Philippine Supreme Court Jurisprudence


Philippine Supreme Court Jurisprudence > Year 1954 > May 1954 Decisions > G.R. No. L-6463 May 26, 1954 - RIZAL SURETY & INSURANCE CO. v. MARCIANO DE LA PAZ

095 Phil 90:




PHILIPPINE SUPREME COURT DECISIONS

EN BANC

[G.R. No. L-6463. May 26, 1954.]

RIZAL SURETY & INSURANCE CO., Plaintiff-Appellee, v. MARCIANO DE LA PAZ, ET AL., Defendants, appellants-appellees. MARCIANO DE LA PAZ and DOMINGO LEONOR, Defendants-Appellants.

Amelito R. Mutuc for Appellee.

Tolentino & Garcia for Appellant.

Padilla, Carlos & Fernando for appellant D. Leonor.

F. A. Rodrigo for interpleader-appellee Pablo Roman.

Solicitor General for the Collector of Internal Revenue.

Tanjuatco & Del Rosario for appellees Jose Santos and D. Nepomuceno.

Alfonso G. Espinosa for S. D. Yñigo.


SYLLABUS


1. OBLIGATIONS AND CONTRACTS; PREFERENCE OF CREDITS; INSOLVENCY. — Where the debtor is insolvent, article 1924 of the old Civil Code is not applicable, since it is considered repealed insofar as it referred to cases of bankruptcy and estates of deceased persons.

2. ID.; ID.; LAW ON ATTACHMENT AND LAW OF PREFERENCE OF CREDITS APPLIED TOGETHER. — The law on attachment and the law of preference of credits under article 1924 of the Civil Code heretofore been applied hand in hand.

3. ID.; ID.; ID.; AMUSEMENT TAXES; SUPERIOR LIEN. — The claim of the Collector of Internal Revenue for amusement taxes on the theater insured, constitutes a lien superior to all other charges or liens, not only on the theater itself but also upon all property rights therein, including the insurance proceeds.

4. ID.; ID.; ORDER OF PREFERENCE UNDER ARTICLE 1924 OF CIVIL CODE. — The order of preference under article 1924, paragraph 3, of the Civil Code, is, first, in favor of credits evidenced by a public instrument and, secondly, in favor of credits evidenced by a final judgment, should they have been the subject of litigation, the preference among the two kinds of credits being determined by priority of dates.

5. ID.; ID.; ID.; ID.; PUBLIC INSTRUMENT; DATE IN BODY IS DATE OF ACKNOWLEDGMENT BY REFERENCE. — Where an instrument is dated in the body, and said is referred to in the notarial acknowledgment, the date of the latter is deemed to be the date appearing in the body of the instrument.

6. ID.; ID.; ID.; ID.; CREDIT EVIDENCED BY PUBLIC INSTRUMENT NEED NOT BE REDUCED TO JUDGMENT. — A credit evidenced by a public instrument, though not reduced to a judgment, is entitled to priority, because article 1924 of the Civil Code distinguishes credits evidenced by a public document.

7. ID.; ID.; ID.; ID.; PREFERENCE UNDER PUBLIC INSTRUMENT NOT LOST BY REDUCTION THEREOF INTO JUDGMENT. — The preference under a public instrument is not lost by the mere fact that the credit is made the subject of a subsequent judicial action and judgment.

8. ID.; ID.; ID.; ID.; FINAL JUDGMENT; ABSENCE OF STAY OF EXECUTION. — A judgment upon which execution has not been stayed under the provisions of section 14 of Act 190, is entitled to the preference provided for in article 1924 of the Civil Code.

9. ID.; ID.; ID.; ID.; PREFERENCE DUE TO NOTICE OF ATTACHMENT OR GARNISHMENT. — A credit made the subject of notice of attachment or garnishment is entitled to preference as of the date of said notice, subject only to the priority of credits provided for by article 1924 of the Civil Code.


D E C I S I O N


PARAS, C.J. :


On March 22, 1950, the plaintiff Rizal Surety and Insurance Company filed a complaint in the Court of First Instance of Manila, alleging that the sum of P20,000 was due and payable to the Federal Films, Inc., as proceeds of fire insurance covering a theater situated in Marikina, Rizal, which was destroyed by fire on February 1, 1947; that as several creditors of the insured, namely, Marciano de la Paz, Domingo Leonor, Jose Santos and Dominador Nepomuceno, Pablo Roman, Serapion D. Yñigo, and the Collector of Internal Revenue, were claiming said proceeds from the plaintiff, the latter had no means of knowing definitely the order of preference among the various claimants; and praying that said creditors, named defendants in the complaint, be ordered to interplead and litigate their conflicting claims, and that the sum of P20,000 be ordered paid to the court for delivery to the proper parties, after deducting the costs of the suit. After the defendants had filed their respective answers, the Court of First Instance of Manila rendered a decision the dispositive part of which reads as follows:jgc:chanrobles.com.ph

"Wherefore, judgment is hereby rendered in favor of the defendants, and the plaintiff is ordered to pay said defendants out of the P20,000 minus the costs in its favor, in the following order: first, the Collector of Internal Revenue to be paid the sum of P3,216.08; second, Jose Santos and Dominador Nepomuceno to be paid the sum of P10,000; third, the defendant Pablo Roman to be paid the sum of P9,000, with six per centum interest per annum from the date of the filing of complaint in Civil Case No. 73256 and his costs in said case out of the remaining balance; forth, the defendant Domingo E. Leonor to be paid the sum of P20,000 with interest of six per centum per annum from the date of the filing of the complaint in Civil Case No. 1749, should there be any balance; and fifth the defendant Marciano de la Paz to be paid the sum of P6,001.50 with interest of six per centum from February 5, 1947, the date of the demand, plus P545 as costs and sheriff’s fees should there be any balance left."cralaw virtua1aw library

From this judgment, which applied section 315 of the National Internal Revenue Code and article 1924, paragraph 3, of the old Civil Code, the defendants Marciano de la Paz and Domingo Leonor appealed. Briefly the contention of appellant Marciano de la Paz is that his claim for P6,001.50 should enjoy first priority, because on February 5, 1947, he caused to be garnished the proceeds in question, said garnishment being prior to all other liens. The appellant Domingo Leonor in turn contends that his claim for P2,300 is superior, except with regards to the tax lien of the Collector of Internal Revenue, because it is evidenced by a public document dated July 19, 1946, in addition to the fact that he garnished the disputed insurance proceeds on February 17, 1947. Incidentally it is insisted for both appellants that, where priority of attachments is involved, article 1924 of the Civil Code is not applicable. Appellant de la Paz further argues that article 1924 may be invoked only when there is a showing of the debtor’s insolvency.

In the first place, we may point out that, where the debtor was insolvent, article 1924 was held not applicable, since it was considered repealed insofar as it referred to cases of bankruptcy and estates of deceased persons. (Peterson v. Newberry Et. Al., 6 Phil., 260.)

In the second place, we find that the law on attachment and the law on preference of credits under article 1924 of the Civil Code had been applied by this court hand in hand, as may be gleaned from the following pronouncements in the case of Kuenzle & Streiff v. Villanueva, 41 Phil., 611, 614-615:jgc:chanrobles.com.ph

"In other words, the question for consideration is whether an attachment levied on specific property gives to the attaching creditor a lien or a right to a preference in the nature of a lien, superior to the statutory right to a preference which is recognized in article 1924 of the Civil Code in favor of the owner of an after-acquired judgment.

"In a long and unbroken line of decisions, running through our reports from the first volume down to the last, we have uniformly and steadfastly sustained and recognized the statutory preferences created by the provisions of title 17 of the Civil Code, save only in so far as they have been expressly or by necessary implication repealed or modified by Acts of the Commission or the Legislature."cralaw virtua1aw library

x       x       x


"Upon full consideration of the provisions of the New Code of Civil Procedure by virtue of which levies of attachments are authorized, and of the circumstances under which that Code was enacted by a commission the majority of whose members were American lawyers, we are satisfied that it was the intention of the legislature to give as attaching creditor a lien or at least a right in the nature of a lien in the attached property; but we see no reason whatever for holding that this lien, or right in the nature of a lien, rises superior to any statutory preferences with which the property is affected at the time of its attachment."cralaw virtua1aw library

We shall therefore proceed to determine the order of preference herein, in the light of priority both by reason of attachments and by reason of article 1924 of the Civil Code, subject however to the superior lien of the Collector of Internal Revenue Code in virtue of section 315 of the National Internal Revenue Code which provides as follows:jgc:chanrobles.com.ph

"Every internal revenue tax on property or in any business or occupation, and every tax on resources and receipts, and any increment to any of them incident to delinquency, shall constitute a lien superior to all other charges or liens not only on the property itself upon which such tax may be imposed but also upon the property used in any business or occupation upon which tax is imposed and upon all property rights therein."cralaw virtua1aw library

We are of the opinion that the trial court correctly ordered that the claim of the Collector of Internal Revenue be paid first. Said claim being for amusement taxes on the theater insured, constitutes a lien superior to all other charges or liens not only on the theater itself but also upon all property rights therein, including the insurance proceeds.

Under article 1924, paragraph 3, of the Civil Code, the order of preference is, first, in favor of credits evidenced by a public instrument, and, secondly, in favor of credits evidenced by a final judgment, should they have been the subject of litigation, the preference among the two kinds of credits being determined by priority of dates.

The trial court was also correct in placing the claim of Jose Santos and Dominador Nepomuceno second in the list of creditors, because their credit is evidenced by a public document dated May 23, 1946. Appellants, with appellee Pablo Roman, argue that said document cannot be classified as public, because its acknowledgment is not dated. This contention is not tenable, since an examination of the instrument shows that the body is dated at Manila on May 23, 1946, and in the acknowledgment the following appears: "Witness my hand and official seal in the date and place above mentioned." This recital logically refers to the date and place specified in the preceding body of the document. There is no point in the observation that the credit of Santos and Nepomuceno, not being reduced to a judgment, should not be entitled to any preference binding against the Federal Films, Inc., which is not a party hereto, because article 1924 of the Civil Code as a matter of fact distinguishes credits evidenced by a public document from those evidenced by a judgment. At any rate, in so far as the absence in this case of the common debtor is concerned, all the defendants are on equal footing.

The next in preference, in our opinion, is the credit of appellant Domingo Leonor because, although he caused a notice of garnishment to be served upon the plaintiff on February 17, 1947, or subsequent to the notice of garnishment of appellant Marciano de la Paz on February 5, 1947, the former’s credit is nonetheless evidenced by a public instrument dated July 19, 1946, duly presented as exhibit. Preference claimed under a public document is not lost by the mere fact that the credit is made the subject of a subsequent judicial action and judgment. Even appellee Pablo Roman admits this proposition.

The next preferred credit is that of defendant-appellee Pablo Roman, evidenced by a judgment which became final on September 26, 1946. It is contended on the part of appellant Domingo Leonor that said judgment was not yet final then, because an appeal was taken therefrom to the Supreme Court which resolved it in favor of appellee Pablo Roman only on May 27, 1947. However, as correctly observed by counsel for the latter, the judgment of September 26, 1946, was not appealed, and the petition filed before the Supreme Court was one for certiorari against the order of the trial court dismissing the appeal; and, indeed, two writs of execution had been issued during the pendency of the certiorari proceeding, one on December 24, 1946, and another on January 9, 1947. In McMicking v. Lichauco, 27 Phil., 386, it was held that "a judgment upon which execution has not been stayed, under the provisions of section 144 of Act No. 190, is entitled to the preference provided for in article 1924 of the Civil Code."cralaw virtua1aw library

The remaining credit to be paid is that of appellant Marciano de la Paz, whose notice of garnishment was served on the plaintiff on February 5, 1947, the appealed decision being correct on this phase of the case. Serapion D. Yñigo failed to present any evidence in support of his claim.

It being understood that the various claimants should be paid in the order indicated in this decision, and that none of them is entitled to receive any interest (as the plaintiff-appellee cannot be deemed as having defaulted in paying out the insurance proceeds in question), the appealed judgment, as thus modified, is hereby affirmed.

So ordered without costs.

Pablo, Bengzon, Montemayor, Reyes, A., Jugo, Bautista Angelo, Labrador and Concepcion, JJ., concur.




Back to Home | Back to Main




















chanrobles.com





ChanRobles On-Line Bar Review

ChanRobles Internet Bar Review : www.chanroblesbar.com

ChanRobles MCLE On-line

ChanRobles Lawnet Inc. - ChanRobles MCLE On-line : www.chanroblesmcleonline.com






May-1954 Jurisprudence                 

  • G.R. No. L-6669 May 3, 1954 - PEDRO DAQUIS v. MAXIMO BUSTOS

    094 Phil 913

  • G.R. No. L-6736 May 4, 1954 - ISABEL GABRIEL, ET AL. v. DEMETRIO B. ENCARNACION, ET AL.

    094 Phil 917

  • G.R. No. L-6220 May 7, 1954 - MARTINA QUIZANA v. GAUDENCIO REDUGERIO, ET AL.

    094 Phil 922

  • G.R. No. L-5773 May 10, 1954 - CASIMIRO, ET AL. v. FABIAN SOBERANO

    094 Phil 927

  • G.R. No. L-6538 May 10, 1954 - PABLO BURGUETE v. JOVENCIO Q. MAYOR, ET AL.

    094 Phil 930

  • G.R. No. L-5694 May 12, 1954 - PAMBUJAN SUR UNITED MINE WORKERS v. SAMAR MINING CO., INC.

    094 Phil 932

  • G.R. No. L-6666 May 12, 1954 - GORGONIO PANDES v. JOSE TEODORO SR., ET AL.

    094 Phil 942

  • G.R. No. L-6765 May 12, 1954 - FULGENCIO VEGA, ET AL. v. MUN. BOARD OF THE CITY OF ILOILO, ET AL.

    094 Phil 949

  • G.R. No. L-4918 May 14, 1954 - REPUBLIC OF THE PHIL. v. JOSE LEON GONZALEZ, ET AL.

    094 Phil 956

  • G.R. No. L-5689 May 14, 1954 - JUAN DE G. RODRIGUEZ, ET AL. v. AURELIO MONTINOLA, ET AL.

    094 Phil 964

  • G.R. No. L-5900 May 14, 1954 - PEOPLE OF THE PHIL. v. PAULINO FRANCISCO

    094 Phil 975

  • G.R. No. L-5942 May 14, 1954 - R.F.C. v. HONORABLE COURT OF APPEALS, ET AL.

    094 Phil 984

  • G.R. No. L-6313 May 14, 1954 - ROYAL SHIRT FACTORY, INC. v. CO

    094 Phil 994

  • G.R. No. L-6444 May 14, 1954 - MUN. OF CALOOCAN v. MANOTOK REALTY, INC. ET AL.

    094 Phil 1003

  • G.R. No. L-6572 May 14, 1954 - MAX CHAMORRO & CO. v. PHIL. READY-MIX CONCRETE CO., INC., ET AL.

    094 Phil 1005

  • G.R. No. L-6792 May 14, 1954 - FAUSTO D. LAQUIAN v. FILOMENA SOCCO, ET AL.

    094 Phil 1010

  • G.R. No. L-6921 May 14, 1954 - EUGENIO CATILO v. GAVINO S. ABAYA

    094 Phil 1014

  • G.R. No. L-6481 May 17, 1954 - JESUS GUIAO v. ALBINO L. FIGUEROA

    094 Phil 1018

  • G.R. No. L-7045 May 18, 1954 - BENIGNO C. GUTIERREZ v. LAUREANO JOSE RUIZ, ET AL.

    094 Phil 1024

  • G.R. No. L-5378 May 24, 1954 - CO TIONG SA v. DIRECTOR OF PATENTS

    095 Phil 1

  • G.R. No. L-6408 May 24, 1954 - PEOPLE OF THE PHIL. v. EPIFANIO CARULASDULASAN, ET AL.

    095 Phil 8

  • G.R. No. L-6522 May 24, 1954 - LUIS B. UVERO, ET AL. v. COURT OF APPEALS, ET AL.

    095 Phil 11

  • G.R. No. L-6807 May 24, 1954 - JESUS SACRED HEART COLLEGE v. COLLECTOR OF INTERNAL REVENUE

    095 Phil 16

  • G.R. No. L-6870 May 24, 1954 - ELENA AMEDO v. RIO Y OLABARRIETA, INC.

    095 Phil 33

  • G.R. No. L-6988 May 24, 1954 - U.S.T. HOSPITAL EMPLOYEES ASSOCIATION v. STO. TOMAS UNIVERSITY HOSPITAL

    095 Phil 40

  • G.R. No. L-4817 May 26, 1954 - SILVESTRE M. PUNSALAN v. MUNICIPAL BOARD OF THE CITY OF MANILA, ET AL.

    095 Phil 46

  • G.R. No. L-5682 May 26, 1954 - ANASTACIO N. ABAD v. CANDIDA CARGANILLO VDA. DE YANCE

    095 Phil 51

  • G.R. No. L-5807 May 26, 1954 - BASILIA CABRERA, ET AL. v. FLORENCIA BELEN, ET AL.

    095 Phil 54

  • G.R. No. L-5906 May 26, 1954 - ANGAT-MANILA TRANSPORTATION CO., INC. v. VICTORIA VDA. DE TENGCO

    095 Phil 58

  • G.R. No. L-5953 May 26, 1954 - EX-MERALCO EMPLOYEES TRANSPORTATION CO., INC. v. REPUBLIC OF THE PHIL.

    095 Phil 61

  • G.R. No. L-6246 May 26, 1954 - PEOPLE OF THE PHIL. v. FELIX RIPAS

    095 Phil 63

  • G.R. No. L-6260 May 26, 1954 - HERMOGENES TARUC v. BACHRACH MOTOR CO.

    095 Phil 73

  • G.R. No. L-6306 May 26, 1954 - FORTUNATO HALILI v. MARIA LLORET, ET AL.

    095 Phil 78

  • G.R. No. L-6353 May 26, 1954 - DANIEL CABANGANGAN v. ROBERTO CONCEPCION, ET AL.

    095 Phil 87

  • G.R. No. L-6463 May 26, 1954 - RIZAL SURETY & INSURANCE CO. v. MARCIANO DE LA PAZ

    095 Phil 90

  • G.R. Nos. L-6675-81 May 26, 1954 - BIENVENIDO E. DOLLENTE v. EL PUEBLO DE FILIPINAS

    095 Phil 97

  • G.R. No. L-7024 May 26, 1954 - ROMAN TOLSA v. ALEJANDRO J. PANLILIO, ET AL.

    095 Phil 104

  • G.R. No. L-4935 May 28, 1954 - J.M. TUASON & CO., INC. v. QUIRINO BOLAÑOS

    095 Phil 106

  • G.R. No. L-6462 May 28, 1954 - BELEN JOVE LAGRIMAS v. TITO LAGRIMAS

    095 Phil 113

  • G.R. No. L-6967 May 28, 1954 - JOSE PONCE DE LEON v. FIDEL IBAÑEZ, ET AL.

    095 Phil 119

  • G.R. No. L-7042 May 28, 1954 - CLOTILDE MEJIA VDA. DE ALFAFARA v. PLACIDO MAPA, ET AL.

    095 Phil 125

  • G.R. No. L-3663 May 31, 1954 - EL PUEBLO DE FILIPINAS v. MARIA VELASCO RODRIGUEZ, ET AL.

    095 Phil 135

  • G.R. No. L-4510 May 31, 1954 - MARC DONNELLY & ASSOCIATES, INC. v. MANUEL AGREGADO, ET AL.

    095 Phil 142

  • G.R. No. L-4633 May 31, 1954 - GREGORIO ARANETA, INC. v. PHILIPPINE NATIONAL BANK

    095 Phil 160

  • G.R. No. L-5824 May 31, 1954 - PAZ PAREJA v. JULIO PAREJA

    095 Phil 167

  • G.R. No. L-5837 May 31, 1954 - CRISTOBAL BONNEVIE, ET AL. v. JAIME HERNANDEZ

    095 Phil 175

  • G.R. No. L-6018 May 31, 1954 - EMILIANO MORABE v. WILLIAM BROWN

    095 Phil 181

  • G.R. No. L-6122 May 31, 1954 - AURELIA DE LARA, ET AL. v. JACINTO AYROSO

    095 Phil 185

  • G.R. No. L-6461 May 31, 1954 - PILAR ARAULLO MACOY v. CARMEN VASQUEZ TRINIDAD, ET AL.

    095 Phil 192

  • G.R. Nos. L-7403 & L-7426 May 31, 1954 - COLLECTOR OF CUSTOMS v. GAVINO S. ABAYA, ET AL.

    095 Phil 205