Case Digest (G.R. No. L-40258)
Facts:
La Tondena, Inc. v. Alto Surety & Insurance Co., Inc., G.R. No. L-10132, July 18, 1957, the Supreme Court En Banc, Reyes, J., writing for the Court.The dispute arose from competing claims over chattel-mortgaged goods belonging to Primitivo P. Ferrer. On April 21, 1949 Ferrer executed a second chattel mortgage in favor of La Tondena, Inc. to secure certain obligations; some of the same properties were already subject to a prior, registered first mortgage in favor of Pedro Ruiz. All mortgages were registered.
On August 18, 1949 Ruiz commenced foreclosure proceedings in the Court of First Instance of Pangasinan (Case No. 10880) and sought replevin; Ferrer secured release of the property from custody by posting a redelivery bond of P20,000 guaranteed by Alto Surety and Insurance Co., Inc. The Pangasinan court rendered judgment in Ruiz’s favor on December 1, 1950, and Ferrer defaulted; Alto Surety ultimately paid Ruiz’s claim on June 19, 1952.
While Ruiz’s case was pending, La Tondena instituted foreclosure proceedings against Ferrer on November 15, 1949 in the Court of First Instance of Manila (No. 9658). Judgment was rendered on June 7, 1950 for monetary recovery and a decree of foreclosure if not paid within ninety days. The Provincial Sheriff of Pangasinan levied on the mortgaged goods and advertised a sale, but at La Tondena’s request the sheriff released the levy on December 13, 1950 to save custody fees, on the condition Ferrer pay by March 31, 1951, failing which La Tondena would proceed with foreclosure.
On March 13, 1951 Alto Surety filed actions in the Court of First Instance of Baguio (Civil Cases Hos. 241 and 242) to recover indemnities it claimed to have paid for Ferrer and obtained writs of preliminary attachment. On April 23, 1951 the Provincial Sheriff, acting for Alto Surety, attached the very goods covered by La Tondena’s mortgage. La Tondena failed to compel payment by March 31 and secured an alias writ of execution on May 26, 1951, but the Alto Surety levy blocked the foreclosure sale. La Tondena filed a third-party claim; Alto Surety gave an indemnity bond (guaranteed by Associated Insurance and Surety Co.) to maintain its levy, and on May 19, 1952 Alto Surety caused the attached goods to be auctioned and purchased them for P3,507.50.
La Tondena then sued Alto Surety, Associated Insurance, and the Provincial Sheriff for damages in the trial court. The Court of First Instance dismissed the complaint, holding that (1) La Tondena’s release of the execution levy extinguished its lien and preference; (2) La Tondena’s extension o...(Subscriber-Only)
Issues:
- Did La Tondena’s discharge of the sheriff’s execution levy on December 13, 1950 extinguish its registered mortgage lien and preference?
- Did the extension of time granted to Ferrer to satisfy the foreclosure judgment constitute a novation that extinguished the judgment?
- Did Alto Surety’s attachment (April 23, 1951) take precedence over La Tondena’s earlier registered mortgage because Alto Surety later paid the first mortgage and was sub...(Subscriber-Only)
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)