Compañia General de Tabacos v. Ganzon
REITERATIONFacts
The Antecedents: La Compañia General de Tabacos de Filipinas (plaintiff-appellant) initiated a case against Romana Ganzon (defendant-appellee) concerning a mortgage deed dated December 10, 1904. The defendant incurred a debt amounting to P75,420.54 by September 12, 1906. She paid P64,326.92 from the sale of mortgaged property and P3,055 from the sale of personal property, leaving a balance of P8,038.62. Procedural History: The Court of First Instance of Occidental Negros found that the defendant owed the plaintiff P8,038.62. The court also noted a P200 charge for attorney's fees, which was deducted from the initial balance, resulting in a final balance of P7,838.62. The court ordered Romana Ganzon to pay this sum with 10% annual interest from September 12, 1906. The judgment stipulated that the net profits from the attached sugar cane and personal property, and if insufficient, the proceeds from the sale of the defendant's attached right of repurchase of Hacienda San Jose, would be applied to the debt. The court also ordered the suspension of the repurchase period for the hacienda from May 10, 1907, until the judgment became final. The Appeal: The plaintiff-appellant appealed the decision, not disputing the amount awarded but challenging the decree regarding the application of sugar profits and the proceeds from the sale of the right of repurchase. The appellant argued that the court should not have dictated the form of execution and that the sugar cane belonged to the plaintiff. It also contended that the action was personal, not a mortgage foreclosure, and that there was no right of repurchase in a foreclosure execution. The appellant further argued that the court improperly suspended the right of repurchase.
Issue(s)
Whether the court erred in ordering the application of net profits from attached sugar cane to the payment of the adjudicated balance. Whether the court erred in ordering the application of proceeds from the sale of the defendant's attached right of repurchase of Hacienda San Jose to the payment of the debt. Whether the court erred in suspending the period for the defendant's right of repurchase of Hacienda San Jose.
Ruling
The Supreme Court affirmed the decision of the Court of First Instance of Occidental Negros with respect to the three findings objected to by the appellant. The Court ordered that the costs of the instance be against the appellant.
Ratio Decidendi
On Issue 1: The Supreme Court ruled that the trial court did not err in ordering the application of the net profits of the sugar obtained from the attached cane to the payment of the balance. This is because Section 436 of the Code of Civil Procedure expressly authorizes the court to order the sale of property attached in the suit. The appellant's contention that the cane belonged to it was a matter to be decided by the court, but until declared null and void, the attachment and its consequences were binding. On Issue 2: Similarly, the Supreme Court held that the trial court did not err in ordering the application of the proceeds from the sale of the right of repurchase of Hacienda San Jose to the payment of the debt. The Court noted that the existence of a right to repurchase mortgaged property sold at public auction was not an issue brought up on appeal or decided by the lower court. However, the attachment of this right, which was admitted by the appellant, meant that the appellant could not evade the consequences and efficiency of its own act. The court acted within its powers under Section 436 in making use of the attached property for the satisfaction of the judgment. On Issue 3: The Supreme Court found no error in the court's order suspending the term for the right to repurchase. The Court invoked conclusive presumptions that all matters within an issue were laid before the court and passed upon, and that the law was obeyed. It reasoned that the attachment of the right of repurchase implied an inhibition or privation of its exercise. Therefore, the court could suspend the running of the prescriptive term for the exercise of that right during the period of attachment and while the litigation was pending, based on the principle that a prescriptive term shall not run against him who cannot act.
Main Doctrine
The Supreme Court affirmed the trial court's decision, upholding the application of attached property, including sugar cane profits and the right of repurchase of a hacienda, to satisfy the defendant's debt. The Court reiterated that Section 436 of the Code of Civil Procedure grants the court the power to order the sale of attached property. Furthermore, it was held that the period for exercising the right of repurchase is suspended during the pendency of litigation and attachment, as the party is legally incapacitated to act, and the prescriptive period does not run against such a party.