FIRST
DIVISION
J. J. PETERSON,
SHERIFF
OF THE CITY OF MANILA,
Plaintiff-Appellee,
G.
R.
No. 2698
May
5,
1906 -versus-
CHARLES P.
NEWBERRY,
ET AL.,
Defendants-Appellants.
D E C I S I
O N
CARSON, J :
This an action
under the
provisions of Section 120 of Act No. 190, brought by J. J. Peterson,
sheriff
of Manila, to compel various claimants to certain funds in his
possession
as sheriff to interplead and litigate their several claims among
themselves.
These funds, amounting to P3,632.62, Philippine currency, are the
proceeds
of a levy on the property of one Fulgencio Tan Tongco, and the
complainant
disclaims all interest therein except as to the cost of the levy.
Findlay
& Co, one
of the defendants in these proceedings, filed suit against the said
Fulgencio
Tan Tongco on October 9, 1902, and on January 31, 1903, judgment was
rendered
in their favor for the sum of 7,070 Pesos, and execution thereon was
lodged
in the hands of the sheriff on April 21, 1904. Charles P. Newberry,
another
defendant in these proceedings, filed suit against the said Fulgencio
Tan
Tongco on November 4, 1902; judgment was rendered in his favor on
August
8, 1903, for the sum of 7,865.05 Pesos, and execution thereon placed in
the hands of the sheriff on March 12, 1904; and the American Bank,
which
is the assignee of Theodore Rogers, is also a defendant in these
proceedings,
filed suit against Tan Tongco on November 19, 1902, and judgment was
rendered
in its favor on December 23, 1902, for the sum of 10,000 Pesos, and
execution
thereon lodged in the hands of the sheriff on April 23, 1904. It thus
appears
that Findlay & Co. first filed suit, that the American Bank first
obtain
judgment, and that Charles P. Newberry first placed execution in the
hands
of the sheriff.
On April
23, 1904,
the sheriff made a simultaneous levy under the above-mentioned
executions,
but, being doubt as to the rights of the various parties and interest,
he did not himself undertake to distribute the funds in his possession,
but filed this action, and thus imposed that duty upon the Court.
Article
1924 of the
Civil Code places judgment creditors in the order of age of their
respective
judgment in the third class of preferred creditors, and applying this
provision
of the code it is clear that the judgment of the American Bank, being
the
eldest, is entitled to preference in the distribution of the funds in
the
hands of the sheriff, and those funds not being sufficient to satisfy
said
judgment, the entire amount must be paid over to the claimant, Theodore
Rogers, assignee of the bank.
It has
been said that
the provisions of this article were wholly repealed by the enactment of
the Code of Civil Procedure, and it would appear that "so far as this
article
is applicable to cases of bankruptcy and estates of deceased persons it
has been rendered obsolete as to the former by Section 524, which
repeals
bankruptcy laws, and repealed as to the latter by Section 735, which
sets
forth the order of payment in the settlement of such estates," but we
are
of opinion that its provisions are not limited to such cases and that
it
remains in full force and effect when by intervention or otherwise a
judgment
creditor is a proper party to distribution proceedings of the funds or
estate of his judgment debtor and duly asserts his right as a preferred
creditor. [Martinez vs. Holliday, Wise & Co., 1 Phil. Rep., 194;
Olivares
vs. Hoskyn & Co., 2 Phil. Rep., 689].
The
Court below erred
in ordering the money paid over to Charles P. Newberry on the ground
that
he first lodged his execution in the hands of the sheriff.
The
learned judge is
of the opinion that "there is no law in the Philippine Islands fixing
the
lien of judgments or executions until the levy," but our attention has
no been directed to any provision of law which provides that a levy
under
execution creates or fixes a lien, general or specific, in favor of a
judgment
creditors, nor does it appear that a creditor acquires a lien upon the
property of the debtor by virtue of the filing of his complaint, the
judgment,
the issue of execution, or the levy thereunder, other than the mere
right,
as prescribed in Article 1924 of the Civil Code, to a preference in the
distribution of the funds of the estate of the judgment debtor in those
cases wherein by intervention or otherwise the judgment creditor is a
property
party to the distribution proceedings and duly asserts his right as a
preferred
creditor.
The
American
authorities
relied upon by the trial court and counsel for Newberry and Findlay
&
Co. are not applicable under existing law in the Philippines, nor can
we
take into consideration arguments of counsel based on convenience or
expedience
where the conclusions drawn therefrom are in conflict with the express
provisions of law.
We are
not unaware
of the difficulties which arise under the existing condition of the
law,
and we can not deny that the rule laid down herein may at times work
hardship
upon debtor and creditor alike because of the repeal of the bankruptcy
provisions of the Spanish law, but until and unless a new bankruptcy
law
is enacted, it is our duty to apply the provisions of existing law as
We
find them.
The
judgment of the
trial court is reversed, without costs, and the said sum of P3,632.66,
Philippine currency, less sheriff's fees and expenses incident to the
levy
and to these proceedings, will be paid over to the said Theodore
Rogers,
assignee of the American Bank. After expiration of twenty days let
judgment
be entered in accordance herewith and ten days thereafter let the
record
be remanded to the court below for proper action. So ordered.
Arellano, C.J.,
Torres, Mapa, and Willard, JJ., concur. |