G.R. No. 36356 ; February 14, 1933
GERARDO GARCIA, claimant-appellant, vs. CHINA BANKING CORPORATION, claimant-appellee.

FACTS

The Compañia Hispano-Filipina, Inc. filed a petition for voluntary dissolution. Gerardo Garcia was appointed receiver. During the dissolution proceedings, the China Banking Corporation filed a claim for preferential payment based on a final judgment it obtained against the corporation and its sureties after the dissolution proceedings had begun. Garcia also filed a claim for preferential payment, arguing his credit for merchandise advanced to the corporation was preferred. The trial court ruled in favor of China Banking Corporation, declaring its judgment credit as preferred. Garcia appealed.

ISSUE

1. Whether a final judgment obtained against a corporation after the commencement of voluntary dissolution proceedings constitutes a preferred credit under the Civil Code.
2. Whether Garcia’s claim, based on entries in the corporation’s duly authenticated commercial books, constitutes a preferred credit under the Civil Code.
3. Whether Garcia’s claim qualifies as a vendor’s preferred credit under the Civil Code.

RULING

1. Yes. The judgment credit of China Banking Corporation is preferred. The Corporation Law on voluntary dissolution contains no provision that invalidates or strips of preference a judgment obtained after dissolution proceedings begin. Therefore, such a judgment retains the scope, nature, and effect of a final judgment under Article 1924(3)(B) of the Civil Code, making it a preferred credit. The fact that the judgment was rendered against the corporation jointly and severally with others does not affect its preferred character.
2. No. Garcia’s claim, as recorded in the corporation’s commercial books authenticated by a justice of the peace, does not constitute a preferred credit based on a “public instrument” under Article 1924(3)(A). While such authentication gives the books a public character, they are not public instruments. A public instrument requires execution before a notary public with witnesses, which the commercial books lack.
3. No. Garcia’s claim does not qualify as a vendor’s preferred credit under Article 1922(1) of the Civil Code. To enjoy such a privilege, the specific goods sold and unpaid for must be identified and shown to be in the purchaser’s possession at the time the claim is filed. Garcia failed to prove that the goods he advanced were the same goods existing at dissolution or that the corporate funds on deposit were the exclusive proceeds from the sale of those specific goods.

The appealed judgment was AFFIRMED.

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