GR 44260; (November, 1938) (Digest)
G.R. No. 44260 . November 2, 1938.
MONTE DE PIEDAD Y CAJA DE AHORROS DE MANILA, plaintiff-appellee, vs. MARIA PAZ MARCIANA GUIDOTE, JORGE B. DELGADO, TEODORO R. YANGCO, PHILIPPINE NATIONAL BANK, and BANK OF THE PHILIPPINE ISLANDS, defendants. TEODORO R. YANGCO, appellant.
FACTS
Plaintiff Monte de Piedad held credits against the spouses Maria Paz Marciana Guidote and Jorge B. Delgado, secured by four real estate mortgages duly registered in 1930 and 1931. Defendant Teodoro R. Yangco also held a credit against the same spouses, arising from a promissory note executed in September 1931 for construction materials supplied. Yangco obtained a judgment for the unpaid balance of this note in September 1932. In the foreclosure proceedings initiated by Monte de Piedad, the trial court subordinated Yangco’s credit to those of Monte de Piedad. Yangco appealed, contending his credit should be preferred.
ISSUE
Whether Yangco’s credit, arising from the sale of construction materials used on the mortgaged properties, is entitled to preference over the prior registered mortgages of Monte de Piedad.
RULING
No. The Supreme Court affirmed the trial court’s judgment. Yangco’s credit is not entitled to the preference under Article 1922 of the Civil Code (now Article 2241[2]) for the price of movables sold and still existing in the debtor’s possession. By accepting a promissory note for the debt and suing upon it, Yangco altered the original vendor-purchaser relationship and waived any such preference. Furthermore, to claim the preference, it was necessary for Yangco to prove that the materials sold were still in the possession of the debtor-spouses and remained identifiable in their original form, which he failed to do. The prior registered mortgages of Monte de Piedad therefore retain their superior preference.
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