G.R. No.

L-15499

February 9, 1921

reducing in a considerable degree t!e apparent beneficial interest of Salomon result of t!e litigation, but t!e$ do not affect t!e fundamentals of t!e case.

. S!arruf in t!e

THE TAYABAS LAND CO !ANY, plaintiff-appellee, vs. SALO ON SHARR"F, CAN"TO BARTOLO E, #$er%&& o& Tayaba#, SAL'ADOR FARRE a() FRANC*SCO AL'ARE+, defendants. SALO ON SHARR"F, appellant.
On December 10, 1914, one Salvador Farre recovered a joint and several judgment against Salomon . S!arruf and Far!am . S!arruf in t!e "ourt of First #nstance of t!e cit$ of anila for t!e sum of %1,&00, 'it! legal interest from September (, 1914, and 'it! costs. )!is judgment !aving remained unsatisfied, and e*ecution 'as upon +pril &, 191,, issued t!ereon at t!e instance of t!e plaintiff. ean'!ile on arc! -., 191(, Salomon . S!arruf !ad !imself recovered a judgment, also in t!e "ourt of First #nstance of t!e cit$ of anila, against t!e )a$abas /and "ompan$ and +. . 0inainati, for t!e sum of %,,141.&,, 'it! interest and costs2 and as t!ere seems to !ave been no visible propert$ belonging to Salomon . S!arruf and Far!am . S!arruf subject to sei3ure b$ t!e s!eriff to satisf$ t!e e*ecution in favor of Salvador Farre, it became important for Farre to subject t!e judgment in favor of Salomon . S!arruf against t!e )a$abas /and "ompan$ and +. . 0inainati to t!e pa$ment of !is o'n claim. )o t!is end process of garnis!ment 4notification de embargo5 'as, on +pril ,, 191,, issued at t!e instance of Salvador Farre in aid of !is e*ecution against t!e S!arrufs and 'as on t!e same or succeeding da$ dul$ served upon t!e )a$abas /and "ompan$. 6$ t!is process t!e )a$abas /and "ompan$ 'as informed t!at lev$ !ad, b$ virtue of t!e e*ecution aforesaid, been made upon all t!e propert$ of S. . S!arruf in t!e possession of said )a$abas /and "ompan$ and upon all debts o'ing b$ t!e latter to said S!arruf, and in particular upon all participation and interest of S. . S!arruf in t!e judgment rendered in !is favor in t!e action prosecuted b$ !im against t!e )a$abas /and "ompan$ and ot!ers. #n pursuance of t!e lev$ t!us effected upon t!e judgment in favor of Salomon . S!arruf against t!e )a$abas /and "ompan$, t!e s!eriff of t!e cit$ of anila, as in ordinar$ cases of lev$ upon c!attels of real propert$, proceeded upon +pril 1(, 191,, to e*pose to sale all rig!t, title, and interest of said S!arruf in t!e judgment aforesaid. +t t!is sale Salvador Farre, t!e e*ecution creditor !imself, became t!e purc!aser of t!e judgment in 7uestion for t!e sum of %-002 but t!e )a$abas /and "ompan$, 'it! a legitimate vie' to its o'n protection, after'ards stepped in, and acting t!roug! r. Francisco +lvare3, as attorne$ and intermediar$, purc!ased from Farre, on October ,, 191., t!e judgment of Salomon . S!arruf against itself, pa$ing to Farre t!e full amount due !im, to 'it, t!e sum of %1,(11.-4. +t t!is point it s!ould be stated t!at '!en lev$ of e*ecution 'as made in t!e manner above stated, upon t!e judgment in favor of S!arruf against t!e )a$abas /and "ompan$ and ot!ers, t!e time allo'ed b$ la' for an appeal in t!at case of t!e Supreme "ourt !ad not passed2 and said cause 'as in fact subse7uentl$ appealed to t!e Supreme "ourt, '!ere final judgment 'as rendered, affirming t!e decision of t!e lo'er court, on Februar$ 1(, 1911.1 #t ma$ also be stated t!at on +pril 4, 191,, Salomon . S!arruf, b$ a public document, '!ic! 'as dul$ incorporated in t!e record in !is case against t!e )a$abas /and "ompan$, et al., sold and transferred unto O86rien 9 "ompan$, a corporation, !is rig!t, title, and interest in t!e judgment aforesaid to t!e e*tent necessar$ to satisf$ a debt for %911.14, o'ing to O86rien 9 "ompan$, for merc!andise purc!ased from said entit$ b$ S!arruf2 and upon t!e same date essrs. "rossfield 9 O86rien, as attorne$s, filed a memorandum of an attorne$8s lien in t!eir favor to t!e e*tent of -( per cent of t!e amount of t!e judgment. )!ese transactions, as 'ill be seen, !ad t!e result of

+s a conse7uence of t!e facts above narrated t!e )a$abas /and "ompan$ supposes t!at t!e judgment obtained b$ Salomon . S!arruf against it and +. . 0inainati !as been '!oll$ satisfied, '!ile Salomon . S!arruf and t!ose interested under !im claim t!at t!e e*ecution sale of t!e judgment in 7uestion 'as void and t!at as a conse7uence said judgment remains '!oll$ unsatisfied. %roceeding upon t!is conception of t!e case, essrs. "rossfield and O86rien, as attorne$s for t!e plaintiff in t!at action, procured an e*ecution to be issued on +ugust &0, 1911, upon said judgment for t!e entire amount of t!e recover$, including accrued interest and costs, less t!e sum of %1&.-1, '!ic! !ad been secured in a garnis!ment proceeding against one of t!e local ban:s. 6eing t!us menaced 'it! t!e lev$ of an e*ecution upon its propert$, t!e )a$abas /and "ompan$ instituted t!e present action in t!e "ourt of First #nstance of t!e cit$ of anila, +gainst Salomon . S!arruf and ot!ers, including t!e s!eriff of t!e %rovince of )a$abas, to obtain an order restraining t!e t!reatened lev$ of e*ecution and perpetuall$ enjoining all proceedings for t!e enforcement of t!e judgment against it. ;pon !earing t!e cause t!e trial court, '!ile recogni3ing t!e validit$ of t!e claims of O86rien 9 "ompan$ and of "rossfield and O86rien, !eld t!at all ot!er interest in said judgment pertaining to Salomon . S!arruf !ad passed b$ virtue of t!e e*ecution sale to Salvador Farre and t!ence b$ transfer t!roug! Francisco +lvare3 to t!e )a$abas /and "ompan$. +s a conse7uence t!e court declared t!e preliminar$ injunction perpetual. From said judgment Salomon . S!arruf appealed to t!is court. )!e principal 7uestion in t!e case relates to t!e validit$ of t!e proceedings '!ereb$ t!e judgment against t!e )a$abas /and "ompan$ and +. . 0inainati in favor of Salomon . S!arruf 'as, on +pril 1(, 191,, e*posed to sale b$ t!e s!eriff under t!e e*ecution issued in t!e action of Salvador Farre against t!e t'o S!arrufs2 and 'e believe it 'ill be conducive to clarit$ in t!e discussion for us to proceed at once to consider t!e manner in '!ic!, under t!e provisions of our "ode of "ivil %rocedure, a judgment for a sum of mone$ entered in favor of t!e plaintiff in one case can be reac!ed and applied to t!e pa$ment of a judgment in anot!er case against t!e part$ '!o occupies t!e position of creditor in t!e former. #n t!e first place, 'e !ave no !esitanc$ in sa$ing t!at a judgment for a sum of mone$, t!at is, t!e interest of t!e plaintiff in suc! a judgment, is liable to e*ecution. + judgment for a sum of mone$ is, as to t!e part$ entitled to pa$ment, a credit2 and as to t!e part$ '!o oug!t to pa$ t!e mone$, a debt. Furt!ermore, t!e interest of t!e creditor in suc! a judgment is clearl$ propert$, t!oug! not capable of manual deliver$. +ll of t!ese elements of value < =debts.= =credits,= and =all ot!er propert$ not capable of manual deliver$= < are e*pressl$ declared, in section 4(0 of t!e "ode of "ivil %rocedure, to be liable to e*ecution. #t 'ill be noted, !o'ever, t!at under t!e section just cited, debts, credits, and ot!er propert$ not capable of manual deliver$ are to be dealt 'it! in a different manner from t!at prescribed in case of t!e e*ecution of tangible propert$2 for '!ile tangible propert$ is proceeded 'it! b$ sei3ure and sale under e*ecution, debts and credits are to be attac!ed b$ t!e citation of t!e debtor. )!e provisions governing t!e e*ecution of tangible propert$ are found in sections 4(& to 4(., inclusive, of t!e "ode of "ivil %rocedure2 '!ile t!e provisions prescribing t!e met!od of reac!ing debts and credits are found c!iefl$ in t!e c!apter relating to attac!ment, consisting principall$ of sections 4&1 to 4&,, inclusive, of t!e "ode of "ivil %rocedure. )!e proceeding t!us indicated as proper, in order to subject a debt or credit is :no'n in +merican civil procedure as t!e process of garnis!ment2 and it ma$ be trul$ said t!at garnis!ment is one of t!e simplest processes, and t!e least involved in tec!nicalities, of an$ proceeding :no'n to t!e la'. #t consists in t!e citation of some stranger to t!e litigation, '!o is debtor to one of t!e parties to t!e action. 6$ t!is means suc! debtor stranger becomes a forced intervenor2 and t!e court, !aving ac7uired jurisdiction over !is person b$ means of t!e citation, re7uires !im to pa$ !is debt, not to !is former creditor, but to t!e ne' creditor, '!o is creditor in t!e main litigation. #t is merel$ a

case of involuntar$ novation b$ t!e substitution of one creditor for anot!er. ;pon principle t!e remed$ is a species of attac!ment or e*ecution for reac!ing an$ propert$ pertaining to a judgment debtor '!ic! ma$ be found o'ing to suc! debtor b$ a t!ird person. )!e situation involved supposes t!e e*istence of at least t!ree persons, to 'it, a judgment creditor, a judgment debtor, and t!e garnis!ee, or person cited, '!o in turn is supposed to be indebted to t!e first debtor 4i.e., judgment debtor5. )o proceed a little furt!er 'it! t!e barest details of t!e process of garnis!ment, 'e note t!at a citation issues from t!e court !aving jurisdiction of t!e principal litigations, notif$ing t!e garnis!ee t!at t!e propert$ and credits of t!e judgment debtor !ave been levied upon or attac!ed in t!e !ands of suc! garnis!ee, and enjoining !im not to deliver, transfer, or ot!er'ise dispose of an$ effects or credits belonging to t!at person, and re7uiring !im furt!ermore to ma:e a statement to t!e court of t!e propert$ of t!e judgment debtor in !is !ands and of t!e debts o'ing b$ t!e garnis!ee to suc! debtor. #n cases '!ere indebtedness is admitted, as not infre7uentl$ occurs, t!e pa$ment of t!e mone$ b$ t!e garnis!ee to t!e judgment creditor or into court, brings t!e proceeding to a close, so far as t!e garnis!ee is concerned2 but if t!e garnis!ee fails to ans'er, or does not admit t!e indebtedness, !e ma$ be re7uired to attend before t!e court in '!ic! t!e action is pending to be e*amined on oat! respecting t!e same. Finall$, if t!e liabilit$ of t!e garnis!ee is made manifest, t!e officer of t!e court ma$, under paragrap! >o. & of section 4&, of t!e "ode of "ivil %rocedure, collect t!e mone$ and pa$ it to t!e person entitled. )!e circumstances t!at garnis!ment !as not been made t!e subject of independent treatment in our "ode of "ivil %rocedure and t!at t!e rules relating t!ereto are onl$ broug!t out inferentiall$ in connection 'it! t!e subject of attac!ment !as undoubtedl$ contributed to obscure a matter '!ic! upon principle is simple enoug!. +dditional lig!t on t!e subject ma$, !o'ever, be ac7uired b$ referring to sections 4.,, 411, and 41, of t!e "ode of "ivil %rocedures, '!ic! treat of supplementar$ proceedings. #t 'ill be found t!at t!ose proceedings are identical in principle 'it! t!e proceeding for t!e citation of debtors e*plained in t!e c!apter on attac!ment. ?noug! !as no' been said to s!o' clearl$ t!at t!e action of t!e s!eriff in e*posing to public sale t!e judgment '!ic! !ad been procured b$ Salomon . S!arruf in t!e action against t!e )a$abas /and "ompan$, et al., 'as '!oll$ unaut!ori3ed, and said sale must be considered void. )!e proper step 'ould !ave been for t!e court to re7uire t!e )a$abas /and "ompan$, after t!e judgment against it !ad become final, to pa$ into court, in t!e cause '!erein Salvador Farre 'as plaintiff, a sufficient amount of mone$ to satisf$ Farre8s claim against S!arruf2 and if t!e judgment against t!e )a$abas /and "ompan$ !ad been permitted to go to t!e stage of e*ecution, t!e proceeds in t!e !ands of t!e s!eriff 'ould !ave been applied, under t!e direction of t!e court, to t!e pa$ment of Farre8s claim before an$ part 'ould !ave been pa$able to S!arruf. #n dealing 'it! t!e problems '!ic! !ave from time to time arisen in connection 'it! garnis!ment proceedings, courts !ave sometimes been perple*ed over t!e matter of protecting t!e garnis!ee from t!e danger of !aving to pa$ !is debt t'ice2 and it goes 'it!out sa$ing t!at t!e procedure must be so adjusted as not to subject t!e garnis!ee to t!is ris:. Ot!er'ise it is a fatal obstacle to t!e garnis!ment. >o suc! difficult$ 'ould arise in a case li:e t!is, '!ere t!e t'o judgments are bot! of record in t!e same court, and '!ere conse7uentl$ t!at court !as control over t!e process in bot! cases. Our conclusion t!at t!e sale of t!e judgment in 7uestion under process of e*ecution 'as void is supported b$ t!e decisions of t!e Supreme "ourt of "alifornia, construing t!e ver$ section of t!e "alifornia "ode of "ivil %rocedure from '!ic! section 4(0 of t!e "ode of "ivil %rocedure of t!e %!ilippine #slands 'as ta:en. )!us, in c6ride vs. Fallon 4,( "al., &01, &0&5, t!e Supreme "ourt of t!at State said@

+fter enumerating t!e :inds of propert$ of a judgment debtor liable to e*ecution, t!e "ode provides t!at =s!ares and interests in an$ corporation or compan$= and debts and credits . . . and all ot!er propert$ not capable of manual deliver$, ma$ be attac!ed on e*ecution in li:e manner as upon 'rits of attac!ments. =Debts and credits and propert$ not capable of manual deliver$ must be attac!ed in t!e mode pointed out b$ subdivision (, sec. (4-.= 4"orresponding to section 4&1 of t!e %!ilippine "ode of "ivil %rocedure.5 =)!at is =b$ leaving 'it! t!e person o'ing t!e debt or !aving in possession or under !is control suc! credits and ot!er personal propert$= or 'it! !is agent, a cop$ of t!e 'rit, and a notice t!at t!e debts o'ing b$ !im to t!e defendant, or t!e credits and ot!er personal propert$8 in !is possession or under !is control, belonging to t!e defendant are attac!ed in pursuance of suc! 'rit. =)!e fact t!at a debt is evidenced b$ a judgment does not, in our opinion, ma:e it an$t!ing more or less t!an a debt, or more capable of manual deliver$ t!an it 'ould be if not so evidenced. >o provision is made for attac!ing or lev$ing on evidences of debt. #t is t!e debt itself '!ic! ma$ be attac!ed b$ 'rit of attac!ment, or on e*ecution in li:e manner as upon 'rits of attac!ment.= )!is 'e t!in: to be t!e meaning of t!e "ode, and t!e mode prescribed b$ it is e*clusivel$ . . . #n order to avoid misunderstanding, 'e 'is! to sa$ t!at 'e ma:e no 7uestion as to t!e propriet$ of t!e proceedings up to t!e time '!en t!e judgment in 7uestion 'as advertised and e*posed to sale b$ t!e s!eriff. )!e issuance of t!e e*ecution and t!e service of t!e garnis!ment 'ere appropriate2 and t!e garnis!ment 'as effective for t!e purpose of preventing t!e garnis!ee, t!e )a$abas /and "ompan$, from pa$ing t!e judgment to Salomon . S!arruf. oreover, t!e garnis!ment 'as effective for t!e purpose of conferring upon t!e )a$abas /and "ompan$ t!e rig!t to pa$ off t!e judgment '!ic! Farre !ad obtained against S!arruf. )!is rig!t is not onl$ recogni3ed in section 411 of t!e "ode of "ivil %rocedure but also in subsection & of article 1-10 of t!e "ivil "ode2 and b$ satisf$ing Farre8s claim, regardless of t!e manner in '!ic! it 'as accomplis!ed, t!e )a$abas /and "ompan$ absolved itself pro tanto from its indebtedness to S!arruf. #t results t!at, alt!oug! t!e judgment against t!e )a$abas /and "ompan$ !as not $et been satisfied in full, said compan$ is entitled to be credited 'it! t!e sum of %1,(11.-4, said b$ it, t!roug! Francisco +lvare3, to Farre on October ,, 191., 'it! interest. #n t!e vie' 'e ta:e of t!e case it becomes unnecessar$ to consider at lengt! t!e fact t!at S!arruf8s judgment against t!e )a$abas /and "ompan$ 'as appealed to t!e Supreme "ourt after t!e process of garnis!ment !ad been served on t!e compan$. Suffice is to sa$ t!at t!is circumstance 'ould at most merel$ postpone t!e reali3ation of t!e results 'it!out defeating t!e garnis!ment. Aeflection upon t!is feature of t!e case, !o'ever, confirms t!e opinion t!at our la'ma:ers acted 'isel$ in re7uiring t!at debts and credits s!ould be e*ecuted b$ means of t!e process of garnis!ment rat!er t!an b$ e*posing t!em to public sale. #n t!e case before us a judgment for a large amount 'as sold for a merel$ nominal sum, and suc! 'ould generall$ be t!e case at a sale under similar conditions. )!is cannot fail to be !ig!l$ prejudicial to t!e debtor '!o is under immediate e*ecution. )!e proceeding b$ garnis!ment, on t!e contrar$, enables all parties to reali3e t!eir rig!ts 'it!out undul$ disturbing t!e position of an$. )!e judgment must be reserved, and t!e defendants 'ill be absolved from t!e complaint. #t is so ordered, 'it!out e*press pronouncement as to costs of eit!er instance.