Bachrach v.

Talisay-Silay
G.R. No. 35223 – September 17, 1931
J. Romualdez

Topic: Kinds of Accession

Petitioners: The Bachrach Motor Co., Inc.
Respondents: Talisay-Silay Milling Co., et al., The Philippine National Bank

Case Summary: The Talisay-Silay Milling Co., Inc., was indebted to PNB. To secure the payment of its
debt, it succeeded in inducing its planters, among whom was Mariano Lacson Ledesma, to mortgage their
land to the creditor bank. In order to compensate those planters for the risk they were running with their
property under that mortgage, the aforesaid central, by a resolution, undertook to credit the owners of the
plantation thus mortgaged every year with a sum equal to 2% of the debt secured according to the yearly
balance, the payment of the bonus being made at once, or in part from time to time, as soon as the central
became free of its obligations to the aforesaid bank, and of those contracted by virtue of the contract of
supervision, and had funds which might be so used, or as soon as it obtained from said bank authority to
make such payment.
 Bachrach Motors was able to levy on the bonus due to Mariano through a civil case.
PNB on the other hand intervened alleging they have preferential credit over the said bonus because it forms
part of the civil fruits of the land which was mortgaged to them.

Facts:
How the Bonus was granted:
 December 22, 1923: Talisay-Silay Milling Co was indebted to PNB.
o To secure payment of debt, it induced its planters, among whom was Mariano Lacson
Ledesma, to mortgage their land to the creditor bank.
o In order to compensate the planters for the risk (of mortgaging their property) the sugar
central undertook to credit the owners of the plantation thus mortgaged every year with a
sum equal to 2% of the debt secured according to yearly balance
▪ The payment of the bonus being made at once, or in part from time to time, as
soon as the central became free from its obligation to PNB and had funds thereof.

 Bachrach Motor Co, filed a complaint against Talisay Silay Milling for the delivery of Php 13, 850
or promissory notes or other instruments or credit for the sum (payable June 30, 1930), as bonus in
favor of Mariano Lacson Ledesma
o The complaint prayed that the sugar central be ordered to render an accounting of the
amounts it owes Mariano Lacson Ledesma by way of bonus and that the sale made by
Mariano Lacson Ledesmabe declared null and void.

 PNB filed a third party claim: alleging a preferential right to receive any amount which Mariano
Lacson Ledesma might be entitled to from the Talisay-Silay Milling Co. as bonus
o PNB claims that these would be civil fruits of the land mortgaged to said bank by said
debtor for the benefit of the central referred to
o Cesar Ledesma answered, he was the owner by purchase in good faith
o Bachrach Motor answered the third party claim saying that its credit against Mariano was
proor and preferential to that of PNB, and prayed that PNB’s complaint be dismissed.

 Trial court after the hearing concluded that Bachrach Motor Co., Inc., had a preferred right to
receive the amount of P11,076.02 which was Mariano Lacson Ledesma's bonus, and it ordered the
defendant central to deliver said sum to the plaintiff.
Issues + Held:
1. W/N the bonus in question is civil fruits [NO]

 Article 355 of the Civil Code considers three things as civil fruits:
1. The rents of buildings;
2. The proceeds from leases of lands; and
3. The income from perpetual or life annuities, or other similar sources of revenue

Note: According to the context of the law, the phrase "u otras analogas" refers only to rent or
income, for the adjectives "otras" and "analogas" agree with the noun "rentas," as do also the
other adjectives "perpetuas"and "vitalicias."
o Therefore, “civil fruits” = rent of a building, tent of land, and certain kinds of income.

 The bonus in question here is NOT rent of a building or of a land, so the only meaning of “civil
fruits” to be examined here is that of “income” (Art 355, 3).
o Said bonus bears no immediate, but only a remote accidental relation to the land mentioned
– granted as compensation for the risk of having subjected one's land to a lien in favor of
the bank, for the benefit of the entity granting said bonus.
o At most, it is income arising from said risk, or, if one chooses, from Mariano Lacson
Ledesma's generosity in facing the danger (of mortgaging one’s land) for the
protection of the central
 IT IS NOT civil fruits or income from mortgaged property.
o Hence, the amount of the bonus is not based upon the value, importance or any other
circumstance of the mortgaged property, but upon the total value of the debt secured –
something quite distinct from and independent of the property referred to.

Ruling: The judgment appealed from is AFFIRMED, without express finding as to costs.