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https://www.lawyerly.ph/juris/view/c1283?user=fbGU2WFpmaitMVEVGZ2lBVW5xZ2RVdz09
[EULOGIO BETITA v. SIMEON GANZON](https://www.lawyerly.ph/juris/view/c1283?user=fbGU2WFpmaitMVEVGZ2lBVW5xZ2RVdz09)
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[ GR No 24137, Mar 29, 1926 ]

EULOGIO BETITA v. SIMEON GANZON +

DECISION

49 Phil. 87

[ G. R. No 24137, March 29, 1926 ]

EULOGIO BETITA, PLAINTIFF AND APPELLEE, VS. SIMEON GANZON, ALEJO DE LA FLOR, AND CLEMENTE PEDREÑA, DEFENDANTS AND APPELLANTS.

D E C I S I O N

OSTRAND, J.:

This action  is brought to recover the possession of four carabaos with  damages in the sum of P200.  Briefly stated, the facts are as follows: On  May 15, 1924, the defendant Alejo  de la Flor recovered a judgment against  Tiburcia Buhayan for the sum of P140  with costs.  Under this judgment the defendant Ganzon, as sheriff, levied execution  on the carabaos in  question which were  found in the possession of  one  Simon Jacinto  but registered  in the  name  of Tiburcia Buhayan.  The plaintiff herein,  Eulogio Betita, presented a  third party claim (terceria) alleging  that the carabaos had  been  mortgaged  to  him and  as  evidence thereof presented a document dated May 6, 1924, but the sheriff  proceeded with the sale  of the animals at public auction where they were purchased by  the  defendant Clemente Pedreña for the sum of P200, and this action was thereupon brought.

The  document upon which the plaintiff bases his cause of action is in the Visayan dialect and in translation reads as follows:

"I, Tiburcia Buhayan, of age, widow and resident of the sitio of Jimamanay, municipality of Balasan,  Province of Iloilo, Philippine Islands, do hereby execute this document extrajudicially and state that I am indebted  to Mr.  Eulogio Betita, resident of the municipality of Estancia, Province of Iloilo, Philippine Islands,  in  the sum of p470, Philippine currency, and was so indebted since the year 1922, and as  a security to my creditor I hereby offer four head of carabaos belonging to me exclusively (three  females and one male), the certificates of registration of said animals being Nos. 2832851, 4670520, 4670521 and 4670522, which I have delivered to said Mr. Eulogio Betita.
"I hereby promise, to pay said debt in the coming month of February, 1925/in case I will not be able  to pay,  Mr. Eulogio Betita may dispose of the carabaos given as  security for said debty

"This document is a new one or a renewal of our former document  because the first carabaos mortgaged died and were substituted for by  the newly branded ones. "In testimony whereof and not knowing how to sign my name, I caused my name to be written and marked same with my right thumb.

"Estancia,  May 6, 1924.
 (Marked).  "TIBURCIA BUHAYAN

"Signed in the presence of:
 "MIGUEL MERCURIO.
 "TIRZO ZEPEDA"
The court below held that inasmuch as this document was prior in date to  the judgment under which the execution was levied, it was  a preferred credit  and judgment was rendered in favor of the plaintiff for the possession of the carabaos, without damages and without costs.   From this judgment  the defendants appeal.

The  judgment  must be  reversed unless  the document above quoted can be considered either a chattel mortgage or else a pledge.  That it is not a  sufficient chattel mortgage is evident; it does not meet the requirements of section 5 of the  Chattel Mortgage  Law (Act No. 1508),  has not been recorded and, considered as a chattel mortgage, is consequently of no effect as against third parties  (Williams vs. McMicking, 17 Phil., 408; Giberson vs. A. N. Jureidini Bros., 44 Phil., 216; Benedicto de Tarrosa vs.  F.  M. Yap Tico & Co. and Provincial Sheriff of Occidental  Negros, 46 Phil., 753).

Neither did the document constitute a  sufficient pledge of the property valid against third parties.   Article 1865 of the Civil Code provides that "no pledge shall be effective as against third parties unless evidence of its date  appears in a public instrument."  The document in question is not public,  but it is suggested  that its  filing  with  the sheriff in connection with the terceria gave it the effect of a public instrument and served to fix the date of the pledge, and that it therefore fulfills the  requirements of article  1865.   Assuming, without conceding,  that the filing  of the document with the sheriff had that effect, it seems nevertheless obvious that the pledge only became effective as against the plaintiff in execution from the date of the filing and did not rise superior to the execution attachment previously levied  {see Civil Code, article 1227). Manresa, in commenting on article 1865, says:
"ART. 1865. A pledge will not be valid against  a third party if the certainty of the date  is not expressed in a public instrument.

"This article,  the  precept of which did  not exist in our old law, answers the necessity for not disturbing the relationship or the status of the ownership of things with hidden or simulated contracts of pledge, in the same way and for the identical reasons that were taken into account by the mortgage  law in order  to suppress  the  implied and legal mortgages which produce so much instability in real property.

"Considering  the  effects of a contract of pledge, it is easily  understood that,  without this  warranty demanded by law, the case may happen wherein a debtor in bad faith from  the moment that  he sees his movable  property in danger of execution may attempt to withdraw the same from the action of justice and the  reach of his creditors by simulating, through  criminal confabulations, anterior and fraudulent alterations in his possession by means of feigned contracts of this nature; and, with  the  object of  avoiding or preventing such abuses, almost all the foreign writers advise that, for the  effectiveness of the pledge, it be demanded as a precise  condition that  in every case the contract  be executed in  a public writing, for,  otherwise, the determination of its date will be rendered difficult and its proof more so, even in cases in which it is executed before witnesses, due to the  difficulty to be  encountered in seeking those  before whom it was executed.

"Our code has not gone so far, for it does not demand in express terms that in all cases the pledge be constituted or formalized in a public writing, nor even in private document, but only that  the certainty of the date be expressed in the first of the said class  of instruments in order that it may be valid against a third party;  and, in default of any express provision of law, in the cases where no agreement  requiring  the  execution in  a  public  writing exists, it should be subjected to the general rule, and  especially to that established in the last paragraph of article 1280, according to which all contracts not included in the foregoing cases  of the  said article  should be  made in writing even though it be private, whenever the  amount of the prestation of one or of the  two contracting parties exceeds 1,500 pesetas."   (Vol. 12,  2d ed., p. 421.)
If the mere filing of a private document with the sheriff after the  levy of execution can  create a lien of pledge superior to the attachment, the purpose of the provisions of article 1865 as explained by Manresa would clearly be defeated.  Such could not have  been the intention  of  the authors of the code.  (See also Ocejo, Perez & Co. vs. International Banking Corporation, 37 Phil, 631, and  Tec Bi & Co. vs.  Chartered Bank of India, Australia & China, 41 Phil., 596.)

The alleged pledge is  also ineffective for another/reason, namely,  that the plaintiff pledgee never had actual possession  of the property within the meaning  of article 1863 of the Civil  Code. But it is argued that at the time of the levy the Animals in question  were in  the possession of one  Simon  Jacinto that  Jacinto  was  the plaintiff's tenant;  and that the tenant's possession was the possession of his landlord.

It appears, however, from the evidence that though not legally married, Simon Jacinto and Tiburcia  Buhayan were living together as husband and wife and had been so living for many years.  Testifying as a witness for the plaintiff, Jacinto  on cross-examination made the following  statements :
"Q. But  the  caraballas  in  question  had never been in possession  of Eulogio  Betita? A.  The three young ones did not get into  his hands.

"Q. And the others? A. Sometimes they were  in the hands of Betita and at other times in the hands oi  Buhayan.

"Q. Those  are the caraballas which formerly were mortgaged by Buhayan to Betita, isn't that so? A. Yes, sir.

"Q. And the four carabaos now  in  question had  never been in possession of Betita,  but  were in  your possession? A. When I worked they were in my hands.

"Q. And before you worked, these  caraballas were in possession  of your mistress, Tiburcia  Buhayan? A. Yes, sir.

"Q. Do you mean to say that from the possession of Tiburcia Buhayan the animals passed immediately into  your possession? A. Yes, sir."
This testimony is substantially in accord with that of the defendant  sheriff to the effect that he found the animals at the place where Tiburcia Buhayan was living.  Article 1863 of the Civil Code reads as  follows:
"In addition to the requisites mentioned in article 1857, it shall be necessary, in order to constitute the contract of pledge, that the pledge be placed in the possession of the creditor  or of a third  person appointed by  common consent."
In his commentary on this article Manresa says:
"This requisite is most essential and is characteristic of a pledge without which the  contract cannot be  regarded as entered into or  completed, because, precisely, in this delivery lies the security of the pledge.  Therefore, in order that the contract of pledge may be complete, it is  indispensable that the  aforesaid  delivery  take  place *  *  *." (P. 411,  supra.)
It is, of course, evident that the delivery  of possession referred  to in article 1863 implies a change  in the actual possession of the property pledged and that a mere symbolic delivery is not sufficient.  In the  present case the animals in question were in the possession of Tiburcia Buhayan and Simon Jacinto before the alleged pledge was entered into and apparently remained with them until the execution was levied, and there was no actual delivery of possession to the plaintiff himself.  There was therefore in reality no change in possession.

It may  further  be noted  that the  alleged relation  of landlord  and tenant between the plaintiff and Simon Jacinto is somewhat obscure and it is, perhaps, doubtful if any tenancy,  properly speaking,  existed.  The land  cultivated by Jacinto was not the property of the plaintiff, but it appears that a part  of the products was to be applied towards the payment  of Tiburcia Buhayan's debt to the plaintiff.  Jacinto states that he was not a tenant until after the  pledge was made.

From what has  been  said it follows  that the judgment appealed from must be reversed and it is ordered and adjudged that  the plaintiff take nothing  by  his  action. Without costs.  So ordered.

Avanceña, C. J., Street,  Villamor, Johns, Romualdez, and Villa-Real, JJ., concur.
Malcolm,  J., concurs in  the result.

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