunal of any country where the offender may be found or into which he may be carried. The jurisdiction of piracy unlike all other crimes has no territorial limits.
•    As it is against all so may it be punished by all. Nor does it matter that the crime was committed within the jurisdictional 3-mile limit of a foreign state, "for those limits, though neutral to war, are not neutral to crimes."

ISSUE: W/N the provisions of the Penal Code dealing with the crime of piracy are still in force.

HELD: In accordance with provisions of Act No. 2726, the defendant and appellant Lol-lo, who is found guilty of the crime of piracy and is sentenced therefor to be hung until dead.

YES.
    Penal code dealing with the crime of piracy, notably articles 153 and 154, to be still in force in the Philippines.
    The crime of piracy was accompanied by (1) an offense against chastity and (2) the abandonment of persons without apparent means of saving themselves. It is, therefore, only necessary for us to determine as to whether the penalty of cadena perpetua or death should be imposed.
    At least 3 aggravating circumstances, that the wrong done in the commission of the crime was deliberately augmented by causing other wrongs not necessary for its commission, that advantage was taken of superior strength, and that means were employed which added ignominy to the natural effects of the act, must also be taken into consideration in fixing the penalty.

Jurisprudence: G.R. No. 17958 February 27, 1922

EN BANC
G.R. No. 17958             February 27, 1922
THE PEOPLE OF THE PHILIPPINE ISLANDS, plaintiff-appellee,
vs.
LOL-LO and SARAW, defendants-appellants.
Thos. D. Aitken for appellants.
Acting Attorney-General Tuason for appellee.
MALCOLM, J.:
The days when pirates roamed the seas, when picturesque buccaneers like Captain Avery and Captain Kidd and Bartholomew Roberts gripped the imagination, when grostesque brutes like Blackbeard flourished, seem far away in the pages of history and romance. Nevertheless, the record before us tells a tale of twentieth century piracy in the south seas, but stripped of all touches of chivalry or of generosity, so as to present a horrible case of rapine and near murder.
On or about June 30, 1920, two boats left matuta, a Dutch possession, for Peta, another Dutch possession. In one of the boats was one individual, a Dutch subject, and in the other boat eleven men, women, and children, likewise subjects of Holland. After a number of days of navigation, at about 7 o'clock in the evening, the second boat arrived between the Islands of Buang and Bukid in the Dutch East Indies. There the boat was surrounded by six vintas manned by twenty-four Moros all armed. The Moros first asked for food, but once on the Dutch boat, too for themselves all of the cargo, attacked some of the men, and brutally violated two of the women by methods too horrible to the described. All of the persons on the Dutch boat, with the exception of the two young women, were again placed on it and holes were made in it, the idea that it would submerge, although as a matter of fact, these people, after eleven days of hardship and privation, were succored violating them, the Moros finally arrived at Maruro, a Dutch possession. Two of the Moro marauder were Lol-lo, who also raped one of the women, and Saraw. At Maruro the two women were able to escape.
Lol-lo and Saraw later returned to their home in South Ubian, Tawi-Tawi, Sulu, Philippine Islands. There they were arrested and were charged in the Court of First Instance of Sulu with the crime of piracy. A demurrer was interposed by counsel de officio for the Moros, based on the grounds that the offense charged was not within the jurisdiction of the Court of First Instance, nor of any court of the Philippine Islands, and that the facts did not constitute a public offense, under the laws in force in the Philippine Islands. After the demurrer was overruled by the trial judge, trial was had, and a judgment was rendered finding the two defendants guilty and sentencing each of them to life imprisonment (cadena perpetua), to return together with Kinawalang and Maulanis, defendants in another case, to the offended parties, the thirty-nine sacks of copras which had been robbed, or to indemnify them in the amount of 924 rupees, and to pay a one-half part of the costs.
A very learned and exhaustive brief has been filed in this court by the attorney de officio. By a process of elimination, however, certain questions can be quickly disposed of.
The proven facts are not disputed. All of the elements of the crime of piracy are present. Piracy is robbery or forcible depredation on the high seas, without lawful authority and done animo furandi, and in the spirit and intention of universal hostility.
It cannot be contended with any degree of force as was done in the lover court and as is again done in this court, that the Court of First Instance was without jurisdiction of the case. Pirates are in law hostes humani generis. Piracy is a crime not against any particular state but against all mankind. It may be punished in the competent tribunal of any country where the offender may be found or into which he may be carried. The jurisdiction of piracy unlike all other crimes has no territorial limits. As it is against all so may it be punished by all. Nor does it matter that the crime was committed within the jurisdictional 3-mile limit of a foreign state, "for those limits, though neutral to war, are not neutral to crimes." (U.S. vs. Furlong [1820], 5 Wheat., 184.)
The most serious question which is squarely presented to this court for decision for the first time is whether or not the provisions of the Penal Code dealing with the crime of piracy are still in force. Article 153 to 156 of the Penal Code reads as follows:
ART. 153. The crime of piracy committed against Spaniards, or the subjects of another nation not at war with Spain, shall be punished with a penalty ranging from cadena temporal to cadena perpetua.
If the crime be committed against nonbelligerent subjects of another nation at war with Spain, it shall be punished with the penalty of presidio mayor.
ART. 154. Those who commit the crimes referred to in the first paragraph of the next preceding article shall suffer the penalty of cadena perpetua or death, and those who commit the crimes referred to in the second paragraph of the same article, from cadena temporal to cadena perpetua:
1. Whenever they have seized some vessel by boarding or firing upon the same.
2. Whenever the crime is accompanied by murder, homicide, or by any of the physical injuries specified in articles four hundred and fourteen and four hundred and fifteen and in paragraphs one and two of article four hundred and sixteen.
3. Whenever it is accompanied by any of the offenses against chastity specified in Chapter II, Title IX, of this book.
4. Whenever the pirates have abandoned any persons without means of saving themselves.
5. In every case, the captain or skipper of the pirates.
ART. 155. With respect to the provisions of this title, as well as all others of this code, when Spain is mentioned it shall be understood as including any part of the national territory.
ART. 156. For the purpose of applying the provisions of this code, every person, who, according to the Constitution of the Monarchy, has the status of a Spaniard shall be considered as such.
The general rules of public law recognized and acted on by the United States relating to the effect of a transfer of territory from another State to the United States are well-known. The political law of the former sovereignty is necessarily changed. The municipal law in so far as it is consistent with the Constitution, the laws of the United States, or the characteristics and institutions of the government, remains in force. As a corollary to the main rules, laws subsisting at the time of transfer, designed to secure good order and peace in the community, which are strictly of a municipal character, continue until by direct action of the new government they are altered or repealed. (Chicago, Rock Islands, etc., R. Co. vs. McGlinn [1885], 114 U.S., 542.)
These principles of the public law were given specific application to the Philippines by the Instructions of President McKinley of May 19, 1898, to General Wesley Meritt, the Commanding General of the Army of Occupation in the Philippines, when he said:
Though the powers of the military occupant are absolute and supreme, and immediately operate upon the political condition of the inhabitants, the municipal laws of the conquered territory, such as affect private rights of person and property, and provide for the punishment of crime, are considered as continuing in force, so far as they are compatible with the new order of things, until they are suspended or superseded by the occupying belligerent; and practice they are not usually abrogated, but are allowed to remain in force, and to be administered by the ordinary tribunals, substantially as they were before the occupations. This enlightened practice is so far as possible, to be adhered to on the present occasion. (Official Gazette, Preliminary Number, Jan. 1, 1903, p. 1. See also General Merritt Proclamation of August 14, 1898.)
It cannot admit of doubt that the articles of the Spanish Penal Code dealing with piracy were meant to include the Philippine Islands. Article 156 of the Penal Code in relation to article 1 of the Constitution of the Spanish Monarchy, would also make the provisions of the Code applicable not only to Spaniards but to Filipinos.
The opinion of Grotius was that piracy by the law of nations is the same thing as piracy by the civil law, and he has never been disputed. The specific provisions of the Penal Code are similar in tenor to statutory provisions elsewhere and to the concepts of the public law. This must necessarily be so, considering that the Penal Code finds its inspiration in this respect in the Novelas, the Partidas, and the Novisima Recopilacion.
The Constitution of the United States declares that the Congress shall have the power to define and punish piracies and felonies committed on the high seas, and offenses against the law of nations. (U.S. Const. Art. I, sec. 8, cl. 10.) The Congress, in putting on the statute books the necessary ancillary legislation, provided that whoever, on the high seas, commits the crime of piracy as defined by the law of nations, and is afterwards brought into or found in the United States, shall be imprisoned for life. (U.S. Crim. Code, sec. 290; penalty formerly death: U.S. Rev. Stat., sec. 5368.) The framers of the Constitution and the members of Congress were content to let a definition of piracy rest on its universal conception under the law of nations.
It is evident that the provisions of the Penal Code now in force in the Philippines relating to piracy are not inconsistent with the corresponding provisions in force in the United States.
By the Treaty of Paris, Spain ceded the Philippine Islands to the United States. A logical construction of articles of the Penal Code, like the articles dealing with the crime of piracy, would be that wherever "Spain" is mentioned, it should be substituted by the words "United States" and wherever "Spaniards" are mentioned, the word should be substituted by the expression "citizens of the United States and citizens of the Philippine Islands." somewhat similar reasoning led this court in the case of United States vs. Smith ([1919], 39 Phil., 533) to give to the word "authority" as found in the Penal Code a limited meaning, which would no longer comprehend all religious, military, and civil officers, but only public officers in the Government of the Philippine Islands.
Under the construction above indicated, article 153 of the Penal Code would read as follows:
The crime of piracy committed against citizens of the United States and citizens of the Philippine Islands, or the subjects of another nation not at war with the United States, shall be punished with a penalty ranging from cadena temporal to cadena perpetua.
If the crime be committed against nonbelligerent subjects of another nation at war with the United States, it shall be punished with the penalty of presidio mayor.
We hold those provisions of the Penal code dealing with the crime of piracy, notably articles 153 and 154, to be still in force in the Philippines.
The crime falls under the first paragraph of article 153 of the Penal Code in relation to article 154. There are present at least two of the circumstances named in the last cited article as authorizing either cadena perpetua or death. The crime of piracy was accompanied by (1) an offense against chastity and (2) the abandonment of persons without apparent means of saving themselves. It is, therefore, only necessary for us to determine as to whether the penalty of cadena perpetua or death should be imposed. In this connection, the trial court, finding present the one aggravating circumstance of nocturnity, and compensating the same by the one mitigating circumstance of lack of instruction provided by article 11, as amended, of the Penal Code, sentenced the accused to life imprisonment. At least three aggravating circumstances, that the wrong done in the commission of the crime was deliberately augmented by causing other wrongs not necessary for its commission, that advantage was taken of superior strength, and that means were employed which added ignominy to the natural effects of the act, must also be taken into consideration in fixing the penalty. Considering, therefore, the number and importance of the qualifying and aggravating circumstances here present, which cannot be offset by the sole mitigating circumstance of lack of instruction, and the horrible nature of the crime committed, it becomes our duty to impose capital punishment.
The vote upon the sentence is unanimous with regard to the propriety of the imposition of the death penalty upon the defendant and appellant Lo-lo (the accused who raped on of the women), but is not unanimous with regard to the court, Mr. Justice Romualdez, registers his nonconformity. In accordance with provisions of Act No. 2726, it results, therefore, that the judgment of the trial court as to the defendant and appellant Saraw is affirmed, and is reversed as to the defendant and appellant Lol-lo, who is found guilty of the crime of piracy and is sentenced therefor to be hung until dead, at such time and place as shall be fixed by the judge of first instance of the Twenty-sixth Judicial District. The two appellants together with Kinawalang and Maulanis, defendants in another case, shall indemnify jointly and severally the offended parties in the equivalent of 924 rupees, and shall pay a one-half part of the costs of both instances. So ordered.
Araullo, C.J., Johnson, Avanceña, Villamor, Ostrand, Johns and Romualdez, JJ., concur.

Crim Law 1 Case Digest: People v. Wong Cheng (1922)

People v. Wong Cheng, 46 Phil. 729
G.R. No.L-18924 October 19, 1922
ROMUALDEZ, J.

FACTS:
·         appellee is accused of having illegally smoked opium, aboard the merchant vessel Changsa of English nationality while said vessel was anchored in Manila Bay two and a half miles from the shores of the city.
·         Lower court dismissed the case

ISSUE: W/N the courts of the Philippines have jurisdiction over crime committed aboard merchant vessels anchored in our jurisdiction waters

HELD: The order appealed from is revoked and the cause ordered remanded to the court of origin for further proceedings in accordance with law, without special findings as to costs.
YES.
·         2 fundamental rules on this particular matter in connection with International Law
  1. French rule-according to which crimes committed aboard a foreign merchant vessels should not be prosecuted in the courts of the country within whose territorial jurisdiction they were committed
UNLESS: their commission affects the peace and security of the territory
  1. English rule
-based on the territorial principle and followed in the United States
-according to which crimes perpetrated under such circumstances are in general triable in the courts of the country within territory they were committed.
·         As to whether the United States has ever consented by treaty or otherwise to renouncing such jurisdiction or a part thereof, we find nothing to this effect so far as England is concerned, to which nation the ship where the crime in question was committed belongs.
·         mere possession of opium aboard a foreign vessel in transit was held by this court not triable by or courts, because it being the primary object of our Opium Law to protect the inhabitants of the Philippines against the disastrous effects entailed by the use of this drug, its mere possession in such a ship, without being used in our territory, does not being about in the said territory those effects that our statute contemplates avoiding. Hence such a mere possession is not considered a disturbance of the public order.
·         to smoke opium within our territorial limits, even though aboard a foreign merchant ship, is certainly a breach of the public order here established, because it causes such drug to produce its pernicious effects within our territory. It seriously contravenes the purpose that our Legislature has in mind in enacting the aforesaid repressive statute.

Jurisprudence: G.R. No. L-18924 October 19, 1922

Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-18924             October 19, 1922
THE PEOPLE OF THE PHILIPPINE ISLANDS, plaintiff-appellant,
vs.
WONG CHENG (alias WONG CHUN), defendant-appellee.
Attorney-General Villa-Real for appellant.
Eduardo Gutierrez Repide for appellee.

ROMUALDEZ, J.:
          In this appeal the Attorney-General urges the revocation of the order of the Court of First Instance of Manila, sustaining the demurrer presented by the defendant to the information that initiated this case and in which the appellee is accused of having illegally smoked opium, aboard the merchant vessel Changsa of English nationality while said vessel was anchored in Manila Bay two and a half miles from the shores of the city.
          The demurrer alleged lack of jurisdiction on the part of the lower court, which so held and dismissed the case.
          The question that presents itself for our consideration is whether such ruling is erroneous or not; and it will or will not be erroneous according as said court has or has no jurisdiction over said offense.
          The point at issue is whether the courts of the Philippines have jurisdiction over crime, like the one herein involved, committed aboard merchant vessels anchored in our jurisdiction waters. 1awph!l.net
          There are two fundamental rules on this particular matter in connection with International Law; to wit, the French rule, according to which crimes committed aboard a foreign merchant vessels should not be prosecuted in the courts of the country within whose territorial jurisdiction they were committed, unless their commission affects the peace and security of the territory; and the English rule, based on the territorial principle and followed in the United States, according to which, crimes perpetrated under such circumstances are in general triable in the courts of the country within territory they were committed. Of this two rules, it is the last one that obtains in this jurisdiction, because at present the theories and jurisprudence prevailing in the United States on this matter are authority in the Philippines which is now a territory of the United States.
          In the cases of The Schooner Exchange vs. M'Faddon and Others (7 Cranch [U. S.], 116), Chief Justice Marshall said:
          . . . When merchant vessels enter for the purposes of trade, it would be obviously inconvenient and dangerous to society, and would subject the laws to continual infraction, and the government to degradation, if such individuals or merchants did not owe temporary and local allegiance, and were not amenable to the jurisdiction of the country. . . .
          In United States vs. Bull (15 Phil., 7), this court held:
          . . . No court of the Philippine Islands had jurisdiction over an offense or crime committed on the high seas or within the territorial waters of any other country, but when she came within three miles of a line drawn from the headlands, which embrace the entrance to Manila Bay, she was within territorial waters, and a new set of principles became applicable. (Wheaton, International Law [Dana ed.], p. 255, note 105; Bonfils, Le Droit Int., secs. 490 et seq.; Latour, La Mer Ter., ch. 1.) The ship and her crew were then subject to the jurisdiction of the territorial sovereign subject to such limitations as have been conceded by that sovereignty through the proper political agency. . . .
          It is true that in certain cases the comity of nations is observed, as in Mali and Wildenhus vs. Keeper of the Common Jail (120 U.., 1), wherein it was said that:
          . . . The principle which governs the whole matter is this: Disorder which disturb only the peace of the ship or those on board are to be dealt with exclusively by the sovereignty of the home of the ship, but those which disturb the public peace may be suppressed, and, if need be, the offenders punished by the proper authorities of the local jurisdiction. It may not be easy at all times to determine which of the two jurisdictions a particular act of disorder belongs. Much will undoubtedly depend on the attending circumstances of the particular case, but all must concede that felonious homicide is a subject for the local jurisdiction, and that if the proper authorities are proceeding with the case in the regular way the consul has no right to interfere to prevent it.
          Hence in United States vs. Look Chaw (18 Phil., 573), this court held that:
          Although the mere possession of an article of prohibited use in the Philippine Islands, aboard a foreign vessel in transit in any local port, does not, as a general rule, constitute a crime triable by the courts of the Islands, such vessels being considered as an extension of its own nationality, the same rule does not apply when the article, the use of which is prohibited in the Islands, is landed from the vessels upon Philippine soil; in such a case an open violation of the laws of the land is committed with respect to which, as it is a violation of the penal law in force at the place of the commission of the crime, no court other than that established in the said place has jurisdiction of the offense, in the absence of an agreement under an international treaty.
          As to whether the United States has ever consented by treaty or otherwise to renouncing such jurisdiction or a part thereof, we find nothing to this effect so far as England is concerned, to which nation the ship where the crime in question was committed belongs. Besides, in his work "Treaties, Conventions, etc.," volume 1, page 625, Malloy says the following:
          There shall be between the territories of the United States of America, and all the territories of His Britanic Majesty in Europe, a reciprocal liberty of commerce. The inhabitants of the two countries, respectively, shall have liberty freely and securely to come with their ships and cargoes to all such places, ports and rivers, in the territories aforesaid, to which other foreigners are permitted to come, to enter into the same, and to remain and reside in any parts of the said territories, respectively; also to hire and occupy houses and warehouses for the purposes of their commerce; and, generally, the merchants and traders of each nation respectively shall enjoy the most complete protection and security for their commerce, but subject always to the laws and statutes of the two countries, respectively. (Art. 1, Commerce and Navigation Convention.)
          We have seen that the mere possession of opium aboard a foreign vessel in transit was held by this court not triable by or courts, because it being the primary object of our Opium Law to protect the inhabitants of the Philippines against the disastrous effects entailed by the use of this drug, its mere possession in such a ship, without being used in our territory, does not being about in the said territory those effects that our statute contemplates avoiding. Hence such a mere possession is not considered a disturbance of the public order.
          But to smoke opium within our territorial limits, even though aboard a foreign merchant ship, is certainly a breach of the public order here established, because it causes such drug to produce its pernicious effects within our territory. It seriously contravenes the purpose that our Legislature has in mind in enacting the aforesaid repressive statute. Moreover, as the Attorney-General aptly observes:
          . . . The idea of a person smoking opium securely on board a foreign vessel at anchor in the port of Manila in open defiance of the local authorities, who are impotent to lay hands on him, is simply subversive of public order. It requires no unusual stretch of the imagination to conceive that a foreign ship may come into the port of Manila and allow or solicit Chinese residents to smoke opium on board.
          The order appealed from is revoked and the cause ordered remanded to the court of origin for further proceedings in accordance with law, without special findings as to costs. So ordered.
Araullo, C.J., Street, Malcolm, Avanceña, Villamor, Ostrand and Johns, JJ., concur.

Jurisprudence: G.R. No. L-18657 August 23, 1922

EN BANC

G.R. No. L-18657             August 23, 1922

THE GREAT EASTERN LIFE INSURANCE CO., plaintiff-appellant,
vs.
HONGKONG & SHANGHAI BANKING CORPORATION and PHILIPPINE NATIONAL BANK, defendants-appellees.

Camus and Delgado for appellant.
Fisher and DeWitt and A. M. Opisso for Hongkong and Shanghai Bank.
Roman J. Lacson for Philippine National Bank.

STATEMENT

The plaintiff is an insurance corporation, and the defendants are banking corporations, and each is duly licensed to do its respective business in the Philippines Islands.

May 3, 1920, the plaintiff drew its check for P2,000 on the Hongkong and Shanghai Banking Corporation with whom it had an account, payable to the order of Lazaro Melicor. E. M. Maasim fraudulently obtained possession of the check, forged Melicor's signature, as an endorser, and then personally endorsed and presented it to the Philippine National Bank where the amount of the check was placed to his credit. After having paid the check, and on the next day, the Philippine national Bank endorsed the check to the Hongkong and Shanghai Banking Corporation which paid it and charged the amount of the check to the account of the plaintiff. In the ordinary course of business, the Hongkong Shanghai Banking Corporation rendered a bank statement to the plaintiff showing that the amount of the check was charged to its account, and no objection was then made to the statement. About four months after the check was charged to the account of the plaintiff, it developed that Lazaro Melicor, to whom the check was made payable, had never received it, and that his signature, as an endorser, was forged by Maasim, who presented and deposited it to his private account in the Philippine National Bank. With this knowledge , the plaintiff promptly made a demand upon the Hongkong and Shanghai Banking Corporation that it should be given credit for the amount of the forged check, which the bank refused to do, and the plaintiff commenced this action to recover the P2,000 which was paid on the forged check. On the petition of the Shanghai Bank, the Philippine National Bank was made defendant. The Shanghai Bank denies any liability, but prays that, if a judgment should be rendered against it, in turn, it should have like judgment against the Philippine National Bank which denies all liability to either party.

Upon the issues being joined, a trial was had and judgment was rendered against the plaintiff and in favor of the defendants, from which the plaintiff appeals, claiming that the court erred in dismissing the case, notwithstanding its finding of fact, and in not rendering a judgment in its favor, as prayed for in its complaint.

JOHNS, J.:

There is no dispute about any of the findings of fact made by the trial court, and the plaintiff relies upon them for a reversal. Among other things, the trial court says:

Who is responsible for the refund to the drawer of the amount of the check drawn and payable to order, when its value was collected by a third person by means of forgery of the signature of the payee? Is it the drawee or the last indorser, who ignored the forgery at the time of making the payment, or the forger?

To lower court found that Melicor's name was forged to the check. "So that the person to whose order the check was issued did not receive the money, which was collected by E. M. Maasim," and then says:

Now then, the National Bank should not be held responsible for the payment of made to Maasim in good faith of the amount of the check, because the indorsement of Maasim is unquestionable and his signature perfectly genuine, and the bank was not obliged to identify the signature of the former indorser. Neither could the Hongkong and Shanghai Banking Corporation be held responsible in making payment in good faith to the National Bank, because the latter is a holder in due course of the check in question. In other words, the two defendant banks can not be held civilly responsible for the consequences of the falsification or forgery of the signature of Lazaro Melicor, the National Bank having had no notice of said forgery in making payment to Maasim, nor the Hongkong bank in making payment to National Bank. Neither bank incurred in any responsibility arising from that crime, nor was either of the said banks by subsequent acts, guilty of negligence or fault.

This was fundamental error.

Plaintiff's check was drawn on Shanghai Bank payable to the order of Melicor. In other words, the plaintiff authorized and directed the Shanghai Bank to pay Melicor, or his order, P2,000. It did not authorize or direct the bank to pay the check to any other person than Melicor, or his order, and the testimony is undisputed that Melicor never did part with his title or endorse the check, and never received any of its proceeds. Neither is the plaintiff estopped or bound by the banks statement, which was made to it by the Shanghai Bank. This is not a case where the plaintiff's own signature was forged to one of it checks. In such a case, the plaintiff would have known of the forgery, and it would have been its duty to have promptly notified the bank of any forged signature, and any failure on its part would have released bank from any liability. That is not this case. Here, the forgery was that of Melicor, who was the payee of the check, and the legal presumption is that the bank would not honor the check without the genuine endorsement of Melicor. In other words, when the plaintiff received it banks statement, it had a right to assume that Melicor had personally endorsed the check, and that, otherwise, the bank would not have paid it.

Section 23 of Act No. 2031, known as the Negotiable Instruments Law, says:

When a signature is forged or made without the authority of the person whose signature it purports to be, it is wholly inoperative, and no right to retain the instrument, or to give a discharge therefor, or to enforce payment thereof against any party thereto, can be acquired through or under such signature, unless the party against whom it is sought to enforce such right is precluded from setting up the forgery or want of authority.

That section is square in point.

The money was on deposit in the Shanghai Bank, and it had no legal right to pay it out to anyone except the plaintiff or its order. Here, the plaintiff ordered the Shanghai Bank to pay the P2,000 to Melicor, and the money was actually paid to Maasim and was never paid to Melicor, and he never paid to Melicor, and he never personally endorsed the check, or authorized any one to endorse it for him, and the alleged endorsement was a forgery. Hence, upon the undisputed facts, it must follow that the Shanghai Bank has no defense to this action.

It is admitted that the Philippine National Bank cashed the check upon a forged signature, and placed the money to the credit of Maasim, who was a forger. That the Philippine National Bank then endorsed the check and forwarded it to the Shanghai Bank by whom it was paid. The Philippine National Bank had no license or authority to pay the money to Maasim or anyone else upon a forge signature. It was its legal duty to know that Melicor's endorsment was genuine before cashing the check. Its remedy is against Maasim to whom it paid the money.

The judgment of the lower court is reversed, and one will be entered here in favor of the plaintiff and against the Hongkong and Shanghai Banking Corporation for the P2,000, with interest thereon from November 8, 1920 at the rate of 6 per cent per annum, and the costs of this action, and a corresponding judgment will be entered in favor of the Hongkong Shanghai Banking Corporation against the Philippine National Bank for the same amount, together with the amount of its costs in this action. So ordered.

Araullo, C.J., Johnson, Street, Malcolm, Avanceña, Villamor, Ostrand and Romualdez, JJ., concur.

Insurance Case Digest: Lopez v. Del Rosario and Quiogue (1922)


G.R. No. L-19189   November 27, 1922

Lessons Applicable: Carrier or Depositary (Insurance)
Laws Applicable: 

FACTS:

  • Benita Quiogue de V. del Rosario (Mrs. del Rosario), owner of a bonded warehouse where Froilan Lopez, holder or 14 waehouse receipts and Elias Zamora had their copra deposited
  • The warehouse recipts states an insurance of 1% their declared value which can be increase or decrease by giving 1 month's notice in writing
  • Lopez paid the insurance to May 18, 1920, but not thereafter
  • June 6, 1920: the warehouse was destroyed by fire.  Only copra worth P49,985 was salvaged.  At that time Lopez was still liable for the storage and insurance of P315.90
  • Mrs. Del Rosario submitted the insurance with the arbitrators and seems to have satisfied all of the persons who had copra stored in her warehouse, including the stockholders in the Compañia Coprera de Tayabas (whose stock she took over), with the exception of Froilan Lopez
  • Ineffectual attempts by Mrs. Del Rosario to effect a compromise with Lopez first for P71,994, later raised to P72,724, and finally reduced to P17,000, were made. But Lopez stubbornly contended, or, at least, his attorney contended for him, that he should receive not a centavo less than P88,595.43 (from originally P107,990.40)
ISSUE: W/N Mrs. Del Rosario should be held liable to Lopez even if he has not paid the insurance at the time of the fire

HELD: YES.  entitled to P88,595.43 minus P7,185.88, his share of the expenses, minus P315.90, due for insurance and storage, or approximately a net amount of P81,093.65, with legal interest

Jurisprudence: G.R. No. L-19189

EN BANC

DECISION

G.R. No. L-19189 November 27, 1922

FROILAN LOPEZ, plaintiff-appellant,
vs.
SALVADOR V. DEL ROSARIO and BENITA QUIOGUE DE V. DEL ROSARIO, defendants-appellants.

Araneta and Zaragoza for plaintiff-appellant.
Jose Espiritu and Gibbs, McDonough and Johnson for defendants-appellants.

Malcolm, J.:

Both parties to this action appeal from the judgment of Judge Simplicio del Rosario of the Court of First Instance of Manila awarding the plaintiff the sum of 88,495.21 with legal interest from May 13, 1921, without special finding as to costs.

The many points pressed by contending counsel can be best disposed of by, first, making a statement of the facts; next, considering plaintiff's appeal; next, considering defendant's appeal; and, lastly, rendering judgment.

STATEMENT OF THE FACTS


On and prior to June 6, 1920, Benita Quiogue de V. del Rosario, whom we will hereafter call Mrs. Del Rosario, was the owner of a bonded warehouse situated in the City of Manila. She was engaged in the business of a warehouse keeper, and stored copra and other merchandise in the said building. Among the persons who had copra deposited in the Del Rosario warehouse was Froilan Lopez, the holder of fourteen warehouse receipts in his own name, and the name of Elias T. Zamora. (Exhibits C, D, and R.)

The warehouse receipts, or negotiable warrants, or quedans (as they are variously termed) of Lopez named a declared value of P107,990.40 (Exhibits L-1 to L-13). The warehouse receipts provided: (1) For insurance at the rate of 1 per cent per month on the declared value; (2) the company reserves to itself the right to raise and/or lower the rates of storage and/or of insurance on giving one calendar month's notice in writing; (3) this warrant carries no insurance unless so noted on the face hereof, cost of which is in addition to storage; (4) the time for which storage and/or insurance is charged is thirty (30) days; (5) payment for storage and/or insurance, etc., shall be made in advance, and/or within five (5) days after presentation of bill. It is admitted that insurance was paid by Lopez to May 18, 1920, but not thereafter.

Mrs. Del Rosario secured insurance on the warehouse and its contents with the National Insurance Co., Inc., the Commercial Union Insurance Company, the Alliance Insurance Company, the South British Insurance Co., Ltd., and the British Traders Insurance Co., Ltd., in the amount of P404,800. All the policies were in the name of Sra. Benita Quiogue de V. del Rosario, with the exception of one of the National Insurance Company, Inc., for P40,000, in favor of the Compañia Coprera de Tayabas. (Exhibits N, O, P, R-1 to R-4.)

The warehouse of Mrs. Del Rosario and its contents were destroyed by fire on June 6, 1920. The warehouse was a total loss, while of the copra stored therein, only an amount equal to P49,985 was salvaged.

Following an unsuccessful attempt by Henry Hunter Bayne, Fire Loss Adjuster, to effect a settlement between the insurance companies and Mrs. Del Rosario, the latter, on August 24, 1920, authorized Attorney F. C. Fisher to negotiate with the various insurance companies. (Exhibit A.) As a result, an agreement between Mrs. Del Rosario and the insurance companies to submit the matter to administration was executed in September, 1920. (Exhibit B.) Mrs. Del Rosario laid claim before the arbitrators, Messrs. Muir and Campbell, to P419,683.95, and the proceeds of the salvage sale. The arbitrators in their report allowed Mrs. Del Rosario P363,610, which, with the addition of the money received from the salvaged copra amounting to P49,985, and interest, made a total of P414,258, collected by her from the companies. (Exhibits E, F, G, H, and Q.)

Mrs. Del Rosario seems to have satisfied all of the persons who had copra stored in her warehouse, including the stockholders in the Compañia Coprera de Tayabas (whose stock she took over), with the exception of Froilan Lopez, the plaintiff. Ineffectual attempts by Mrs. Del Rosario to effect a compromise with Lopez first for P71,994, later raised to P72,724, and finally reduced to P17,000, were made. (Exhibits Y, 1, 3, 4, 6, 7, 8, 12.) But Lopez stubbornly contended, or, at least, his attorney contended for him, that he should receive not a centavo less than P88,595.43. (Exhibits 4, 5.)

PLAINTIFF'S APPEAL


Plaintiff, by means of his assignment of error, lays claim to P88,595.43 in lieu of P88,495.21 allowed by the trial court. The slight difference of P100.22 is asked for so that plaintiff can participate in the interest money which accrued on the amount received for the salvaged copra. (Exhibits EE and FF.) Defendant makes no specific denial of this claim. We think the additional sum should accrue to the plaintiff.

Plaintiff's second and third assignment of error present the point that the defendant has fraudulently — and even criminally — refrained from paying the plaintiff, and that the plaintiff should recover interest at the rate of 12 per cent per annum. We fail to grasp plaintiff's point of view. The defendant has not sought to elude her moral and legal obligations. The controversy is merely one which unfortunately all too often arises between litigious persons. Plaintiff has exactly the rights of any litigant, equally situated, and no more.

It has been the constant practice of the court to make article 1108 of the Civil Code the basis for the calculation of interest. Damages in the form of interest at the rate of 12 per cent, as claimed by the plaintiff, are too remote and speculative to be allowed. The deprivation of an opportunity for making money which might have proved beneficial or might have been ruinous is of too uncertain character to be weighed in the even balances of the law. (Civil Code, art. 1108; Gonzales Quiros vs. Palanca Tan-Guinlay [1906], 5 Phil. 675; Tin Fian vs. Tan [1909], 14 Phil. 126; Sun Life Insurance Co. of Canada vs. Rueda Hermanos & Co. and Delgado [1918], 37 Phil. 844; Scævola, Codigo Civil, vol. 19, p. 576; 8 R.C.L. 463; 17 C.J. 864.)

DEFENDANT'S APPEAL


Counsel for defendant have adroitly and ingeniously attempted to avoid all liability. However, we remain unimpressed by many of these arguments.

Much time has been spent by counsel for both parties in discussing the question, of whether the defendant acted as the agent of the plaintiff, in taking out insurance on the contents of the bodega, or whether the defendant acted as a reinsurer of the copra. Giving a natural expression to the terms of the warehouse receipts, the first hypothesis is the correct one. The agency can be deduced from the warehouse receipts, the insurance policies, and the circumstances surrounding the transaction.

After all, however, this is not so vitally important, for it might well be — although we do not have to decide — that under any aspect of the case, the defendant would be liable. The law is that a policy effected by bailee and covering by its terms his own property and property held in trust; inures, in the event of a loss, equally and proportionately to the benefit of all the owners of the property insured. Even if one secured insurance covering his own goods and goods stored with him, and even if the owner of the stored goods did not request or know of the insurance, and did not ratify it before the payment of the loss, yet it has been held by a reputable court that the warehouseman is liable to the owner of such stored goods for his share. (Snow vs. Carr [1878], 61 Ala. 363; 32 Am. Rep. 3; Broussard vs. South Texas Rice Co., [1910], 103 Tex. 535; Ann. Cas., 1913-A, 142, and note; Home Insurance Co. of New York vs. Baltimore Warehouse Co. [1876], 93 U.S. 527.)

Moreover, it has not escaped our notice that in two documents, one the agreement for arbitration, and the other the statement of claim of Mrs. Del Rosario, against the insurance companies, she acknowledged her responsibility to the owners of the stored merchandise, against risk of loss by fire. (Exhibits B and C-3.) The award of the arbitrators covered not alone Mrs. Del Rosario's warehouse but the products stored in the warehouse by Lopez and others.

Plaintiff's rights to the insurance money have not been forfeited by failure to pay the insurance provided for in the warehouse receipts. A preponderance of the proof does not demonstrate that the plaintiff ever ordered the cancellation of his insurance with the defendant. Nor is it shown that the plaintiff ever refused to pay the insurance when the bills were presented to him, and that notice of an intention to cancel the insurance was ever given the plaintiff.

The record of the proceedings before the board of arbitrators, and its report and findings, were properly taken into consideration by the trial court as a basis for the determination of the amount due from the defendant to the plaintiff. In a case of contributing policies, adjustments of loss made by an expert or by a board of arbitrators may be submitted to the court not as evidence of the facts stated therein, or as obligatory, but for the purpose of assisting the court in calculating the amount of liability. (Home Insurance Co. vs. Baltimore Warehouse Co., supra.)

Counsel for the defendant have dwelt at length on the phraseology of the policies of the National Insurance Company, Inc. Special emphasis has been laid upon one policy (Exhibit 9) in the name of the Compañia Coprera de Tayabas. In this connection it may be said that three members of the court, including the writer of this opinion, have been favorable impressed by this argument, and would have preferred at least to eliminate the policy for which premiums were paid, not by Mrs. Del Rosario on behalf of Lopez and others, but by Compañia Coprera de Tayabas. A majority of the court, however, believe that all the assets should be marshalled and that the plaintiff should receive the benefit accruing from the gross amount realized from all the policies. Consequently, no deduction for this claim can be made.

The remaining contention of the defendant that the plaintiff cannot claim the benefits of the agency without sharing in the expenses, is well taken. Although the plaintiff did not expressly authorize the agreement to submit the matter to arbitration, yet on his own theory of the case, Mrs. Del Rosario was acting as his agent in securing insurance, while he benefits from the amicable adjustment of the insurance claims. As no intimation is made that the expenses were exorbitant, we necessarily accept the statement of the same appearing in Exhibits Q and 8.

Of the insurance money, totalling P414,258, P382,558 was for copra and the remainder for buildings, corn, etc. The expenses for collecting the P414,258 totalled P33,600. 382,558/414,258 of 33,600 equals P31,028.85, the proportionate part of the expenses with reference to the copra. Of the expenses amounting, as we have said, to P31,028.85, plaintiff would be liable for his proportionate share or 88,595.43/382,558.00 of P31,028.85 or P7,185.875 SKbHd.

The parties finally agree that the plaintiff at the time of the fire was indebted to the defendant for storage and insurance in the sum of P315.90.

JUDGMENT


In resume, the result is to sustain plaintiff's first assignment of error and to overrule his second and third assignments of error, to overrule defendant's assignment of error 1, 2, 3, and 4 in toto and to accede to defendant's assignments of error, 5, 6, and 7 in part. If our mathematics are correct, and the amounts can be figured in several different ways, plaintiff is entitled to P88,595.43 minus P7,185.88, his share of the expenses, minus P315.90, due for insurance and storage, or approximately a net amount of P81,093.65, with legal interest. This sum the defendant must disgorge.

Wherefore, judgment is modified and the plaintiff shall have and recover from the defendants the sum of P81,093.65, with interest at 6 per cent per annum from May 13, 1921, until paid. Without special finding as to costs in either instance, it is so ordered.

Araullo, C. J., Street, Avanceña, Villamor, Ostrand, Johns, and Romualdez, JJ., concur.
Johnson, J., took no part. .

Negotiable Instruments Case Digest: Great Eastern Life Ins. Co. v. Hongkong Shanghai Bank (1922)


G.R. No. L-18657             August 23, 1922
Lessons Applicable: Forgery (Negotiable Instruments Law)

FACTS:
  • May 3, 1920: Great Eastern Life Ins. Co. (Eastern) drew its check for P2,000 on the Hongkong and Shanghai Banking Corporation (HSBC) payable to the order of Lazaro Melicor. 

  • E. M. Maasim fraudulently obtained possession of the check, forged Melicor's signature, as an endorser, and then personally endorsed and presented it to the Philippine National Bank (PNB) and it was placed to his credit. 

  • Next day: PNB endorsed the check to the HSBC who paid it

  • HSBC sent a bank statement to the Eastern showing the amount of the check was charged to its account, and no objection was made

  • 4 months after the check was charged, it developed that Lazaro Melicor, to whom the check was made payable, had never received it, and that his signature, as an endorser, was forged by Maasim, 

  • Eastern promptly made a demand upon the HSBC to credit the amount of the forged check

  • Eastern filed against HSBC and PNB

  • RTC: dismissed the case

ISSUES: W/N Eastern has the right to recover the amount of the forged check

HELD: YES. lower court is reversed.  Eastern against HSBC who can claim against PNB
  • forgery was that of Melicor (payees and NOT the maker)

    • Eastern received it banks statement, it had a right to assume that Melicor had personally endorsed the check, and that, otherwise, the bank would not have paid it

  • Section 23 of  Negotiable Instruments Law:

When a signature is forged or made without the authority of the person whose signature it purports to be, it is wholly inoperative, and no right to retain the instrument, or to give a discharge therefor, or to enforce payment thereof against any party thereto, can be acquired through or under such signature, unless the party against whom it is sought to enforce such right is precluded from setting up the forgery or want of authority.
  • The Philippine National Bank had no license or authority to pay the money to Maasim or anyone else upon a forge signature.

    • Its remedy is against Maasim to whom it paid the money.