G.R. No. 24996, September 4, 1926
J. M. PO PAUCO, plaintiff-appellant, vs. J. G. TAN JUNCO, defendant-appellee.

FACTS

J. M. Po Pauco sued J. G. Tan Junco for breach of contract. The trial court ruled in favor of Po Pauco. During the appeal, Po Pauco executed the judgment, causing the sheriff to levy and sell Tan Junco’s properties. The Supreme Court reversed the trial court’s decision, absolving Tan Junco from the complaint and ordering an accounting on his counterclaim. The case was remanded to determine the correct account balance and the restitution due to Tan Junco for the properties seized under the erroneous execution. The trial court, after proceedings, awarded Tan Junco a sum representing the account balance and the full value of the seized properties. Po Pauco appealed this award.

ISSUE

1. What is the correct balance due on the current account between the parties?
2. What is the extent of the plaintiff’s liability for restitution of properties seized and sold under the erroneous execution?

RULING

1. On the Account Balance: The Supreme Court recalculated the account, excluding certain unjustified items from Po Pauco’s claim. The correct balance due to Tan Junco was found to be P2,641.71, with legal interest from July 29, 1920.
2. On Restitution for Erroneous Execution:
* For properties purchased by Po Pauco himself at the sheriff’s sale, he must account for their fair market value at the time of seizure, which was P2,798.40.
* For properties sold to third parties, the general rule applies: a judgment creditor who causes execution on a judgment later reversed is not a wrongdoer or trespasser. His liability for restitution is limited to the actual proceeds of the sale that came into his hands, not the property’s market value. Therefore, Po Pauco is liable only for the P1,681.41 realized from those sales.
From the total proceeds, the amount applied to pay Tan Junco’s income tax (P453.23) was deducted, as it never reached Po Pauco.

DISPOSITIVE PORTION:
The appealed judgment was MODIFIED. Tan Junco is awarded a total of P6,668.29, broken down as follows:
* P2,641.71 (account balance) with legal interest from July 29, 1920.
* P4,026.58 (restitution: P2,798.40 + P1,681.41 – P453.23) with legal interest from the date of the levy.
The judgment, as modified, is AFFIRMED. No costs.