SICAM vs.

JORGE
G.R. No. 159617 August 8, 2007
Facts:
Lulu Jorge pawned several pieces of jewelry with Agencia de R. C. Sicam to secure
a loan.
On October 19, 1987, two armed men entered the pawnshop and took away
whatever cash and jewelry were found inside the pawnshop vault. Sicam sent
respondent Lulu a letter informing her of the loss of her jewelry due to the robbery
incident in the pawnshop. Respondent Lulu expressed disbelief stating that when the
robbery happened, all jewelry pawned were deposited with Far East Bank near the
pawnshop since it had been the practice that before they could withdraw, advance
notice must be given to the pawnshop so it could withdraw the jewelry from the bank.
Respondent Lulu then requested petitioner Sicam to prepare the pawned jewelry for
withdrawal on but petitioner Sicam failed to return the jewelry.
Respondent Lulu is seeking indemnification for the loss of pawned jewelry and
payment of damages. Petitioner is interposing the defense of casofortuito on the
robber committed against the pawnshop.
Issue:
WON Sicam is liable for the loss of the pawned articles in their possession? YES
Held:
Fortuitous events by definition are extraordinary events not foreseeable or avoidable.
It is therefore, not enough that the event should not have been foreseen or
anticipated, as is commonly believed but it must be one impossible to foresee or to
avoid. The mere difficulty to foresee the happening is not impossibility to foresee the
same.
Robbery per se, just like carnapping, is not a fortuitous event. It does not foreclose
the possibility of negligence on the part of herein petitioners.
A review of the records clearly shows that petitioners failed to exercise reasonable
care and caution that an ordinarily prudent person would have used in the same
situation. Petitioners were guilty of negligence in the operation of their pawnshop
business. No sufficient precaution and vigilance were adopted by petitioners to
protect the pawnshop from unlawful intrusion. There was no clear showing that there
was any security guard at all.
Sicams admission that the vault was open at the time of robbery is clearly a proof of
petitioners failure to observe the care, precaution and vigilance that the
circumstances justly demanded. Petitioner Sicam testified that once the pawnshop
was open, the combination was already off. Instead of taking the precaution to
protect them, they let open the vault, providing no difficulty for the robbers to cart
away the pawned articles.

In contrast, the robbery in this case took place in 1987 when robbery was already
prevalent and petitioners in fact had already foreseen it as they wanted to deposit
the pawn with a nearby bank for safekeeping. Moreover, unlike in Austria, where no
negligence was committed, we found petitioners negligent in securing their
pawnshop as earlier discussed.

PRESIDENTIAL COMMISSION
SANDIGANBAYAN
G.R. Nos. 119609-10

ON

GOOD

GOVERNMENT

VS.

FACTS OF THE CASE

The PCGG issued writs of sequestration against OWNI. Then, it sent Corporate
Secretary Africa of Ocean Wireless Network, Inc. (OWNI) a letter directing him to
send notices to all stockholders of record of OWNI for special stockholders meeting.
He was required to issue one qualifying share each to PCGG Commissioners
Maceren and Castro from the unissued shares and to record the transfer in the stock
and transfer book of OWNI. Failure to comply within 5 days from receipt thereof,
Assistant Solicitor General Desuasido would be designated as acting corporate
secretary.During the special stockholders meeting of OWNI, PCGG voted all the
Class A shares in the election of directors and elected to the board of directors
Commissioners Maceren, Parlade and Gutierrez representing the Class A shares,
and Brooker and Miller representing Class B and C shares. The new board of
directors then elected Maceren as Chairman of the Board, Gutierrez as President,
ASG Desuasido as Acting Corporate Secretary and Velasco as Acting Treasurer.
None of the registered Class A shareholders of OWNI was present in that special
stockholders meeting.Corporate Secretary Africa wrote the SEC questioning the
election of the PCGG nominees as directors of the OWNI board on the ground that
they were not stockholders of the OWNI. Then, a special stockholders meeting of
OWNI took place, were another election of directors for Class A shares were held.
Thus, the PCGG sought to enjoin the new directors from interfering with PCGGs
management of OWNI and/or representing themselves as directors. Sandiganbayan
nullified the writs of sequestration, stressing the need to file a separate action
against OWNI.
ISSUE
Whether or not the PCGGs takeover of OWN is legal.
RULING
PCGGs takeover of OWNI is not legal. It was previously ruled by the Court that the
PCGG cannot exercise acts of dominion over property sequestered, frozen or
provisionally taken over. The act of sequestration does not import or bring about a
divestment of title over said property; does not make the PCGG the owner thereof.
Further, the writ of sequestration issued against OWNI is not valid because the civil
suit filed against its stockholders is not a suit against OWNI. This Court has held that
failure to implead these corporations as defendants and merely annexing a list of

such corporations to the complaints is a violation of their right to due process for it
would in effect be disregarding their distinct and separate personality without
a hearing.
People vsQuasha
FACTS:
William H. Quashaa member of the Philippine bar, committed a crime of falsification
of a public and commercial document for causing it to appear that ArsenioBaylon, a
Filipino citizen, had subscribed to and was the owner of 60.005 % of the subscribed
capital stock of Pacific Airways Corp.(Pacific) when in reality the money paid belongs
to an American citizen whose name did not appear in the article of incorporation,to
circumvent the constitutional mandate that no corp. shall be authorize to operate as
a public utility in the Philippines unless 60% of its capital stock is owned by Filipinos.
Found guilty after trial and sentenced to a term of imprisonment and a fine. Quasha
appealed to this Court. Primary purpose: to carry on the business of a common
carrier by air, land or water. Baylon did not have the controlling vote because of the
difference in voting power between the preferred shares and the common shares
ISSUE: W/N Quasha should be criminally liable

HELD: NO. Acquitted.

falsification consists in not disclosing in the articles of incorporation that Baylon was
a mere trustee ( or dummy as the prosecution chooses to call him) of his American
co- incorporators, thus giving the impression that Baylon was the owner of the
shares subscribed to by him
For the mere formation of the corporation such revelation was not essential, and the
Corporation Law does not require it
The moment for determining whether a corporation is entitled to operate as a public
utility is when it applies for a franchise, certificate, or any other form of authorization
for that purpose, that can be done after the corporation has already come into being
and not while it is still being formedso far as American citizens are concerned, the
said act has ceased to be an offense within the meaning of the law, so that
defendant can no longer be held criminally liable therefor.

PCIB V. CA
350 SCRA 446
FACTS:
In October 1977, Ford Philippines drew a Citibank check in the amount of
P4,746,114.41 in favor of the Commissioner of the Internal Revenue (CIR). The
check represents Fords tax payment for the third quarter of 1977. On the face of the
check was written Payees account only which means that the check cannot be
encashed and can only be deposited with the CIRs savings account (which is with
Metrobank). The said check was however presented to PCIB
and PCIB accepted the same. PCIB then indorsed the check for clearing to Citibank.
Citibank cleared the check and paid PCIB P4,746,114.41. CIR later informed Ford
that it never received the tax payment.
An investigation ensued and it was discovered that Fords accountant Godofredo
Rivera, when the check was deposited with PCIB, recalled the check since there was
allegedly an error in the computation of the tax to be paid. PCIB, as instructed by
Rivera, replaced the check with two of its managers checks.
It was further discovered that Rivera was actually a member of a syndicate and the
managers checks were subsequently deposited with the Pacific Banking
Corporation by other members of the
syndicate. Thereafter, Rivera and the other members became fugitives of justice.
Ford Philippines filed actions to recover from the drawee bankCitibank and collecting
bank PCIB the value of several checks payable to the Commissioner of
Internal Revenue which wereembezzled allegedly by anorganized syndicate. What
prompted this action was the drawing of acheck by Ford, which it deposited to PCIB
as payment and was debited from their Citibank account. It later on found out that
the payment wasnt received by the Commissioner. Meanwhile, according to the
NBI report, one of the checks issued by petitioner was withdrawn from PCIB for
alleged mistake in the amount to be paid. This wasreplaced with managers checkby
PCIB, which were allegedly stolen by the syndicate and de posited in their own
account.
The trial court decided in favor of Ford.
ISSUE:
Has Ford the right to recover the value of the checks intended as payment to CIR?
HELD:
The checks were drawn against the drawee bank but the title of the person
negotiating the same was allegedly defective because the instrument wasobtained
by fraud and unlawful means, and the proceeds of the checks were not remitted to
the payee. It was established that instead paying theCommissioner, the checks
werediverted and encashed for the eventual distribution among members of the
syndicate.

Pursuant to this, it is vital to show that the negotiation is made by the perpetrator in
breach of faith amounting to fraud. The person negotiating the checks must have
gone beyond the authority given by his principal. If the principal could prove that
there was no negligence in the performance
of his duties, he may set up the personal defense to escape li ability and recover
from other parties who, through their own negligence, allowed the commission of the
crime.
It should be resolved if Ford is guilty of the imputed contributor y negligence that
would defeat its claim for reimbursement, bearing in mind that its employees were
among the members of the syndicate. It appearsalthough the employees of Ford
initiated the transactions attributable tothe organized syndicate, their actions were
not the proximate cause ofencashing the checks payable to CIR. The degree of
Fords negligence couldnt be characterized as theproximate cause of the injury to
parties. The mere fact that th e forgery was committed by a drawer-payors
confidential employee or agent, who by virtue of his position had unusualfacilities for
perpetrating the fraud and imposing the forged paperupon the bank, doesnt entitle
the bank to shift the loss to thedrawer-payor, in the absence of some circumstance
raising estoppel against the drawer.
Note:not onlyPCIB but also Citibank is responsible for negligence. Citibank was
negligent in the performance of its duties as a draweebank. It failed to establish its
payments of Fords checks were made in due course and legally in order.
ISSUE: W/N Ford can hold both PCIB and Citibank liable
HELD: YES. CA AFFIRMED. PCIBank, know formerly as Insular Bank of Asia and
America, id declared solely responsible for the loss of the proceeds of Citibank
Check in the amount P4,746,114.41. However, MODIFIED as follows: PCIBank and
Citibank are adjudged liable for and must share the loss, concerning the proceeds of
Citibank Check Numbers SN 10597 and 16508 on a 50-50 ratio to pay Ford

GR: if the master is injured by the negligence of a third person and by

the concurring contributory negligence of his own servant or agent, the latter's
negligence is imputed to his superior and will defeat the superior's action
against the third person, assuming, of course that the contributory negligence
was the proximate cause of the injury of which complaint is made.
ISSUE: What are the liabilities of each party?
HELD: G.R. No. 121413/G.R. No. 121479
PCIB is liable for the amount of the check (P4,746,114.41). PCIB, as a collecting
bank has been negligent in verifying the authority of Rivera to negotiate the check. It
failed to ascertain whether or notRivera can validly recall the check and have them
be replaced with PCIBs managers checks as in fact, Ford has no knowledge and
did not authorize such. A bank (in this case PCIB) which cashes a check drawn upon
another bank (in this case Citibank), without requiring proof as to the identity of
persons presenting it, or making inquiries with regard to them, cannot hold the

proceeds against the drawee when the proceeds of the checks were afterwards
diverted to the hands of a third party. Hence, PCIB is liable for the amount of the
embezzled check.
G.R. No. 128604
PCIB and Citibank are liable for the amount of the checks on a 50-50 basis.
As a general rule, a bank is liable for the negligent or tortuous act of its employees
within the course and apparent scope of their employment or authority. Hence, PCIB
is liable for the fraudulent act of its employee who set up the savings account under
a fictitious name.
Citibank is likewise liable because it was negligent in the performance of its
obligations with respect to its agreement with Ford. The checks which were drawn
against Fords account with Citibank clearly states that they are payable to the CIR
only yet Citibank delivered said payments to PCIB. Citibank however argues that the
checks were indorsed by PCIB to Citibank and that the latter has nothing to do but to
pay it. The Supreme Court cited Section 62 of the Negotiable Instruments Law which
mandates the Citibank, as an acceptor of the checks, to engage in paying thechecks
according to the tenor of the acceptance which is to deliverthe payment to the
payees account only.
But the Supreme Court ruled that in the consolidated cases, that PCIB and Citibank
are not the only negligent parties. Ford is also negligent for failing to examine its
passbook in a timely manner which could have avoided further loss. But this
negligence is not the proximate cause of the loss but is merely contributory.
Nevertheless, this mitigates the liability of PCIB and Citibank hence the rate of
interest, with which PCIB and Citibank is to pay Ford, is lowered from
12% to 6% per annum.

Ching vs Secretary of Justice

Lessons Applicable: Corp. Officers or employees, through whose act, default or
omission the corp. commits a crime, are themselves individually guilty of the crime
(Corporate Law)
FACTS:
Ching was the Senior Vice-President of Philippine Blooming Mills, Inc. (PBMI).
Sometime in September to October 1980, PBMI, through petitioner, applied with the
Rizal Commercial Banking Corporation (respondent bank) for the issuance of
commercial letters of credit to finance its importation of assorted goods. Under the
receipts, petitioner agreed to hold the goods in trust for the said bank, with authority
to sell but not by way of conditional sale, pledge or otherwise; and in case such
goods were sold, to turn over the proceeds thereof as soon as received, to apply
against the relative acceptances and payment of other indebtedness to respondent
bank. In case the goods remained unsold within the specified period, the goods were
to be returned to respondent bank without any need of demand. Thus, said goods,
manufactured products or proceeds thereof, whether in the form of money or bills,

receivables, or accounts separate and capable of identification were respondent

banks property. When the trust receipts matured, petitioner failed to return the
goods to respondent bank, or to return their value amounting to P6,940,280.66
despite demands. Thus, the bank filed a criminal complaint for estafa6 against
petitioner in the Office of the City Prosecutor of Manila.
Issue: Whether or not Ching is liable for Estafa
Held: In the case at bar, the transaction between petitioner and respondent bank
falls under the trust receipt transactions envisaged in P.D. No. 115. Respondent bank
imported the goods and entrusted the same to PBMI under the trust receipts signed
by petitioner, as entrustee, with the bank as entruster. The failure of person to turn
over the proceeds of the sale of the goods covered by the trust receipt to the
entruster or to return said goods, if not sold, is a public nuisance to be abated by the
imposition of penal sanctions.It must be stressed that P.D. No. 115 is a declaration
by legislative authority that, as a matter of public policy, the failure of person to turn
over the proceeds of the sale of the goods covered by a trust receipt or to return said
goods, if not sold, is a public nuisance to be abated by the imposition of penal
sanctions.
Failure of the entrustee to turn over the proceeds of the sale of the goods covered by
the trust receipts to the entruster or to return said goods if they were not disposed of
in accordance with the terms of the trust receipt is a crime under P.D. No. 115,
without need of proving intent to defraud.In Colinares v. Court of Appeals, the
Court declared that there are two possible situations in a trust
receipt transaction. The first is covered by the provision which refers to money
received under the obligation involving the duty to deliver it (entregarla) to the owner
of the merchandise sold. The second is covered by the provision which refers to
merchandise received under the obligation to return it (devolvera) to the
owner. Thus, failure of the entrustee to turn over the proceeds of the sale of the
goods cov- ered by the trust receipts to the entruster or to return said goods if they
were not disposed of in accordance with the terms of the trust receipt is a crime
under P.D. No. 115, without need of proving intent to defraud. The law punishes
dishonesty and abuse of confidence in the handling of money or goods to the
prejudice of the entruster, regardless of whether the latter is the owner or not. A mere
failure to deliver the proceeds of the sale of the goods, if not sold, constitutes a
criminal offense that causes prejudice, not only to another, but more to the public
interest.
P.D. No. 115 is malumprohibitum but is classified as estafa under paragraph 1(b),
Article 315 of the Revised Penal Code, or estafawith abuse of confidence.The
crime defined in P.D. No. 115 is malumprohibitum but is classified as estafa under
paragraph 1(b), Article 315 of the Revised Penal Code, or estafa with abuse of
confidence. It may be committed by a corporation or other juridical entity or by
natural persons. However, the penalty for the crime is imprisonment for the periods
provided in said Article 315.

Acebedo Optical Company, Inc. vs. The Honorable Court of Appeals

G.R. No. 100152
March 31, 2000
Facts: Petitioner applied with the Office of the City Mayor of Iligan for a business
permit. After consideration of petitioner's application and the opposition interposed
thereto by local optometrists, respondent City Mayor issued Business Permit No.
5342 subject to the following conditions: (1) Since it is a corporation, Acebedo cannot
put up an optical clinic but only a commercial store; (2) It cannot examine and/or
prescribe reading and similar optical glasses for patients, because these are
functions of optical clinics; (3) It cannot sell reading and similar eyeglasses without
a prescription having first been made by an independent optometrist or
independent optical clinic. Acebedo can only sell directly to the public, without need
of a prescription, Ray-Ban and similar eyeglasses; (4) It cannot advertise optical
lenses and eyeglasses, but can advertise Ray-Ban and similar glasses and frames;
(5) It is allowed to grind lenses but only upon the prescription of an
independent optometrist. On December 5, 1988, private respondent Samahanng
Optometrist SaPilipinas (SOPI lodged a complaint against the petitioner alleging that
Acebedo had violated the conditions set forth in its business permit and requesting
the cancellation and/or revocation of such permit. On July 19, 1989, the City Mayor
sent petitioner a Notice of Resolution and Cancellation of Business Permit effective
as of said date and giving petitioner three (3) months to wind up its affairs.
Issue: Whether the City Mayor has the authority to impose special conditions, as a
valid exercise of police power, in the grant of business permits
Ruling: Police power as an inherent attribute of sovereignty is the power to
prescribe regulations to promote the health, morals, peace, education, good
order or safety and general welfare of the people. It is essentially regulatory in nature
and the power to issue licenses or grant business permits, if exercised for a
regulatory and not revenue-raising purpose, is within the ambit of this power. The
authority of city mayors to issue or grant licenses and business permits is beyond
cavil. However, the power to grant or issue licenses or business permits must always
be exercised in accordance with law, with utmost observance of the rights of all
concerned to due process and equal protection of the law.
In the case under consideration, the business permit granted by respondent City
Mayor to petitioner was burdened with several conditions. Petitioner agrees with
the holding by the Court of Appeals that respondent City Mayor acted beyond his
authority in imposing such special conditions in its permit as the same have no basis
in the law or ordinance. Public respondents and private respondent SOPI are one in
saying that the imposition of said special conditions is well within the authority of the
City Mayor as a valid exercise of police power.
The issuance of business licenses and permits by a municipality or city is essentially
regulatory in nature. The authority, which devolved upon local government units
to issue or grant such licenses or
permits, is essentially in the exercise of the police power of the State within the
contemplation of the general welfare clause of the Local Government Code.

What is sought by petitioner from respondent City Mayor is a permit to engage in the
business of running an optical shop. It does not purport to seek a license to engage
in the practice of optometry. The objective of the imposition of subject conditions on
petitioner's business permit could be attained by requiring the optometrists in
petitioner's employ to produce a valid certificate of registration as optometrist, from
the Board of Examiners in Optometry. A business permit is issued primarily to
regulate the conduct of business and the City Mayor cannot, through the issuance of
such permit, regulate the practice of a profession. Such a function is within the
exclusive domain of the administrative agency specifically empowered by law to
supervise the profession, in this case the Professional
Regulations Commission and the Board of Examiners in Optometry.