Message of Senior Associate Justice Antonio T. Carpio During the Launch of "Credit Transactions: Notes and Cases"

"I am very pleased to be here for the launching of Prof. Gomez-Somera’s 2-volume textbook, Credit Transactions: Notes and Cases. Stephanie Gomez was my student in Credit Transactions, and after her graduation she joined me in private practice. She also joined me in the Office of the President when I served as Chief Presidential Legal Counsel under President Fidel V. Ramos.

While in private practice, Atty. Gomez and I agreed on one thing: Credit Transactions is one of the most useful subjects. Whether you do litigation or corporate work, you encounter aspects of Credit Transactions in most of the cases you handle. It simply pays to be well grounded in the subject.

Sometime in the late 1980s, I suggested to Atty. Gomez that we write a book on Credit Transactions. She dutifully prepared an outline but in private practice you seldom have enough time for extra work like writing a textbook. So nothing happened to that book project of ours, solely due to my fault.

Presentation of "Credit Transactions: Notes and Cases"

Allow me to present this textbook, Credit Transactions: Notes and Cases, Volumes I and II, by briefly discussing what I consider its deviations from the usual.

The first deviation is that the provisions of the law are not presented sequentially; rather, they are discussed based on the defining elements of the credit transaction under study.  The reason is that to the student, specifically, the sophomore student of the College, certain phrases, for example, “obligations of the bailor” will have no immediate denotative, much less connotative meaning.  On the other hand, certain other phrases, such as “the obligation to deliver,” should immediately bring to their mind concepts already studied in previous subjects, in this case, the concept of “real contracts” and all its legal denotations and connotations.

The second deviation is that in the cases, which are excerpts rather than digests of Supreme Court decisions, the provisions of the contracts under review are line bordered.  The intention is to focus the student’s attention on contract language.  One of the assignments I give in my course is a contract review of an actual contract of loan with real estate mortgage and a contract of loan with chattel mortgage.  They are required to submit a memorandum advising a fictional client, either the creditor or the debtor, on contractual rights and obligations. The goal is to familiarize the student not only with the language of decisions and pleadings, with which he or she is inundated, but also with the language of contracts.

The third deviation is that the law is reformatted without any change in its language.  Borrowing from diagramming as a means of teaching grammar, and from the way students highlight, sectionalize and mark up what they read, the legal provisions are in a sense “diagrammed” so that the student immediately focuses on the essential elements already contained in the very language of the law.  For example Article 1933 is presented with a lead phrase “By the contract of loan,” teaching the student from that first phrase alone that the obligations in a loan always arise as a consequence of contract, with all its legal implications.

Like all deviations, there is therefore an element of experimentation involved in this textbook, and a determination of the success or failure of this experiment will depend on how my students perform this semester.

For me, it is appropriate that the textbook leads off with a case decided by Justice George A. Malcolm.  Allow me then to read an excerpt that discusses the case of People v. Concepcion, G.R. No. L-19190, November 29, 1922, 44 Phil 126:

"Justice Malcolm’s definition of credit in People v. Concepcion provides a conceptual framework for understanding credit in relation to credit transactions.  Borrowing from Bouvier’s Law Dictionary, he defined credit as a person’s “ability to borrow money by virtue of the confidence or trust reposed by a lender that he will pay what he may promise.”... This definition hews closely to the dictionary definition of the word credit, which is, “belief; trust” originating as it does from the Latin credere, to trust, to believe." 

I remind my students that the word “credit” is therefore etymologically linked to the word “creed,” which is why the expression of our Catholic Faith as contained in the Nicene Creed begins with “I believe...”

Which brings me to why I wrote this textbook.  This is a difficult first for me.  It started as an outline, excerpts of relevant cases, and innumerable marginal notes on other textbooks. There was much to do to be able to meet the deadline set in my contract, to make it available for this second semester, and yet there is still even more to do now. Proofreading and lay outing never seems to end, and already I am thinking that it may be more efficient to have a digital version.  I realize that it will be quite a while before I consider this task accomplished.  And therefore I ask myself why I got into this in the first place.

Gratefully, there is an answer.  I wrote this textbook because I believe – I believe - that it will help the students of the College, specifically, my students, see the subject more clearly, and understand it more precisely. So quite simply, I got myself into this because of my students.

In the first part of the textbook there is a list of the people to whom I have expressed gratitude, and it is a privilege to have some of them present here now.  I will not repeat their names, but let me just say that the expression of gratitude on paper does not approximate the depths I feel in my soul.

Thank you all very much.

Welcome Remarks for the PBA Fellowship on ICT

"Never in all their history have men been able truly to conceive of the world as one: a single sphere, a globe ... a round earth in which all the directions eventually meet, in which there is no center because every point, or none, is center — an equal earth which all men occupy as equals."

That statement was made by lawyer, poet and librarian of the US Congress, Archibald MacLeish in 1942, over 60 years ago; but it has remained evocative with the passage of time. With the world enmeshed in a great war, MacLeish described his "image of victory" based on the perspective of what he called "the airman's earth", that is, the earth as seen from the air.

Twenty five years later, Macleish's description was profoundly viewed by all of humanity when the pictures of our planet, our earth, taken from the unique perspective of space, were first published.

Now more than 60 years later, his compelling image of an equal earth where every point or none is center can very well describe the world created by information and communication technology - cyberspace, the world wide web, the Internet.

The question before us today is this: will our laws help us create such an equal world, or with they hinder us.

Introduction to the Concept of Credit (Credit Transactions: Notes and Cases)

"William Shakespeare’s play, 'The Merchant of Venice,' dramatizes the inherent tension between creditor and debtor, and illustrates the evolution of the concepts of credit and debt. In the play, the judge, Portia, unexpectedly declares the forfeiture, in favor of the State of Venice, of all the lands and goods, not of the debtor, but of the creditor, Shylock.

In ancient times, that would have been unthinkable. Under Greek law, non-payment of a debt was categorized as a capital crime similar to murder.  Under Roman law, a creditor was allowed to seize the debtor and sell or kill him in foreclosure, since a sum of money owed was equated with human life.  And under Judaic law, a creditor was allowed to take the children of the debtor for nonpayment of a debt. 

Juxtapose the harshness of these legal concepts with the constitutional mandate that 

No person shall be imprisoned for debt… 

and it becomes clear that centuries of social, cultural, and political change have dramatically altered the concepts of credit and debt.

But the historical tension between creditor and debtor, dramatized in 'The Merchant of Venice,' has obviously not disappeared.  In lieu of human life - the allegorical pound of flesh - merchants had to devise a rational, and kinder, system of ensuring the payment of debt.  Hence the concept of security, a transaction by which a creditor mitigates the risk of non-payment of debt by equating a sum of money owed with property or another person’s undertaking to pay. 

It is intuitive that Shakespeare titled his play after Antonio, the merchant, because it was the rise of the merchant class, of mercantilism, of trade and commerce , which greatly influenced this evolution.  Without credit, and without a rational system of dealing with non-payment of debt, trade and commerce would not have flourished to the levels that were seen in the 14th to the 19th century.  

By the 20th century, modern-day merchants were translating the concepts of credit, debt and security into increasingly complicated and sophisticated transactions required by the global economy.   But the metamorphosis seemingly ignored the underlying premise and legal framework of these concepts."