CLASSIFICATION OF

CREDIT
CLASSIFICATION OF
CREDIT
Special Ordinary Preferred Common
Preferred Credits Credits Credits
(Non-Preferred)
Specific Specific
Movable Immovabl Article 2244 Article 2245
Property e
-Article Property
2441 -Article
2442
FIRST CLASSIFICATION: SPECIAL
PREFERRED CREDITS

(1) Specific Movable Property (SMP) -

Article 2441

(2) Specific Immovable Property (SIP)

-Article 2442
 A. Specific Movable Property
(SMP) - Article 2441
1. Duties, taxes and fees due thereon to the State or any
subdivision thereof;
2. Claims from misappropriation, breach of trust,
malfeasance of public officer;
3. Claim for unpaid price of movable sold;
4. Credits guaranteed with pledge or mortgage;
5. Credits for making, repairs, safekeeping or preservation
of the property;
 A. Specific Movable Property
(SMP) - Article 2441
6. Claims for laborers wages on goods manufactured or
the work done;
7. Expenses of salvage upon the goods salvaged;
8. Credits between the landlord and tenant from their
contract on the share of each in the fruits or harvest;
9. Price of the contract of transportation and incidental
expenses on the goods carried, until their delivery and
thirty (30) days thereafter;
 A. Specific Movable Property
(SMP) - Article 2441
10. Credits for lodging and supplies furnished to travelers by
hotel keepers on the movables belonging to the guest as
long as such movables are in the hotel;
11. Expenses for cultivation and harvest upon the fruits
harvested;
12. Rent for one (1) year upon the property of lessee existing
on the immovable leased and on the fruits of the same but
not on money or instruments of credit; and
14. Claims of the depositor if depositary has wrongfully sold
the thing deposited, upon the price of the sale.
A. Specific Movable Property
(SMP) - Article 2441

What if there is wrongful taking of

movables under Article 2241?

Accion Subrogatoria
Specific Movable Property (SIP) -
Article 2441

What if there is wrongful taking of

movables under Article 2241?

Accion Subrogatoria
B. Specific Immovable Property
(SIP) - Article 2441
1. Taxes due upon land or building;
2. Unpaid price of real property;
3. Claims of laborers and other workmen engaged in
construction and reconstruction or repair of buildings,
canals and other works;
4. Claims of furnishers of materials used in the
construction, reconstruction, or repair of buildings,
canals and other works;
5. Mortgage Credits;
B. Specific Immovable Property
(SIP) - Article 2441
6. Expenses for preservation and improvement of real
property when the law authorizes reimbursement;
7. Credits annotated in the Registry of Property by virtue of
judicial order, attachment or execution;
8. Claims of co-heirs for warranty in the partition of the
property;
9. Claims of donors for pecuniary charges or other conditions
imposed by him upon the donee; and
10. Claims of insurers for insurance premium for two (2)
years.
 SECOND CLASSIFICATION: ORDINARY
PREFERRED CREDITS

1. Credits for services rendered by laborers;

2. Funeral expenses for the debtor, or his children under
parental authority who have no own property, upon court
approval;
3. Expenses during the last illness of debtor or of his or her
spouse and children under parental authority, if they
have no own property;
4. Compensation due the laborers or their dependents
under laws providing for indemnity;
 SECOND CLASSIFICATION: ORDINARY
PREFERRED CREDITS

5. Credits and advancements made to the debtor for

support himself, and his family, during the last year
preceding insolvency;
6. Support during the insolvency proceedings and for the
three (3) months thereafter;
7. Fines and civil indemnifications arising from criminal
offense;
8. Legal expenses and expenses incurred in the valid
administration of the insolvents estate;
 SECOND CLASSIFICATION: ORDINARY
PREFERRED CREDITS

9. Taxes and assessments due the National Government

other than those mentioned in Articles 2241 (1) and 2242
(1) of the Civil Code;
10. Taxes and assessments due any city or municipality
other than those indicated in Articles 2241 (1) and 2242
(1) of the Civil Code;
11. Taxes and assessments due any province other than
those indicated in Articles 2241 (1) and 2242 (1) of the
Civil Code;
 SECOND CLASSIFICATION: ORDINARY
PREFERRED CREDITS

12. Damages for death or physical injuries caused by

quasi-delict;
13. Gifts due to charitable public and private institutions;
and
14. Credits which, without special privilege, appear in (a) a
public instrument; or (b) in a final judgment, if they have
been the subject of litigation.
STATUTORY PREFERENCE NOT
APPLICABLE TO GOVERNMENT
Article 2244, particularly par. (14)(a) thereof, is not
applicable to obligations of the State as it is a recognized
doctrine that the State is always solvent

The order of preference in Article 2244 of the Civil Code

is very important. The order of preference here, however,
does not refer to specific or personal property. It refers to
other property.
THIRD CLASSIFICATION: COMMON CREDITS

Any other claims or credits other than those mentioned

in Articles 2241, 2242 and 2244 of the Civil Code.

There is no order of preference among common

creditors. They share whatever is left in proportion to
their credit, regardless of date.
 THIRD CLASSIFICATION: COMMON CREDITS

In contrast with Articles 2241 and 2242 of the

Civil Code, 2244 creates no liens on determinate
property which follow such property.

What Article 2244 creates are simply rights in

favor of certain creditors to have the cash and
other assets of the insolvent applied in a certain
sequence pr order of priority.
Refectionary Credit

Indebtedness incurred in the repair or reconstruction of

something previously made, such repair or
reconstruction being made necessary by the
deterioration or destruction of the thing as it formerly
existed.

They include new constructions