C. HEINZEN &
CO.,
Plaintiffs-Appellees,
G.
R.
No. L-2129
March
12, 1908
-versus-
JAMES J.
PETERSON
AND THE
FIRST
NATIONAL
BANK OF HAWAII,
Defendants-Appellants.
D
E C I S I
O N
JOHNSON, J :
On the 10th day of August
1903, the plaintiffs filed an Amended Complaint in an action against
the
defendant, James J. Peterson, as Sheriff of the City of Manila, to
recover
the possession of certain personal property, more particularly
described
on pages 4, 5, and 6 of the record of the lower court, or P1,500, the
value
of the same, and also to recover the sum of P2,500 as damages for the
wrongful
withholding of the said property.
On the 18th day of
August 1903, the defendant, James J. Peterson, filed an Answer to the
Complaint
of the plaintiffs, and among other things, alleged that one Joseph H.
Hartman
was the owner of the property in question and denied that the
plaintiffs
were the owners thereof.
On the 3rd day of
November
1903, the defendant, the First National Bank of Hawaii, intervened in
said
cause, alleging that the property in question was the property of the
said
Joseph H. Hartman, and also prayed for a judgment against the
plaintiffs
for $135.25, United States currency, as damages and also the sum of
$902.87,
United States currency, with interest at the rate of 8 per cent from
the
12th day of July, 1903.
On the 9th day of
November
1903, the plaintiffs filed a demurrer to the answer of the First
National
Bank of Hawaii.
On the 16th day of
November 1903, the judge of the Court of First Instance of the City of
Manila overruled the said demurrer and after hearing the evidence
adduced
during the trial of said cause, on the 14th day of December, 1903,
filed
a decision in said cause, in which he made the following findings of
fact:
"1. The plaintiff is
a corporation duly organized under the laws of the Philippine Islands,
and doing business in the city of Manila;
"2. On the 10th day
of June, 1903, J. H. Hartman, being the owner of a saloon and fixtures,
consisting of the property set forth in the inventory in the sheriff's
return, on pages 4, 5, and 6 of this record, and bring indebted to the
plaintiffs in this action, executed to the plaintiffs a bill of sale, a
copy of which is set forth on page 38 of the record in this case, as
security
for the indebtedness of said Hartman to the plaintiffs and the
responsibilities
which the plaintiffs had assumed in behalf of the said J. H. Hartman;
"3. The defendant is
the duly appointed and acting sheriff of the city of Manila, and on the
10th day of June, 1903, in a certain action, No. 1817, pending in the
Court
of First Instance, wherein the Pacific and oriental Trading Company was
plaintiff and the said J. H. Hartman was defendant, did seize and
attach
the property set forth in said sheriff's return hereinbefore mentioned,
pursuant to an order of attachment duly issued in said action, No. 1817;
"4. That thereupon
the plaintiffs, in order to protect their interests in said property,
as
security for the claim which they had against J. H. Hartman, caused
said
attachment to be released, and paid the claim of the plaintiff in said
action, No. 1817;
"5. That on the 29th
day of June, 1903, the First National Bank of Hawaii commenced an
action
in the Court of First Instance for the City of Manila against said J.
H.
Hartman, to recover money for a debt, and on the said date the sheriff
of Manila duly attached and seized the property hereinbefore mentioned,
pursuant to an order of attachment issued in said cause, as the
property
of said J. H Hartman, and that the plaintiffs herein had knowledge of
said
attachment proceedings;
"6. That on the 3rd
day of July, 1903, the plaintiffs herein claimed to be the owners of
the
property hereinbefore mentioned, and to be entitled to the possession
thereof,
and demands of the defendant, as sheriff of the City of Manila,
possession
of the said property, pursuant to the provisions of the Code of Civil
Procedure;
"7. That thereupon
the defendant, as sheriff of the city of Manila, on the 6th day of
July,
1903, delivered to the plaintiffs, C. Heinszen and Co., said property
above
described;
"8. That thereafter,
on the 7th day of July, 1903, an alias order of attachment was issued
in
cause No. 1928, in the Court of First Instance for the city of Manila,
First National Bank of Hawaii vs. J. H. Hartman, and the defendant, as
sheriff of the city of Manila, again seized and took possession of the
property hereinbefore mentioned and in controversy in this suit;
"9. That on the 7th
day of July, 1903, the said J. H. Hartman executed to the plaintiffs in
this case a new bill of sale for the property hereinbefore mentioned,
and
it is a controverted fact whether this second bill of sale was executed
prior to or after the alias writ of attachment had been executed upon
the
property in question."
From the record, it appears
that sometime prior to the 10th of day of June 1903, the Pacific and
Oriental
Trading Company commenced an action against the said J. H Hartman for
the
purpose of recovering the sum of money due the former from the latter,
by virtue of which action the plaintiff secured an attachment against
the
property of the said Hartman, which property is admitted to be the same
property enumerated on pages 4, 5, and 6 of the record in the present
cause.
In order to relieve the property of the said Hartman from said
attachment,
the plaintiffs herein executed and delivered a bond to the said Pacific
and Oriental Trading Company, guaranteeing the payment of the
indebtedness
due from Hartman to said company. The record discloses that the said
Hartman
was also indebted to the plaintiffs herein at that time in a certain
sum
of money. Heinszen and Co., the plaintiffs herein, in order to secure
themselves
against loss by virtue of the said bond as well as to secure payment of
the indebtedness of Hartman to them, obtain from the said Hartman on
the
10th day of June 1903, the following contract or bill of sale:
"Know all men by
these
presents: That I, J. H. Hartman, of Manila, P. I., for and in
consideration
of the sum of three thousand dollars [$3,000], local currency, and the
signing of a bond for one thousand two hundred dollars [$1,200], United
States currency, in the case of The Pacific and Oriental Trading
Company
vs. J. H. Hartman, do hereby sell, assign, and transfer unto C.
Heinszen
and Co., of Manila, my saloon at the corner of Calle Soledad and the
Binondo
Canal, Manila, P. I., known as the 'Merchants Exchange,' with all
fixtures
and stock therein contained, as well as the name and 'good-will'
thereof.
"To have and to hold
the same unto the said C. Heinszen and Co., their heirs and assigns.
And
I do hereby covenant and agree to warrant and defend the sale of said
property
unto the said C. Heinszen and Co., their heirs and assigns, against all
and every person and persons whomsoever lawfully claiming or to claim
the
same.
"Provided that in
case
of a sale saloon to a third party the proceeds shall be applied as
follows:
"First. Twelve
hundred
dollars [$1,200], United States currency, to be held by the said C.
Heinszen
and Co. until all liability on said bond is annulled.
"Second. To the
payment
of the claim of the said C. Heinszen and Co.
"Third. The balance
to be paid to the said J. H. Hartman, including the twelve hundred
dollars
($1,200), United States currency, held as indemnity on said bond.
"In witness whereof,
I have hereunto set my hand this tenth day of June, A. D. nineteen
hundred
and three.
"J. H. HARTMAN."(Notarial seal
of Thomas D. Aitken)
"UNITED STATES OF
AMERICA,
"Philippine Islands,
City of Manila, SS.:
"Before me, Thomas
D. Aitken, notary public in and for the city of Manila, personally
appeared
this day J. H. Hartman, known to me to be the person named in the
foregoing
instrument, and acknowledged to me that he subscribed and executed the
same as his free and voluntary act and deed.
"In witness whereof,
I have hereunto set my hand and attached my official seal this 30th day
of June, 1903, at the said city of Manila.
"THOS. D. AITKEN,
"Notary Public,
Manila,
P. I.
"Commission expires
January 1, 1905."
It
is admitted in the record
that the said Hartman was permitted to continue in the possession and
control
of said property, notwithstanding this alleged bill of sale executed by
him to the plaintiffs herein on said 10th day of June 1903. The record
also discloses that the said Hartman was in possession of the property
in question at the time of the attachment in favor of the First
National
Bank of Hawaii of the same property by the sheriff of the City of
Manila
on the 29th day of June, 1903. The record also discloses that the
plaintiffs
herein made due demand upon the sheriff for the possession of the
property
in question, in accordance with Section 442 of the Code of Procedure in
Civil Actions, on the 2nd day of July, 1903, and that the said sheriff,
by reason of the failure of the said First National Bank to execute and
deliver to the said sheriff a forthcoming bond, as provided for in said
section, delivered the property in question to the plaintiffs herein on
the 6th day of July, 1903, and that the plaintiffs herein took
possession
of said property on said date. The record also discloses that on the
7th
day of July, 1903, the said First National Bank of Hawaii obtained from
the Court of First Instance of the City of Manila another attachment,
which
was served by the sheriff of the City of Manila upon the property in
question
after the same had been delivered, as above indicated, to the
plaintiffs
herein.
The contention of the
plaintiffs herein is that by virtue of the said contract of the 10th
day
of June, 1903, and by virtue of the fact that they obtained possession
of said property on the 6th day of July, 1903, they had a preferred
right
to the property in question, and that the attachments of the First
National
Bank of Hawaii on the 7th day of July, 1903, created no preferred
rights
in favor of the said bank as against the said property over that of the
plaintiffs herein.
Certainly the
plaintiffs
obtained no preferred rights over the property in question by virtue of
said contract of June 10, 1903, at that time for the reason that they
did
not take possession of said property. [Art. 1863 of the Civil
Code].
Moreover, We are of the opinion that the plaintiffs, under said
contract,
might at any time, by virtue of said contract, complete the pledge by
obtaining
the actual possession of said property. It will be noted, however, that
the sale of the said Hartman to the plaintiffs was a conditional one,
and
that whenever the plaintiffs herein attempted to enforce the conditions
of said sale they were obligated by the conditions imposed therein.
The record discloses
that upon the 7th day of July, the said Hartman attempted to make
another
bill of sale the property in question to the plaintiffs herein. The
record
does not fully disclose whether this second bill of sale was made
before
or after the attachment of the same date in favor of the First National
Bank of Hawaii. There is no doubt, however, that the plaintiffs herein
had taken possession of the said property on the 6th day of July and
thereby
had completed the pledge of said property under and by virtue of the
contract
of the 10th day of June. At the time the plaintiffs herein took
possession
of said property, thereby completing their pledge on the 6th day of
July,
there was no lien or attachment upon said property other than that of
the
said plaintiffs. There is no question raised in the record with
reference
to the consideration between the plaintiffs herein and the said Hartman
for the contract of June 10.
The decision of this
question depends upon the question as to whether the contract of
pledge,
entered into by and between the plaintiffs herein and the said Hartman,
made by the latter to the former, coupled with the fact that the
plaintiffs
herein obtained possession of said property at a time when no other
liens
existed against it, gave the plaintiffs a preferred right over the said
property. If this question is answered in the affirmative, then the
property
could not have been legally levied upon by the sheriff at the request
of
the defendant, the said First National Bank of Hawaii. [Arts. 1921 and
1922, Civil Code].
The contract of June
19, coupled with the actual possession of the property on the part of
the
plaintiffs herein, complies with all the requisites provided for in
article
1857 of the Civil Code. The contract, therefore, together with the
possession
of the property, was a perfect contract of pledge under said article
1857
and Article 1863 of said Code. [Banco Español-Filipino vs.
Peterson,
7 Phil. Rep., 409]. It was not proven that the said contract of
June
10 and the possession of July 6 were in any way fraudulent. The
indebtedness
existing between the plaintiffs herein and the said Hartman, mentioned
in said contract, was not denied.
We are of the opinion,
therefore, and so hold, that the plaintiffs herein are entitled to the
possession of the property in question in accordance with the terms of
the contract of June 10, 1903, and the proceeds thereof must be applied
in accordance with the terms of said contract, and if, after the
disposition
of said property, there is anything remaining in favor of the said
Hartman,
such surplus may be disposed of in accordance with the provisions of
the
Code of Procedure in Civil Actions.
Therefore, the Decision
of the lower court is hereby affirmed, with costs. So ordered.
Torres, Mapa, Carson,
Willard and Tracey, JJ., concur. |