Credtrans: For purposes of satisfying several

credits annotated by attachments or executions,

Manabat v. Laguna Fed
177 the rule is still preference according to priority of
the credits in the order of time, not pro rata.
L-23888 March 18, 1967 J. Bengzon, JP Peaches
Petitioners: Respondents:
Francisco C. Manabat (as Provincial Sheriff of Laguna, Laguna Federation of Facomas, Inc., Et Al., Florentino
Branch I) Cayco and Jose Fernandez Zorilla
Recit Ready Summary
Laguna Fed filed a suit against one Nieves M. Vda de Roxas and got a judgment in its favor. A writ of execution was
issued and so Sheriff Manabat held a public auction wherein he sold 10 parcels of land for P37,000. It was later
discovered that the parcels of land were subject to registered liens annotated at the TCTs. Manabat then filed an
action for interpleader for all those creditors claiming to have a right to the properties sold in order to determine their
rights to the proceeds of sale. CDFI ruled that the defendants-claimants “are entitled to the proceeds of the sale in the
order of preference in accordance with the dates of the registration of their credits.” From this, only Cayco and Zorilia
appealed saying that it should follow Art. 2249 which provides for the pro rata satisfaction of credits with respect to
the same specific real property.

Issue is w/n satisfaction of several claims should be pro rata? NO. It must be preference in the order of dates of
registration. Art. 2249 admits of exceptions. First one being Article 2249 itself which expressly provides that taxes and
assessments upon the real property are to be paid first. Second is subpar. (7) of Article 2242 of the Civil Code. 1 The
phrase "only as to later credits" qualifies the order of preference as to those credits annotated in the Registry of
Property. SC said that for purposes of satisfying several credits annotated by attachments or executions, the rule is
still preference according to priority of the credits in the order of time. Since it is an undisputed fact that Florentino
Cayco and Jose Zorilia's credit is "later" than those of Laguna Federation of Facomas, Inc., Valeriana Lim-aco de
Almeda and Cosmopolitan Insurance Co., Inc., their credits must be deemed preferred to that of Cayco and Zorilia’s.
Facts
1. Laguna Federation of Facomas, Inc. filed a suit against a certain Nieves M. Vda. de Roxas and CFI of
Laguna rendered judgment for the plaintiff.
2. Due to the judgment, a writ of execution was issued on February, 8, 1960.
3. Pursuant to this, provincial sheriff Manabat (petitioner), sold at public auction on November 24, 1960 all
rights, titles and interests of Nieves M. Vda. de Roxas in ten (10) parcels of land for a total price of P37,000.
4. Subsequently, it was found that parcels of land sold were subject to some registered liens annotated at the
back of the respective title certificates.
5. Manabat then instituted an action for interpleader on February 21, 1961 in the same CFI for the different
creditors or lienholders to litigate among themselves and determine their rights to the P37,000 proceeds of
the sale. See claims after disposition portion.
6. CFI ruled that the defendants-claimants “are entitled to the proceeds of the sale in the order of preference in
accordance with the dates of the registration of their credits.”
7. From the creditors-claimants, only Florentino Cayco and Jose Fernandez Zorilia (respondents) appealed.
Point/s of Contentions
Respondents:
1. Since this is an in instance of several credits referring to the same specific real property, following Art. 2249
of the CC2, the to should be to satisfy all the aforesaid credits pro rata.
Issue Ruling
Whether the rule to follow in the satisfaction of the credits involved is that of preference in the Preference in the
order of dates of registration, as held by the court a quo, or distribution pro rata, as appellants order of dates of
maintain. registration.
Rationale
Art. 2249 admits of exceptions. First one being Article 2249 itself which expressly provides that taxes and
assessments upon the real property are to be paid first. Second is subpar. (7) of Article 2242 of the Civil Code which
states that:

1
ART. 2242. With reference to specific immovable property and real rights of the debtor, the following claims, mortgages and liens
shall be preferred, and shall constitute an encumbrance on the immovable or real right:
xxx xxx xxx
(7) Credits annotated in the Registry of Property, in virtue of a judicial order, by attachments or executions, upon the
property affected, and only as to later credits.
2
ART. 2249. If there are two or more credits with respect to the same specific real property or real rights, they shall be satisfied pro
rata, after the payment of the taxes and assessments upon the immovable property or real right.
 ART. 2242. With reference to specific immovable property and real rights of the debtor, the following claims,
mortgages and liens shall be preferred, and shall constitute an encumbrance on the immovable or real right:
xxx xxx xxx
(7) Credits annotated in the Registry of Property, in virtue of a judicial order, by attachments or executions,
upon the property affected, and only as to later credits.

The phrase "only as to later credits" qualifies the order of preference as to those credits annotated in the Registry of
Property. SC said that for purposes of satisfying several credits annotated by attachments or executions, the rule is
still preference according to priority of the credits in the order of time. If not, the result would be absurd: the
preference of an attachment or execution lien over later credits, could easily be defeated by simply getting writs of
attachment or execution, and annotating them, no matter how much later.

Since it is an undisputed fact that Florentino Cayco and Jose Zorilia's credit is "later" than those of Laguna Federation
of Facomas, Inc., Valeriana Lim-aco de Almeda and Cosmopolitan Insurance Co., Inc., their credits must be deemed
preferred to that of Cayco and Zorilia’s.

To satisfy them pro rata would erase the difference between earlier and later credits provided for by subpar. (7) of
Article 2242 aforementioned. (“as to later credits”)
Disposition
CFI’s judgment affirmed. Satisfy the claims in order of time.
CLAIMS:
Claimant Nature of Annotation Date of Reg. of Credit Amount of Claim

1. Laguna Federation of Attachment writ in CFI Laguna Case sc-152. October 10, 1958 P17,448.00
Facomas, Inc.

2. Valeriana &Limaco de Attachment writ in CFI Laguna Case SC-153 October 13, 1958 3,735.00
Almeda

3. Cosmopolitan Attachment writ in CFI Manila Case No. 38118 October 20, 1958 12,650.00
Insurance Co., Inc.

4. Florentino Cayco and Attachment writ in CFI Rizal Case No. 5238 October 29, 1958 26,787.50
Jose Fernandez Zorilla

5. Victoria Dimayuga Attachment writ in CFI Manila Case No. 3878 May 23, 1960 12,500.00

6. Jose Marfori and Execution writ CFI Cavite Case No. 6480-R September 26, 1960 9,410.00
Josefina Reyes

7. Pastor Canillas Attachment writ in CFI Manila Case No. 38872 November 23, 1960 25,552.00

8. Trinidad Calatin Execution writ in CFI Laguna Case No. B-191 November 29, 1960 3,450.00

9. Rosauro Taningco and Reg. of Deeds denied registration of deed

Simplicio Ramos mortgage; registrability became object of suit in
Supreme Court, L-15242.