Sampaguita Pictures vs Jalwindor Sampaguita Pictures owner of building in Cubao It leased the roofdeck of the building and all

ll existing improvements to Capitol 300 Inc o To be used by Capitol for social purposes and for its members and guests only o All permanent improvements, remodelling, alterations, additions introduced by Capitol shall belong to Sampaguita without any obligation on Sampaguita to reimburse Capitol for the same o Said improvements to form part of consideration of monthly rentals Capitol purchased from Jalwindor Manufacturers GLASS AND WOODEN JALOUSIES, which were later delivered and installed in the premises o Old windows replaced with new ones Capitol failed to pay so Jalwindor filed with CFI an action for collection with petition for Preliminary Attachment Compromise Agreement was entered into with Capitol acknowledging the debt in the amount of 9,531 payable in 300/month o All materials purchased by Capitol considered as security Capitol was not able to pay rentals, water, electric and telephone services to Sampaguita so it filed a complaint for ejectment and collection of sum of money o Trial court ordered Capitol to vacate Capitol also failed to comply with Compromise Agreement, so SHERIFF MADE A LEVY o Sampaguita filed 3rd party claim alleging that it is the owner and not Capitol o Jalwindor filed indemnity bond (highest bidder) Sampaguita filed with CFI to nullify Sheriffs sale and for issuance of Writ of Prel Inj vs Jalwindor FROM DETACHING THE GLASS AND WOODEN JALOUSIES o Court ordered Status Quo pending final determination of case o No hearing took place but parties entered into stipulation of facts

LOWER COURT DISMISSED THE COMPLAINT AND ORDERED SAMPAGUITA TO PAY JALWINDOR o Capitol could not legally transfer jalousies o Sampaguita not rightful owner o Execution and Sheriffs sale valid Sampaguita appeals

Issue: Held:

Capitol became the owner of jalousies upon delivery even if not yet fully paid Sampaguita later became the owner of the items in question by virtue of the agreement: "that all permanent improvements made by lessee shall belong to the lessor and that said improvements have been considered as part of the monthly rentals." o When levy or said items was made on July 31, 1965, Capitol, the judgment debtor, was no longer the owner thereof when a property levied upon by the sheriff pursuant to a writ of execution is claimed by a third person in a sworn statement of ownership thereof, as prescribed by the rules, an entirely different matter calling for a new adjudication arises. items in question were illegally levied upon since they do not belong to the judgemnt debtor. Execution sales affect the rights of judgment debtor only, and the purchaser in the auction sale acquires only the right as the debtor has at the time of sale. Since the items already belong to Sampaguita and not to Capitol, the judgment debtor, the levy and auction sale are, accordingly, null and void

PCIB vs National Mines National Mines and Allied Workers Union obtained in NLRC case a judgment ordering Philippine Iron Mines to pay the union 4,298,307.77 as severance pay-final and exec o Result of an unfair labor practice case filed by Union vs PIM for failure to comply with the condition imposed upon it by the Minister of Labor when it was granted clearance to shut down and lay off all its personnel due to bankruptcy "subject to such rights and benefits accruing to the workers and employees of your company under (the) existing collective bargaining agreement and relevant provisions of the Labor Code." Coincidentally, PIM was a mortgage debtor separately of the Development Bank of the Philippines and of herein petitioners, hence, for failure of PIM to pay its obligations just referred to, PCIB and Manila Bank foreclosed all mortgages in their favour. Both banks later secured final conveyances in their favour after being highest bidder in foreclosure sale NLRC granted unions ex parte motion for the garnishment of the amount of 4,298,307.77 due from Atlas Consolidated Mining and Devl Corp to the PCIB an Manila Banking Corp-as part of the price for which the mining machinery and eqpt of the PIL (acquired under foreclosure sale by the two banks) was sold by the 2 banks to Atlas for 30M Atlas complied with the writ and delivered to the Sheriff a check for the 4.2M 2 banks appealed by certiorari alleging that: o They were not parties in the labor case o Funds garnished were not due to judgment debtor, PIL SC resolved: o To require the the Union and Allied to Answer o To issue a writ of Prel Injunc after Atlas and Union file 100k bond-for Atlas to stop payment on check and Union is enjoined from cashing the check; and that if check has not yet been delivered to Union-give it back to Atlas and if already delivered, Union is enjoined from distributing the proceeds to its members

It appears , however, that check had already been encashed (April) and proceeds thereof were duly distributed to members/claimants the same day and everyday til the distribution was finished in May o Union even filed a "Report of Compliance and Motion for Admission and Approval of Schedule of Distribution" to the Labor Artbiter The established principle is that when the events sought to be prevented by injunction or prohibition have already happened, nothing more could be enjoined or prohibited because nothing more could be done in reference thereto. Hence, banks to pray that a Writ of Preliminary Mandatory Injunction upon such bond be issued ordering the Atlas Consolidated Mining and Development Corporation to stop payment of the check delivered to the NLRC Sheriff, and to stop delivery to Union and the Union to stop distributing the proceeds this case is now moot and academic, the prohibitory injunction prayed for being already impossible of enforcement, the acts sought to be enjoined having been already consummated. main and real remedy aimed at by petitioners is: o for them to be considered as in no way liable for the money paid to the laborers of respondent Philippine Iron Mines by virtue of the writ of execution and garnishment in question o Atlas surrender of check was uncalled for, hence Atlas should still be liable to them for the purchase price whether or not petitioners, as auction purchasers of the properties of PIM mortgaged to them and as sellers thereof to Atlas are subject to the claims of the Union finally adjudged by the NLRC Held: banks are liable Deed of sale says: Warranties of Sellers. Sellers (the petitioners in the case at bar) warrant that (1) they have full and sufficient title over the PROPERTIES and that (2) the PROPERTIES are free from all liens and encumbrances, (3) the BUYER (Atlas) being hereby saved free and harmless from all claims in incidental actions of National

Mines & Allied Workers' Union (NAMAWU) - unconditionally and unqualifiedly protective of Atlas; guarantees and duties of the petitioners in favor of Atlas show that the former have no cause of action against the latter. NLRC case was brought about by the cessation or shutdown of business by PIM, its workers enjoy first preference as regards wages due for services rendered prior to the bankruptcy or liquidation, as against other creditors New Labor Code provide o Art. 110. Worker Preference in case of bankcruptcy. In the event of bankcruptcy or liquidation of an employer's business, his workers shall enjoy first preference as regards wages due them for services rendered during the period prior to the bankcruptcy or liquidation, any provision of law to the contrary notwithstanding. Unpaid wages shall be paid in full before other creditors may establish any claim to share in the assets of the employer o Section 10. Payment of wages in case of bankcruptcy. Unpaid wages earned by the employees before the declaration of bankcruptcy or judicial liquidation of the employer's business shall be given first preference and shall be paid in full before other creditors may establish any claim to a share in the assets of the employees. (IRR) 'wages' refer to all remunerations, earnings and other benefits in terms of money accruing to the (employees or workers for services rendered. even if the employer's properties encumbered by means of a mortgage contract, still the workers'wages which enjoy first preference in case of bankcruptcy or liquidation are duly protected by an automatic first lien over and above all other earlier encumbrances on the said properties. Otherwise, workers'wages may be imperilled by foreclosure of mortgages, and as a consequence, the aforecited provision of the New Labor Code would be rendered meaningless. right of the Union members over the properties or assets of PIM became vested from the date the Minister of Labor approved PIM's application for clearance on May 7, 1975. When Banks acquired the properties of PIM in the foreclosure sales, those properties were already encumbered in favor of the Union

members/claimants by force of law. Worse, petitioners were well aware they were foreclosing on properties of a mortgage debtor who had already secured from the Ministry of Labor a corresponding clearance for shutdown due to liquidation, and, needless to say, petitioners are presumed to know the law on the matter already referred to above they sold the same knowing they were saddled with the rights of the laborers of PIM under the clearance of the Ministry of Labor

Central Bank vs Morfe Issue: WON final judgment for the payment of a time deposit in a savings bank which judgment was obtained after the bank was declared insolvent, is a preferred claim against the bank Feb 1969: Resolution 350- Fidelity Savings Bank found to be insolvent by the monetary board so Board directed Supt of Banks to take charge of its assets and forbade it to do business Dec 1969: CB filed petition for assistance and supervision in CFI Manila Mar 1971: Job and Marcela Elizes filed complaint with CFI Manila against Fidelity to recover 50,584 as balance of their time deposits Dec 1972: Fidelity was ordered to pay Elizes the amount plus interest Apr 1972: court also ruled in favour of spouses Padilla for 80,000 balance on their time deposits plus 70,000 moral and exemplary D plus attys fees Aug 1973 and Feb 1974: Elizes and Padilla spouses filed motion with court having jurisdiction of liquidation proceeding, with CB as liquidator, to have their time deposit payments as preferred credits, evidenced by final judgments under 2244 (14)(b), if there are enough funds in the CBs custody in excess of the credits more preferred under Sec30 of CB law in reln to 2244 and 2251 of NCCGRANTED CB appealed by certiorari o Judgments secure by Padilla and Elizes spouses DO NOT ENJOY PREFERENCE because: They were rendered after Fidelity was declared insolvent Under CB charter and CB law: no final judgment can be validly be obtained against an insolvent bank Trial court (liquidation court): no provision of CB charter in General Banking law which suspends civil actions against an insolvent bank pending in other courts-hence judgments against insolvent banks could be considered as preferred credits under art 2244 (14)(b) o CB to honor the writs of exec issued by courts in favour of spouses

That after satisfaction of the judgment, the CB as liquidator, should include said judgments in the list of preferred credits contain in Project of Distribution with the notation- Already paid

CB: once MB has declared a bank insolvent and ordered is ops to cease, Boar becomes trustee of its assets for the equal benefit of all creditors, including the depositors and cites Rohr: one cannot obtain advantage over another by attachment, execution or otherwise o All depositors should file their actions with the liquidation court o Invokes provisions that penalize officer that disburses funds after bank has become insolvent

Held:

ART. 2244. With reference to other property, real and personal, of the debtor, the following claims or credits shall be preferred in the order named: o (14) Credits which, without special privilege, appear in (a) a public instrument; or (b) in a final judgment, if they have been the subject of litigation. These credits shall have preference among themselves in the order of priority of the dates of the instruments and of the judgments, respectively. (1924a)

ART. 2251. Those credits which do not enjoy any preference with respect to specific property, and those which enjoy preference, as to the amount not paid, shall be satisfied according to the following rules: In the order established in article 2244; o Common credits referred to in article 2245 shall be paid pro rata regardless of dates. Republic Act No. 265: Sections 29 (procedure); Section 30 (Distribution of Assets) Whenever upon examination by the Superintendent or his examiners or agents into the condition of any banking institution, it shall be disclosed that the condition of the same is one of

insolvency, or that its continuance in business would involve probable loss to its depositors or creditors, it shall be the duty of the Superintendent forthwith, in writing to inform the Monetary Board of the facts, and the Board, upon finding the statements of the Superintendent to be true, shall forthwith forbid the institution to do business in the Philippines and shall take charge of its assets and proceeds according to law. The Monetary Board shall thereupon determine within thirty days whether the institution may be reorganized or otherwise placed in such a condition so that it may be permitted to resume business with safety to its creditors and shall prescribe the conditions under which such resumption of business shall take place. In such case the expenses and fees in the administration of the institution shall be determined by the Board and shall be paid to the Central Bank out of the assets of such banking institution. At any time within ten days after the Monetary Board has taken charge of the assets of any banking institution, such institution may apply to the Court of First Instance for an order requiring the Monetary Board to show cause why it should not be enjoined from continuing such charge of its assets, and the court may direct the Board to refrain from further proceedings and to surrender charge of its assets. If the Monetary Board shall determine that the banking institution cannot resume business with safety to its creditors, it shall, by the Office of the Solicitor General, file a petition in the Court of First Instance reciting the proceedings which have been taken and praying the assistance and supervision of the court in the liquidation of the affairs of the same. The Superintendent shall thereafter, upon order of the Monetary Board and under the supervision of the court and with all convenient speed, convert the assets of the banking institution to money. SEC. 30. Distribution of assets.In case of liquidation of a banking institution, after payment of the costs of the proceedings, including reasonable expenses and fees of the Central Bank to be allowed by the court, the Central Bank shall pay the debts of such institution, under the order of the court, in accordance with their legal priority.

fixed, savings, and current deposits of money in banks and similar institutions are not true deposits. They are considered simple loans and, as such, are NOT PREFERRED CREDITS one purpose in prohibiting the insolvent bank from doing business is to prevent some depositors from having an undue or fraudulent preference over other creditors and depositors o purpose would be nullified if, as in this case, after the bank is declared insolvent, suits by some depositors could be maintained and judgments would be rendered for the payment of their deposits and then such judgments would be considered preferred credits under article 2244 (14) (b) of the Civil Code would mean that depositors in insolvent banks, after learning that the bank is insolvent as shown by the fact that it can no longer pay withdrawals or that it has closed its doors or has been enjoined by the Monetary Board from doing business, would rush to the courts to secure judgments for the payment of their deposits Depositors armed with such judgments would pester the liquidation court with claims for preference on the basis of article 2244(14)(b). Less alert depositors would be prejudiced. That inequitable situation could not have been contemplated by the framers of section 29 Rohr case: "become a trust fund, to be administered for the benefit of all creditors pro rata and, while the bank retains its corporate existence, and may be sued, the effect of a judgment obtained against it by a creditor is only to fix the amount of debt. He can acquire no lien which will give him any preference or advantage over other general creditors. What was directly prohibited should not be encompassed indirectly. Bank Liquidation Rules and Regulation: Step III the procedure for processing the claims against the insolvent bank; Step IV, the court directed the Central Bank, as liquidator, to submit a Project of Distribution which should include "a list of the preferred credits to be paid in full in the order of priorities established in Articles 2241, 2242, 2243, 2246 and 2247" of the Civil Code (note that article 2244 was not mentioned)the Elizes and Padilla spouses should have adhered to the procedure outlined in the said rules and regulations.

Manabat vs Laguna Federation Laguna Federation of Facomas obtained judgment against Nieves vda. De Roxas, hence all rights, titles and interests of Nieves in 10 parcels of land were sold at a public auction for 37,000 by Provincial Sheriff Francisco Manabat pursuant to a writ of execution When the Sheriff found out that said parcels of land were subject to REGISTERED LIENS such as writs of execution and attachment annotated at the back of the TCTs, the sheriff instituted an action for interpleader in CFI Laguna for the difference creditors or lienholders to litigate among themselves and determine their rights to the 37,000 proceeds of the sale Laguna Federation of Facomas- 17,448 Valeriana and Limaco de Almeda 3,735 Cosmopolitan Insurance 12,650 Florentino Cayco and Jose Fernandez Zorilla 26,787.50 Victoria Dimayuga 12,500 Jose Marfori and Josefina Reyes 9,410 Pastor Canillas 25,552 Trinidad Calatin 3,450 Rosauro Taningco and Simplicio Ramos 9,000 CFI held: aforementioned defendants-claimants are entitled to the proceeds of the sale in the order of preference in accordance with the dates of the registration of their credits. Florentino Cayco and Jose Zorilia appealed grounded on ART. 2249. If there are two or more credits with respect to the same specific real property or real rights, they shall be satisfied pro rata, after the payment of the taxes and assessments upon the immovable property or real right. CA certified appeal to SC whether the rule to follow in the satisfaction of the credits involved is that of preference in the order of dates of registration, as held by the court a quo, or distribution pro rata, as (zayco) maintain

Similarly, the rule of pro rata does not apply to the credits mentioned in subpar. (7) of Article 2242 of the Civil Code: o ART. 2242. With reference to specific immovable property and real rights of the debtor, the following claims, mortgages and liens shall be preferred, and shall constitute an encumbrance on the immovable or real right: xxx xxx xxx (7) Credits annotated in the Registry of Property, in virtue of a judicial order, by attachments or executions, upon the property affected, and only as to later credits.

expressly provided that said credits are preferred "only as to later credits", it follows that the same limitation applies as to their preference among themselves; i.e., for purposes of satisfying several credits annotated by attachments or executions, the rule is still preference according to priority of the credits in the order of time. For, otherwise, the result would be absurd: the preference of an attachment or execution lien over later credits, as above provided for, could easily be defeated by simply obtaining writs of attachment or execution, and annotating them, no matter how much later. that appellants' (Zayco) credit is "later" than those of appellees Laguna Federation of Facomas, Inc., Valeriana Lim-aco de Almeda and Cosmopolitan Insurance Co., Inc., the appellees' credits must be deemed preferred to that of appellants. satisfy them pro rata would erase the difference between earlier and later credits provided for by subpar. (7) of Article 2242 aforementioned.

Held:

Article 2249 itself, supra, expressly provides that taxes and assessments upon the real property are to be paid first.

Zossimo Uy vs Jose Zamora Upon instance of Uy, trial court ordered attachment of a motor vehicle belonging to Zamora Subsequently, court ruled in favour of Uy and ordered Zamora to pay 1,740 plus interest at 12% per annum, attys fees in the amount of 435 and costs of suit Zamora appealed to CFI Manila Pending appeal , Allied Finance sought and was allowed to intervene o The motor vehicle attached by Sheriff had previously been mortgaged to bank by Zamora to secure payment of 3,060 loan and that at the time of filing the complaint, a 1,451 balance remained-hence Allied prayed that Zamora be ordered to pay the balance plus attorneys fees Meanwhile, Zamora and Uy submitted a compromise agreement wherein Zamora admitted the indebtedness plus sheriff and attys fee, bond premiums, litigation costs= 2500 o Since motor vehicle had already been sold: proceeds of sale to go to Zamora Issue: Which of the 2 credits is preferred? Uy: Lien arising from attachment of motor vehicle on Aug 11, 1960 Allied: preference on a Deed of Chattel Mortgage covering the same motor vehicle executed on jan 14, 1960 and acknowledged before a notary public on June 20, 1960 (it is not shown whether the mortgage was recorded in the Chattel Mortgage Register and noted in the records of the Motor Vehicles Office, although both plaintiff Uy and the intervenor affirm in their briefs that the mortgage was registered on August 24, 1960) Lower court: an unregistered chattel mortgage is void, hence Allieds claim could not be considered specially preferred credit under 2241 (1)- HOWEVER, IT COULD BE CONSIDERED APPEARING IN A PUBLIC INSTRUMENT UNDER ARTICLE 2244 (14) SO THAT IT COULD BE CONSIDERED PREFERRED OVER PLAINTIFFS ATTACHMENT LIEN BECAUSE OF PRIORITY OF ITS DATE MR denied

that the intervenor Allied Finance, Inc. registered its mortgage only on August 24, 1960, or subsequent to the date of the writ of attachment obtained by plaintiff Uy on August 11, 1960, the credit of the intervenor cannot prevail over that of the plaintiff. the credit of the intervenor cannot be considered as preferred until the same has been recorded in the Motor Vehicles Office.