EN
BANC
MARIANO
CORDOVA,
Petitioner,
G.
R.
No. L-12348
May
28,
1958
-versus-
HONORABLE
GREGORIO
NARVASA, ET AL.,
Respondents.
D
E C I S I
O N
BAUTISTA
ANGELO, J :
This is a Petition for
Certiorari with Preliminary Injunction seeking to set aside two orders
of respondent Judge which are alleged to have been issued in excess of
jurisdiction or with grave abuse of discretion. The writ prayed for was
issued upon filing by petitioner of the required bond.
The Orders complained
of involved the payment of two [2] judgment credits: one in favor of
petitioner
and the other of Jacinta Abella against a common debtor, G. K. Co Bun
Kim.
The only property of Co Bun Kim for the payment of said credits is a
seventeen-door
apartment building in Ermita, Manila, and the funds in the hands of the
receiver of the building. The receivership was instituted in Civil Case
No. 16221 of the Court of First Instance of Manila at the instance of
one
Natalio Enríquez in order to preserve the property and secure
payment
of the credit existing in his favor.
The judgment credit
of petitioner originated from a loan of P20,986.42 taken by Co Bun Kim
from one Concha Apacible which he obtained for the improvement and
preservation
of the building under receivership which he built on a parcel of land
he
leased from spouses Rafael Alonso and Consuelo A. Lara. This loan was
secured
by Co Bun Kim with a mortgage over the same building which was duly
recorded.
On August 31, 1951, upon failure of Co Bun Kim to pay the loan as
agreed
upon, Apacible filed an action in the court of first instance for the
foreclosure
of the mortgage which was docketed as Civil Case No. 14603. Judgment
was
rendered on April 23, 1952 ordering Co Bun Kim to pay Apacible the sum
of P20,986.42, with interest, attorneys' fees and costs. A writ of
execution
was secured by Apacible on July 7, 1952 but the execution was not
carried
out because the building was placed under receivership in Civil Case
No.
16221 which was instituted by Co Bun Kim against Natalio
Enríquez
for the annulment of a third mortgage on the building for the amount of
P50,000. It must be noted that the mortgage in favor of Apacible is
only
a second mortgage on the building, the first mortgage thereon for the
sum
of P30,000 being in favor of Tabacalera Company, and the third mortgage
in favor of Natalio Enríquez. When Enríquez learned of
the
existence of the two prior mortgages, he bought the rights of
Tabacalera
and Apacible under their mortgages. The mortgage credit of Apacible was
acquired by him on September 20, 1952 and that of Tabacalera on October
21, 1952. Subsequently however, or on March 26, 1956, Natalio
Enríquez
transferred and assigned all his rights under the three mortgages to
the
herein petitioner Mariano Cordova.
In the meantime, Co
Bun Kim failed to pay the rentals of the land on which the building is
erected and so on April 25, 1953, Jacinta Abella, who bought the land
from
its original owners, filed an action to collect them in the Court of
First
Instance of Manila which was docketed as Civil Case No. 19409. Judgment
was rendered in favor of Abella ordering Co Bun Kim to pay the rentals
from January, 1953 to January, 1955, which judgment was affirmed by the
Supreme Court on February 28, 1957.
On April 8, 1957,
petitioner
filed a motion in the receivership case [Civil Case No. 16221] praying
that the receiver be authorized to pay him the judgment rendered in
favor
of Apacible which was assigned to him in preference to the judgment
rendered
in favor of Jacinta Abella for rentals of the building on the ground
that
his mortgage credit has preference under the law over that of Abella.
Petitioner,
on the same date, filed another motion praying that the judgment
rendered
in favor of Abella be held in abeyance until his judgment credit shall
have been satisfied based on the same ground of preference that his
credit
enjoys under the law. Both motions were denied by respondent Judge
thereby
giving the impression that the judgment in favor of Jacinta Abella for
back rentals may be executed in preference to that of petitioner. Hence
the present petition for certiorari.
The issue before Us
is whether the judgment credit of Concha Apacible which was assigned to
petitioner is preferred over the judgment credit in favor of Jacinta
Abella,
and if so, whether the former may be executed in preference to the
latter
contrary to what was decreed by respondent Judge.
Petitioner contends
that his judgment credit is preferred over that of Jacinta Abella for
the
following reasons:
"[a] the credit of
petitioner matured and became due way back in 1951 and the judgment
thereon
became final and executory in June, 1952; while the judgment of
respondent
Abella became final and executory only last March, 1957, and the same
is
for rentals which fell due only from January, 1953 up to January, 1955;
"[b] the judgment
credit
of petitioner is secured by a mortgage on the building in receivership
from which the funds in the hands of the receiver were derived, which
mortgage
operates directly and immediately upon the said building and its
income;
while the claim of Abella is only for some months' back rentals on the
land for which there is no lien whatsoever on the building or on the
income
therefrom in the hands of the receiver;
"[c] the judgment
credit
of petitioner is on a loan which was used by the debtor Co Bun Kim for
the repair, improvement and preservation of the building in
receivership;
and
"[d] the funds in the
hands of the receiver, from which petitioner seeks payment, were
collected
and preserved because of the institution of the receivership at the
instance
of Natalio Enríquez, assignor of the petitioner, for the payment
of his (now petitioner's mortgage credits, and not for the payment of
the
claim of Abella."
There
is merit in this
contention. Under Article 2244 of the new Civil Code, re:
classification
of credits, it is provided that, with reference to real and personal
properties
of the debtor, a credit which appears in a final judgment, which was
the
subject of litigation, is considered preferred, and the preference is
determined
by considering the priority of the dates of the judgment. Again, under
Article 2242, it is also provided that with reference to specific
immovable
property and real rights of the debtor, a mortgage credit recorded in
the
Registry of Property is deemed preferred in so far as the property
mortgaged
is concerned, over other unsecured credits. Under these legal
provisions,
there can be no question that the judgment credit rendered in favor of
Concha Apacible which was assigned to petitioner is preferred over that
of Jacinta Abella for back rentals because the same is not only prior
in
time but secured by a real estate mortgage. Thus, it appears that the
judgment
in favor of Apacible was rendered on April 23, 1952 and became final
and
executory on July 7, 1902, whereas the judgment credit in favor of
appellee
became final and executory only in March, 1957. On the other hand, the
judgment credit of Abella is unsecured, whereas the credit of Apacible
is secured by real estate mortgage which was duly recorded in the
registry
of property. There is therefore no plausible reason why the judgment
credit
of petitioner should not be executed in preference to that of Jacinta
Abella.
It is true that the
properties on which the judgment is sought to be executed are under
receivership,
but it is for this reason that petitioner filed a motion in the
receivership
case praying for authority for the payment of his judgment credit by
the
receiver as required by law. But even this step was thwarted because of
the refusal of respondent Judge to grant the motion. Respondent Judge
seems
to have adopted the attitude that the judgment credit of Jacinta Abella
is entitled to preference and should first be executed. Obviously,
respondent
Judge acted on the matter with grave abuse of discretion.
Wherefore, petition
is granted. The Orders subject of the petition are hereby set aside,
the
writ of preliminary injunction issued by this Court is declared
permanent.
Costs against respondent Jacinta Abella.
Paras, C.J.,
Bengzon, Montemayor, Reyes, A., Labrador, Reyes, J. B. L., Endencia and
Felix JJ., concur. |