Somes v. Molina
REITERATIONFacts
The Antecedents: On July 27, 1903, defendant Molina sold a business to defendant De la Riva for P134,636.12, payable in four installments with interest. De la Riva made only the first payment. Molina obtained three separate judgments against De la Riva for the second, third, and fourth installments. Executions were issued and levies made on De la Riva's property, but the property was not sold. Procedural History: Plaintiff Somes, as surety for De la Riva on a supersedeas bond for the second installment judgment, paid that judgment. Somes then became a creditor of De la Riva and sought to be subrogated to Molina's rights, asserting seniority of the judgment he paid. The lower court ruled in favor of Somes. The Petition: Somes filed an action to be declared subrogated to Molina's rights, including the seniority of the judgment he paid, and to have preference in satisfying his debt from De la Riva's property over Molina's other judgments.
Issue(s)
Whether there exists a preference among the judgments (Nos. 3402, 3829, and 4766) and if such preference is determined by the date of the judgments. Whether the plaintiff, Somes, having paid one judgment as surety, can exercise the rights conferred by subrogation against the creditor Molina before the entire debt of the principal debtor to the creditor (all installments) is fully paid.
Ruling
The Supreme Court ruled that there is no preference among the judgments and that the surety, Somes, can only exercise his rights of subrogation after the creditor, Molina, has been fully paid all his judgments. The Court reversed so much of the lower court's judgment as was inconsistent with this ruling.
Ratio Decidendi
On Issue 1: The Court held that preference among the judgments is determined by the date of the underlying public document, which is the contract of purchase and sale, and not by the dates of the judgments secured by virtue of it. Under the provisions of Article 1924, subdivision 3, of the Civil Code, the public document, for the purposes of said section, is not merged in any judgment obtained under it. Its date dictates the priority of those judgments as to preference. Since all three judgments (Nos. 3402, 3829, and 4766) spring from the same public document, there can be no preference among them; consequently, the debtor's property, if insufficient, must be divided among them pro rata. On Issue 2: The Court ruled that the three judgments actually constitute one debt, being merely parts of a single whole—the P134,636.12 consideration of the indivisible contract of purchase and sale. Applying the well-established doctrine, also clearly laid down in Article 1213 of the Civil Code, a surety cannot exercise the rights conferred by subrogation until the entire debt owed by the principal debtor to the creditor is fully paid. Therefore, Somes, as surety, is not permitted to exercise any rights obtained under subrogation until Molina has been fully paid not only judgment No. 3402 but also judgments Nos. 3829 and 4766.
Main Doctrine
A surety cannot exercise the rights conferred by subrogation until the debt which the principal debtor owes to the creditor is fully paid. Furthermore, preference among judgments arising from installments of a single indivisible contract is determined by the date of the public document evidencing the contract, not by the dates of the judgments.