Case #1 - Zosa

Petitioner: People of the Philippines

Respondent: Venancio Concepcion
G.R. No. L-19190, Nov 29, 1922
TOPIC: Concept of Credit
FACTS
Sec. 35 of Act No. 2747 (Feb 20, 1918) of
the National Bank prohibits, (in)directly, to grant
loans to any of the members of the board of directors
of the bank nor to agents of branch banks.
Sometime in April-May 1919, PNB
President Venancio Concepcion authorized an
extension of credit in the amount of P300,000 in
favor of Puno y Concepcion, S. en C. without
asking for collateral security.
Puno y Concepcion, S. en C. was a
copartnership where the wife of President
Concepcion was a member of.
President Concepcion was charged with a
violation of Sec 35 of Act No. 2747. However in
1921, said section was already repealed.
RELEVANT ISSUES
1. Was granting the P300,000 credit, a loan within
the meaning of sec 35, Act No. 2747?
2. Was granting the P300,000 credit, a loan or a
discount?
3. Was granting the P300,000 credit, an indirect
loan within the meaning of sec 35 of Act No. 2747?
4. Could Pres Concepcion be convicted of violating
sec 35, Act No. 2747 when it has already been
repealed by Act No. 2938?
5. Does the alleged good faith of Pres Concepcion in
extending credit constitute a legal defense?
RULING
1. No, what was granted was credit and not a
loan.

CREDIT ability to borrow money by virtue of the

confidence or trust reposed by a lender that he will
pay what he may promise.
LOAN the delivery by one party and the receipt by
the other party of a given sum of money, upon an
agreement, expressed or implied, to repay the sum
loaned, with or without interest.
2. It was a loan.
LOAN
1. Loan is loan.
2. Interest is taken at
the expiration of a
credit.
3. Generally on singlename paper.

DISCOUNT
1. A mode of loan
2. Interest is deducted
in advance.
3. Always on doublename paper.

The demand notes signed by the Puno y

Concepcion, S. en C. were not discount paper but
were mere evidences of indebtedness because:
1. interest was not deducted from the face of the
notes (but was paid when the notes fell due)
2. they were single-name papers
3. Yes, the loan was made indirectly to him
through Puno y Concepcion, S. en C.
It must be noted that Rosario San Agustin,
wife of Pres Concepcion contributed P50,000, onehalf of the capital of the partnership. The share of the
wife in the partnership is considered a conjugal
property and thus the credit was an indirect loan to
the Pres Concepcion.
4. Yes, it has been held that where the repeal
of an Act of the Legislature which penalizes an
offense does not have the effect of thereafter
depriving the courts of jurisdiction to try, convict, and
sentence offenders charged with violations of the old
law.
5. In the statute which the defendant has
violated, criminal intent is not necessarily material.
The doing of the inhibited act constitutes the crime.
Pres Concepcion has been proved guilty beyond
reasonable doubt of the crime charged in the
information.