Philippine Trust Company v. Philippine National Bank

JOHNS, J.:

The plaintiff and defendant are corporations organized under the laws of the Philippine Islands and domiciled in the city of Manila. Salvador Hermanos was a copartnership and during the month of January, 1919, executed to the defendant eight promissory notes aggregating P156,000, payable on demand, and each secured by a quedan, or warehouse receipt, issued by the firm of Nieva, Ruiz and Company, Each note recites that it is payable on demand after date, for value received, and that the firm has deposited "with the said bank as collateral security for the payment of this note, or any note given in extension or renewal thereof, as well as for the payment of any other liability or liabilities of the undersigned to the said bank due or to become due, whether now existing or hereafter arising, the following property owned by the undersigned." The note then specifies the number of the quedan and the amount of copra in piculs, and states that the quedan was issued by Nieva, Ruiz and Company.

The note for P8,000, dated January 18, 1919, was secured by warehouse receipt No. 30; for P20,000, dated January 22, 1919, was secured by receipt No. 35; for P20,000, dated January 24, 1919 was secured by receipt No. 38; for P20,000, dated January 27, 1919, was secured by receipt No. 41; for P14,000, dated January 28, 1919 was secured by receipt No. 42; for P18,000, dated January 21, 1919, was secured by receipt No. 33; for P18,000, dated January 23, 1919, was secured by receipt No. 36; and for P18,000, dated January 25, 1919, was secured by receipt No. 39, making a total of 16,051.10 piculs of copra, covered by the warehouse receipts of the firm of Nieva, Ruiz and Company issued to the firm of Salvador Hermano, and by that firm pledged as collateral to the defendant to secure the payment of the eight above-described notes. Each of them further recites that "on the nonperformance of this promise, or upon the non-payment of any of the liabilities above-mentioned, or upon the failure of the undersigned forthwith, with or without notice, to furnish satisfactory additional securities in case of decline, as aforesaid, then and in either such case, this note and all liabilities of the undersigned, or any of them, shall forthwith become due and payable, without demand or notice, and full power and authority are hereby given to said bank to sell, assign, transfer and deliver the whole of the said securities, or any part thereof, or any substitutes therefor or any additions thereto, or any other securities or property given unto or left in the possession of or hereafter give unto or left in the possession of said bank by the undersigned for safe keeping or otherwise, at any brokers' board or at public or private sale, at the option of said bank or of its president or secretary, without either demand, advertisement or notice of any kind, which are hereby expressly waived.

At any such sale, the said bank may itself purchase the whole or any part of the property sold, free from any right of redemption on the part of the undersigned, which is hereby waived and released." Stamped in red ink across the face of each quedan are the words "Negotiable Warrant," and each of them was in the usual form of warehouse receipts.

On February 10, 1919, the firm of Salvador Hermanos withdrew from the defendant bank, by and with its consent, warehouse receipts Nos. 33, 36, and 39 above described, which the bank was holding as collateral security for each of the three 18,000-peso notes amounting to P54,000.

the total amount of copra evidenced by the receipts withdrawn was 6,024.55 piculs, the declared value of which, shown on the face of such receipts, was P90,368.25. At the time of the withdrawal, the firm executed the following writing: We received from the Philippine National Bank the warehouse receipts issued by Messrs. Nieva, Ruiz and Company, the contents of which are as follows: No. Date Sacks Piculs Declared Value 33 January 21/19 2,325 2,040.55 P30,608.25 36 January 23/19 2,175 1,992.00 29,880.00 39 January 25/19 2,335 1,992.00 29,880.00 Total