GR 48336; (September, 1942) (Digest)
G.R. No. 48336 ; September 21, 1942
THE PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. FELIPE MAPOY and R. M. MAIPID, defendant-appellants.
FACTS
The defendants, Felipe Mapoy and R. M. Maipid, were charged with violating the Bulk Sales Law ( Act No. 3952 ). The specific violation was that they mortgaged all of their stock of goods without providing the required notice to Daido Boeki Kaisha, Ltd., one of their creditors to whom they were indebted in the amount of P2,568.85. The defendants pleaded guilty to the charge. The Court of First Instance of Manila sentenced them to pay a fine of P100 and the costs. Additionally, the court ordered them to indemnify Daido Boeki Kaisha, Ltd., jointly and severally in the sum of P2,568.85, with subsidiary imprisonment in case of insolvency.
ISSUE
Whether the trial court erred in ordering the defendants to indemnify Daido Boeki Kaisha, Ltd., for the pre-existing debt of P2,568.85 as a liability arising from the crime of violating the Bulk Sales Law.
RULING
Yes, the trial court erred. The Supreme Court held that it was incorrect for the trial court to treat the pre-existing indebtedness to Daido Boeki Kaisha, Ltd., as a civil liability arising from the crime charged. The obligation to pay the sum of P2,568.85 existed prior to and independently of the execution of the fraudulent mortgage. This debt was not a consequence of the violation of the Bulk Sales Law, nor was it affected by said violation.
The Court explained that under Section 4 of the Bulk Sales Law, the mortgage in question was fraudulent and void. Since there was no proof that the mortgaged goods had disappeared, those goods remained subject to attachment for the satisfaction of creditors’ lawful claims against the defendants. Consequently, Daido Boeki Kaisha, Ltd., could still bring a separate civil action against the defendants to collect the debt. If the defendants failed to pay a judgment in that civil case, the goods involved in the criminal case could be seized and sold. Therefore, the order for indemnity and subsidiary imprisonment was set aside. The defendants were only liable for the fine and costs imposed for the criminal violation.