G.R. No. 47646 and 47657; June 10, 1941
FRANCISCO BALTAZAR in his capacity as judicial receiver of Mabalacat Sugar Central, ET AL., petitioners, vs. ANDRES LAYUG, ET AL., respondents.

FACTS

On February 9, 1932, Francisco Baltazar, as the judicial receiver of the Mabalacat Sugar Central (which was under receivership due to a foreclosure proceeding), filed an action in the Court of First Instance of Pampanga against Geo. C. Sellner to foreclose a chattel mortgage on the standing sugar-cane crop in the “Hacienda Concepcion” for the 1931-1932 agricultural year. A writ of replevin was issued, the sugar-cane was seized, milled at the Central, and the proceeds were applied to partially pay Sellner’s mortgage debt. On July 6, 1932, the respondents, who were tenants of the Hacienda Concepcion, sought leave to intervene, petitioning for the liquidation and payment of their shares of the crop. The trial court authorized the intervention, appointed a commissioner, and, based on the commissioner’s report approved on June 8, 1938, rendered judgment ordering the Mabalacat Sugar Central and Geo. C. Sellner to pay the respondents specified amounts. An order was also issued fixing the commissioner’s fee at P250, to be paid equally by the parties. The Court of Appeals affirmed both the judgment and the order. The Mabalacat Sugar Co. and Geo. C. Sellner jointly appealed.

ISSUE

The main issues were: (1) whether one-half of the sugar-cane crop pertained to the respondent tenants; (2) whether the levy on the entire crop to satisfy Sellner’s mortgage debt was legal; (3) whether the receiver had prior knowledge of the tenants’ share; (4) whether the receiver’s mortgagee right was superior to the tenants’ claim; and (5) whether the intervention of the respondents was proper.

RULING

The Supreme Court affirmed the judgment of the Court of Appeals.
1. On the tenants’ share: The Court upheld the finding that one-half of the sugar-cane crop belonged to the respondents. This was based on a stipulation of the parties that Geo. C. Sellner was the lessee and the claimants were his tenants entitled to one-half of the proceeds of the crop they individually raised and harvested. The Court rejected the argument distinguishing between the crop and its proceeds as a quibble that confuses justice.
2. On the legality of the levy: Since one-half of the crop belonged to the tenants, Sellner could not lawfully mortgage that portion, and the receiver could not lawfully levy on it to satisfy Sellner’s personal indebtedness. The levy on the tenants’ half was therefore illegal.
3. On the receiver’s knowledge: The Court declined to review the factual finding of the Court of Appeals regarding the receiver’s knowledge of the tenants’ share, noting it was immaterial. Regardless of such knowledge, the fact remained that one-half of the crop belonged to the respondents and was not subject to the mortgage.
4. On the superiority of rights: The Court held that no comparison of rights was necessary because the receiver had “absolutely no right” to the half of the crop belonging to the respondents. Sellner could not mortgage property he did not own.
5. On the intervention: The Court found the intervention proper. Sellner was estopped from questioning it due to his acquiescence in open court. Furthermore, the respondents had a legal interest in the crop under litigation, entitling them to intervene under section 121 of Act No. 190.
Other assigned errors pertaining to findings of fact were not reviewable. Costs were awarded against the petitioners.