Case Digest (G.R. No. L-3088)
Facts:
El Banco Espanol-Filipino v. James Peterson, G.R. No. 3088. February 06, 1907, the Supreme Court En Banc, Torres, J., writing for the Court.
The plaintiff-appellant was El Banco Espanol-Filipino (the bank); the defendants-appellees were James Peterson, Sheriff of the City of Manila, and Juan Garcia (the judgment creditor and levying party). On October 24, 1905 the bank filed suit against the sheriff and Garcia seeking declaration that an execution levy on certain goods (wines, liquors, canned goods and similar merchandise) was illegal, that the goods be returned or their value (P30,000) paid, and that under the pledge contract the bank had the right to apply the proceeds of the goods to a secured debt of P40,000 with preference over Garcia’s claim.
The complaint alleged that on March 4, 1905 the bank loaned Francisco Reyes P141,702, who was already indebted in P84,415.38, making a total of P226,117.38, all at 8% per annum; to secure payment Reyes executed a public instrument mortgaging certain real property and pledging specified personal property, including a merchandise stock then valued at P90,591.75. The merchandise was to be delivered to Ramon Garcia y Planas for safe-keeping; later, by agreement dated September 29, 1905, the parties modified the March 4 instrument so that the goods then in the depositary’s possession would secure only P40,000, and Luis M.a Sierra was designated depositary in substitution for Ramon Garcia y Planas.
On October 19, 1905, in a separate action in the Court of First Instance, Juan Garcia y Planas obtained judgment against Francisco Reyes and Ramon Agtarat for P15,000; execution was issued and at Garcia’s request the sheriff entered the warehouse where the pledged merchandise was kept under depositary Sierra and levied upon the goods listed in Exhibit A. The sheriff seized merchandise that the bank claimed was under pledge and in the possession of a depositary and of the bank’s agent, thereby depriving the bank of possession.
In his answer the sheriff admitted certain allegations but denied that the bank retained possession or that the pledge was valid, and prayed for dismissal. After trial the Court of First Instance rendered judg...(Subscriber-Only)
Issues:
- Was the contract of pledge between El Banco Espanol-Filipino and Francisco Reyes valid under the Civil Code?
- If valid, did the bank’s pledge give it a preferential right to the pledged goods (or their value) that made the sheriff’s levy at the instance of Juan Garcia illegal?
- Was the pledge contract fraudulent as to other cre...(Subscriber-Only)
Ruling:
- (Subscriber-Only)
Ratio:
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Doctrine:
- (Subscriber-Only)