1. Banco Espanol Filipino (BEP) loaned Francisco Reyes money and Reyes pledged goods stored in a warehouse as collateral.
2. Sheriff James Peterson improperly seized $30,000 worth of goods pledged to BEP.
3. The court ruled the contract of pledge was valid, as Reyes was no longer in possession of the goods and BEP had symbolic possession through the depositary, Luis Sierra, appointed by both parties. BEP thus had a better claim to the goods than Peterson.
1. Banco Espanol Filipino (BEP) loaned Francisco Reyes money and Reyes pledged goods stored in a warehouse as collateral.
2. Sheriff James Peterson improperly seized $30,000 worth of goods pledged to BEP.
3. The court ruled the contract of pledge was valid, as Reyes was no longer in possession of the goods and BEP had symbolic possession through the depositary, Luis Sierra, appointed by both parties. BEP thus had a better claim to the goods than Peterson.
1. Banco Espanol Filipino (BEP) loaned Francisco Reyes money and Reyes pledged goods stored in a warehouse as collateral.
2. Sheriff James Peterson improperly seized $30,000 worth of goods pledged to BEP.
3. The court ruled the contract of pledge was valid, as Reyes was no longer in possession of the goods and BEP had symbolic possession through the depositary, Luis Sierra, appointed by both parties. BEP thus had a better claim to the goods than Peterson.
1. Banco Espanol Filipino (BEP) loaned Francisco Reyes money and Reyes pledged goods stored in a warehouse as collateral.
2. Sheriff James Peterson improperly seized $30,000 worth of goods pledged to BEP.
3. The court ruled the contract of pledge was valid, as Reyes was no longer in possession of the goods and BEP had symbolic possession through the depositary, Luis Sierra, appointed by both parties. BEP thus had a better claim to the goods than Peterson.
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POSSESION
Banco Espanol Filipino v Peterson Ruling:
(1907) The contract was valid. Reyes was no Facts: On March 4, 1905, Banco Espanol longer in possession of the pledged Filipino (BEP) executed a contract of loan property. BEP had symbolic possession of in favor of Francisco Reyes for P141 the same. 702.00. Reyes was already indebted to the bank for P84 415.00. His total debt was The contract complies with all the therefore P226 117.38. To secure requisites of a valid pledge contract, as payment of the P141k and the P84k, prescribed by the Civil Code: Reyes executed a public instrument 1. The property was pledged to secure a mortgaging several of his properties and debt ledging part of his personal property to 2. The date of execution, the terms of the BEP (P90 591.75 worth of wines, liquors pledge, and the property pledged and canned goods), which were stored at appeared in a public instrument a warehouse he rented in Manila. BEP and 3. The property pledged was placed in the Reyes agreed that the goods should be hands of a third person (in this case, delivered to Ramon Garcia (depositary) Sierra) by common consent of the debtor for safekeeping. Reyes turned over the and creditor, under the supervision of an goods to R. Garcia by giving him the agent (in this case, Rodriguez) of the bank warehouse keys. On September 29, 1905, BEP and Reyes substituted Luis Sierra in Reyes, after the pledge, parted with the place of R. Garcia as the depositary. On possession of his personal property, October 19, 1905, Juan Garcia (yes, which was delivered to a third person (R. related to Ramon) brought an action Garcia, and subsequently, Sierra) who against Francisco Reyes and Ramon would take care of them for BEP. Sierra Agtarat. CFI Manila ruled against Reyes was the third person appointed by and Agtarat for P15 000.00. On the same common consent of BEP (creditor) and day, Sheriff James Peterson entered the Reyes (debtor), to hold possession over warehouse where the goods pledged to the goods pledged in favor of the bank BEP were stored under the custody of the under the direct supervision of Rodriguez, depositary, Sierra. Peterson levied upon an agent specifically appointed by the P30 000 worth of the goods pledged to bank. The contract in question was, the bank, depriving the latter of therefore, a perfect contract of pledge possession of the same, as stipulated in under articles 1857 and 1863 of the Civil the March 4 contract of loan. Code, it having been conclusively shown that the pledgee (BEP) took charge and Issues possession of the goods pledged through 1. Was the contract of pledge a depositary (Sierra) and a special agent between BEP and Reyes to secure a (Rodriguez) appointed by it, each of loan valid? whom had a duplicate key to the 2. Was Reyes still in possession of the warehouse wherein the said goods were pledged property, thereby making stored, and that the pledgee (BEP), itself, the contract defective? received and collected the proceeds of the goods as they were sold. The legality of the pledge was not affected by the fact that the goods remained in the warehouse formerly rented by Reyes the pledgor. This is because after the pledge had been agreed upon, and after the depository appointed with common consent of the parties had taken possession of the said property, Reyes could no longer dispose of the same because BEP was the only party allowed to do so through Sierra and Rodriguez. The symbolic transfer of the goods through delivery of the keys to the warehouse where the goods were stored was sufficient evidence to show that Sierra, the depositary appointed by both BEP and Rodriguez, was legally placed in possession of the goods. Since the contract of pledge was valid, BEP had a better right to the goods compared to J. Garcia. The Court ordered either the return of the improperly levied goods, or the payment of their value, P30 000.