Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. 35223 September 17, 1931
THE BACHRACH MOTOR CO., INC., plaintiff-appellee,
vs.
TAISA!"SIA! MIING CO., ET A., defendants-appellees.
THE PHIIPPINE NATIONA BAN#, intervenor-appellant.
Roman J. Lacson for intervenor-appellant.
Mariano Ezpeleta for plaintiff-appellee.
Nolan and Hernaez for defendants-appellees Talisay-Silay Milling Co. and Cesar
Ledesma.
ROMUA$E%, J.:
This proceeding originated in a coplaint filed b! the Bachrach Motor Co., "nc., against
the Talisa!-#ila! Milling Co., "nc., for the deliver! of the aount P$%,&'( or proissor!
notes or other instruents or credit for that su pa!able on )une %(, $*%(, as bonus
in favor of Mariano +acson +edesa, the coplaint further pra!s that the sugar central
be ordered to render an accounting of the aounts it o-es Mariano +acson +edesa
b! -a! of bonus, dividends, or other-ise, and to pa! the plaintiff a su sufficient to
satisf! the .udgent entioned in the coplaint, and that the sale ade b! said
Mariano +acson +edesa be declared null and void.
The Philippine National Ban/ filed a third part! clai alleging a preferential right to
receive an! aount -hich Mariano +acson +edesa ight be entitled to fro the
Talisa!-#ila! Milling Co. as bonus, because that -ould be civil fruits of the land
ortgaged to said ban/ b! said debtor for the benefit of the central referred to, and b!
virtue of a deed of assignent, and pra!ing that said central be ordered to delivered
directl! to the intervening ban/ said su on account of the latter0s credit against the
aforesaid Mariano +acson +edesa.
The corporation Talisa!-#ila! Milling Co., "nc., ans-ered the coplaint stating that of
Mariano +acson +edesa0s credit, P1,'(( belonged to Cesar +edesa because he
had purchased it, and pra!ing that it be absolved fro the coplaint and that the
proper part! be naed so that the reainder ight be delivered.
Cesar +edesa, in turn, claiing to be the o-ner b! purchase in good faith an for a
reconsideration of the P1,'(( -hich is a part of the credit referred to above, ans-ered
pra!ing that he be absolved fro the coplaint.
The plaintiff Bachrach Motor Co., "nc., ans-ered the third part! clai alleging that its
credit against Mariano +acson +edesa -as prior and preferential to that of the
intervening ban/, and pra!ing that the latter0s coplaint be disissed.
At the trial all the parties agreed to recogni2e and respect the sale ade in favor of
Cesar +edesa of the P1,'(( part of the credit in 3uestion, for -hich reason the trial
court disissed the coplaint and cross-coplaint against Cesar +edesa authori2ing
the defendant central to deliver to hi the aforeentioned su of P1,'((. And upon
conclusion of the hearing, the court held that the Bachrach Motor Co., "nc., had a
preferred right to receive the aount of P$$,(14.(5 -hich -as Mariano +acson
+edesa0s bonus, and it ordered the defendant central to deliver said su to the
plaintiff.
The Philippine National Ban/ appeals, assigning the follo-ing alleged errors as
coitted b! the trial court6
$. "n holding that the bonus -hich the Talisa!-#ila! Milling Co., "nc., bound
itself to pa! the planters -ho had ortgaged their land to the Philippine
National Ban/ to secure the pa!ent of the debt of said central to said ban/
is not civil fruits of said land.
5. "n not holding that said bonus becae sub.ect to the ortgage e7ecuted b!
the defendant Mariano +acson +edesa to the Philippine National Ban/ to
secure the pa!ent of his personal debt to said ban/ -hen it fell due.
%. "n holding that the assignent 8E7hibit *, P.N.B.9 of said bonus ade on
March 1, $*%(, b! Mariano +acson +edesa to the Philippine National Ban/
to be applied to the pa!ent of his debt to said Philippine National Ban/ is
fraudulent.
:. "n holding that the Bachrach Motor Co. "nc., in civil case No. %$'*1 of the
Court of ;irst "nstance of Manila levied a valid attachent upon the bonus in
3uestion.
'. "n aditting and considering the suppleentar! coplaint filed b! the
Bachrach Motor Co., "nc., alleging as a cause of action the attachent of the
bonus in 3uestion -hich said Bachrach Motor Co., "nc., in civil case No.
%$&5$ of the Court of ;irst "nstance of Manila levied after the filing of the
original coplaint in this case, and after Mariano +acson +edesa in this
case had been declared in default.
4. "n holding that the Bachrach Motor Co., "nc., has a preferential right to
receive fro the Talisa!-#ila! Milling Co., "nc., the aount of P$$,(14.(5
-hich is in the possession of said corporation as the bonus to be paid to
Mariano +acson +edesa, and in ordering the Talisa!-#ila! Milling Co., "nc.,
to deliver said aount to the Bachrach Motor Co., "nc.
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1. "n not holding that the Philippine National Ban/ has a preferential right to
receive fro the Talisa!-#ila! Milling Co., "nc., the aount of P$$,(14.(5 held
b! said corporation as Mariano +acson +edesa0s bonus, and in not ordering
said Talisa!-#ila! Milling Co., "nc., to deliver said aount to the Philippine
National Ban/.
&. "n not holding that the aended coplaint and the suppleentar!
coplaint of the Bachrach Motor Co., "nc., do not state facts sufficient to
constitute a cause of action in favor of the Bachrach Motor Co., "nc., and
against the Talisa!-#ila! Milling Co., "nc., or against the Philippine National
Ban/.
The appellant ban/ bases its preferential right upon the contention that the bonus in
3uestion is civil fruits of the lands -hich the o-ners had ortgaged for the benefit of
the central giving the bonus, and that, as civil fruits of said land, said bonus -as
assigned b! Mariano +acson +edesa on March 1, $*%(, b! virtue of the docuent
E7hibit * of said intervening institution, -hich aditted in its brief that <if the bonus in
3uestion is not civil fruits or rent -hich becae sub.ect to the ortgage in favor of the
Philippine National Ban/ -hen Mariano +acson +edesa0s personal obligation fell due,
the assignent of March 1, $*%( 8E7hibit *, P.N.B.9, is null and void, not because it is
fraudulent, for there -as no intent of fraud in e7ecuting the deed, but that the cause or
consideration of the assignent -as erroneous, for it -as based upon the proposition
that the bonus -as civil fruits of the land ortgaged to the Philippine National Ban/.<
8P. %$.9
The fundaental 3uestion, then, subitted to our consideration is -hether or not the
bonus in 3uestion is civil fruits.
This is ho- the bonus cae to be granted6 =n >eceber 55, $*5%, the Talisa!-#ila!
Milling Co., "nc., -as indebted to the Philippine National Ban/. To secure the pa!ent
of its debt, it succeeded in inducing its planters, aong -ho -as Mariano +acson
+edesa, to ortgage their land to the creditor ban/. And in order to copensate
those planters for the ris/ the! -ere running -ith their propert! under the ortgage,
the aforesaid central, b! a resolution passed on that sae date, i.e., >eceber 55,
$*5%, undertoo/ to credit the o-ners of the plantation thus ortgaged ever! !ear -ith
a su e3ual to t-o per centu of the debt secured according to !earl! balance, the
pa!ent of the bonus being ade at once, or in part fro tie to tie, as soon as the
central becae free of its obligations to the aforesaid ban/, and of those contracted b!
virtue of the contract of supervision, and had funds -hich ight be so used, or as soon
as it obtained fro said ban/ authorit! to a/e such pa!ent. 8E7hibits ', 4, P.N.B.9
Article %'' of the Civil Code considers three things as civil fruits6 ;irst, the rents of
buildings, second, the proceeds fro leases of lands, and, third, the incoe fro
perpetual or life annuities, or other siilar sources of revenue. "t a! be noted that
according to the conte7t of the la-, the phrase ! otras analogas refers onl! to rent or
incoe, for the ad.ectives otras and analogas agree -ith the noun rentas" as do
also the other ad.ectivesperpet!as and vitalicias. That is -h! -e sa! that b! <civil
fruits< the Civil Code understands one of three and onl! three things, to -it6 the rent of
a building, the rent of land, and certain /inds of incoe.
As the bonus in 3uestion is not rent of a building or of land, the onl! eaning of <civil
fruits< left to be e7ained is that of <incoe.<
Assuing that in broad .uridical sense of the -ord <incoe< it ight be said that the
bonus in 3uestion is <incoe< under article %'' of the Civil Code, it is obvious to
in3uire -hether it is derived fro the land ortgaged b! Mariano +acson +edesa to
the appellant ban/ for the benefit of the central, for it is not obtained fro that land but
fro soething else, it is not civil fruits of that land, and the ban/0s contention is
untenable.
"t is to be noted that the said bonus bears no iediate, but onl! a reote accidental
relation to the land entioned, having been granted as copensation for the ris/ of
having sub.ected one0s land to a lien in favor of the ban/, for the benefit of the entit!
granting said bonus. "f this bonus be incoe or civil fruits of an!thing, it is incoe
arising fro said ris/, or, if one chooses, fro Mariano +acson +edesa0s generosit!
in facing the danger for the protection of the central, but certainl! it is not civil fruits or
incoe fro the ortgaged propert!, -hich, as far as this case is concerned, has
nothing to do -ith it. ?ence, the aount of the bonus, according to the resolution of the
central granting it, is not based upon the value, iportance or an! other circustance
of the ortgaged propert!, but upon the total value of the debt thereb! secured,
according to the annual balance, -hich is soething 3uite distinct fro and
independent of the propert! referred to.
;inding no erit in this appeal, the .udgent appealed fro is affired, -ithout
e7press finding as to costs. #o ordered.
Jo#nson" Street" Malcolm" $illamor" %strand" $illa-Real" and
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