[ G.R. No. 5160. February 03, 1910 ] 15 Phil. 133
[ G.R. No. 5160. February 03, 1910 ]
ENRIQUE F. SOMES, PLAINTIFF AND APPELLEE, VS. RAFAEL MOLINA Y SALVADOR ET AL., DEFENDANTS AND APPELLANTS. D E C I S I O N
MORELAND, J.:
The contract out of which this action indirectly springs was executed between the defendant Molina as vendor and the defendant De la Riva as vendee on the 27th day of July, 1903, and was for the sale and transfer of an extensive hemp, copra, and merchandise business, with its accessories, consisting of certain launches, buildings, and real estate, situated in the Island of Catanduanes, as well as a large amount of bills receivable and outstanding accounts due from the local patrons of and dealers with the establishment sold. The purchase price of said property was P134,636.12, Mexican currency, to be paid by De la Riva in four equal installments; the first payment to be made at the time of the execution of the document, the second payment one year from the date thereof, the third payment at the end of two years from that date, and the fourth payment at the end of three years from that date, with interest at the rate of 5 per cent per annum to be paid at the end of each year. No payment was made by De la Riva under said contract except the first payment, which was made at the date of the execution of the contract. On the 18th day of April, 1905, said Molina obtained against said De la Riva a judgment in the Court of First Instance for the amount of the second installment due under said contract. An appeal was taken from said judgment by De la Riva, and the Supreme Court affirmed the judgment on the 22d day of March, 1906.[1] On the 23d day of November, 1905, the defendant Molina recovered against the defendant De la Riva another judgment in the Court of First Instance upon the third installment due under said contract. An appeal was taken from that judgment and the same was affirmed by the Supreme Court on the 5th day of January, 1907.[2] On the 19th day of February, 1907, the said Molina obtained another judgment against De la Riva in the Court of First Instance for the recovery of the fourth and last installment due under said contract. Executions were issued under said judgments on the 21st day of April, 1906, the 19th day of February, 1907, and the 19th day of February, 1907, respectively. Said executions were placed in the hands of the sheriff of the city of Manila and the sheriff of the Province of Albay, and all of the property of the defendant De la Riva was levied upon under said executions, which levies still remain in force, the property not having been sold pursuant thereto. When the defendant De la Riva made his appeal from the judgment in the first case above referred to, No. 3402, he filed a supersedeas bond, signed by himself, as principal, and by Messrs. Somes and Spalding as sureties, the three binding themselves de mancomun et in solidum. The judgment in question was eventually satisfied out of the property of Somes, who thereupon became a creditor of De la Riva for the amount of the judgment in said case No. 3402. Molina, having collected the amount of his judgment in case No. 3402, remained a creditor of De la Riva for the amount of his judgments in the other two cases, numbered, respectively, 3829 and 4766. It became apparent that De la Riva’s property was insufficient to discharge all of these obligations, and the question of preference, if any, among the judgments arose. In his complaint in this action Somes asserts that the judgment rendered in case No. 3402 is senior to those rendered in cases Nos. 3829 and 4766; that he, having paid, as surety for De la Riva, the judgment of Molina against the latter, is entitled to be subrogated to the rights and privileges of Molina, including a right of seniority of the judgment in case No. 3402. This action was brought by the surety, Somes, for the purpose of having this court declare that the plaintiff is entitled to the subrogation above indicated as against not only the defendant De la Riva but also against the defendant and creditor Molina; and also that this court decide and decree that, having been so subrogated, the plaintiff shall enjoy the right of preference in satisfying his debt out of the property of De la Riva, as against Molina, the holder of the other two judgments in cases Nos. 3829 and 4766. It must be remembered, in the first place, that the contract of purchase and sale, which is the basis of the various suits and proceedings between the parties, including the cause at bar, is a public document, executed as such by the parties thereto with all the formalities required for such purpose by the law. This being so, it is evident that, under the provisions of article 1924, subdivision 3, of the Civil Code, preference is determined by the date of the public document and not by the dates of the judgments secured by virtue of it. The public document, for the purposes of said section, is not merged in any judgment obtained under it, and its date, rather than the dates of the judgments recovered by virtue of it, determines the priority of those judgments as to preference. There can, therefore, be no preference among the judgments in question. The debtor’s property is divided among them pro rata, should such property be insufficient to pay them in full. It must be borne in mind, in the second place, that the three judgments really constitute one debt. They are but parts of a whole, namely, P134,636.12. They are simply installments of one debt, the consideration of the contract of purchase and sale. That contract is an indivisible contract and its consideration single and entire. (Roberts vs. Beatty, 21 Am. Dec, 410, 418; Alcott vs. Hugus, 105 Pa. St., 350; Cherry Valley Iron Works vs. Florence Iron River Co., 64 Fed. Rep., 569; Norrington vs. Wright, 115 U. S., 188, 203; Stein vs. Steamboat Prairie Rose, 93 Am. Dec, 631, and cases there cited). This being the case, the question to be determined here, viz, the right of the plaintiff to subrogation, is brought squarely within the well-established doctrine that the surety can not exercise the rights conferred by subrogation until the debt which the principal debtor owes to the creditor is fully paid. (Supreme court of Spain, July 9, 1897 (No. 37) ; Wilcox vs. Bank, 7 Allen, 270; London & N. W. American Mortgage Company vs. Fitzgerald, 55 Minn., 71; Lumbermen’s Ins. Co. vs. Sprague, 59 Minn., 208; 27 Am. & Eng. Ency. L., 205, and cases cited). These holdings clearly require that Molina must be paid not only judgment No. 3402, but also judgments Nos. 3829 and 4766, before the plaintiff can exercise any rights obtained under subrogation. The result thus obtained conforms to justice and equity. This doctrine is also clearly laid down in article 1213 of the Civil Code, which is quite decisive of this case. It is, therefore, adjudged and decreed: First. That there exists no preference among the judgments in actions Nos. 3402, 3829, and 4766, referred to in this action. They all stand on an equal footing. Second. That the plaintiff herein is entitled to subrogation in the judgment obtained in action No, 3402, but he may not exercise the rights conferred by such subrogation until the defendant Molina has been fully paid judgments in actions Nos. 3829 and 4766. Third. That so much of the judgment of the court below as is inconsistent herewith is hereby reversed. Fourth. That there is no special finding as to the costs of this appeal. Arellano, C. J., Torres and Mapa, JJ., concur.