G.R. No. L-7896; March 30, 1914
JOSE MCMICKING, sheriff ex-officio of Manila, plaintiff-appellee, vs. CRISANTO LICHAUCO, ET AL., defendants-appellants.

FACTS:
This case arose from interpleader proceedings to determine the rightful claimants to the proceeds of a judgment rendered in favor of Crisanto Lichauco against Chu Chan Chac. The competing claimants were Antonio Flor Mata and Clara Lichauco. Antonio Flor Mata held a judgment against Crisanto Lichauco dated October 6, 1910, for P8,465.42, which was unsatisfied and pending on appeal at the time of the interpleader. However, execution on this judgment was not stayed by special order of the court. Clara Lichauco, Crisanto’s aunt, held a later judgment against him dated February 2, 1911, for P17,666.60. The trial court ruled in favor of Mata, granting his claim preference over Clara Lichauco’s claim. Clara Lichauco and other defendants appealed.

ISSUE:
Whether a judgment creditor (Antonio Flor Mata) whose judgment is pending on appeal but with execution not stayed is entitled to preference over a subsequent judgment creditor (Clara Lichauco) in the distribution of the judgment debtor’s funds.

RULING:
Yes. The Supreme Court affirmed the trial court’s decision granting preference to Antonio Flor Mata’s judgment, but modified the decree to account for the pending appeal.

The Court held that under Article 1924 of the Civil Code, which grants preference to sentencias firmes (final judgments), a judgment upon which execution has not been stayedpursuant to Section 144 of Act No. 190 (Code of Civil Procedure)is entitled to such preference. Although Mata’s judgment was on appeal, it was not a sentencia firme in the strict Spanish legal sense because an appeal was pending. However, the Court reasoned that the preference under Article 1924 is based on the judgment creditor’s right to immediate recourse to the debtor’s property. Since execution was not stayed, Mata had that immediate right, akin to a sentencia firme.

The Court rejected the argument that an appeal destroys the judgment’s lien or preference, citing American authorities that an appeal merely suspendsnot extinguishesthe lien of a judgment. The better doctrine is that the lien persists unless the law expressly provides otherwise.

However, because Mata’s judgment was still subject to modification or reversal on appeal, the Supreme Court directed the trial court to retain sufficient funds or require a refunding bond to protect the parties in case of reversal or modification. Thus, the preference was upheld, but distribution was to be deferred pending the appeal’s outcome.

The judgment was affirmed with costs against appellants, subject to the indicated safeguards.