G.R. No. L-23888; March 18, 1967
FRANCISCO C. MANABAT, in his capacity as Provincial Sheriff of Laguna, Branch I, plaintiff-appellee, vs. LAGUNA FEDERATION OF FACOMAS, INC., ET AL., defendants-appellees. FLORENTINO CAYCO and JOSE FERNANDEZ ZORILLA, defendants-appellants.

FACTS

In a prior case, Laguna Federation of Facomas, Inc. obtained a judgment against Nieves M. Vda. de Roxas. Pursuant to a writ of execution, Provincial Sheriff Francisco Manabat sold at public auction on November 24, 1960 the judgment debtor’s rights, titles, and interests in ten parcels of land for P37,000. The sheriff discovered the sold properties were subject to various registered liens, such as writs of execution and attachment, annotated on the titles. He therefore instituted an interpleader action in the Court of First Instance of Laguna for the creditors to litigate their rights to the proceeds. Multiple creditors asserted claims, with their annotations registered on different dates. The trial court ruled that the claimants were entitled to the proceeds in the order of preference according to the dates of registration of their credits. Only claimants Florentino Cayco and Jose Fernandez Zorilla appealed.

ISSUE

Whether the satisfaction of the several credits annotated by attachments or executions upon the same specific real property should follow the rule of preference in the order of dates of registration or the rule of pro rata distribution.

RULING

The Supreme Court affirmed the trial court’s judgment. The rule of preference in the order of dates of registration applies. While Article 2249 of the Civil Code generally provides for pro rata satisfaction of credits with respect to the same specific real property, this rule does not apply to the credits specified in Article 2242(7). Article 2242(7) grants preference to credits annotated in the Registry of Property by virtue of a judicial order, by attachments or executions, “and only as to later credits.” This express limitation means that among several such annotated credits, the rule of priority in time governs. To apply pro rata distribution would erase the distinction between earlier and later credits expressly provided for by Article 2242(7) and lead to an absurd result where the preference over later credits could be defeated by simply obtaining and annotating writs later. Since it was undisputed that appellants’ credit was annotated later than those of certain appellees, the appellees’ earlier credits were preferred.