THE PEOPLE OF THE PHILIPPINE ISLANDS,  vs.

VENANCIO CONCEPCION, 

G.R. No. L-19190             November 29, 1922 MALCOLM, J.:

Topic. Purpose of Construction: determine legislative intent

Case. Appeal from a lower court decision

Facts. Philippine National Bank President Concepcion issued a memo limiting the discretional power of
local manager at Aparri, Cagayan to grant loans and discount negotiable documents to P5000 to P10000.

Manager asked for authorization from Concepcion about an establishment’s, Puno y Concepcion, loan.
PNB Pres. Concepcion authorized extension of credit to Puno y Concepcion in the amount of P300,000.
Security consisted of 6 demand notes. The notes and interest were paid accordingly.

Puno y Concepcion consisted of several members including PNB President Concepcion’s wife Rosario San
Agustin.

Cagayan CFI found PNB Pres. Concepcion guilty of violating Sec. 35 of Act No. 2747 which reads: “The
National Bank shall not, directly or indirectly, grant loans to any of the members of the board of
directors of the bank nor to agents of the branch banks.” Sec. 49 of same act prescribes punishments.
But these were later repealed by Act. No. 2938 on Jan. 1921, after CFI decision.

Issue. (1) Was the credit grant a “loan”? –Yes; (2) Was it a “loan” or “discount”? -Loan; (3) Was it an
“indirect loan”? -Yes; (4) Can he be convicted when relevant provisions have been repealed? -Yes; (5)
Was it in violation of Sec. 35 of Act. No. 2747? –Yes; (6) Can good faith be his defense? -No

Ratio. (1) Concession of credit necessary involves granting of a loan.

(2) Because interest was not deducted from the face of the notes, but was paid when the notes fell due
and they were single-name and not double-name paper.

(3) They are man and wife.

(4) “Where an Act of the Legislature which penalizes an offense, such repeal 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) Defense contend that 35 refers to bank. 49 refers to punishment not on bank but person. Therefore,
they argue that there is no penalty for person. This is misconstrued. If corporation is forbidden to do an
act, same extends to directors.

(6) Under this statute, criminal intent is immaterial.

On a review of the evidence of record, with reference to the decision of the trial court, and the errors
assigned by the appellant, and with reference to previous decisions of this court on the same
subject, we are irresistibly led to the conclusion that no reversible error was committed in the trial of
this case, and that the defendant has been proved guilty beyond a reasonable doubt of the crime
charged in the information. The penalty imposed by the trial judge falls within the limits of the
punitive provisions of the law.

Judgment is affirmed, with the costs of this instance against the appellant. So ordered.

Doctrine: The principles can be found in ratio 3. “Directly or indirectly” could be problematic to
understand. But looking at the legislative intent would clear things out. In the inclusion of this phrase,
the Legislature intended to prohibit temptation for bank director. Personal interest and duty at times
conflict and the provision saw this coming. In this case, it is apparent that Concepcion is interested to
see his wife succeed which overcame his duty to PNB. Therefore, he is “indirectly” a participant.

Definitions:

Credit of an individual: his ability to borrow money by virtue of the confidence or trust reposed by a
lender that he will pay what he may promise.

Loan: delivery by one party and the receipt by the other party of a given sum of money, upon an
agreement, express or implied, to repay the sum of money, upon an agreement, express or implied, to
repay the sum loaned, with or without interest.

Discount: Interest is deducted in advance; always on double-name paper.

Loan: Interest is taken at the expiration of a credit; generally on single-name paper.