G.R. No. 47001 . February 1, 1941.
IN THE MATTER OF THE VOLUNTARY INSOLVENCY OF EDWARD MITCHELL. HARRY GOODMAN, petitioner-appellee, vs. FAUSTINO LICHAUCO, assignee-appellant.

FACTS

Edward Mitchell, owner of the New Plaza Hotel in Manila, was declared insolvent in the proceedings for his voluntary insolvency (Civil Case No. 54662 of the Court of First Instance of Manila). Faustino Lichauco was appointed assignee of the insolvency. On March 31, 1939, Harry Goodman filed a petition in the insolvency proceedings, asking the court to order the assignee to return to him the following personal properties: 1 suitcase, 2 handbags, 4 suits, 1 razor, 2 belts, 15 neckties, 1 bathrobe, 4 pairs of shoes, 6 pairs of socks, and shirts, 5 suits underwear, personal letters, treasurer box of coins and 1 pair of pajamas. The petitioner alleged that these personal properties were his and not the insolvent’s. The assignee opposed the petition, alleging that the petitioner had been a guest of the hotel; that he left the hotel owing an amount greater than the value of the properties he claimed; that he had refused to pay his debt representing the amount of his lodging; and that as assignee he had the right to retain the petitioner’s personal properties by way of pledge until the petitioner paid his debt. After hearing the parties, the court, by order of April 1 of the same year, denied the petition. The petitioner moved for reconsideration of said order on the ground that the personal properties he claimed were exempt from attachment and execution, pursuant to Article 452(4) of the Code of Civil Procedure. The court, by order of June 28, 1939, set aside the previous order, granted the petition, and ordered the assignee to return the mentioned personal properties to the petitioner. The assignee moved for reconsideration of the last order, and his motion having been denied, he excepted to it and interposed the present appeal. It is admitted that the personal properties claimed by the petitioner are his exclusive property and that the assignee retains and has refused to return them because the petitioner owes the insolvency a certain sum of money, greater than the value of the personal properties, a debt which he has refused to pay up to the time the incident arose.

ISSUE

Whether the assignee of the insolvent hotel owner has the right to retain the petitioner’s personal properties found in the hotel as a pledge for the unpaid debt for lodging, notwithstanding the exemption from attachment and execution provided for such properties under Article 452(4) of the Code of Civil Procedure.

RULING

The Supreme Court reversed the appealed order of June 28, 1939. The Court held that the personal properties claimed by the petitioner are constituted as a pledge in favor of the insolvency (through the assignee) and answer for the payment of what the petitioner owes for lodging, pursuant to Article 1922, paragraph 5, of the Civil Code, which grants to credits for lodging a preference over the movables of the debtor existing in the inn. The Court cited commentator Manresa, who explained that innkeepers have a right of pledge over effects brought into the inn and existing therein at the time, belonging to the debtor. Article 452(4) of the Code of Civil Procedure, which exempts necessary wearing apparel from attachment and execution, is inapplicable because the case does not involve an attachment or execution. Its provisions do not conflict with the lien created by Article 1922(5) of the Civil Code, and both precepts can coexist without impairing the rights acquired under them. The clothes needed by a judgment debtor and all those of his family cannot be attached or sold in execution of a judgment against him, but if he owes for lodging to a hotel keeper, the latter has the right to retain them as a pledge until he pays his debt for lodging. The appealed order was revoked, with costs against the petitioner-appellee.