Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-27343 February 28, 1979
MNUEL G. S!NGSONG, "OSE #EL$UNCE, GUST!N E. TONS%, "OSE L. ESP!NOS,
#COLO& SOUT'ERN LUM#ER %R&, a() OPPEN, ESTE#N, !NC., plaintiffs-appellees,
vs.
!S#EL S*M!LL, MRGR!T G. SL&"ENO a() +er +u,ba() CEC!L!O SL&"ENO
LEON GR!#%, T!MOTEO TU#UNG#NU, a() T'E PRO-!NC!L S'ER!FF OF NEGROS
OCC!&ENTL, )e.e()a(/,, MRGR!T G. SL&"ENO a() +er +u,ba() CEC!L!O
SL&"ENO, defendants-appellants.

FERNN&E$, J.0
This is an appeal to the ou!t of "ppeals f!o# the $ud%#ent of the ou!t of Fi!st Instance of Ne%!os
Occidental in ivil a%e No. &'(', entitled )Manuel G. Singson, et all vs. Isabela Sawmill, et al.,),
the dispositive po!tion of *hich !eads+
IN VI,- OF T., FOR,/OIN/ ONSID,R"TIONS, it is he!eb0 held. 123 that the
cont!act, "ppendi4 )F), of the Pa!tial Stipulation of Facts, ,4h. )"), has not c!eated a
chattel #o!t%a%e lien on the #achine!ies and othe! chattels #entioned the!ein, all of
*hich a!e p!ope!t0 of the defendant pa!tne!ship )Isabela Sa*#ill), 153 that the
plaintiffs, as c!edito!s of the defendant pa!tne!ship, have a p!efe!!ed !i%ht ove! the
assets of the said pa!tne!ship and ove! the p!oceeds of thei! sale at public auction,
supe!io! to the !i%ht of the defendant Ma!%a!ita /. Salda$eno, as c!edito! of the
pa!tne!s 6eon /a!iba0 and Ti#oteo Tubun%banua7 1'3 that the defendant Isabela
Sa*#ill8 is indebted to the plaintiff Oppen, ,steban, Inc. in the a#ount of P2,599.9:,
*ith le%al inte!est the!eon f!o# the filin% of the co#plaint on ;une &, 2:&:7 1(3 that
the sa#e defendant is indebted to the plaintiff Manuel /. Sin%son% in the total
a#ount of P&,<5'.&=, *ith inte!est the!eon at the !ate of 2 > pe! #onth f!o# Ma0 ?,
2:&:, 1the date of the state#ents of account, ,4hs. )6) and )M)3, and 5&> of the
total indebtedness at the ti#e of pa0#ent, fo! atto!ne0s8 fees, both inte!est and
atto!ne0s fees bein% stipulated in ,4hs. )I) to )2<), inclusive7 1&3 that the sa#e
defendant is indebted to the plaintiff "%ustin ,. Tonsa0 in the a#ount of P:''.<',
*ith le%al inte!est the!eon f!o# the filin% of the co#plaint on ;une &, 2:&:7 1?3 that
the sa#e defendant is indebted to the plaintiff ;ose 6. ,spinos in the a#ount of
P2,&<:.((, *ith le%al inte!est the!eon f!o# the filin% of the co#plaint on ;une &,
2:&:7 1<3 that the sa#e defendant is indebted to the plaintiff @acolod Southe!n
6u#be! Aa!d in the a#ount of Pl,=(9.<9, *ith le%al inte!est the!eon f!o# the filin% of
the co#plaint on ;une &, 2:&:7 193 that the sa#e defendant is indebted to the plaintiff
;ose @elBunce in the a#ount of P5,=&5.2=, *ith le%al inte!est the!eon f!o# the filin%
of the co#plaint on ;une &. 2:&:7 1:3 that the defendant Ma!%a!ita /. Salda$eno,
havin% pu!chased at public auction the assets of the defendant pa!tne!ship ove!
*hich the plaintiffs have a p!efe!!ed !i%ht, and havin% sold said assets fo! P
(&,===.==, is bound to pa0 to each of the plaintiffs the !espective a#ounts fo! *hich
the defendant pa!tne!ship is held indebted to, the#, as above indicated and she is
he!eb0 o!de!ed to pa0 the said a#ounts, plus atto!ne0s fees eCuivalent to 5&> of the
$ud%#ent in favo! of the plaintiff Manuel /. Sin%son, as stipulated in ,4hs. )I) )to I-
2<), inclusive, and 5=> of the !espective $ud%#ents in favo! of the othe! plaintiffs,
pu!suant to. "!t. 55=9, pa!s. 1&3 and 1223, of the ivil ode of the Philippines7 12=3
The defendants 6eon /a!iba0 and Ti#oteo Tibun%banua a!e he!eb0 o!de!ed to pa0
to the plaintiffs the !espective a#ounts ad$ud%ed in thei! favo! in the event that said
plaintiffs cannot !ecove! the# f!o# the defendant Ma!%a!ita /. Salda$eno and the
su!et0 on the bond that she has filed fo! the liftin% of the in$unction o!de!ed b0 this
cou!t upon the co##ence#ent of this case.
The c!oss-clai# cf the defendant Ma!%a!ita /. Salda$eno a%ainst the defendants
6eon /a!iba0 a!id Ti#oteo Tubun%banua is he!eb0 discussed Ma!%a!ita /.
Salda$eno shall pa0 the costs.
SO ORD,R,D.
1
In a !esolution p!o#ul%ated on Feb!ua!0 ', 2:?<, the ou!t of "ppeals ce!tified the !eco!ds of this
case to the Sup!e#e ou!t )conside!in% that the !esolution of this appeal involves pu!el0 Cuestions
o! Cuestion of la* ove! *hich this ou!t has no $u!isdiction ...
2
On ;une &. 2:&:, Manuel /. Sin%son%, ;ose @elBunce, "%ustin ,. Tonsa0, ;ose 6. ,spinos, @acolod
Southe!n 6u#be! Aa!d, and Oppen, ,steban, Inc. filed in the ou!t of fi!st Instance of Ne%!os
Occidental, @!anch I, a%ainst )Isabela Sa*#ill), Ma!%a!ita /. Salda$eno and he! husband ecilio
Salda$eno, 6eon /a!iba0, Ti#oteo Tubun%banua and the P!ovincial She!iff of Ne%!os Occidental a
co#plaint the p!a0e! of *hich !eads+
-.,R,FOR,, the plaintiffs !espectfull0 p!a0+
123 That a *!it of p!eli#ina!0 in$unction be issued !est!ainin% the defendant P!ovincial
She!iff of Ne%!os Occidental f!o# p!oceedin% *ith the sales at public auction that he
adve!tised in t*o notices issued b0 hi# on Ma0 29, 2:&: in connection *ith ivil
ase No. &55' of this .ono!able ou!t, until fu!the! o!de!s of this ou!t7 and to #aDe
said in$unction pe!#anent afte! hea!in% on the #e!its+
153 That afte! hea!in%, the defendant pa!tne!ship be o!de!ed7 to pa0 to the plaintiff
Manuel /. Sin%son the su# of P',<5'.&= plus 2> #onthl0 inte!est the!eon and 5&>
atto!ne08s fees, and costs7 to pa0 to the plaintiff ;ose@elBunce the su# of P5,=&5.2=,
plus ?> annual inte!est the!eon and 5&> fo! atto!ne08s fees, and costs7to pa0 to the
plaintiff "%ustin ,. Tonsa0 the su# of P::'.<' plus ?> annual inte!est the!eon and
5&> atto!ne08s fees, and costs7 to pa0 to the plaintiff @acolod Southe!n 6u#be! Aa!d
the su# of P2,=(9.<9, plus ?> annual inte!est the!eon and 5&> atto!ne08s fees, and
costs7 and to pa0 to the plaintiff Oppen, ,steban, Inc. the su# of P2,'&=.9:, plus ?>
annual inte!est the!eon and 5&> atto!ne08s fees and costs+
1'3 That the so-called hattel Mo!t%a%e e4ecuted b0 the defendant 6eon /a!iba0 and
Ti#oteo Tubun%banua in favo! of the defendant Ma!%a!ita /. Salda$eno on Ma0 5?,
2:&9 be decla!ed null and void bein% in f!aud of c!edito!s of the defendant
pa!tne!ship and *ithout valuable conside!ation insofa! as the said defendant is
conce!ned+
1(3 That the .ono!able ou!t o!de! the sale of public auction of the assets of the
defendnat pa!tne!ship in case the latte! fails to pa0 the $ud%#ent that the plaintiffs
#a0 !ecove! in the action, *ith inst!uctions that the p!oceeds of the sale b e applied
in pa0#ent of said $ud%#ent befo!e an0 pa!t of saod p!oceeds is paid to the
defendant Ma!%a!ita /. Salda$eno7
1&3 That the defendant 6eon /a!iba0, Ti#oteo Tubun%banua, and Ma!%a!ita /.
Salda$eno be decla!ed $ointl0 liable to the plaintifs fo! *hateve! deficienc0 #a0
!e#ain unpaid afte! the p!oceeds of the sale of the assets of the defendnt
pa!tne!ship a!e supplied in pa0#ent of the $ud%#ent that said plaintiffs #a0 !ecove!
in this action7
1?3 The plaintiffs fu!the! p!a0 fo! all othe! !e#edies to *hich the .ono!able ou!t *ill
find the# entitled to, *ith costs to the defendants.
@acolod it0, ;une (, 2:&:.
3
The action *as docDeted as ivil ase No. &'(' of said cou!t.
In thei! a#ended ans*e!, the defendants Ma!%a!ita /. Salda$eno and he! husband, ecilio
Salda$eno, alle%ed the follo*in% special and affi!#ative defenses+
444 444 444
5. That the defendant Isabela Sa*#ill has been dissolved b0 vi!tue of an action
entitled )In the #atte! of+ Dissolution of Isabela Sa*#ill as pa!tne!ship,
etc. Margarita G. Saldajeno et al. vs. Isabela Sawmill, et al., ivil ase No. (<9<,
ou!t of Fi!st Instance of Ne%!os Occidental7
'. That as a !esult of the said dissolution and the decision of the ou!t of Fi!st
Instance of Ne%!os Occidental in the afo!esaid case, the othe! defendants he!ein
Mess!s. 6eon /a!iba0 and Ti#oteo Tubun%banua beca#e the successo!s-in-inte!est
to the said defunct pa!tne!ship and have bound the#selves to ans*e!e fo! an0 and
all obli%ations of the defunct pa!tne!ship to its c!edito!s and thi!d pe!sons7
(. That to secu!e the pe!fo!#ance of the obli%ations of the othe! defendants 6eon
/a!iba0 and Ti#oteo Tubun%banua to the ans*e!in% defendant he!ein, the fo!#e!
have constituted a chattel #o!t%a%e ove! the p!ope!ties #entioned in the anne4es to
that inst!u#ent entitled )"ssi%n#ent of Ri%hts *ith hattel Mo!t%a%e) ente!ed into on
Ma0 5?, 2:?9 and dul0 !e%iste!ed in the Re%iste! of Deeds of Ne%!os Occidental on
the sa#e date+
&. That all the plaintiffs he!ein, *ith the e4ceptionof the plaintiff Oppen, ,steban, Inc.
a!e c!edito!s of Mess!s. 6eon /a!iba0 and Ti#oteo Tubun%banua and not of the
defunct Isabela Sa*#ill and as such the0 have no cause of action a%ainst ans*e!in%
defendant he!ein and the defendant Isabela Sa*#ill7
?. That all the plaintiffs he!ein, e4cept fo! the plaintiff Oppen, ,steban, Inc. %!anted
cash advances, %asoline, c!ude oil, #oto! oil, %!ease, !ice and nipa to the defendants
6eon /a!iba0 and Ti#oteo Tubun%banua *ith the Dno*led%e and notice that the
Isabela Sa*#ill as a fo!#e! pa!tne!ship of defendants Ma!%a!ita /. Isabela Sa*#ill
as a fo!#e! pa!tne!ship of defendants Ma!%a!ita /. Salda$eno, 6eon /a!iba0 and
Ti#oteo Tubun%banua, has al!ead0 been dissolved7
<. That this .ono!able ou!t has no $u!isdictionove! the clai#s of the plaintiffs
Oppen, ,steban, Inc., "%ustin R. Tonsa0, ;ose 6. ,spinos, and the @acolod Southe!n
6u#be! Aa!d, it appea!in% that the a#ounts sou%ht to be !ecove!ed b0 the# in this
action is less than P5,===.== each, e4clusive of inte!ests7
9. That in so fa! as the clai#s of these alle%ed c!edito!s plaintiffs a!e conce!ned,
the!e is a #is$oinde! of pa!ties because this is not a class suit, and the!efo!e this
.ono!able ou!t cannot taDe $u!isdictionof the clai#s fo! pa0#ent7
:. That the clai#s of plaintiffs-c!edito!s, e4cept Oppen, ,steban, Inc. %o be0ond the
li#it #entioned inthe statute of f!auds, "!t. 2(=' of the ivil ode, and a!e the!efo!
unenfo!ceable, even assu#in% that the!e *e!e such c!edits and clai#s7
2=. That this .ono!able ou!t has no $u!isdiction in this case fo! it is *ell settled in
la* and in $u!isp!udence that a cou!t of fi!st instance has no po*e! o! $u!isdiction to
annul $ud%#ents o! dec!ees of a coo!dinate cou!t because othe! function devolves
upon the p!ope! appellate cou!t7 16acuna, et al. vs. Ofilada, et al., /.R. No. 6-2'&(9,
Septe#be! '=, 2:&:7 abi%ao vs. del Rosa!io, (( Phil. 2957 PN@ vs. ;avellana, (:
O./. No. 2, p.25(3, as it appea!s f!o# the co#plaint in this case to annul the decision
of this sa#e cou!t, but of anothe! b!anch 1@!anch II, ;ud%e Eue!ubin p!esidin%3.
4
Said defendants inte!posed a c!oss-clai# a%ainst the defendsants 6eon /a!iba0 and Ti#oteo
Tubun%banua p!a0in% )that in the event that $ud%#ent be !ende!ed o!de!in% defendant c!oss
clai#ant to pa0 to the plaintiffs the a#ount clai#ed in the latte!8s co#plaint, that the c!oss clai#ant
*hateve! a#ount is paid b0 the latte! to the plaintiff in acco!dance to the said $ud%#ent. ...
1
"fte! t!ial, $ud%#ent *as !ende!ed in favo! of the plaintiffs and a%ainst the defendants.
The defendants, Ma!%a!ita /. Salda$eno and he! husband ecilio Salda$eno, appealed to the ou!t
of "ppeals assi%nin% the follo*in% e!!o!s+
I
T., OFRT " EFO ,RR,D IN "SSFMIN/ ;FRISDITION OV,R T., "S,.
II
T., OFRT " EFO ,RR,D IN .O6DIN/ T."T T., ISSF, -IT. R,F,R,N,
TO T., -IT.DR"-"6 OF D,F,ND"NT-"PP,66"NT M"R/"RIT" /.
S"6D";,NO FROM T., P"RTN,RS.IP )S"@,6" S"-MI66) -"S -.,T.,R
OR NOT SF. -IT.DR"-"6 "FS,D T., )OMP6,T, DIS"PP,"R"N,)
OR ),GTINTION) OF S"ID P"RTN,RS.IP.
III
T., OFRT " EFO ,RR,D IN OT .O6DIN/ T."T T., -IT.DR"-"6 OF
D,F,ND"NT-"PP,66"NT M"R/"RIT" /. S"6D";,NO "S " P"RTN,R
T.,R,IN DISSO6V,D T., P"RTN,RS.IP )IS"@,6" S"-MI66) 1FORM,D ON
;"N. '=, 2:&2 "MON/ 6,ON /"RI@"A, TIMOT,O TF@FN/@"NF" "ND S"ID
M"R/"RIT" /. S"6D";,NO3.
IV
T., OFRT " EFO ,RR,D IN ISSFIN/ T., -RIT OF PR,6IMIN"RA
IN;FNTION.
V
T., OFRT " EFO ,RR,D IN .O6DIN/ T."T T., ."TT,6 MORT/"/,
D"T,D M"A 5?, 2:&9, -.I. ONSTITFT,D T., ;FD/M,NT IN IVI6 "S,
NO. (<:< "ND -.I. -"S FOR,6OS,D IN IVI6 "S, NO. &55' 1@OT. OF
T., OFRT OF FIRST INST"N, OF N,/ROS OID,NT"63 -"S NF66 "ND
VOID.
VI
T., OFRT " EFO ,RR,D IN .O6DIN/ T."T T., ."TT6,S "EFIR,D @A
D,F,ND"NT-"PP,66"NT M"R/"RIT" /. S"6D";,NO IN T., FOR,6OSFR,
S"6, IN IVI6 "S, NO. &55' ONSTITFT,D 8"66 T., "SS,TS OF T.,
D,F,NDN"T P"RTN,RS.IP.
VII
T., OFRT " EFO ,RR,D IN .O6DIN/ T."T D,F,ND"NT-"PP,66"NT
M"R/"RIT" /. S"6D";,NO @,"M, PRIM"RI6A 6I"@6, TO T., P6"INTFFS-
"PP,66,,S FOR ."VIN/ "EFIR,D T., MORT/"/,D ."TT6,S IN T.,
FOR,6OSFR, S"6, ONDFT,D IN ONN,TION -IT. IVI6 "S, NO.
&55'.
VIII
T., OFRT " EFO ,RR,D IN .O6DIN/ D,F,ND"NT-"PP,66"NT M"R/"RIT"
/. S"6D";,NO 6I"@6, FOR T., O@6I/"TIONS OF M,SSRS. 6,ON /"RI@"A
"ND TIMOT,O TF@FN/@"NF", INFRR,D @A T., 6"TT,R "S P"RTN,RS IN
T., N,- 8IS"@,6" S"-MI668, "FT,R T., DISSO6FTION OF T., O6D
P"RTN,RS.IP IN -.I. S"ID M"R/"RIT" /. S"6D";,NO -"S " P"RTN,R.
IG
T., OFRT " EFO ,RR,D IN .O6DIN/ D,F,ND"NT-"PP,66"NT M"R/"RIT"
/. S"6D";,NO 6I"@6, TO T., P6"INTIFFS-"PP,66,,S FOR "TTORN,A8S
F,,S.
G
T., OFRT " EFO ,RR,D IN NOT DISMISSIN/ T., OMP6"INT OF T.,
P6"INTIFFS-"PP,66,,S.
GI
T., OFRT " EFO ,RR,D IN DISMISSIN/ T., ROSS-6"IM OF
D,F,ND"NT-"PP,66"NT M"R/"RIT" /. S"6D";,NO "/"INST ROSS-
D,F,ND"NTS 6,ON /"RI@"A "ND TIMOT,O TF@FN/@"NF".
2
The facts, as found b0 the t!ial cou!t, a!e+
"t the co##ence#ent of the hea!in% of the case on the #e!its the plaintiffs and the
defendant ecilio and Ma!%a!ita %. Salda$eno sub#ittee a Pa!tial Stipulation of Facts
that *as #a!Ded as ,4h. )"). Said stipulation !eads as folo*s+
2. That on ;anua!0 '=, 2:&2 the defendants 6eon /a!iba0, Ma!%a!ita
/. Salde$eno, and Ti#oteo Tubun%banua ente!ed into a ont!act of
Pa!tne!ship unde! the fi!# na#e )Isabela Sa*#ill), a cop0 of *hich is
he!eto attached "ppendi4 )").
5. That on Feb!ua!0 ', 2:&? the plaintiff Oppen, ,steban, Inc. sold a
Moto! T!ucD and t*o T!acto!s to the pa!tne!ship Isabela Sa*#ill fo!
the su# of P5=,&==.==. In o!de! to pa0 the said pu!cahse p!ice, the
said pa!tne!ship a%!eed to #aDe a!!an%e#ents *ith the Inte!national
.a!veste! o#pan0 at @acolod it0 so that the latte! *ould sell fa!#
#achine!0 to Oppen, ,steban, Inc. *ith the unde!standin% that the
p!ice *as to be paid b0 the pa!tne!ship. " cop0 of the co!!espondin%
cont!act of sle is attached he!eto as "ppendi4 )@).
'. That th!ou%h the #ethod of pa0#ent stipulated in the cont!act
#a!Ded as "ppendi4 )@) he!ein, the Inte!national .a!veste! o#pan0
has been paid a total of P2:,522.22, leavin% an unpaid balance of
P2,599.9: as sho*n in the state#ents he!eto attached as
"ppendices )), )-2), and )-5).
(. That on "p!il 5&, 2:&9 ivil ase No. (<:< *as filed b0 the
spouses ecilio Salda$eno and Ma!%a!ita /. Salda$eno a%ainst the
Isabela Sa*#ill, 6eon /a!iba0, and Ti#oteo Tubun%banua, a cop0 of
*hich o#plaint is attached as "ppendi4 8D8.
&. That on "p!il 5<, 2:&9 the defendants 6eon/a!iba0, Ti#oteo
Tubun%banua and Ma!%a!ita /. Salda$eno ente!ed into a
)Me#o!andu# "%!ee#ent), a cop0 of *hich is he!eto attached as
"ppendi4 8,8 in ivil ase (<:< of the ou!t of Fi!st Instance of
Ne%!os Occidental.
?. That on Ma0 5?, 2:&9 the defendants 6eon /a!iba0, Ti#oteo
Tubun%banua and Ma!%a!ita /. Salda$eno e4ecuted a docu#ent
entitled )"ssi%n#ent of Ri%hts *ith hattel Mo!t%a%e), a cop0 of
*hich docu#ents and its "nne4es )") to )"-&) fo!#in% a pa!t of the
!eco!d of the above #entioned ivil ase No. (<:<, *hich deed *as
!efe!!ed to in the Decision of the ou!t ofFi!st Instance of Ne%!os
Occidental in ivil ase No. (<:< dated Ma0 5:, 2:&9, a cop0 of
*hich is he!eto attached as "ppendi4 )F) and )F-2) !espectivel0.
<. That the!eafte! the defendants 6eon /a!iba0 and Ti#oteo
Tubun%banua did not divide the assets and p!ope!ties of the )Isabela
Sa*#ill) bet*een the#, but the0 continued the business of said
pa!tne!ship unde! the sa#e fi!# na#e )Isabela Sa*#ill).
9. That on Ma0 29, 2:&: the P!ovincial She!iff of Ne%!os Occidental
published t*o 153 notices that he *ould sell at public auction on ;une
&, 2:&: at Isabela, Ne%!os Occidental ce!tain t!ucDs, t!acto!s,
#achine!0, officeeCuip#ent and othe! thin%s that *e!e involved in
ivil ase No. &55' of the ou!t of Fi!st Instance of Ne%!os
Occidental, entitled )Ma!%a!ita /. Salda$eno vs. 6eon /a!iba0, et al.)
See "ppendices )/) and )/-2).
:. That on Octobe! 2&, 2:?: the P!ovincial She!iff of Ne%!os
Occidental e4ecuted a e!tificate ofSale in favo! of the defendant
Ma!%a!ita /. Salda$eno, as a !esult of the sale conducted b0 hi# on
Octobe! 2( and 2&, 2:&: fo! the enfo!ce#ent of the $ud%#ent
!ende!ed in ivil ase No. &55' of the ou!t of Fi!st Instance of
Ne%!os Occidental, a ce!tified cop0 of *hich ce!tificte of sale is he!eto
attached as "ppendi4 ).).
2=. That on Octobe! 5=, 2:&: the defendant Ma!%a!ita /. Salda$eno
e4ecuted a deed of sale in favo! of the Pan O!iental 6u#be!
o#pan0 t!ansfe!in% to the latte! fo! the su# of P(&,===.== the
t!ucDs, t!acto!s, #achine!0, and othe! thin%s that she had pu!chashed
at a public auction !efe!!ed to in the fo!e%oin% pa!a%!aph, a ce!tified
t!ue cop0 of *hich Deed of Sale is he!eto attached as "ppendi4 )I).
22. The plaintiffs and the defendants ecilio Salda$eno and Ma!%a!ita
/. Salda$eno !ese!ve the !i%ht to p!esent additional evidence at the
hea!in% of this case.
Fo!#in% pa!ts of the above copied stipulation a!e docu#ents that *e!e #a!Ded as
"ppendices )"), )@), )), )-2), )-5), )D), ),), )F), )F-2), )/), )/-2), ).), and )I).
The plaintiffs and the defendants ecilio and Ma!%a!ita /. Salda$eno p!esented
additional evidence, #ostl0 docu#enta!0, *hile the c!oss-defendants did not p!esent
an0 evidence. The case ha!dl0 involves Cuetions of fact at all, but onl0 Cuestions of
la*.
The fact that the defendnat 8Isabela Sa*#ill8 is indebted to theplaintiff Oppen,
,steban, Inc. in the a#ount of P2,599.9: as the unpaid balance of an obli%ation of
P5=,&==.== cont!acted on Feb!ua!0 ', 2=:&? is e4p!essl0 ad#itted in pa!a%!aph 5
and ' of the Stipulation, ,4h. )") and its "ppendices )@), )), )-2), and )-5).
The plaintiff "%ustin ,. Tonssa0 p!oved b0 his o*n testi#on0 and his ,4hs. )@) to)/)
that f!o# Octobe! ?, 2:&9 to Nove#be! 9, 2:&9 he advanced a total of P(,5==.== to
the defendant 8Isabela Sa*#ill8. "%aist the said advances said defendant delive!ed to
Tonsa0 P',5??.5< *o!th of lu#be!, leavn% an unpaid balance of P:''.<', *hich
balance *as confi!#ed on Ma0 2&, 2:&: b0 the defendant 6eon /a!iba0, as
Mana%e! of the defendant pa!tne!ship.
The plaintiff Manuel /. Sin%son% p!oved b0 his o*n testi#on0 and b0 his ,4hs. );) to
)6) that f!o# Ma0 5&, 2:99 to ;anua!0 2', 2:&: he sold on c!edit to the defendnat
)Isabela Sa*#ill) !ice and b!an, on account of *hich business t!ansaction the!e
!e#ains an unpaid balance of P',&9=.&=. The sa#e plaintiff also p!oved that the
pa!tne!ship o*nes hi# the su# of P2('.== fo! nipa shin%les bou%ht f!o# hi# on
c!edit and unpaid fo!.
The plaintiff ;ose 6. ,spinos p!oved th!ou%h the testi#on0 of his *itness a0etano
Pal#a!es and his ,4hs. )N) to )O-') that he o*ns the )/uia 6u#be! Aa!d), that on
Octobe! 22, 2:&9 said lu#be! 0a!d advanced the su# of P5,&==.== to the defendant
)Isabela Sa*#ill), that a%ainst the said cash advance, the defendant pa!tne!ship
delive!ed to /uia 6u#be! Aa!d P:5=.&? *o!th of lu#be!, leavin% an outstandin%
balance of P2,&<:.((.
The plaintiff @acolod Southe!n 6u#be! Aa!d p!oved th!ou%h the testi#on0 of the
*itness a0etano Pal#a!es an its ,4hs. )P) to )E-2) that on Octobe! 22, 2:&9 said
plaintiff advanced the su# of P2,&==.== to the defendsant 8Isabela Sa*#ill8, that
a%ainst the said cash advance, the defendant pa!tne!ship delive!ed to the said
plaintiff on Nove#be! 2:, 2:&9 P'<<.<5 *o!th of lu#be!, and P<'.&( *o!th of lu#be!
on ;anua!0 5<, 2:&:, leavin% an outstandin% balance of P2,=(9.<9.
The plaintiff ;ose @alBunce p!oved th!ou%h the testi#on0 of 6eon /a!iba0 *ho# he
called as his *itness, and th!ou%h the ,4hs. )R) to ),) that f!o# Septe#be! 2(, 2:&9
to Nove#be! 5<, 2:&9 he sold to the defedant )Isabela Sa*#ill) %asoline, #oto! fuel,
and lub!icatin% oils, and that on account of said t!ansactions, the defendant
pa!tne!sip o*nes hi# an unpaid balance of P5,=&5.2=.
"ppendi4 ).) of the stipulation ,4h. )") sho*s that on Octobe! 2' and 2(, 2:&: the
P!ovincial She!iff sold to the defendant Ma!%!ita /. Salda$eno fo! P'9,=(=.== the
assets of the defendsant )Isabela Sa*#ill) *hich the defendants 6eon /. /a!iba0
and Ti#oteo Tubun%banua had #o!t%a%ed to he!, and said pu!chase p!ice *as
applied to the $ud%#ent that she has obtained a%ainst he said #o!t%a%o!s in ivil
ase No. &55' of this ou!t.
"ppendi4 )I) of the sa#e stipulation ,4h. )") sho*s that on Octobe! 5=, 2:&: the
defendant Ma!%a!ita /. Salda$eno sold to the P"N ORI,NT"6 6FM@,R OMP"NA
fo! P(&,===.== pa!t of the said p!ope!ties that she had bou%ht at public aucton one
*eeD befo!e.
444 444 444
7
It is contended b0 the appellants that the ou!t of Fi!st Instance of Ne%!os Occidental had no
$u!isdiction ove! ivil ase No. &'(' because the plaintiffs Oppen, ,steban, Inc., "%ustin R. Tonsa0,
;ose 6. ,spinos and the @acolod Southe!n 6u#be! Aa!d sou%ht to collect su#s of #oen0, the
bi%%est a#ount of *hich *as less than P5,===.== and, the!efo!e, *ithin the $u!isdiction of the
#unicipal cou!t.
This contention is devoid of #e!it because all the plaintiffs also asDed fo! the nullit0 of the
assi%n#ent of !i%ht *ith chattel #o!t%a%e ente!ed into b0 and bet*een Ma!%a!ita /. Salda$eno and
he! fo!#e! pa!tne!s 6eon /a!iba0 and Ti#oteo Tubun%banua. This cause of action is not capable of
pecunia!0 esti#ation and falls unde! the $u!isdiction of the ou!t of Fi!st Instnace. -he!e the basic
issue is so#ethin% #o!e than the !i%ht to !ecove! a su# of #one0 and *he!e the #one0 clai# is
pu!el0 incidental to o! a conseCuence of the p!incipal !elief sou%ht, the action is as a case *he!e the
sub$ect of the liti%ation is not capable of pecunia!0 esti#ation and is co%niBable e4clusivel0 b0 the
ou!t of Fi!st Instance.
The $u!isdiction of all cou!ts in the Philippines, in so fa! as the autho!it0 the!eof depends upon the
natu!e of liti%ation, is defined in the a#ended ;udicia!0 "ct, pu!suant to *hich cou!ts of fi!st instance
shall have e4clusive o!i%inal $u!isdiction ove! an0 case the sub$ect #atte! of *hich is not capable of
pecunia!0 esti#ation. "n action fo! the annul#ent of a $ud%#ent and an o!de! of a cou!t of $ustice
belon%s to th cate%o!0.
8
In dete!#inin% *hethe! an action is one the sub$ect #atte! of *hich is not capable of pecunia!0
esti#ation this ou!t has adopted the c!ite!ion of fi!st asce!tainin% the natu!e of the p!incipal action
o! !e#ed0 sou%ht. If it is p!i#a!il0 fo! the !ecove!0 of a su# of #one0, the clia# is conside!ed
capable of pecunia!0 esti#ation, and *hethe! $u!isdiciton is in the #unicipal cou!ts o! in the cou!ts of
fi!st instance *ould depend on the a#ount of the clai#. .o*eve!, *he!e the basic issue is
so#ethin% othe! than the !i%ht to !ecove! a su# of #one0, *he!e the #one0 clai# is pu!el0
incidental to, o! a conseCuence of, the p!incipal !elief sou%ht, this ou!t has conside!ed such actions
as cases *he!e the sub$ect o%f the liti%ation #a0 not be esti#ated in te!#s of #one0, and a!e
co%niBable e4clusivel0 b0 cou!ts of fi!st instance.
In Andres Lapitan vs. SCANDIA, Inc., et al.,
9
this ou!t held+
"ctions fo! specific pe!fo!#ance of cont!acts have been e4p!essl0 p!ounounced to
be e4clusivel0 co%niBable b0 cou!ts of fi!st instance+ De esus vs. udge Garcia, 6-
5?92?, Feb!ua!0 59, 2:?<7Manu!acturers" Distributors, Inc. vs. #u Siu Liong, 6-
5259&, "p!il 5:, 2:??. "nd no co%ent !eason appea!s, and none is he!e advanced b0
the pa!ties, *h0 an actin fo! !escission 1o! !esolution3 should be diffe!entl0 t!eated, a
)!escission) bein% a counte!pa!t, so to speaD, of )specific pe!fo!#ance8. In both
cases, the cou!t *ould ce!tainl0 have to unde!taDe an investi%ation into facts that
*ould $ustif0 one act of the othe!. No a*a!d fo! da#a%es #a0 be had in an action fo!
!esicssion *ithout fi!st conductin% an inCui!0 into #atte!s *hich *ould $ustif0 the
settin% aside of a cont!act, in the sa#e #anne! that cou!ts of fi!st instance *ould
have to #aDe findin%s of fact and la* in actions not capable of pecunia!0 esti#nation
esp!essl0 held to be so b0 this ou!t, a!isin% f!o# issues liDe those a!ised in "!!oB v.
"lo$ado, et al., 6-552&', Ma!ch '2, 2:?< 1the le%alit0 o! ille%alit0 of the conve0ance
sou%ht fo! and the dete!#ination of the validit0 of the #one0 deposit #ade37 De
$rsua v. %ela&o, 6-2'59&, "p!il 29, 2:&= 1validit0 of a $ud%#ent37 'una&og v. (unas,
6-25<=<, Dece#be! 5', 2:&: 1validit0 of a #o!t%a%e37 'aito v. Sarmiento, 6-2'2=&,
"u%ust 5&, 2:?= 1the !elations of the pa!ties, the !i%ht to suppo!t c!eated b0 the
!elation, etc., in actions fo! suppo!t37 De )ivera, et al. v. *alili, 6-2&2&:, Septe#be!
'=, 2:?' 1the validit0 o! nullit0 of docu#ents upon *hich clai#s a!e p!edicated3.
Issues of the sa#e natu!e #a0 be !aised b0 a pa!t0 a%ainst *ho# an action fo!
!escission has been b!ou%ht, o! b0 the plaintiff hi#self. It is, the!efo!e, difficult to see
*h0 a p!a0e! fo! da#a%es in an action fo! !escission should be taDen as the basis fo!
concludin% such action fo! !esiccison should be taDen as the basis fo! concludin%
such action as one cpable of pecunia!0 esti#ation - a p!a0e! *hich #ust be included
in the #ain action if plaintiff is to be co#pensated fo! *hat he #a0 have suffe!ed as
a !esult of the b!each co##itted b0 defendant, and not late! on p!ecluded f!o#
!ecove!in% da#a%es b0 the !ule a%ainst splittin% a cause of action and discou!a%in%
#ultiplicitl0 of suits.
The fo!e%oin% doct!ine *as !eite!ated in (+e Good Development Corporation vs. (utaan,
13
*he!e
this ou!t held+
On the issue of *hich cou!t has $u!isdiction, the case of S,N- vs. %astolante, et al.,
is in point. It *as !uled the!ein that althou%h the pu!poses of an action is to !ecove!
an a#ount plus inte!est *hich co#es *ithin the o!i%inal $u!isidction of the ;ustice of
the Peace ou!t, 0et *hen said action involves the fo!eclosu!e of a chattel #o!t%a%e
cove!in% pe!sonal p!ope!ties valued at #o!e than P5,===, 1no* P2=,===.==3 the
action should be instituted befo!e the ou!t of Fi!st Instance.
In the instanct, case, the action is to !ecove! the a#ount of P2,&5=.== plus inte!est
and costs, and involves the fo!eclosu!e of a chattel #o!t%a%e of pe!sonal p!ope!ties
valued at P2&,'(=.==, so that it is clea!l0 *ithin the co#petence of the !espondent
cou!t to t!0 and !esolve.
In the li%ht of the fo!e%oin% !ecent !ulin%s, the ou!t of Fi!st Instance of Ne%!os Occidental did no e!!
in e4e!cisin% $u!isidction ove! ivil ase No. &'('.
The appellants also contend that the chattel #o!t%a%e #a0 no lon%e! be annulled because it had
been $udiciall0 app!oved in ivil ase No. (<:< of the ou!t of Fi!st Instance of Ne%!os Occidental
and said chattel #o!t%a%e had been o!de!ed fo!eclosed in ivil ase No. &55' of the sa#e cou!t.
On the Cuestion of *hethe! a cou!t #a0 nullif0 a final $ud%#ent of anothe! cou!t of co-eCual,
concu!!ent and coo!dinate $us!idiction, this ou!t o!i%inall0 !uled that+
" cou!t has no po*e! to inte!fe!e *ith the $ud%#ents o! dec!ees of a cou!t of
concu!!ent o! coo!dinate $u!isdiction havin% eCual po*e! to %!ant the !elief sou%ht b0
the in$unction.
The va!ious b!anches of the ou!t of Fi!st Instance of Manila a!e in a sense
coo!dinate cou!ts and cannot be allo*ed to inte!fe!e *ith each othe!s8 $ud%#ents o!
dec!ees.
11
The fo!e%oin% doct!ine *as !eite!ated in a 2:&' case
12
*he!e this ou!t said+
The !ule *hich p!ohibits a ;ud%e f!o# inte!te!in% *ith the actuations of the ;ud%e of
anothe! b!anch of the sa#e cou!t is not inf!in%ed *hen the ;ud%e *ho #odifies o!
annuls the o!de! isued b0 the othe! ;ud%e acts in the sa#e case and belon%s to the
sa#e cou!t 1,leaBa! vs. Handueta, (9 Phil. 2:'. @ut the !ule is inf!in%ed *hen the
;ud%e of a b!anch of the cou!t issues a *!it of p!eli#ina!0 in$unction in a case to
en$oint the she!iff f!o# ca!!0in% out an o!de! b0 e4ecution issued in anothe! case b0
the ;ud%e of anothe! b!anch of the sa#e cou!t. 1abi%ao and IBCuie!do vs. Del
Rosa!io et al., (( Phil. 2953.
This !ulin% *as #aintained in 2:?<. In Mas vs. Dumaraog,
13
the $ud%#ent sou%ht to be annulled *as
!ende!ed b0 the ou!t of Fi!st Instance of Iloilo and the action fo! annull#ent *as filed *ith the ou!t of
Fi!st Instance of "ntiCue, both cou!ts belon%in% to the sa#e ;udicial Dist!ict. This ou!t held that+
The po*e! to open, #odif0 o! vacant a $ud%#ent is not onl0 possessed b0 but
!est!icted to the cou!t in *hich the $ud%#ent *as !ende!ed.
The !eason of this ou!t *as+
Pu!suant to the polic0 of $udicial stabilit0, the $ud%#ent of a cou!t of co#petent
$u!isdiction #a0 not be inte!fe!ed *ith b0 an0 cou!t concu!!!ent $u!isdiction.
"%ain, in 2:?< this ou!t !uled that the $u!isdiction to annul a $ud%e#ent of a b!anch of the cou!t of
Fi!st Instance belon%s solel0 to the ve!0 sa#e b!anch *hich !ende!ed the $ud%e#ent.
14
T*o 0ea!s late!, the sa#e doct!ine *as laid do*n in the Ste!lin% Invest#ent case.
11
In Dece#be! 2:<2, ho*eve!, this cou!t !e-e4a#ined and !eve!sed its ea!lie! doct!ine on the #atte!.
In Dupla v. Court o! Appeals,
12
this T!ibunal, speaDin% th!ou%h M!. ;ustice Villa#o! decla!ed+
... the unde!l0in% philosoph0 e4p!essed in the Du#a!a-o% case, the polic0 of $udicial
stabilit0, to the end that the $ud%#ent of a cou!t of co#petent $u!isdiction #a0 not be
inte!fe!ed *ith b0 an0 cou!t of concu!!ent $u!isdiction #a0 not be inte!fe!ed *ith b0
an0 cou!t of concu!!ent $u!isdiciton, this ou!t feels that this is as %ood an occasion
as an0 to !e-e4a#ine the doct!ine laid do*n ...
In an action to annul the $ud%#ent of a cou!t, the plaintiff8s cause of action sp!in%s
f!o# the alle%ed nullit0 of the $ud%#ent based on one %!ound o! anothe!, pa!ticula!l0
f!aud, *hich fact affo!ds the plaintiff a !i%ht to $udicial inte!fe!ence in his behalf. In
such a suit the cause of action is enti!el0 diffe!ent f!o# that in the act%ion *hich
%!ave !ise to the $ud%#ent sou%ht to be annulled, fo! a di!ect attacD a%ainst a final
and e4ecuto!0 $ud%#ent is not a incidental to, but is the #ain ob$ect of the
p!oceedin%. The cause of action in the t*o cases bein% distinct and sepa!ate f!o#
each othe!, the!e is no plausible !eason *h0 the venue of the action to annul the
$ud%#ent should necessa!il0 follo* the venue of the p!evious action ...
The p!esent doct!ine *hich postulate that one cou!t o! one b!anch of a cou!t #a0 not
annul the $ud%#ent of anothe! cou!t o! b!anch, not onl0 opens the doo! to a violation
of Section 5 of Rule (, 1of the Rules of ou!t3 but also li#it the oppo!tunit0 fo! the
application of said !ule.
Ou! conclusion #ust the!efo!e be that a cou!t of fi!st instance o! a b!anch the!eof has
the autho!it0 and $u!isdiction to taDe co%niBance of, and to act in, suit to annul final
and e4ecuto!0 $ud%#ent o! o!de! !ende!ed b0 anothe! cou!t of fi!st instance o! b0
anothe! b!anch of the sa#e cou!t...
In Feb!ua!0 2:<( this ou!t !eite!ated the !ulin% in the Dulap case.
17
In the li%ht of the latest !ulin% of the Sup!e#e ou!t, the!e is no doubt that one b!anch of the ou!t of
Fi!st Instance of Ne%!os Occidental can taDe co%niBance of an action to nullif0 a final $ud%#ent of the
othe! t*o b!anches of the sa#e cou!t.
It is t!ue that the dissolution of a pa!tne!ship is caused b0 an0 pa!tne! ceasin% to be associated in
the ca!!0in% on of the business.
18
.o*eve!, on dissolution, the pa!tne!shop is not te!#inated but
continuous until the *indin% up to the business.
19
The !e#ainin% pa!tne!s did not te!#inate the business of the pa!tne!ship )Isabela Sa*#ill). Instead
of *indin% up the business of the pa!tne!ship, the0 continued the business still in the na#e of said
pa!tne!ship. It is e4p!essl0 stipulated in the #e#o!andu#-a%!ee#ent that the !e#ainin% pa!tne!s
had constituted the#selves as the pa!tne!ship entit0, the )Isabela Sa*#ill).
23
The!e *as no liCuidation of the assets of the pa!tne!ship. The !e#ainin% pa!tne!s, 6eon /a!iba0 and
Ti#oteo Tubun%banua, continued doin% the business of the pa!tne!ship in the na#e of )Isabela
Sa*#ill). The0 used the p!ope!ties of said pa!tne!ship.
The p!ope!ties #o!t%a%ed to Ma!%a!ita /. Salda$eno b0 the !e#ainin% pa!tne!s, 6eon /a!iba0 and
Ti#oteo Tubun%banua, belon%ed to the pa!tne!ship )Isabela Sa*#ill.) The appellant, Ma!%a!ita /.
Salda$eno, *as co!!ectl0 held liable b0 the t!ial cou!t because she pu!chased at public auction the
p!ope!ties of the pa!tne!ship *hich *e!e #o!t%a%ed to he!.
It does not appea! that the *ithd!a*al of Ma!%a!ita /. Salda$eno f!o# the pa!tne!ship *as published
in the ne*spape!s. The appellees and the public in %ene!al had a !i%ht to e4pect that *hateve!,
c!edit the0 e4tended to 6eon /a!iba0 and Ti#oteo Tubun%banua doin% the business in the na#e of
the pa!tne!ship )Isabela Sa*#ill) could be enfo!ced a%ainst the p!oep!ties of said pa!tne!ship. The
$udicial fo!eclosu!e of the chattel #o!t%a%e e4ecuted in favo! of Ma!%a!ita /. Salda$eno did not
!elieve he! f!o# liabilit0 to the c!edito!s of the pa!tne!ship.
The appellant, #a!%!ita /. Salda$eno, cannot co#plain. She is pa!tl0 to bla#e fo! not insistin% on the
liCuidaiton of the assets of the pa!tne!ship. She even a%!eed to let 6eon /a!iba0 and Ti#oteo
Tubun%banua continue doin% the business of the pa!tne!ship )Isabela Sa*#ill) b0 ente!in% into the
#e#o!andu#-a%!ee#ent *ith the#.
"lthou%h it #a0 be p!esu#ed that Ma!%a!ita /. Salda$eno had action in %ood faith, the appellees
aslo acted in %ood faith in e4tendin% c!edit to the pa!tne!ship. -he!e one of t*o innocent pe!sons
#ust suffe!, that pe!son *ho %ave occasion fo! the da#a%es to be caused #ust bea! the
conseCuences. .ad Ma!%a!ita /. Salda$eno not ente!ed into the #e#o!andu#-a%!ee#ent allo*in%
6eon /a!iba0 and Ti#oteo Tubun%banua to continue doin% the business of the ap!tne!ship, the
applees *ould not have been #isled into thinDin% that the0 *e!e still dealin% *ith the pa!tne!ship
)Isabela Sa*#ill). Fnde! the facts, it is of no #o#ent that technicall0 speaDin% the pa!tne!ship
)Isabela Sa*#ill) *as dissolved b0 the *ithd!a*al the!ef!o# of Ma!%a!ita /. Salda$eno. The
pa!tne!ship *as not te!#inated and it continued dopin% business th!ou%h the t*o !e#ainin%
pa!tne!s.
The contention of the appellant that the appleees cannot b!in% an action to annul the chattel
#o!t%a%e of the p!ope!tiesof the pa!tne!ship e4ecuted b0 6eon /a!iba0 and Ti#oteo Tubun%banua
in favo! of Ma!%a!ita /. Salda$eno has no #e!it.
"s a !ule, a cont!act cannot be assailed b0 one *ho is not a pa!t0 the!eto. .o*eve!, *hen a cont!act
p!e$udices the !i%hts of a thi!d pe!son, he #a0 file an action to annul the cont!act.
This ou!t has held that a pe!son, *ho is not a pa!t0 obli%ed p!incipall0 o! subsidia!il0 unde! a
cont!act, #a0 e4e!cised an action fo! nullit0 of the cont!act if he is p!e$udiced in his !i%hts *ith
!espect to one of the cont!actin% pa!ties, and can sho* det!i#ent *hich *ould positivel0 !esult to
hi# f!o# the cont!act in *hich he has no inte!vention.
21
The plaintiffs-appellees *e!e p!e$udiced in thei! !i%hts b0 the e4ecution of the chattel #o!t%a%e ove!
the p!ope!ties of the pa!tne!ship )Isabela Sa*#ill) in favop! of Ma!%a!ita /. Salda$eno b0 the
!e#ainin% pa!tne!s, 6eon /a!iba0 and Ti#oteo Tubun%banua. .ence, said appelees have a !i%ht to
file the action to nullif0 the chattel #o!t%a%e in Cuestion.
The po!tion of the decision appealed f!o# o!de!in% the appellants to pa0 atto!ne08s fees to the
plaintiffs-appellees cannot be sustained. The!e is no sho*in% that the appellants displa0ed a *anton
dis!e%a!d of the !i%hts of the plaintiffs. Indeed, the appellants believed in %ood faith, albeit
e!!oneousl0, that the0 a!e not liable to pa0 the clai#s.
The defendants-appellants have a !i%ht to be !ei#bu!sed *hateve! a#ounts the0 shall pa0 the
appellees b0 thei! co-defendants 6eon /a!iba0 and Ti#oteo Tubun%banua. In the #e#o!andu#-
a%!ee#ent, 6eon /a!iba0 and Ti#oteo Tubun%baun unde!tooD to !elease Ma!%a!ita /. Salda$eno
f!o# an0 obli%ation of )Isabela Sa*#ill) to thi!d pe!sons.
22
-.,R,FOR,, the decision appealed f!o# is he!eb0 affi!#ed *ith the eli#ination of the po!tion
o!de!in% appellants to pa0 atto!ne08s fees and *ith the #odification that the defendsants, 6eon
/a!iba0 and Ti#oteo Tubun%banua, should !ei#bu!se the defendants-appellants, Ma!%a!ita /.
Salda$eno and he! husband ecilio Salda$eno, *hateve! the0 shall pa0 to the plaintiffs-appellees,
*ithout p!onounce#ent as to costs.
SO ORD,R,D.
(ee+an.ee /C+airman0, Ma.asiar, Guerrero, De Castro and Melencio1*errera, ., concur.