HEIRS OF NICOLAS vs. METROPOLITAN BANK

"He swept the floor with his jacket and lay down, using the book he had just finished reading as a pillow. 
He told himself that he would have to start reading thicker books: they lasted longer, 
and made more comfortable pillows."  

- The Alchemist

Do you remember this kind of bike? The BMX Schwinn Sting-Ray? I'm sure it's familiar. This was the fastest and sturdiest bike ever created when children began racing their bicycles on dirt tracks in southern California in the mid 70's. Inspired by the Motocross stars of that time it picked up and became a craze in the Philippines in the 80s up to the 90s. It's the closest you can get to a Motocross dirt bike when you were still young and tender and adults don't allow you to ride a real motorcycle but you're dreaming of the action. This bike is unmistakably one of the toughest icons of the 80s.

Speaking of the 80s which is considerably the most wild and unforgettable decade. If there's two words to describe that particular era, it's glory & radicalism. My gad it was a glorious and rebellious era and I'm proud I was at least a part of it. It's an ironic time so-to-speak, the era of innocence yet ironically the toughest times and perhaps was the only decade that is home for the braves, you know what I'm sayin? No gadgets, no i-phones. The gadget we knew was an Atari and a load of mechanical stuff and a little Gameboy here and there. And everything was operated by gut feel. Kids then were toughest as nails. No guts? no glory. Every boy and girl were pushed to their limits and I think that made them sturdy. The good thing is they become tougher to protect and preserve the other side of the irony, innocence, if you know what I mean. Something the millennials nowadays are having a hard time to understand simply because of their gadget focus. LOL.

I remember standing at the defunct Roces Velodrome with two of my good high school pals and we were watching the throng of bikers doing the slaloms on the dirt tracks racing like all hell's loosed with this bike. What's great about it is they've put up boombox speakers on each corners playing rock music and so if you're out there racing, it doubles the adrenaline, you'd feel the testosterone rising within, you can't help thinking you're like some actor dude in the coolest movie scene or somethin'. You feel your heart beating fast like the beat of the drum and the electric guitars screaming in your soul with all those overdrives and distortions sound that makes you think that life is putting you to the test, pushing you to the limits and you don't care, all you think about is survive, that you gotta push yourself to that fuckin' limits in order to prove something, that you can win. It's crazy you feel your life is actually larger than life itself. Tsk.. magnificent.

The good thing then was there were rentals that costs us almost our week's allowance (exag) so.. we looked at each other.. what the hell right? cease the day! might as well go broke for a week yet have the feels. So we each took one to join the pack. They were playing 'follow-the-leader', of course we all knew the mechanics, there's this pack of bikers constantly vying for the No. 1 spot. The rule is simple, what ever the leader does, everyone behind should follow. If he took a skid at the angle track each one should do it too. If he did a bunny hop after the slaloms you must do it too. Until another rider get's the lead and takes over. I tell you it's so pretty to watch all the circuit action from afar. The girls go gaga and that is what we want. It's an open race anyone can enter at any point and it's all on-going for hours and if you think you're tough enough then no one stops you from entering the race. That is if you can take it. And I tell yah it usually gets dirty.

At first the three of us raced with each other at the off-dirt fine track.. until this song from the first Karate Kid Soundtrack played THE BEST and soon enough adrenaline kicked in we went straight into the race shouting and laughing "Larusso!!!" hungry for victory. The thing about this race is if you enter in the middle, riders will try to kick you out and they have the right to do so, but if you enter at the tail and work your way to the front, hostility is minimized. But who would want to start at the tail right? Everyone's staring and working to steal the 1st position anyway. So we entered the middle part and boom we were kicked out of the race. And so we dusted off and had to step back and watch the pack and the whole dirt circuit to see some loop holes. We were like lions looking for the weak link from the pack of prey where we could enter. And we saw one weak spot and soon enough we were all inside trying our best to widen the gaps. I think almost 60 seconds I was able to take the lead, until another one stole it from me. Boy I tell yah it was one hell of a ride, and knowing you were able to hold the reins and become a leader even for just less than 60 seconds? the feels man. The guys try to look at you with that coveted approval, "that cowboy held it for more than 8 seconds". (just made that up :) I asked my pals what's that song they were playing when I took the lead. "Someday love will find you.. by Journey". I bought a cassette tape after that HAHAHAHAHA!!!  Cassette Tape!!! and the song reads "Separate Ways" WTF.

I was trying to restore this bike (inset picture). Yeah trying to do some Rick's Restoration stuff. You know how Rick does it? He strips everything and builds everything from scratch. And this is how I exactly wanted to do it. This is my nephews bike. I took it from their garage a week after his father died. You're right it's a BMX Schwinn Sting-Ray. His dad bought it for him at a tight budget on his birthday when he was about 11 or 12. It was the best gift you can give an 11 year old boy. not to mention that it's not just some bike, it's an original one. I saw it lying there after the wake a little bit rusted, old and wrecked and unusable... so I took it put it at the back of the car and told him I'd fix it, I mean you know, just to alleviate at least a part of his suffering and sorrow for the loss, the least thing that I can do co'z I know it's special to him.

It was a horrible feeling seeing your loved ones like two of my nephs and niece going through the toughest time of their life carrying that ordeal as young as that. I'd consider they have more depths in life experience compared to mine I never knew the feeling of loss of a loved one, which is too ironic, considering I'm old and their young. I kinda question God why they should have to go through it at such a young age. I always thought it was too unfair.

It was so heart wrenching I tell you. These kids grew up with me as their tito who fixed everything for them when they needed help ever since they were toddlers and at that moment I was so dumb founded I couldn't do anything. I remember arriving at the funeral and about to park my car when I saw my neph seated at his car parked there with an open door, his friends were outside waving at me and pointing inside. So I walked over and soon as I got there he quickly slipped a pair of shades. He doesn't want me to see him crying. Were talking about a 17 year old and the youngest child here who naturally is considered to be the most affected by scientific findings in this type of circumstance. I opened the car door sat beside him and slowly inched up his shades. "You're crying" "No tito I'm not". But the eyes were so swollen and red.  You should see his friends, they never left his side. Tough bunch. "It's alright you don't have to hide it from me. It's okay to cry.. it will help you and I will always understand" I told him. "I miss him tito.. (sob)" He didn't bawl. But tears kept flowing from his eyes he wanted to slip back the shades. And then he said something like how he loved that car and how his dad taught him how to drive. My heart was shattering like glass pieces.

You should have seen my eldest neph. Tough as the toughest nail. Of course the family slept in their house during the wake. It was morning when he entered the room. I woke "How are you John? hows it going?" "Everything's good tito!.. don't worry I can handle it." So cool and savvy he just gave that usual smile I love seeing. "Ok hit the sack you need to get some sleep from last night's wake vigil" "Alrightyy!!". The minute he hit the bed he bawled so loud like a little child my tears suddenly gushed out unknowingly I had to call my dad his lolo to comfort him. I know these kids are tough but going through an experience like that, it's more tougher to just cry co'z they usually see their tito always strong enough to withstand adverse conditions and control emotions so they were trying to show me their made of the same stuff. Of course they haven't seen me going  through the same ordeal so I'd think it's unfair for them to even think of comparisons.

Ah you should've seen my niece. 'Gad.. :) my niece was the toughest ever. The only time I saw her cry was when she had thrown to me all her sorrows the first time I got there during the funeral and I gave her a hug and that was it, she was okay during the whole funeral. Here's the thing. It sank into her right after all the people were gone and everything was through and they were all by themselves in the house back to their everyday lives. She must've suddenly felt that big hole of absence of her father. She bawled almost everyday. And I know how deeply she missed him, her profy pic had been always a picture of her and her dad and statuses of how she misses him, it brakes my heart every time I chanced reading it. And it's so good to see hundreds of her acquaintances and close friends bombard her page with comforting comments.  

Right now after about two years I am so proud my sister was able to hold it together. I see three very positive out-looked, happy and productive, and well brought up young human beings every time they come over for a visit or we visit them in their house. Sometimes I look at them and feel glad they were able to survive that life storm and everything were all kept in tact. Thanks for God's everyday comfort and provision and love of course. He never left them. God never left us, the whole family. We can only do so much but I think God saw the suffering and brought comfort and true healing and joy each day.

I told them "You will get over this.. I know how tough you three are... for now it may look impossible, and too painful... I understand, and it's because of the abrupt change you were forced to face and you weren't ready for it... but pain heals.. I guarantee you... it's just a matter of time... you just have to hang in there and comfort each other (and tears flowed).   And whenever you pass that hospital (VRP Medical Center) I know you'd feel a pain in your heart inside when you see it whoever you are with, in a bus, the MRT, the car.. don't disregard it, or be bitter about it... make it a point of reference, a place that is something special, like Calvary.. the cross. Make it your own Calvary. We know there's suffering that happened there.. but there's also Salvation... and always remember this and never forget this... the absence of your dad doesn't make you incomplete compared to your friends. Knowing that you went through something or have something like this to carry in your heart... makes you more special.. very special. And you're dad served Him well, he's in heaven.. and we share the same Salvation... and at least we know that his sufferings from his diabetes complications are all over now, right?"  'God I will never forget that moment.

About 8 months after the burial my neph told me he was driving home along Edsa once and it was bumper-to-bumper traffic so he decided to pull over. Lo and behold he found himself right in front of the VRP Medical Hospital so he decided to try to see if he has fully recovered. He went inside the building, walked into the elevator, stepped out to the floor and went to the room where his dad was confined. He told me he never felt anything. Just recalled the funny and light conversations. And so he felt good. He decided to go down to the ICU and the Emergency Room. When he got there, that was when he suddenly felt such deep agony and pain and he started crying he had to control it co'z there were people and doctors and nurses around. He quickly got out of the building and ran to his car. And there he cried real loud where no one can see him. He was actually there at the deathbed with his brother and mom when they were trying to revive his dad and he was screaming holding his daddy's arm. He was telling me this while we were parked at the mall slipping on and off the same shades smiling and laughing as he switched on to other topics. So I laugh as he crack jokes and take a look at him, way too different from way back then... oh death where is your sting... truly the Lamb has overcome.

Roughly almost two years now. It was only this start of the year that I finished the bike. Just right in time for his Feb 13 birthday. He understands of course I'm in my review now so he told me to take my time. They spent the New Year celebration with us so I asked him "What color do you want?" "Maroon, or red and gold" "Any particular reason for the colors?" "It's the color of Ironman's suit" "Ahhhh okay..." "And the label?" His brother interrupted "Mark 46.. that's the best suit Tony Stark had". Well it really does look good compared to the Mark 7... but I've read  from the threads that Mark 7 was one of the toughest and carries a real good history with it even though it's old. Well.. I guess I was talking to millennials here.

I look at them both as they check out my books in the room and stuff and throw some queries about law as we laugh and say funny stuffs. It was a far cry from way back... and I'm so proud of them. They've grown tougher and yet protected that goodness and innocence inside of them. Like that in the 80's... I guess something the millennials have picked up.

Anyway, let's go digest. This is a.. a succession case.

Domingo and Josefa Nicolas are the registered owner of a conjugal property which are 2 parcels of land located in Q.C. both having TCTs respectively under the QC Registry of Deeds. And on this lots stood their residential house. Any children? yup. The spouses got 2 children who herein actually are the petitioners. 

Here's how the story goes. In 1986 the father died, and 2 years after that, a fire broke out and gutted down the QC Registry of Deeds office and among records destroyed were the original TCT copies of herein stated 2 parcels of land. So what the widow did since she had no choice was to file with the Land Registration Administration (LRA) an application for reconstitution of the 2 land titles of which the LRA approved. 

Now here's the start of the controversy. Since the co-owner of the conjugal property was deceased the LRA signed the approved application in the name of the applicant alone, meaning the widow.

And boom!  Roughly about 7 years upon approval the 2 kids found out their mother mortgaged the lots with Metrobank who is inhere respondents. Well there must be some valid reason for the widow's act, this was a woman who was making both ends meet in the absence of a spouse. And well of course there's now the absence of a co-signee in a conjugal property, so might as well right? Wala kang magagawa kailangang mabuhay eh.  Eto matinde, the mortgage was foreclosed. Of course you know, that's what all banks are waiting for right? That's actually how they always want it done. Then they also found out that the respondent bank had the land titles already consolidated in its name. Of course then they would find out what respondent was trying to do next, finalize everything by taking possession of their land. They were filing a court petition in the QC RTC for issuance of a writ of possession which actually was granted.

So what the children did was file a petition for:

1. Annulment of the following: (1) Reconstituted Titles, (2) Mortgage, (3) Sale at Public Auction
2. File with the corresponding court a Motion to Quash the Writ of Possession (which was denied)
3. (Thereupon) They filed with the CA a petition for Certiorari

But the appellate court dismissed the petition, it held that the trial court did not commit Grave Abuse of Discretion amounting to Lack or Excess of Jurisdiction in its Writ of Possession issuance since such task of issuance of such writ is purely ministerial.

An MR of course was their next move yet to no avail, hence this petition.

ISSUE:

Heirs of Nicolas contends CA erred in the dismissal of their petition for certiorari. Of course the certiorari dismissal zooms on the previous lower court decision of dismissal on their earlier motion to quash the writ of possession, thereby affirming the lower court ruling.

In assailing the CA decision petitioners invoked the ruling in Rivero de Ortega vs. Natividad contending that:

"Where a party in possession was not a party to the foreclosure, and did not acquire his possession from a person who was bound by the decree, but who is a mere stranger and who entered into possession before the suit was begun, the court has no power to deprive him of possession by enforcing the decree."  Thus, it was held that only parties to the suit, persons who came in under them pendente lite (meaning pending law suit), and trespassers or intruders without title, can be evicted by a writ of possession. 

Now the question is.. are the Heirs of Nicolas' contention tenable?

RULING:

Here the Supreme Court coming to the rescue.. stating that..

Petitioners are the children of owners of above said registered properties and therefore compulsory heirs of the spouses. Hence prior to the foreclosure of mortgage and respondent's filing of a writ of possession the children by operation of law acquired ownership of portions of the lot as their legitime upon their father's death.

Second is, petitioners are strangers or 3rd parties to the writ of possession whose rights cannot be determined since they were not impleaded by the respondent. Verily they should not be deprived of their legitime by the enforcement of the writ. So, crystal clear that writ of possession should not include parts of the 2 lots above mentioned.

Furthermore, records indicate that the estate of Domingo Nicolas has not been judicially or extra-judicially settled. Therefore such writ of possession should only apply as far as their mother Josefa Nicolas' share is concerned as determined in a civil case for the purpose of settling the undivided estate of their father.

The CA's assailed decision was modified in the sense that the writ of possession issued by the RTC applies only to such portions of lots pertaining to the mother Josefa Nicolas.

The heirs of  Nicolas wins their shares.

UY CHICO vs. UNION LIFE ASSURANCE SOCIETY

I dunno. In some way I kinda miss Atty. Edward Chico's class in Civil Law Review. I love that class. The teacher was such a stand up comedian you are kept smiling and laughing from the moment you enter the room up to your way out. Atty. Chico is such a genius when it comes to punchlines. The guy reminds me of this stand-up comedian turned gov. official.. what's his face?. Arnel Ignacio. They kinda look alike too LOL. Word of advice to students behind me. If you look at the subject list to enroll this year and you see the teacher is that guy, by all means enlist your name in that class. I think the dude is sui generis hahaha. Sya lang talaga yung ganon, mahirap makausap ng matino. But I admire his wisdom sometimes. We have the same viewpoint on life.  And I guarantee you, it'll be an experience you'll never regret. Well the fact that genuinely mabait si sir ok na yon. And di sya  gaanong nangbabagsak. He even helps you to remember and push you to dig into your stock knowledge while reciting. That's a real review class. Walang pressure. 

What's the case today..

UY CHICO vs..“Uyy chikoo!!” I remember back in my freshmen year in my previous law school we sort of make fun of the names on the case titles just so it would stick and we wouldn’t forget.  This kinda remind me of an old favorite Bamboo song “..amoy chiko na ako..”. 

To tell you frankly the fruit doesn’t even taste a bit like wine, its so sweet. I remember being introduced to the fruit by my grandma back when I was a little boy swinging on a vine during summer vacation in the province. My grandpa lived in this big old house that got a stuck river like a lagoon right in front of it where me and my cousins took a dip almost everyday. It got this big chico tree standing overlapped on the waters, thing was, the best ones were all at the top of the water so we tied a rope to swing like monkeys. The best part was landing on water with a chico on your mouth. (grabe.. ngiting kasama ng hangin) Tsk.. I guess the best ones are really the ones that’s hard to get huh? (don't believe that crap). And whenever my grandma slides this big bowl full of ripe chicos on the table in the morning when I woke? That’s what I say “Uyyy chikoo!!” It’s really one of my fave fruits.

You know it's awesome living then. Every part of the day is a best part. Morning we feed the ducks and pigs, and then laugh and go fishing. Afternoon we take a dip at the lagoon and climb trees and eat fruits. Evening comes we smile and play and play some more.  Play in the garden under the light of the sky full of stars or the full moon. And all sudden bushes would shake so we'd all stop and stare and then "Awwooooooo!!" boy split second were all running to the veranda when we hear that and our uncles would pop out of the flower bushes laughing so hard. So we'd get the remaining hard chikos and throw at them. But the part I like the most is the haunting part in the mid evening. Co'z the big house was fuckin' infested with ghosts. So it's so exciting when we're all inside the big mosquito net and we hear footsteps in shackles (this is really true) and we were all shaking Aw! coz the old huge house was once used by the japs durin the war I guess, I dunno, I heard stories from my uncles and aunts, and it's got a long silent romantic history I swear. And  I so love the adventure of ghost hunting. One time I secretly took a ball of thread from my aunt's sewing box, tied my lolo's damn rocking chair and secretly kept pulling hahahahaha!.. everyone was screaming like crazy when they saw it movin right before their very eyes. And then my aunt caught me laughing I was almost kicked out of the mosquito net still laughing ahahahahaha!!!  

Anyway let's get to the case (LOL).

This case is ah.. an insurance case. But we will tackle the evidence aspect of this case zeroing in on the attorney-client privilege.

FACTS:

Plaintiff Uy Chico had his dry goods insured. He availed of the insurance upon stocks of dry goods Union Life Assurance had to offer then. And he signed the insurance policies himself. You must understand these were Chinese businessmen and security in their commerce is utmost to them. And subsequent to signing his insurance contract with Union Life, his goods were gutted down by fire. Perfect timing huh?

It appears that the dad of Uy Chico died in 1897 (Am I correct? 1897? This must have been a very old case) . At which time he was conducting business under his own name Uy Layco. (Uuyyy! Like ko!! ehehehe, that’s what you say when you’re liking what you read on facebook and itching to click the ‘like’ button... nahawa na yata ako kay papa Jack este.. papa Edward Chico).  

The thing was, when the dad died Uy Chico and his brother took over the business and merely continued it under the same name “Uy Layco”. (I can attest that this really is an old case, just take a close look at the Chinese names. None of the Chinese names I know nowadays precedes their first names by their last names, which was very prevalent during the Rizal era, sorry I didn’t check the decision date).   

Ok so what happened was.. during years of conducting business with his brother, which was subsequent to the death of the dad and preceding the incident of fire. The plaintiff Uy Chico bought off his brother’s interest in the business. So probably holding a handsome amount his brother ventured on a different business, of course we all know how these Chinese are. Which is a good and wise practice of course, you don't put your eggs in just one basket, right?  So Uy Chico continued the dry goods business on his own, but the thing was, he was still carrying on the business under his father’s name whom we all know was already deceased.

Now there’s quite a controversy that surfaced on this. You see at the time of the fire, the dad was heavily indebted and Uy Chico inheriting the business became even more indebted even to the creditors of the estate of his dad.

Now here comes the attorney-client privilege issue. During the course of the legal proceedings, Uy Chico’s attorney due to the indebtedness of his client had no choice but to enter a compromise with the insurance company for half the face value of the signed insurance policy. Here's what the counsel did. He took the insurance policy documents, surrendered it to the court assigned administrator of his dad’s estate, who in turn compromised with the insurance company. So money was paid into court and held by the court sheriff.

(I take that ah.. I dunno, I'm trying to rationalize the counsel's behavior. Maybe he's trying to salvaged what's there to save, I dunno, maybe by virtue of a promise to the former's deathbed to guard and help diminish future loss. He must've belonged to the older Uy's retainer. He must be originally a lawyer of his dad to be able to behave like that. You know most of the time as I have observed, those who served the predecessor automatically or even unawarely pay tribute to or consider the former's will).

Uy Chico  now brings this action maintaining that the policies and goods insured belonged to him and not to the estate of his deceased father, and together with it he alleges that he is not bound by the compromise effected by the administrator of his father’s estate (see what I'm talking about? there you go). (I wonder if this was Uy Chico’s ploy not to transfer his dad’s title of ownership under his own name, maybe to evade 3^rd party creditors. Thing was, his dad's lawyers therefore operated on the former premise, if that be the case).

Nevertheless, plaintiff was asked by the court if he had any objection to his attorney’s testifying concerning the surrendering of the policies. Plaintiff replied in the negative. Counsel was then called for that purpose. (Imagine you’re supposed to stand as counsel for a party in court and you end up finding yourself on your way to the witness stand, but hey, as I have said, there must be an underlying reason behind all of these. Subject of course to whether such counsel's move was proper).

ISSUE:

The gist of this case is the Attorney-Client Privilege. Whether or not the attorney-client privilege was violated by the attorney’s act of surrendering the insurance policies to the administrator of the estate to effect a compromise agreement with the insurance company.   

The counsel based his argument of the proposition anchoring on a jurisprudence that a waiver of the client’s privilege may be withdrawn at any time before acted upon. 

Let’s see if it will hold.

RULING:

SC ruled that “A lawyer must strictly maintain inviolate the confidence and preserve the secrets of his client. He shall not be permitted in any court, without the consent of his client, to testify to any facts imparted to him by his client in professional consultation, or for the purpose of obtaining advice upon legal matters”

So it’s clear. It's a question of Legal Ethics. I will not further expound on this. This is interlocutory in nature. We have not even touched on the real legal issue of this case. So if I may close this case post without further ado. The act amounts to a violation of the Attorney-Client Privilege Rule stated under the Rules of Court. 

Atty. E. Chico.... a este... Uy Chico wins this case.

ALVARADO vs GAVIOLA

This is a beautiful Succession case. Which could not have been beautiful had the court not seen the beauty that is typically unseen with the naked eye.. the ESSENCE of the Law.

And well ehem!, credits also goes to the lawyer who had presence of mind, and the tenacity to go over the rudiments of it all never buckling down in his obligation in the preparation of the testamentary documents together with the substantial requisites that goes with it. Otherwise the failing old man's true intention and will of disinheriting his abusive illegitimate son would have amounted to nothing and have executed the complete opposite of his intent. 

The 79 year old testator was suffering from GLAUCOMA and therefore partially blind. He executed a notarial will and a subsequent codicil for that matter wherein he DISINHERITED HIS ILLEGITIMATE SON. 

Actually it happened this way.. He called up a lawyer who is most probably personally well known to him. (Here comes the lawyer walking in.. places his Armani leather satchel on the mahogany table, loosens up his collar "Vincenzo is that you?.. let me feel your face".. "Don Brigido" "It is you.. I have known this face ever since you were a little boy.. your face is so much that of your father's.. and I have missed him ever since he was gone.. my comrade and most trusted friend" ah ehem!.. I just made that up LOL sorry)

Now notice, what the lawyer did was this. He summoned 3 credible witnesses who are mostly known to the old man,  a notary public, and drafted the 8 page document giving each one (3 witnesses and notary public) a copy and read the same aloud, the 4 following the reading with their own respective copies, before the ailing testator.  

Thereafter a codicil was executed changing some dispositions in the notarial will and said subsequent instrument was likewise not read by the testator but was read to the testator in the same manner as with the previously executed will. 

Now here comes the illegit son. When the will was submitted to the court for probation, the abusive illegitimate son, petitioner in this case (Alvarado) filed opposition saying that the will was not executed and attested as required by law.

ISSUE:

Was the will valid? Should it be admitted to probate despite allegations of defects in the execution and attestation as testator was allegedly blind at the time of its execution and the DOUBLE READING requirement under ART. 808 of the New Civil Code was not complied with? 

RULING:

IT'S VALID - The court never could have said it more beautifully and I quote "The spirit of the law was served though letter was not"  

You see the applicable provision ART. 808 speaks that "If the testator is BLIND, the will shall be read to him; once, by one of the (1.)SUBSCRIBING WITNESSES, and again, by the (2.) NOTARY PUBLIC before whom the will is acknowledged." This didn't happen here.

So here we see clearly the letter of the law was not strictly construed with regard to this case. It was the lawyer who read the testamentary will to the testator, and so the opposing party contradicted this as non-compliance to the applicable provision.

But the court said it doesn't matter. You see the essence of the law is that the testamentary will after its been completely drafted is MERELY REQUIRED to be sufficiently made known to the blind testator as to its content so that the testator may object and correct it upon hearing in order for it to conform to what his final intentions are. And CLEARLY in this case that requisite was COMPLIED WITH, even if it's the lawyer who rendered the reading.  

Furthermore, there was no evidence that contents of the will and codicil were not sufficiently made known and communicated to the testator.  With four persons mostly known to him following the reading word by word with each having his own copy, it can be safely concluded that the testator was reasonably assured that what was read to him were terms in the document. 

This comes under one of those circumstances where formal imperfections should be brushed aside when they do not affect its purpose and which if taken to account may only defeat the testator's will. And it is clear this is a NON-FATAL DEFECT affecting the validity of the testamentary documents as to the execution of the provision. 

It's just OVER-ZEALOUSNESS on the part of the lawyer, that's my own take on this. He must have been aware of the circumstances prevailing since the testator is personally well known to him and only wanted to protect him and his estate making sure he is there in every step of the way.. never realizing he was over-doing it.

And he probably love what he's doing.."Hep hep! Ako na babasa. Tutal ako naman nagsulat eh. And.. maganda naman boses ko.. di ba?" :) 

Well, there's nothin' completely wrong with that. Hinde epal yon ah.. in fact that's considerably admirable. Sinong gusto ng tatamad-tamad na abugado? 

NERA vs. REMANDO (Formalities of Wills - Test of Presence)

One of the best lecturers I’ve encountered in my new law school so far is my teacher in Succession, Atty. Fretti Ganchoon. Believe me once you’re seated in her class you wouldn’t want to miss a single word you’d wish you’re wired or somethin', like you have that tiny high definitioned microphone planted in you that records everything she says. Not for the purpose of wire tapping of course but to record everything vital and worth taking down in that lecture. Or maybe you could at least had it tape recorded with her knowledge to be at least fair to the teacher right? Co’z the moment she starts discussing, man! legal insights after another would keep flowing like she've just handpicked for you the salient points from the Jurado book where I bet your pen could hardly keep up. And do take note, her lectures are mostly precise and logically arranged. Her scenarios of the cases are concise, direct and clearly pictured out, and if possible in relation with or in contrast to other cases. And the principles of the discussed applicable laws and potential remedies are always clearly delivered.

This is a case about formalities of wills. Since this case was partially discussed in a previous post, allow me to discuss it further and a little bit more fully. This is the "2 Room Blocked By Curtain" case. Basically what happened here is that the will was executed in a large room which was connected to a smaller room by a doorway covered by a curtain. The parties needed to the execution of this will as prerequisite were all present. We have the testator, and the three witnesses or more. Of course we all know the notarial part may be satisfied afterwards.

The thing was, one of the witnesses to the signing of the instrument was in the small room when all the other witnesses were attaching their signatures to the instrument in the large room together with the testator. So it’s a question of presence, or position of witnesses when the instrument was signed.  The lower court did not consider that as of vital importance. It based its decision in an earlier ruling in the Jabonetta Case (Jabonetta vs. Gustillo) where the court held it was NOT sufficient to invalidate execution of the will. The CA affirmed the lower court ruling

So the ISSUE is.. is PRESENCE sufficient to INVALIDATE will?

The Supreme Court decided otherwise saying YES! It is sufficient to invalidate a will. You see presence is not one of those that could go under SUBSTANTIAL COMPLIANCE, this is a FATAL DEFECT that could not be cured by mere examination, since the law on succession expressly provides in

ART. 805 - “…attested and subscribed by three or more credible witnesses IN THE PRESENCE OF THE TESTATOR AND OF ONE ANOTHER”

In this case, the attaching of signature was not done in the presence of the witness in the other room (I wonder whut the hell the punk’s doin’ there?).

Well the court wanted to be liberal about it in the sense that I think it said somethin' like 'if there’s no curtain blocking the two rooms..' they might have considered it. Or maybe at least the.. you know those sleazy tassel curtains? those exotic ones we see on some Arab harems in movies where you hear sleazy music and see sultry women belly dancing? cobra rising and stuff (Lol). Well atleast it's see-through right? I mean you know like at least the other guy in the small room if he’s sneaking in on the lechon or somethin' in that small room could at least peek or somethin' and see “Oops! their signing it… that's hudas... woops that's barabas...  I gotta finish this off right away it’s gonna be my turn.. my gawd so yummy”.. "hestaaas!!! where the hell are you?!! " LOL

But.. oh well. A thick dark curtain is a thick dark curtain.. so. The court held that the line of vision of witness to testator was BLOCKED by curtain. I mean you know, the rule books say their suppose to see each other sign.. so.. there’s nothin’ we can do with that.

Of course the Jabonetta Case was invoked here and here’s what the Supreme Court said:

In the Jabonetta Case the ruling was settled revolving in the principle that “The true test of presence is not whether or not they saw each other sign.  But whether they might have seen each other sign if they chose to do so considering their physical, mental condition, and position in relation to each other at the moment of signing” (my lechon anecdote remember)

I think the invoked ruling even strengthened the superior court ruling.

So I guess it's clear, the court didn't find the Jabonetta Case applicable here. And though the court tried hard for the law not to be strictly construed and tried to be liberal about it, but what can it do, it’s the fuckin’ curtains man!  This is no longer a question of substantial compliance, this is clearly a fatal defect, e wala syang makita eh.. barado.. so ofcourse the court would  have no choice but to strictly construe.

JAVELLANA vs. LEDESMA

This Succession Case tackles the chronological issues in signing a will or codicil for that matter. Whether which should come first. Must the document be accomplished in one sitting? Or once acknowledgements had all been accomplished, the unfinished document can be set aside for another day or two where concluding parts of it such as the notarial requisite be accomplished in a subsequent act. 

Well the Old Civil Code of 1899 expressly requires that all be accomplished in one sitting, otherwise the instrument may be deemed invalid.

So I wonder how they pass on their inheritance in the olden days? Boy it must be all dramatic and all that stuff. Just imagine everyone is there, present. I mean if there be grudge and bad blood that runs in the family, consider the ordeal these documentary witnesses and notarial representative (should there'd be any) undergo when the family starts washing their dirty linens even in closed doors. 

Let's try to take a look at one case.

Court admitted to probate a will and codicil executed by the deceased Apolinaria Ledesma. The contestant was the sister and nearest surviving kin of the deceased. In her appeal she alleged that the will and codicil were not executed in accordance with law, well because:

1. The testament was executed at the house of the testator. [under the Old Civil Code of 1899] 2. But the codicil was executed and attested at the San Pablo hospital [after the enactment of the New Civil Code (NCC)], and therefore had to be acknowledged before a notary public. 

So basically were talking about the acknowledgement of a codicil here. What is acknowledgement by the way? Is it any different from attestation? How about a Jurat?

Now, the contestant, who happens to be one of the instrumental witnesses asserted that after the codicil was signed and attested at the San Pablo hospital, the Notary Public signed and sealed it on the same occasion. (Duh?) Notary public however, said that he did not do so, and that the act of signing and sealing was done afterwards. (Whut the...Is this the only difference between the old and the new code?.. this is what I hate about transitions) 

Well, one clear allegation was that the certificate of acknowledgement (were talking about the notarial act) to the codicil was signed elsewhere, most probably in the office of the notary. 

Nevertheless, what is the ISSUE here: 

The issue is whether or not the signing and sealing of the codicil by notary public in the absence of the testator and witnesses affects the validity of the will. 

RULING:

NO.  Court held that unlike in the Old Civil Code of 1899, the NCC does not require that the signing of the testator, the witnesses and the notary be accomplished in one single act. All that is required is that every will must be acknowledged before a notary public by the testator and witnesses. 

The subsequent signing and sealing is not part of the acknowledgement itself nor of the testamentary act. Their separate execution out of the presence of the testator and the witnesses cannot be a violation of the rule that testaments should be completed without interruption.

Alright let me get that straight: Let's do some differentiation here to somehow clear things up (I hope) and somehow make this post a reference:

NOTARIZATION vs. ATTESTATION 

It’s a common assumption that “notarization” and “attestation” refer to the same type of act. But you see, while a public notary can only perform notarial acts, attestations are required for certain documents.  

The act of notarization the signatures on a document can only by a legal public notary. it usually involves paying a fee, taking an oath, and being sworn in by the attesting authority.  

Attestations, on the other hand, can be performed by anyone, regardless as to whether or not the individual is a public notary. It's common for public documents to require witness attestations, which basically means that a 3rd party must bear witness to the document’s signing. You see this 3rd party attests that the document was signed by the said person.  So basically it is used in the context of validating the contents of a document.

Another key difference between notarial acts and attestations involves the way in which they are executed. When a notarial act is being performed, the public notary is usually required to place his or her official stamp or seal and recording log numbers on the document. 

Someone who’s attesting the signatures on a document and/or its contents, on the other hand, are not required to place a stamp or seal on the document.

ATTESTATION vs. ACKNOWLEDGEMENT  

An attestation however is different from an acknowledgement. Attestation is done by a witness. An acknowledgement is done by the party concerned. 

You will also come across the word “Subscribe” in legal documents. Strictly speaking, the word “Subscribe” does not impute personal knowledge of the matter in consideration and is more in the nature of appending the names of signatures in a mechanical manner.

The term attested, when used in relation to a deed or document, means that the deed or document concerned is attested by two or more witnesses. So it is imperative that each of the witnesses should have seen the Testator (who is the executor of the document) sign the document. And each of them (3 or more Witnesses as in the case of a notarial will) should have signed as a witness in the presence of the Testator and all other Witnesses. 

By the way, In the US their succession laws carries no specific or particular form prescribed for attestations. It is not necessary that the witnesses should sign in the presence of each other. It is only required that each of the witness has direct knowledge that the document had been signed by the Executor (which they refer to as  Executant for that matter).  Here in the Philippines on the other hand, our succession laws requires stricter application. Witnesses are expected to sign the notarial will as attestation in the presence of the Testator and other Witnesses.

Such in the case of Nera vs. Rimando two rooms were blocked by a curtain. One of the witnesses was in a the other room while the other witness was attaching his signature to the instrument in front of the testator. The lower court did not consider the position of the witnesses at the time of signing of vital importance. This lower court decision was based on an earlier ruling called the Jabonetta Case (Jabonetta vs. Gustillo) where it was held that it was not sufficient to invalidate execution of will. The CA affirmed this decision but when it reached the highest court the decision was overturned. The court said the line of vision of witness to the testator and other witnesses was blocked, 

I think in hindsight, the highest court was telling the lower court, 'You've used the right citational   jurisprudence but you've misapplied the doctrine'  Don't verbatim quote me on that. This is just my interpretation. You see the doctrine of the Jabonetta Case states that "True test of presence is not whether or not they saw each other sign but WHETHER THEY MIGHT HAVE SEEN EACH OTHER SIGN IF THEY CHOSE TO DO SO, considering their physical, mental condition and position in relation to each other at the moment of signing." 

So as if the SC was saying 'If the curtain wasn't there and nothing is blocking the winess' vision even if he is positioned in the other room it might have been considered. But the curtain was there what can we do, the Jabonetta Case had provided the standard' Again don't quote me on that. I just can't stop my creative juices coming out. So the bottom-line is they should see each other sign.

More on ACKNOWLEDGEMENT: 

You know at times, a person may sign his or her name in a deed or document for identifying an Executor. The purpose of this is only to confirm the identity and such. The identifier does not become an Attestor for the execution of deed or document concerned.

The term “Sign” generally mean affixing the signature or otherwise affixing the name or a mark to represent the name of a person. The “signing” should be such that it would bind the person concerned as relating to the aspect of signing. Even the insertion of a name, done in the manner required, may amount to signing, authentication or attestation as the case may be.

JURAT vs. ACKNOWLEDGEMENT  

Now, Acknowledgement and Jurat  are the two most common notarial acts. Actually there is confusion among law students about the difference between these two.   

A jurat is used when the signer is swearing to the content of the document.  The notary must administer an oath or affirmation to the signer in order to complete the jurat. A jurat also requires that the signer signs in the presence of the notary. it's quite easy to identify a Jurat in a legal document. Just find the portion that states “Subscribed and sworn to before me…” – subscribed meaning “signed” and sworn meaning that an oral oath or affirmation was given.  “Before me” means that both were done in the presence of the notary public.

In Acknowledgements however, acknowledgement portion is used to verify the identity of the signer and to confirm that they signed the document.  They are not swearing to the truthfulness or validity of the document, they are simply acknowledging that they signed the document.  

An acknowledgment certificate indicates that the signer:

1. personally appeared before the Notary,

2. was identified by the Notary, and

3. acknowledged to the Notary that the document was freely signed.

Acknowledgments do not need to be signed in the notary’s presence although it would be highly preferred whenever possible. For this matter I think the confusion lies from the fact that the signer must appear before the Notary at the time of notarization to acknowledge that he or she freely signed for the purposes stated in the document.

But take note of this, documents requiring a Jurat must be signed in the Notary’s presence, as dictated by the typical jurat wording, “Subscribed (signed) and sworn to before me…” okay? So in theory, it is imperative that it is the executor who was presenting the document to the notary. But in practice, sometimes if not, then must be duly identified. 

In executing a Jurat, a notary guarantees that the signer:

1. personally appeared before the notary,

2. was given an oath or affirmation by the notary, and finally

3. signed in the Notary Public’s presence.

To summarize, the key difference between a JURAT vs ACKNOWLEDGMENT is that the former (Jurat) is used primarily when dealing with sworn statements and the latter (Acknowledgment)  typically applies to documents that must be signed in front of an unbiased independent witness.

SAMAR MINING vs. NORDEUTSCHER

This Transpo Law case arose from an importation made by SAMAR MINING. The cargo was 1 crate of Optima Welded Wedge Wire. The freight-in ship was named M/S Schwabenstein, a German cargo ship owned by NORDEUTSCHER.  Which was represented in the Philippines by its agent CF SHARP.  The shipment was covered by a bill of lading duly issued to consignee SAMAR MINING.  

I hope I made it clear, the consignee in this case is the shipper himself SAMAR MINING.  The cargo was aboard a German vessel. The carrier here or the ship-owner of course  is a German company,  which is NORDEUTSCHER. And wait,  there’s a 3^rd party here. The shipper Samar Mining had availed of the services of a bonded warehouse called AMCYL beforehand. 

So upon arrival of the vessel at the port of Manila, importation was unloaded and delivered in good order and condition to the bonded warehouse AMCYL as was agreed upon.  The goods however was never delivered to and received by consignee Samar at the port of destination which is Davao.

Wait let me get that straight. You see the following are the pertinent ports as provided in the Bill of Lading:

1. Port of Loading – GERMANY
2. Port of Discharge from Ship – MANILA
3. Port of Destination (Discharge of Goods) - DAVAO  

So as plainly indicated on the face of the Bill, vessel  M/S Schwabenstein is to transport the goods only up to Manila.  Thereafter, the goods are to be TRANSHIPPED by the carrier to the port of destination. So what on earth is NORDEUTSCHER thinking?

So there you go, letters of complaint therefore were sent to  NORDEUTSCHER, which failed to elicit the desired response.   SAMAR therefore filed a formal complaint for claims of damage against NORDEUTSCHER, its local agent CF SHARP, and warehouse AMCYL as 3^rd party defendant .  

The lower court CFI of Manila favored SAMAR, but however stated that  NORDEUTSCHER may recoup whatever they may pay Samar by enforcing the judgment against 3^rd Party Defendant AMCYL.  

So what is the ISSUE here:

The issue is whether appellants NORDS, SHARP, and AMCYL were liable for the loss of goods under the bill of lading.

HELD:

The answer is NO.  SC said the Bill of Lading operates both as a:  1. RECEIPT for the goods on board and 2. A CONTRACT to transport and deliver the same as stipulated therein.

Geez what happened?  Say what?

Let’s take a look at the Bill of Lading then.

You see,  in Section 1 of Paragraph 3 of the Bill of Lading the parties stipulated that:

“The carrier shall not be liable in any capacity whatsoever for any delay, loss or damage occurring before the goods enter ship’s tackle to be loaded or after the goods leave ship’s tackle to be discharged, transshipped or forwarded. “

Question, was this a valid stipulation? The court said it’s VALID.  We are talking about what is not on carriers actual custody you see.  Therefore the carrier may be exempt from liability for loss or damage, for how can you oblige someone with something that is not in their actual custody?

Here’s an illustration I prepared to make it more clear to you:

Here’s the original deal. The 2 parties SAMAR and NORDEUTSCHER had a meeting of minds, the agreement was to transport and deliver the cargo from Germany to Davao. That is the intent. Manila is just a point of reference between Germany and Davao. And that a TRANSHIPMENT was bound to happen. Either NORDEUTSCHER reloads it from the warehouse into another ship they own which happen to be in the Manila port or hire another ship of local ownership to deliver the goods to the consignee in Davao.  So the bill of lading is very clear, we could infer from it that the shipper-consignee had no wish to obligate itself to handle any booking of further shipment other than the one starting from Germany. It is leaving it all to the carrier’s discretion. All it wanted to do was start the shipment in Germany and wait for the end of shipment in Davao.

If you look at my diagram you can see bold lines and broken lines right? The bold lines is where the carrier  NORDEUTSCHER has actual custody of the goods. And therefore must exercise extra-ordinary diligence as required by law. The broken lines are the moments it has no actual custody and control. And this does not require any kind of diligence, pursuant to what had been stipulated in the bill of lading. Right? So why oblige someone of something he has no control of?

And what the SC had decided upon is the part in the middle where the broken lines landed on the warehouse awaiting transshipment.  This is where this decision was based. SC said there was ACTUAL CONSTRUCTIVE DELIVERY during that time. The goods were discharged from the ship to the warehouse. Therefore the liability now shifts from the carrier to the warehouse. Meaning it is no longer in their custody and control. Therefore the requisite to exercise extra-ordinary diligence ceases, and they are no longer liable for loss or destruction of the goods. Why? Well basically by virtue of the above stipulation. (Section 1 of Paragraph 3 of the Bill of Lading).

Gets? 

TEOFISTO GUINGONA vs CITY FISCAL OF MANILA

A certain Clemente David made several investments with NSLA (National  Savings and Loan Association). But after almost 3 years of investing the bank was placed under receivership by the Central Bank.

So.. here we find out that NSLA is suppose to be a bank ok?  Don’t laugh. This is not a mainstream bank were talking about here such as BDO, BPI, MetroBank, RCBC and all those commercial banks we all see around.  These types are what you call S&L banks or Thrift Banks ok? The difference between the two is that thrift banks are governed by R.A. 7906 which is the Thrift Bank Act, whereas commercial banks are governed by R.A. 8791 the General Banking Law, though the latter law has suppletory application to thrift banks. Gets? So if the name doesn’t ring any bell, it’s suppose to be highly understandable.  

S&L,  meaning savings and loan association. These are financial institutions that specializes in accepting savings deposits and making mortgage and other loans.  They are often mutually held by a certain collective class , like teachers, soldiers, etc. often called mutual savings banks meaning that the depositors and borrowers are members with voting rights, and have the ability to direct the financial and managerial goals of the organization. I should know, I've worked in one type of bank my self during my Letran days.

To site some examples I think we have the Manila Teachers Savings and Loan Association, which has its office in UN Ave.  JUSLAI is another, the Judiciary Savings and Loan Association Inc., I think the Armed Forces have one of their own.  So generally these institutions are not stand alones, they are mostly subsidiaries of their mother institution to where their collective clients belong. 

So here we see in this case NSLA was placed under receivership by Central Bank, and whenever you hear that a certain bank (thrift banks included) is being placed under receivership by Banko Sentral,  take note that's a red flag, that only means one thing, that the bank is in a brink of insolvency.. in other words its getting bankrupt.  So better take your money immediately out of it. You see by law, thrift banks can have no more than 20 percent of their lending in commercial loans so their focus on mortgage and consumer loans makes them particularly vulnerable to housing downturns.

So here’s the scenario,  starting early of 1979 David and her sister were making several investments with said thrift bank NSLA right?  Three years later (1981) the bank gets bankrupt.  So by operation of law Central Bank has to come in right? in order to save bank assets  and see what can be done for its recovery. And of course to protect investors. Which they actually did. But sadly due to technical reasons, not in this case. But can you blame the petitioners here? I dont think so.

With regard to the owners of the bank I dunno correct me if I’m wrong but I’m just inferring from the digested case. I think the said bank was partly owned by the then Senator Teofisto Guingona Jr. , I’m talking about the old Guingona. No not the Sr. but the  Jr. because the current senate speaker, which is the good Senator Teofisto Guingona III is ofcourse the third.

This case was decided 1984. The senator assumed senate office in 1987. And that was mostly the start of his long political career. So.. this tells you aside from heading the Philippine Chamber of Commerce and being the top honcho of DBP before assuming his seats of power, the fellow was a simple businessman.

But as an investor of course suddenly knowing that the funds in the bank where you placed your money is at stake, you ofcourse kinda worry for your financial security you know?  So what David did was he requested  from Guingona and Martin a joint promissory note stating that they are absorbing the obligations of the bank in case of insolvency, and since the former senator as we all know is a man of his word, in good faith, he and his co-owner divided the indebtedness and issued the requested joint promissory note.   

Let’s take a look at what David is arguing for and how much he is trying to secure.  It says in the actual case Clement David, together with his sister, Denise Kuhne, invested with NSLA the sum of:

P1,145,546.20 on time deposits

P13,531.94 on savings account deposits  

 US$ 75,000.00 on foreign deposits

(plus interests)

Ladies and gentlemen were talking about year 1979-1981. So.. you could just figure out how much this amounts are valued during the time prevailing.  

But I’m not sure what triggered private respondent David to file a complaint with the Office of the City Fiscal of Manila charging Guingona and Martin with estafa and violation of Central Bank Circular No. 364 and related Central Bank regulations on foreign exchange transactions.  The actual case as I read it recounts that the promissory note was based on the statement of account as of June 30, 1981 prepared by the private respondent.  Thing was, the amount of indebtedness assumed appears to be bigger than the original claim because of the added interest and the inclusion of other deposits of private respondent's sister in the amount of P116,613.20 where Guingona by himself executed another promissory note antedated to June 17, 1981 whereby he personally acknowledged an indebtedness. So here it's clear, the former senator was aware of his obligation and had no plans to back down.

So, what do you think will happen next?  If I am the former senator and I am faced with a criminal law suit instead of a civil one, I would file a petition myself. Which they did. Hence this case.  

This is a petition for prohibition and injunction with a prayer for the immediate issuance of restraining order and/or writ of preliminary injunction seeking  to prohibit the public respondent which is the City Fiscal of Manila  from proceeding with the preliminary investigation, in which they were charged by private respondent Clement David.  

So as I said erlier, the charge was ESTAFA and a violation of Central Bank Circular No 364.  Now here lies the controversy .. Estafa is a criminal offense.   

So the ISSUE now is: Whether City Fiscal of Manila acted without jurisdiction when they investigated the charges of estafa and violation of CB Circular No. 364 and related regulations regarding foreign exchange transactions.

RULING:

Court HELD that the City Fiscal of Manila have NO JURISDICTION over the charge of ESTAFA.

When private respondent David invested his money  with the bank, the contract that was perfected was a CONTRACT OF SIMPLE LOAN or mutuum and not a Contract of Deposit.

So take note okay?  Time deposits are different from savings account deposits.  It’s an all too different bologna.  It’s more complicated than you’ll ever thought.  The rulebooks and the SC couldn’t have said it more clearly.  It’s an all too different contract meaning the repercussions and ramification are not the same.    

Check this out: Article 1980 of the New Civil Code provides that:  

“Fixed, savings, and current deposits of-money in banks and similar institutions shall be governed by the provisions concerning simple loan” 

Hence, the relationship between David and the NSLA is that of creditor and debtor.  David is the creditor the bank is the debtor.  So  if you do time deposits, consequently, the ownership of the amount deposited will be transmitted to the bank upon the perfection of the contract. That means the bank can make use of the amount deposited for its banking operations, such as to pay interests on deposits and to pay withdrawals.

Now, take note of this, while the Bank has the obligation to return the amount deposited, it has, however, no obligation to return or deliver the same money that was deposited.  Meaning the bank may return it in full or in half depending on its solvency.

And, take note further…  the failure of the Bank to return the amount deposited will not constitute estafa through misappropriation punishable under Article 315, par. l(b) of the Revised Penal Code, but it will only give rise to CIVIL LIABILITY, as in the case at bar public respondent City Fiscal of Manila therefore have no- jurisdiction.. since its suppose to be a civil case, tsk tsk tsk.

Coz you see… in order that a person can be convicted under the above-quoted provision, it must be proven that he has the obligation to deliver or return the sum of money, goods or  personal property that he received.   And as we have just pointed out, such in the prevailing contract, petitioners Guingona and Martin had no such obligation to return the same money they received from David. Okay?

This is because as clearly as stated earlier the sums of money that petitioners received were loans. The nature of simple loan is defined in Articles 1933 and 1953 of the Civil Code. So.. check it out for yourself.

If I were you, I’d hold on to that money and push aside that time deposit contract. Shake that manager’s hand and bid him farewell. Until you find a stronger, stable, and reliable bank for that matter.

 "Art. 1933. - By the contract of loan, one of the parties delivers to another, either something not consumable so that the latter may use the same for a certain time-and return it, in which case the contract is called a commodatum; or money or other consumable thing, upon the condition that the same amount of the same kind and quality shall be paid in which case the contract is simply called a loan or mutuum.

"Commodatum is essentially gratuitous." Simple loan may be gratuitous or with a stipulation to pay interest."In commodatum the bailor retains the ownership of the thing loaned while in simple loan, ownership passes to the borrower.

"Art. 1953. - A person who receives a loan of money or any other fungible thing acquires the ownership thereof, and is bound to pay to the creditor an equal amount of the same kind and quality."

So in simple loan(mutuum), as contrasted to commodatum the borrower acquires ownership of the money, goods or personal property borrowed right? And of course being the owner, the borrower can dispose of the thing borrowed (Article 248, Civil Code) and his act will not be considered misappropriation thereof. right?'

Uuuuh!! Gooey. 

MARTINI vs. MACONDRAY

Pardon my 'UN-BAR-LIKE' penmanship. This is my desperate 10 minute case digest at the backseat of my car. If push comes to shove where all else been taken into account and matters must be confronted, means I'll have to rely on this piece of crap in the recitation coming within an hour. Look at that, it's not even done due to time constraint. It need not be. The ruling is in my head.

Alright here we go, plaintif G. MARTINI Ltd.  is a Trading Company, alright?  MACONDRAY & Co., respondent in this case  is an Australian Steamship Company.. meaning we have a common carrier here which is a shipping company.   Martini had to transport 219 packages of chemical products from Manila to Japan. So, port of loading –Manila, port of destination – Kobe, Japan.  

It was a Friday morning when Martini applied to Macondray for a space on the steamship called Eastern. (Please be noted, steamships are obsolete, they are propelled by coal energy, like the RMS Titanic remember?  They heap coal at the inner bottom of the ship to produce steam to run the ship’s engine. The shipping industry have evolved since the early 19th century so practically it’s of no use today.  This is ahmm.. this case is dated 1916 so there you are, that explains everything,  this case actually happened 4 years after the sinking of the Titanic).

So the ship captain received the Shipping Order (don’t pay too much attention to it, its not the Bill of Lading,  its ahm.. its just a slip issued by the company which mainly constitutes extending authority to the one in-charge of the ship to receive the cargo aboard, it’s more like a job order or something) Once the Shipping Order is issued, shipment starts to be loaded, and then the ship issues something what you call a Mate’s Receipt to the shipper, which in this case is Martini. The thing was, the receipt did not reach Martini’s hand till Monday night.  BTW - The receipt had a stamp on its face that said “ON DECK AT SHIPPER’S RISK”. Which confirmed the ship captain had decided to merely carry it on deck rather than under the hatches as was requested. 

But beforehand the day of his application on Friday, Martini expressed desire to the Macondray company if he could obtain the Bill of Lading on Saturday morning in order that he might negotiate them at the bank. So a request was made by Martini to Macondray for the delivery of the Bill of Lading on that day. But to effectuate this, Martini was required to enter into a written obligation, something you call a Letter of Guarantee.   So in other words we established 3 things here. 1. That it isn’t Martini who was paying for the shipment but the bank. 2. That the cargo is being loaded on the ship while Martini was simultaneously taking care of shipment and bank documents. 3.  Saturday during the 1900s unlike today was a bank day. (Geez I didn’t know that, so Saturday is still work huh? bummer)  

So in conformity with the purpose of this document the Bills of Lading were  issued, and the negotiable copies were on the same day negotiated at the bank by plaintiff Martini for 90% of the invoice value of the goods. So this means it didn't actually reached Saturday when Martini got what he asked for, he got it even earlier, So clearly these are two parties that comply right away to each other's documentary need. But of course there's a defect somewhere, had there not then we're not looking at a legal case here.  

Now here comes the controversy.  The Bills of Lading were issued right? Right just in time when the shipper needed it.  But the thing was, the Bills of Lading contained on their face the conspicuously stenciled words “ON DECK AT SHIPPER’S RISK.” 

So Martini upon seeing the words  all at once called the attention of S. Codina, the Martini employee whose primary duty was to attend to all shipments of merchandise and cargo related documents. 

And so through Codina, Martini sent Macondray a letter  stating the following :            

“It is the prevailing practice that, whenever a cargo is being carried on deck, ship owners  or agents give advice of it to shippers previous to shipment taking place, and obtain their consent to it. If we had been advised of it, shipment would not have been effected by us. We regret very much this occurrence, but you will understand that in view of your having acted in this case on your own responsibility, we shall have to hold you amenable for any consequences that may be caused from your action.” (hadnt it occured to you.. Old English sounds and even looks more compelling especially when it's used in law)

So Macondray called Codina by phone saying they:

“..could not accept the cargo  for transportation otherwise (meaning under the hatches) than on deck and that if Martini were dissatisfied, the cargo could be discharged from the ship.”

You must understand, the content of cargo were CHEMICALS. I dunno but maybe having found out from the Shipping Order and from ocular inspection that such cargo constitute hazardous material. So carrying it under hatches renders a greater risk on the ship itself than on deck on open air, should it cause fire or anything else for that matter.

So it's clear, Macondray opted to observe ORDINARY DILIGENCE (Diligence of a Good Father of a Family) with regard to the Martini cargo, other than the usual EXTRA-ORDINARY DILIGENCE basically required of all common carriers. 

Well there is substantial conformity with respect to the time of the conversation by telephone and the nature of the message which Macondray & Co. intended to convey. But in conclusion, it seems clear enough that, although Martini would have greatly preferred for the cargo to be carried under the hatches, they nevertheless consented for it to go on deck.

So the goods were embarked at Manila on the steamship Eastern and were carried to Kobe on the deck of that ship. Upon arrival at the port of destination they found out that the chemicals which comprised the shipment had suffered damage from the effects of both fresh and salt water.

Therefore an action was instituted by Martini to recover the amount of the damage (I think I should add here ‘thereby occasioned’ so It’d look something like I’m in the 1912 or somethin’…. I’M THE KING OF THE WOORRLD!!) 

The Court of First Instance of Manila’s judgment was rendered in favor of Martini for the sum of P34,997.56, with interest from 24 March 1917, and costs of the proceeding.

ISSUE:

Do you think Macondray should be held liable?

HELD:

NO. (I'm pasting from BerneGuerrero's Haystack now)

1. Damage was caused by water
The damage was caused by water, either falling in the form of rain or splashing aboard by the action of wind and waves.

2. Paragraph 19 of the several bills of lading issued for transportation of the cargo
Paragraph 19 of the several bills of lading issued for transportation of the cargo reads “(19) Goodssigned for on this bill of lading as carried on deck are entirely at shipper’s risk, whether carried on deck or under hatches, and the steamer is not liable for any loss or damage from any cause whatever.“

3. Shipper ordinarily produce mate’s receipt to agents of ship’s company
Ordinarily the shipper is supposed to produce the mate’s receipt to the agents of the ship’s company, who thereupon issue the bill of lading to the shipper. When, however, the shipper desires to procure the bill of lading before he obtains the mate’s receipt, it is customary for him to enter into a written obligation, binding himself, among other things, to abide by the terms of the mate’s receipt. Herein,

4. Contents of the “Letter of Guarantee”
The “Letter of Guarantee” dated 16 September 1916, is of the tenor “In consideration of your signing us clean B/L for the undermentioned cargo per above steamer to be shipped on or under deck at ship’s option, for Kobe without production of the mate’s receipt, we hereby guarantee to hold you free from any responsibility by your doing so, and for any expense should the whole or part of the cargo be shut out, or otherwise, and to hand you said mate’s receipt as soon as it reaches us and to abide by all clauses and notations on the same.”

5. Martini did nothing to discharge cargo
In order to get the cargo off certain formalities were necessary which could not be accomplished, as for instance, the return of the mate’s receipt (which had not yet come to Martini’s hands), the securing of a permit from the customs authorities, and the securing of an order of discharge from the steamship company. In view of the fact that Martini did nothing whatever looking towards the discharge of the cargo, not even so much as to notify Macondray that the cargo must come off, the proof relative to the practicability of discharge is inconclusive. If Martini had promptly informed Macondray of their resolve to have the cargo discharged, and the latter had nevertheless permitted the ship to sail without discharging it, there would have been some ground for Martini’s contention that its consent had not been given for the goods to be carried on deck. Needless to say the Court attached no weight to the statement of Codina that he was unable to get Macondray by telephone in order to communicate directions for the discharge of the cargo. 

(The rest you can get it from there, here's the link, just hunt it down)
https://berneguerrero.files.wordpress.com/2012/08/2004hs198_transpo.pdf