Philippine National Bank, Plaintiff-Appellee vs. Laureano Atendido, Defendant-Appellant G. R. No. L- 6342, January 26, 1954 [Supreme Court Decisions]

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Title: Philippine National Bank, Plaintiff-Appellee vs. Laureano Atendido, Defendant-Appellant G. R. No. L- 6342, January 26, 1954 [Supreme Court Decisions]
Language: English
Source: The Lawyers Journal XIX (5) May 31, 1954
Year: 1954
Subject: Supreme Court Decisions; Warehouse receipts—Philippines.; Court of Appeals
Rights
Abstract: [This refers to an appeal from a decision of the Court of First Instance of Nueva Ecija which orders Laureano Atendido, the defendant, to pay his obtained loan from the Philippine National Bank the sum of Php 3,000, with interest at 6% per annum from June 26, 1940. As guarantee to pay his loan, Atendido pledged 2,000 cavanes of palay placed in the warehouse of Cheng Siong Lam & Co. in San Miguel, Bulacan, wherein he endorsed in favor of the bank the corresponding warehouse receipt. For unknown reason, these cavanes of palay disappeared. Atendido failed to pay the principal loan and its interest which led the complainant file this case.]
Fulltext: We are inclined to uphold the view of the Solicitor General. From the transcript of the notes taken at the hearing in connec~ tion with the motion for disnussal, it appears that a conference was had between petitioner and the offended party in the office of the fiscal concerning the case and that as a result of that con· ference the offended party filed the motion 'to dismiss. It also a,.. pears that as no action has been taken on said motion, counsel for petitioner invited the attention of the court to the matter who acted thereon only after certain explanation was given by said coUnset And when the order came the court made it plain that the dis· missal was merely provisional in character. It can be plainly seen that the dismissal was effected. not onl11 with the ezpNBB consent of petitioner but even. uptm the urging of his counsel. This attitude of petitioner, or of his counsel, takes thia case out of the operation of the ritle. · A case in pOint is People v. Romero, G. R. No. L-4517·20, promulgated on J'uly 31, 1951, wherein the order of dismissal was is-sued after the defense counsel has invited the attention i>f the court t.o its former order to the· effect that the case would be dis-missed if the fiscal was not ready to proceed with the trial on J'une 1', 1960. When the case reached this Court on appeal, coun· se1 claiml!d that "it is indubitable that your defendant d\d not himself personally move for the dismissal of the cases against him nor expressly consent to it; and that the dismissal was, in effect, an acquittal on the merits for failure to prosecute, because no reserva· tiOn was made in favor of the prosecution to renew the charges against 1our defendant in the ulterior proceedings." In overruling this plea, this Court sai~: "Whatever explanation that may be given by the attorneys for the defendant, it is a fact which cannot be controverted that the dismissal of the cases against the defendant was or· dered upon the petition of defendant's counsel. In opening the postponement of the trial of the cases and insisting on the compliance with the .:irder of the court dated May 25, 1950 that the cases be dismissed if the Provincial Fiscal Was not ready for trial on the continuation of the hearing on June 14, 1950, he obViously insisted that the cases be dismissed. The fact that the counsel for the defendant and not the defendant himself, personall11 moved for the dismisaal of the cases against him, had the same effect as if the defendant had personally moved for such dismissal, inasmuch as the act of the counsel in the prosecution of the defendant's cases was the act of the defendant himself, for the only case in which the defendant cannot be represented by his counsel is in pleading guilty according to section 3, Rule 114, of the Rules of Court." There is more weighty reason to uphold the theory of reinstate~ ment in the present case than in that of Romero considering the particularity that the dismissal was provisional in character. In our opinion this is not the dismissal contemplated by the rule that has the effect of barring 8. Subsequent prosecution. Petition is diamis1ed with coats. Pablo, Padilla, Montema.vor, Reyes, Jugo and Labrador, J. J., concur. Justice Bengzon, concurs in the result. Chief Justice Ptllf'a.S took no part. XVII Philippine National Bank, Pla.intiff-AppeUee 11s. Lauf'eano Atendi.. do, Defendant-Appellant G. R. No . .L..6342, Januat-y 26, 1954. WAREHOUSE RECEIPT; PLEDGE THEREOF TO GUARANTEE THE PAYMENT OF AN OBLIGATION; CASE AT BAR.-On June. 26. 1940. A obtained from the Philippine Na.. tional Bank a loan of P3,000 payable in 120 days with interest at 6% per annum from the date Of maturity. To guarantee the payment of the obligation the borrower pledge to the ba:nk 2,000 cavanea of palay which w11re then depositfod in the warehouse of Cheng Siong Lam & Co. in San Miguel Bulacan, and. to that effect the borrower e,ndorsed in favor of the bank the correaponding warehouse receipt. . Before the maiurity of the loan, the 2,000 ca.vanes of palay disappeared for unknown reason in the warehouse. When the loan matured the borrower failed to pay either the principal or the interest and so action was instituted. Held: The delivery of said palay being meJ:ely by we.y of security, it follows that by the very nature of the transaction its ownership remains with the pledgor subject only to foreclosure in case of non-fulfillment of· the obligation. By thia we mean that if the obligation ia not paid upon maturity the moit that the pledgee can do is to sell the property and apply the proceeds to the payment of the obligation and to return the balance, if a.ny, to the pledgor (Article 1872, Old Civil Code). This is the essense of this contJ:act, for, a.cco1·ding to law, a pledgee cannot become the o~ner of, no1· appropriate to hinlself, the thing given in pledg'! <Article 1859, Old Civil Codel. If by the contract of pledge the pledgor continues to be the owner of the thing peldge durin~ the pendency o~ the obligation, it stands to reason that in case of loaa of the property, the loss shonld be borne by the pledgor. The fact that the wuehouse receipt cc.vering the p&lay was delivered, endorsed in blankr to the bank does not alter the situation, the pu1·pose of i!IUch endorsement being merely to transfer the juridical. possession of the property to the pledgee and to forestall any possible disposition thereof on the party of the pledgor. Thia is true notwithstanding the provisions to the contrary of the Warehouse Receipt Law. Gaudencfo L Atendido for appellant. Ramon B. d« los Re11es and Nfl'IMaio P. Li6unao for a.pfellee .. DECISION BAUTISTA ANGELO, J., Thia is an appeal from a decision of the Court of First Inatance of Nueva Ecij~ which orders the defendant to pay to the pl&intiff the sum of P3,000, with interest thereon at the rate of 6% per annum from June 26, 1940, and the coats of action. On June 26, 1940, Laureano Atendido obtained. from the Philip.. pine National Bank a loan of P3,000 payable in 120 days with interest at 6% pel' annum from the da.te of maturity. To guarantee the pay. 1nent of the obligation the borrower pledge to the bank 2,000 cavanes of palay .;,hich were then deposited in the wa1-ehouse of Cheng Siong Lam & Co. in San 1fliguel, Bulacan, and to that effect the borrower endorsed in favor of the bank the correspondi~g warehouse receipt. Before the maturity of the loan, the 2,000 cavanes of palay dis. appeared for unknown reasons in the warehouse. When the loan matured the borrower failed to pay either the principal or the interest and so the present action was instituted. Defendant set up a special defense and a counterclaim. As i·eg-ards the former, defendant claimed that the warehouse receipt cc.veJ;ing the palay which was given as security having been endorsed in blank in fa.vor of the bank, and the palay having been lost or disappeared, he thereby became relieved of liability. And, by way of counterclaim, defendant claimed that, as a corollary to his theory, he is entitled to an indemni~y which represents the difference, between the va.lue of the pa lay lost and ::.he amount of his obligation. The case was submitted on an agreed statement of facts and thereupon the cou1t i·endered judgment as stated in the early part of this decision. Defendant took the case on appeal to the Court of Appeals but later it was certified to this Cou1t on the ground that the C!Ueation involved is purely one of law. The only issue involved in this appeal is whether the surrender cf the warehouse receipt covering the 21 000 cavanes of palay giver. as a security, endorsed in blank, to appellee, has the effect of transferring their title Ol' ownership to said appellee, or it should be considered merely as a guarantee to secUl'e the payment of the nb1igation of appellant. In ·upholding the view of appellee the lower court said: "The surrr.ndering of warehouse receipt No. 8-1719 covering the 2,000 cavanes of palay by the defendant in favo1· df the pla.intiff was not th~t of a final transfe1· of that wa1-ehouse receipt but merely 242 LAWYERS JOURNAL May 31, 1954 D8 a guaranty to the fulfillment of the original obligation of P3,000.00. In other word, plaintiff corporation had no right to dispose (of) the warehouse r1..-ceipt until after the maturity of the promissor1' note Exhibit A. Moreove1·, the 2,000 cavanes of palay were not on the first place in the actual possession of plaintiff corpors.tion, although symbolice.lly speaking the delivery of the warehouse receipt was actually done to the bank." We hold this finding to be correct not only because it is in line wit.h the n11.ture of a contract of pledge as defined by law lArticles 1857, 1858 and 1863, Old Civil Code), but is supported by the stipulations embodied in the contr1t.ct signed by arpellant. when he secured the loan fl'om appellee. There is nn question that the 2,000 cavanes of palay covered by the w&1.·eho11sc receipt .were given to appellee only as guarantee to secure the fulfillment by appellant of his obligation. This clearly appears in the contract Exhibit A wherein it i11 expressly stated that said 2,000 cava.nes nf palay were given as a collateral security. The delivery quired by Commonwealth Act No. 103 is not a prerequisite to the right of a labor organization to appear and litigate a case beJorc the O:>urt of Industria] ~lations. CKapisanan Timbu1an ng mga Ma.nggagawa, 44 0. G. CU, pp. 182, 184-185.) In the second place, (lnce the Court of Industrial Relations has acquired jurisdiction over a case under the law of its creation, it retains that jurisdiction until the case is completely decided, including all the incidents related thereto. 2. EMPLOYER AND EMPLOYEE; THE POSITION 01'' SUPERINTENDENT IS THAT OF AN EMPLOYEE. - In a reneral sens£: an· " 'employee' is one who rendto:t·s service for another for wages or salarY, and that in this sense a person entployed to superintend, with powe1· ~ employ and dischal'ge men and generally to represent the principal is &n 'employee,' " <Shields v. W. R. Grace and Co., 179 P. 265, 271, quoted in 14 Words and Phrases 360.) of said palay being merely by way of security, it foJlows that by 3. the very nature of the trans9.ction its .ownership i·e1nains with IBID; IBID. - It has been said tha.t while a superintendent who has the power to appoint and discharge may be considered as part of the management, in the dispute that arises between it and the laborers, said surerinrettdent is an employee in his own relatiou to the capitalist or owner of the business, in this case, the Cebu Pol"tla:ud Cement Company. the pledgo1· subject only to foreclosure in case of non-fulfiJlment of the obligation. By this we mean that if the obligation is not paid upon maturity the most that the pledgee can do is to sell the property and apply the proceeds W the payment of the obligation and to return the balance, if any, to the pledgor <Article 1872, Old Cicil Code). This is the essence of this contract, for, according to 4. law, a pledgee cnnnot become the owner of, nor appropriate to-him- , self, the thing given in pledge <Article 1859, Old Civil Code>. If IBID; IBID. - Valencia. was, in the case of bis dismissal by the Cebu Portland Cement Company an employee, not a part of the management, and his case properly falls under the catego:i-y of an industrial dispute falling under the jurisdiction of the Court '>f Industria] Relations. And the fact thai his position was among the highest in a government enterprise did not change the nature of his 1-elation to his employer. by the contract of pledge the pledgor continues to be the owner of the thing pledge dut~ing the pendency of the obligation, it stands to reason that in case of loss of the p1·operty, the loss should be borne by the pledgot'. The fact that the we.rehouse receipt eovering the palay was delivered, endorsed in blank, to the bank 5. does not alter the situation, the purpose of such endorsement being merely to transfer the juridical possession of the property to the pledgee and to forestall any possible disposition thereof on the part of the pledgor. -This is true notwithstanding the pt'OviaionS to IBID; DISMISSAL WITHOUT CAUSE. - There is no question that the position of general superintendent was not aboli~ed; its sala1·y of P6,000 and which was held by one Ocampo, was supi)ressed. Instead of retiring Ocampo, whose petition was abolished, Valencia wes retired, even as his position was re... tained, and Ocampo promoted to take his <Valencia's) position. As ValE'ncia's position was not abolished or suppressed, Valencia should not have been separated by retfrement: it should have been Ocampo wh:> should have been retired because of the abolition of his own position. Petitioner's argument in effect is a.s foilows: that there is economy if Valencia is separatfo.d and Ocampo retained, and Valencia dismissed. Thf! absurdity of the contention is .evident; it· is its own refutation. Reasons of economy may have justified the reduction, of Valencia's salary, but certainly not his separation. Evidently the ·reduction wa.s merely the opportune occasion for a dismissal without cause. the contrary of t!Je Warehouse Receipt Law. In a. case recently decided by this Court <Martinez v. Philip. pine National Bank, G. R. No. L.4080, September 21, 1953) which, involves a similar transaction, this Court held: "In conclusion, we hold that whe1·e a warehouse i-eceipt or quedan is transferred or endorsed to a creditor only to secu1-e the payment of a loan or debt, the transfenee or endorsee does nnt automatically become the owner of the good covered by the wa.rehouse receipt or quedan but he merely retains the 1.ight to. keep and with the conser;it of the owner to sell them so as to satisfy the obligation frnm the proceeds of the sale, this for the simple reason that the transaction involved is not a sale but only a mortgage or pledge, and that if the property covered by the qpedans or wa1·ehouse receipts is lost without the fault or negligence of the mortgagee or pledgee , or the transferree or endorsee of the warehouse receipt or quedan, t-hen said goods are to be 1-egarded as lost on account of the real owner, mc:.rtgagor or pledgor." Wherefore, the decision appea.led from i$ affirmed, with costs against appellant. . B-engzon, Padilla, Montemayor, Jugo, Reyes and Labrador, J. J.; concur. Chief Justice Paras dissents for the same reasons ·stated in Martinez vs. P.N.B., L.4080. XVlll Cebu Portland Cement Company, Petitioner vs. The Court of liaduatrial Relations (CIR) and Philippine Land-Air-Sea Labor Union CPLASLU>, ~espondents, G. R. No. L- 6158, Ma.reh 11, 1904. 1. COURT O~' INDUSTRIAL RELATIONS; JURISDICTION OVER A CLAIM FILED BY A LABOR UNION WHOSE PERMIT HAD ALREADY EXPIRED AND NOT RENEWED BY THE SECRETARY OF I.ABOR. - Tlie registratfon re. Legal Counsel of Cebu Po1tland Cement Company, FM'tunato V. Borromeo and Asst. Gov't Corporate Counsel, Leovigildo Monasterial for petitioners. Emilio Lumontad for respondents, PLASLU. DECISION LABRADOR, J.: This is an appeal by certiorari from a decision of the Court of Industrial Relations ordel'ing the petitioner Cebu Portland Cement Company to reinstate Felix V. Valencia to his former position as general superintendent, with full back pay at Pl,000 a month from November 15, 1950, up to his reinsta.tement and the differential salary collectible f1·om May 1, 1949 up to November 16, 1950, with all the privileges and emoluments attached to said position. The reco1•d discloses that on December 31, 1948 i-espondent Philippine Land-Air-Sea Labor Union CPLASLO> filed a petition with the Court of Industrial Relations, docketed as CIR Case No. 241-V and entitled Philippine Land-Air-Sea Labor U:nion vs. Cebu Portland Cement Company, submitting a set of grievances and demands againet the therein respondent, herein petitioner, for decision and settlement hi said cou1t. While the said case was pending and on May 31, 1954 LAWYERS JOURNAL 248
pages: 242-243