MCMICKING (SHERIFF, PLAINTIFF-APPELLEE) VS EL BANCO ESPANOL 10. Lower court held: Ayala is entitled to P756.

Lower court held: Ayala is entitled to P756.66, the remaining balance be paid
FILIPINO ET. AL (DEFENDANT), AYALA (APPELLANT) to D.

FACTS: 11. Ayala appeals.

1. One Sanchez and Cue Suan (as a sociedad en comandita, some kind of ISSUES:
partnership), were owners of steamship “hock-tay”. 1. W/N appellant has liens existing in this case
2. W/N, for purposes of compliance with a mercantile contract, Arts 57 and 58 of Code
2. On feb 21 1907, Cue Suan/comandita borrowed from D the sum of P30,000, of Commerce inre to Art. 646 are applicable to the case.
and gave as security for the payment a chattel mortgage executed and delivered in 3. W/N the not granting of the appellant the wages corresponding to the subordinate
accordace with act. 1508 of PH commission. crew is valid.
RULING
3. The mortgage was duly recorded in the office of the collector customs in the 1. Defendant bases his claim on the theory that wages of the crew and expenses
port of manila, and in the office of registry of property in manila. incurred for the ship have a preference over the claim of the defendant. While
Defendant bases his claim on articled 580 and 646.
4. On Oct 10 1907, D caused to be delivered to sheriff P the same chattel By virtue of paragraph 6 of art. 580, in all judicial sales of vessels the salaries
mortgage, with notice that the terms of said mortgage has been broken by due to the captain and crew during the last voyage shall be paid in accordance with
mortgagors, and requested the sheriff to sell property. the preferences mentioned in said article out of the proceeds of the ship.
While article 646 creates a lien under the law and take preference over a lien
5. Sheriff then gave the due notice to Cue Suan in accordance with law. Fixed created by giving the ship as security for money borrowed.
date of sale was on oct. 27 1907 “Liens in favor of the crew under these circumstances are known as legal
liens and whoever buys a ship or loans money and takes chattel mortgage as
6. That on Oct. 26 1907, Manuel Ayala served upon said sheriff a notice, stating security, takes the ship subject to such prior liens.”
that he is the captain of the subject steamer, Hock-Tay, and demanded sheriff to not
deliver to D herein the sum of P4,441.92 which represents the wages of the crew and 2. The absence of a provision regarding the matter of this case is that in no case
expenses of supply from their last voyage due to them in accordance to the code of can such sale or a sale based upon the second mortgage or lien upon property affect
commerce. That the latter claim constitutes preferred claims and the notice being in any way prior liens.
made was made under oath. It cannot be contended that the mere fact that a ship has been sold under a
judicial sale means that the rights of prior lien holders, who are not parties to the
7. On oct. 27 1907, hock-tay was sold for P30,000.00 procedure under which sale took place, were foreclosed.

8. Oct 30 1907 sheriff filed complaint and asked the court: that the defendant be 3. The lower court denies the right of Ayala on the ground that he was not the
requested to interplead their respective rights to funds, and that that he be relieved of real person in interest with respect to the other members of the crew, but under no
any responsibility upon the delivery of the funds. Ayala then answered and alleged theory could the amount due to the other members be recovered has it not been for
his claim. the assignment of claims to Ayala.
By virtue of sec 114 of the code of procedure, the assignment of rights of
9. On Nov 09 1907, D answered that Sanchez et al, nor Manuel Ayala had any action is recognized even when one has a right of action assigned to him he may
right to the funds of the sale, and claimed that all of the money except legal expenses maintain an action upon such claim or right.
should be paid to said bank.

1
 10. Lower court rules that the Yu de sane may, is she desires, ask for another order of
execution, and may by virtue thereof attach subject properties. She may order their sale
by public auction subject to the mortgage in favor of PNB

ARROYO (SHERIFF, PLAINTIFF-APPELLEE) VS. YUDE SANE, PAUCO, LIONG 11. Lower court holds the action for damages by Pauco as “not proven”.
(DEFENDANT-APPELLANT), PHILIPPINE NATIONAL BANK (DEFENDANT
-APPELLEE) 12. Yu de sane and Pauco’s appeals were taken, hence:

FACTS ISSUES
4. In CFI herein sheriff herein instated an action to compel various persons and entities
with claims to the Lorchas (sailing ship) ‘China’ and ‘Cuylim’ to interplead and 1. W/N there is a valid registration of the mortgage between Pauco and PNB
determine their conflicting rights.
2. W/N Yu de sane has a superior claim over the other parties.
5. The mortgage of the subject property executed in favor of Pauco, and the transfer of
said mortgage by the latter in Nov. 29 1919 to PNB is duly registered, and is valid and 3. W/N Pauco has valid claims over subject property.
legal. The fact that his mortgage was not registered ‘in time’ is proved to be due to the
doubt entertained by the collector of customs re. the applicability of the amended Act RULING
No. 3324.
1. Section 1171 of the Administrative Code has modified the provisions of sec 4 chattel
6. But the property herein do not cease to pertain to the Lim Ponzo Navigation Co., mortgage law. It is now not necessary for a chattel mortgage of a vessel to be noted in
evidenced by certificates of ownership and being LPNC’s they were validly attached the registry of deeds. However it is essential that a record of documents affecting the
and levied upon by virtue of a writ of execution upon petition of herein D Yu de sane. title of a vessel be with the office of the collector of customs, at a port of entry.
On Dec.06 1928 the sheriff levied upon the subject property and had been attached on
Dec. 04 1928 Mortgages on vessels, although not recorder, are good between the parties.
But as against creditors of the mortgagor, an unrecorded mortgage is invalid.
7. It being understood that both attachment and execution were subject to all liens
existing upon said property on the date of attachment, which liens were the mortgages The constructive registration of the mortgage in this case is accepted.
in favor of Pauco transferred by the same to the PNB.
2. Between Yu de sane and PNB, PNB has a superior claim in the amount of P20,000,
8. Yu de sane’s writ of execution was not carried out because PNB files a third party representing the amount transferred by Pauco to PNB.
claim, and Yu de sane failed to give indemnity required by the sheriff.
3. There is no particular merit in the arguments by Pauco offered on behalf of Liong, for
9. That on dec. 29 1928 Sheriff dissolved the attachment levied upon the property and his mortgage was not on the boats themselves, moreover his mortgage has never been
delivered them to Pauco. That on Dec 17 the complaint for interpleading was filed. The recorded in the office of the collector of customs.
court rules that the sheriff should not have delivered the same without the authority of
the court. The sheriff acted in his own authority and hence must assume full personal However in his pleading there were procedural anomalies alleged, thus the
responsibility. case was remanded for further proceedings.