G.R. No. 2235

FACTS:
Plaintiff-appellee Thomas Pepperell filed an action to recover a debt based on a promissory note executed by defendant-appellant B.F. Taylor. Concurrently, Pepperell applied for and obtained a writ of attachment against Taylor’s property, specifically the launch Scotia, based on an affidavit alleging that Taylor “had disposed of his property or is about to dispose of his property with intent to defraud his creditors.” Taylor moved to dissolve the attachment, arguing the affidavit was defective for being stated in the alternative and that the attachment was improper because Pepperell already held a chattel mortgage on the same launch as security for the debt. The trial court denied the motion and later rendered judgment in favor of Pepperell. Taylor appealed.

ISSUE:
1. Whether the affidavit for attachment, which alleged grounds in the alternative, is sufficient to support the issuance of the writ.
2. Whether the existence of a prior chattel mortgage on the attached property constitutes “other sufficient security” that bars an attachment under Section 426 of the Code of Civil Procedure.
3. Whether the award of interest from the date of default until full payment is lawful.

RULING:
The Supreme Court AFFIRMED the judgment of the trial court.

1. On the Sufficiency of the Affidavit: The affidavit was held sufficient. While an affidavit alleging alternative groundsone statutory and one notwould be defective, an affidavit alleging two alternative grounds, both of which are valid statutory grounds for attachment (as in this case: actual disposition or intended disposition of property to defraud creditors), is valid. It positively states that at least one ground for attachment exists. The Court recognized that a creditor might, in good faith, be unable to specify precisely which of the two fraudulent stages has occurred at the time of the affidavit.

2. On the Prior Chattel Mortgage as “Other Sufficient Security”: The existence of the chattel mortgage on the launch Scotia did not preclude its attachment under Section 426. The purpose of the statute is to prevent a creditor with security on specific property from attaching other property of the debtor for the same debt. It does not prohibit the attachment of the very property that secures the debt in an action to recover that debt. The Court declined to rule on the validity of the chattel mortgage instrument itself, as it was not necessary to resolve the issue.

3. On the Award of Interest: The award of interest at the stipulated rate from the date of default (September 14, 1903) until full payment was upheld as lawful, following the precedent set in Banco Español-Filipino v. Donaldson Sim & Co. ( G.R. No. 2422 ). Section 510 of the Code of Civil Procedure, which concerns interest on judgments, does not apply to the contractual interest due from the date of default.