Philippine Supreme Court Jurisprudence

Philippine Supreme Court Jurisprudence > Year 1917 > December 1917 Decisions > G.R. No. L-11717 December 6, 1917 - GO KIAM CO v. LIM TUICO ET AL.

037 Phil 283:



[G.R. No. L-11717. December 6, 1917. 1 ]

GO KIAM CO, Plaintiff-Appellee, v. LIM TUICO ET AL., Defendants-Appellants.

Beaumont & Tenney for Appellants.

No appearance for Appellee.


1. PREFERRED CREDITORS; PREFERENCE CONCEDED TO DIFFERENT CREDITORS UNDER PARAGRAPH I OF ARTICLE 1922 OF THE CIVIL CODE — The amount of the preference conceded to different creditors under paragraph 1 of article 1922 of the Civil Code is based upon the amount received for the merchandise when sold at public auction and not the amount which a common creditor promised to pay therefor.



The only question presented by this appeal is, whether or not, in an action, by different creditors, against the same debtor, the preference, which is conceded to the vendor of personal property over the creditors is measured by the value of the goods sold at the time of the sale or by the amount received by the sheriff at the public sale of the same. In other words, for example, A and B are common creditors of C. C is insolvent. B obtains a judgment and secures an order for the sale of the personal property of C. A presents a claim based upon his preference under paragraph 1 of article 1922 of the Civil Code. The goods are sold at public auction. A identifies the goods so sold by the sheriff as the identical goods sold by him to C upon credit. The value of the goods sold by A to C was P165. The amount received by the sheriff was p21. Query: To what amount is A entitled in the distribution of the proceeds of the sale by the sheriff? P165 or P21 only?

Paragraph 1 of article 1922 of the civil Code provides that preference shall be given, in the case of common creditors of the same debtor "for the amount of the sale of personal property which may be in the possession of the debtor to the extent of the value of such property." What is the signification of the phrase "credits . . . to the extent of the value of such property?" Does said phrase mean the value of such property at the time of the sale by the creditor to the common debtor, or its value at the time it is sold by the sheriff? That personal property is constantly fluctuating in value is a fact well recognized. The fact that it was sold on the 1st day of the month last P165 is not absolute proof that its value on the last day of the month is more than P21. And moreover, the vendor, in cases like the present, in order to enforce his preference has no right to the return of the identical property. He is only entitled to a preference to the extent of the value of such property. The merchandise was sold. The vendor thereby lost his title thereto. he is not entitled to a return of the merchandise simply because his debt has not been paid, in the absence of conditions to that effect. The law gives him the right of preference only "to the extent of the value of such merchandise" in the final distribution of the assets of the insolvent. We are of the opinion that the phrase giving to the vendor a preference "to the extent of the value of such property" relates to its value as ascertained by the sheriff’s sale of the same at public auction. If that is true, then the preference of the plaintiff in the present action is not to the extent of the value of the goods at the time he sold them, or P165, but to their value at the time of the sale by the sheriff at public auction, or P21.

Therefore, the judgment of the lower court giving the plaintiff a preference in the amount of P165 is hereby modified; and it is hereby ordered and decreed that the plaintiff be given a preference over the P21 in the hands of the sheriff, less necessary costs and expense in the sale of said merchandise. With said modification, the judgment of the lower court is hereby affirmed, without any finding as to costs. So ordered.

Arellano, C.J., Carson, Street, and Malcolm, JJ., concur.

Araullo, J., did not take part.


1. Note: Cases R.G. No. 11748 and 11749 involving the same question were decided at the same time.

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