G.R. No. L-11754, October 8, 1917
AQUILINO CALVO, as sheriff of Pangasinan, plaintiff-appellee, vs. CO CANG & CO., ET AL., defendants. CO CANG & CO., appellant.

FACTS:
The plaintiff, Aquilino Calvo, as sheriff of Pangasinan, filed an action under Section 120 of Act No. 190 to determine the rightful claimants to the proceeds of an execution sale of property belonging to the common debtors, Lim Kian and Lim Tiang Teng. The property was sold for P685, with costs of sale amounting to P207.05, leaving a net balance of P477.95. Multiple defendants, including Co Cang & Co. and several other judgment creditors, asserted claims to the proceeds.

Co Cang & Co. claimed a preference under Article 1922(1) of the Civil Code, arguing that the attached and sold goods were the same merchandise they had sold to the debtors and for which the debtors had not paid. They had commenced an action on May 4, 1914, obtained an attachment on May 7 or 8, 1914, and secured a judgment on September 29, 1914.

The other defendants (So Yengco, Doroteo Soratos, Jose S. Yok Peng, Dy Heng Chong, Co Chiongco, Yu Tivo & Sons, Ong Pung, and Tan Yangco) were judgment creditors whose judgments were rendered on various dates in May 1914. They claimed priority under Article 1924 of the Civil Code based on the dates of their judgments.

The trial court awarded the proceeds to Jose S. Yok Peng, So Yengco, and Doroteo Soratos, ruling that their earlier judgments gave them preference. Co Cang & Co. appealed.

ISSUE:
Whether Co Cang & Co. is entitled to a preferred right over the other judgment creditors to the proceeds of the execution sale under Article 1922(1) of the Civil Code.

RULING:
Yes. The Supreme Court reversed the trial court’s decision and awarded the net proceeds of P477.95 to Co Cang & Co.

The Court held that Article 1922(1) of the Civil Code governs the case, not Article 1924. Article 1922(1) grants a preference to credits for the selling price of personal property found in the debtor’s possession. The evidence established that: (a) the debt owed to Co Cang & Co. was the unpaid price of the specific goods sold to the debtors; (b) Co Cang positively identified the attached goods as the same merchandise sold; and (c) the identical property was found in the debtors’ possession at the time of attachment and sale.

Since the property’s value was less than the amount due to Co Cang & Co., they were entitled to the entire net proceeds. The dates of the other creditors’ judgments were irrelevant because Co Cang & Co.’s preference arose from a specific statutory right under Article 1922(1), which takes precedence over the general rules on concurrence of credits.

Arellano, C.J., Araullo, Street, and Malcolm, JJ., concurred. Carson, J., filed a separate concurring opinion noting that the attachment itself, if valid, would also have secured Co Cang & Co.’s claim, but resolution under Article 1922(1) was sufficient.

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