Supervisión del funcionamiento del sistema

1) Special preferred credits. (Art. 2241 and 2242, CC)

a) Considered as mortgages or pledges of real or personal property or liens within the purview of legal provisions governing insolvency.

b) Taxes due to the State shall first be satisfied.

2) Ordinary preferred credits (Art. 2244) – Preferred in the order given by law.

3) Common credits (Art. 2245) – Credits of any other kind or class, or by any other right or title not comprised in Arts. 2241- 2244 shall enjoy no preference.

Art. 2236. The debtor is liable with all his property, present and future, for the fulfillment of his obligations, subject to the exemptions provided by law. (1911a)

Art. 2237. Insolvency shall be governed by special laws insofar as they are not inconsistent with this Code. (n)

Art. 2238. So long as the conjugal partnership or absolute community subsists, its property shall not be among the assets to be taken possession of by the assignee for the payment of the insolvent debtor's obligations, except insofar as the latter have redounded to the benefit of the family. If it is the husband who is insolvent, the administration of the conjugal partnership of absolute community may, by order of the court, be transferred to the wife or to a third person other than the assignee. (n)

Art. 2239. If there is property, other than that mentioned in the preceding article, owned by two or more persons, one of whom is the insolvent debtor, his undivided share or interest therein shall be among the assets to be taken possession of by the assignee for the payment of the insolvent debtor's obligations. (n)

Art. 2240. Property held by the insolvent debtor as a trustee of an express or implied trust, shall be excluded from the insolvency proceedings. (n)

Exempt Property

1. Family home constituted jointly by husband and wife or by unmarried head of a family (Article 152, Family Code).

Exceptions:

a.) for non-payment of taxes;

b.) for debts incurred prior to the constitution of the family home;

c.) for debts secured by mortgages on the premises before or after such constitution; and

d.) for debts due to laborers, mechanics, architects, builders, material men and others who have rendered service or furnished material for the construction of the building

2. Right to receive support as well as any money or property obtained as such support. (Article 205, Family Code)

3. Tools and implements necessarily used by him in his trade or employment;

4. Three horses, or three cows, or three carabaos or other beasts of burden, such as the debtor may select, not exceeding one thousand pesos in value and necessarily used by him in his ordinary occupation;

5. His necessary clothing and that of all his family.

6. Household furniture and utensils necessary for housekeeping and used for that purpose by the debtor, such as the debtor may select, of a value not exceeding one thousand pesos; 7. Provisions for individual or family use insufficient for three months;

8. The professional libraries of attorney’s, judges, physicians, pharmacists, dentist, engineers, surveyors, clergymen, teachers and other professionals, not exceeding three thousand pesos in value;

9. One fishing boat and net, not exceeding the total value of one thousand pesos, the property of any fisherman, by the lawful use of which he earns a livelihood;

10. So much of the earnings of the debtor for his personal services within the month preceding the levy as are necessary for the support of his family;

11. Lettered gravestones;

12. All moneys, benefits, privileges or annuities accruing or in any manner growing out of any life insurance, if the annual premiums paid do not exceed five hundred pesos, and if they exceed the sum, a like exemption shall exist which shall bear the same proportion to the moneys, benefits privileges and annuities so accruing or growing out of such insurance that said five hundred pesos bears to the whole premiums paid;

13. The right to receive legal support, or money or property obtained as such support, or any pension or gratuity from the government;

14. Copyrights and other properties especially exempted by law (Section 12, Rule 39)

15. Property under legal custody and of the public dominion.

Art. 2241. With reference to specific movable property of the debtor, the following claims or liens shall be preferred:

(1) Duties, taxes and fees due thereon to the State or any subdivision thereof;

(2) Claims arising from misappropriation, breach of trust, or malfeasance by public officials committed in the performance of their duties, on the movables, money or securities obtained by them;

(3) Claims for the unpaid price of movables sold, on said movables, so long as they are in the possession of the debtor, up to the value of the same; and if the movable has been resold by the debtor and the price is still unpaid, the lien may be enforced on the price; this right is not lost by the immobilization of the thing by destination, provided it has not lost its form, substance and identity; neither is the right lost by the sale of the thing together with other property for a lump sum, when the price thereof can be determined proportionally; (4) Credits guaranteed with a pledge so long as the things pledged are in the hands of the creditor, or those guaranteed by a chattel mortgage, upon the things pledged or mortgaged, up to the value thereof;

(5) Credits for the making, repair, safekeeping or preservation of personal property, on the movable thus made, repaired, kept or possessed;

(6) Claims for laborers' wages, on the goods manufactured or the work done; (7) For expenses of salvage, upon the goods salvaged;

(8) Credits between the landlord and the tenant, arising from the contract of tenancy on shares, on the share of each in the fruits or harvest;

(9) Credits for transportation, upon the goods carried, for the price of the contract and incidental expenses, until their delivery and for thirty days thereafter;

(10) Credits for lodging and supplies usually furnished to travellers by hotel keepers, on the movables belonging to the guest as long as such movables are in the hotel, but not for money loaned to the guests;

(11) Credits for seeds and expenses for cultivation and harvest advanced to the debtor, upon the fruits harvested;

(12) Credits for rent for one year, upon the personal property of the lessee existing on the immovable leased and on the fruits of the same, but not on money or instruments of credit; (13) Claims in favor of the depositor if the depositary has wrongfully sold the thing deposited, upon the price of the sale.

In the foregoing cases, if the movables to which the lien or preference attaches have been wrongfully taken, the creditor may demand them from any possessor, within thirty days from the unlawful seizure. (1922a)

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:

(1) Taxes due upon the land or building;

(2) For the unpaid price of real property sold, upon the immovable sold;

(3) Claims of laborers, masons, mechanics and other workmen, as well as of architects, engineers and contractors, engaged in the construction, reconstruction or repair of buildings, canals or other works, upon said buildings, canals or other works;

(4) Claims of furnishers of materials used in the construction, reconstruction, or repair of buildings, canals or other works, upon said buildings, canals or other works;

(5) Mortgage credits recorded in the Registry of Property, upon the real estate mortgaged; (6) Expenses for the preservation or improvement of real property when the law authorizes reimbursement, upon the immovable preserved or improved;

(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;

(8) Claims of co-heirs for warranty in the partition of an immovable among them, upon the real property thus divided;

(9) Claims of donors or real property for pecuniary charges or other conditions imposed upon the donee, upon the immovable donated;

(10) Credits of insurers, upon the property insured, for the insurance premium for two years. (1923a)

Carried Lumber Co. v. ACCCFA,

For failure of Facoma to comply with the terms of their compromise agreement as approved by the trial court, plaintiff secured an execution of the judgment on compromise. Whereupon, the sheriff levied on Facoma's lease rights, warehouse, rice mill building and scheduled an auction sale thereof on January 31, 1961. On January 25, 1961, defendant filed a third-party claim and informed the sheriff that the properties levied upon had already been sold to it on November 5, 1960, when it foreclosed its mortgage lien over the properties. It was placed in possession on January 27, 1961. Nevertheless, the sheriff went on with the auction sale and sold the properties to plaintiff, as the highest bidder. Thereafter, plaintiff sued defendant to assert its preferential materialman's lien over the Facoma's properties and in order to obtain possession thereof. After trial, the lower court held that plaintiff has a lien over the warehouse and ricemill building of Facoma, superior to defendant's mortgage credit, to which it is entitled to material possession should defendant not satisfy its claim. From this judgment, defendant instituted the present appeal.

Facts:

 The term pro rata in Article 2249 of the Civil Code means in proportion or ratably, or a division according to share, interest or liability of each (72 C.J.S. 967-8).

 The enumeration of ten claims, mortgages and lines in Article 2242 of the Civil Code did not create an order of preference. The materialman's (mechanic's) lien of refectionary credit, listed as No. 4 is not superior to the mortgage credit which is listed as No. 5. Said article merely lists the credits which may concur with respect to specific real properties and which would be satisfied pro-rata according to Article 2249.

 There is no dispute that the Facoma warehouse was constructed by means of the materials supplied by plaintiff and that the construction was financed by defendant. Therefore, it is just and proper that the two creditors should have pro-rata shares in that warehouse.

 The ruling (De Baretto vs. Villanueva, 110 Phil. 896, 904, 906) that as insolvency or a similar proceeding is necessary in order "to enable the court to ascertain the pro rata dividend corresponding to each" of the two creditors as well as the "other creditors" entitled to preference under Article 2242 does not apply where there are only two creditors.

 Since plaintiff specified that it was asserting a lien only over the Facoma warehouse and not on the ricemill building, the trial court erred in sustaining its lien over the ricemill building. Plaintiff has no materialman's lien on the ricemill, it having supplied materials only for the construction of the warehouse.

Recorded Mortgage Credits DBP v. NLRC, 1990

 "A preference of credit bestows upon the preferred creditor an advantage of having his credit satisfied first ahead of other claims which may be established against the debtor. Logically, it becomes material only when the properties and assets of the debtors are insufficient to pay his debts in full; for if the debtor is amply able to pay his various creditors in full, how can the necessity exist to determine which of his creditors shall be paid

first or whether they shall be paid out of the proceeds of the sale the debtor's specific property? Indubitably, the preferential right of credit attains significance only after the properties of the debtor have been inventoried and liquidated, and the claims held by his various creditors have been established

 A distinction should be made between a preference of credit and a lien. A preference applies only to claims which do not attach to specific properties. A lien creates a charge on a particular property. The right of first preference as regards unpaid wages recognized by Article 110 does not constitute a lien on the property of the insolvent debtor in favor of workers. It is but a preference of credit in their favor, a preference in application. It is a method adopted to determine and specify the order in which credits should be paid in the final distribution of the proceeds of the insolvent's assets. It is a right to a first preference in the discharge of the funds of the judgment debtor.

 "Article 110 of the Labor Code does not purport to create a lien in favor of workers or employees for unpaid wages either upon all of the properties or upon any particular property owned by their employer. Claims for unpaid wages do not therefore fall at all within the category of specially preferred claims established under Articles 2241 and 2242 of the Civil Code, except to the extent that such claims for unpaid wages are already covered by Article 2241, number 6: `claims for laborers' wages, on the goods manufactured or the work done;' or by Article 2242, number 3: `claims of laborers and other workers engaged in the construction, reconstruction or repair of buildings, canals and other works.' To the extent that claims for unpaid wages fall outside the scope of Article 2241, number 6 and 2242, number 3, they would come within the ambit of the category of ordinary preferred credits under Article 2244."

 The DBP anchors its claims on a mortgage credit. A mortgage directly and immediately subjects the property upon which it is imposed, whoever the possessor may be, to the fulfillment of the obligation for whose security it was constituted (Article 2176, Civil Code). It creates a real right which is enforceable against the whole world. It is a lien on an identified immovable property, which a preference is not. A recorded mortgage credit is a special preferred credit under Article 2242 (5) of the Civil Code on classification of credits. The preference given by Article 110, when not falling within Article 2241 (6) and Article 2242 (3) of the Civil Code and not attached to any specific property, is an ordinary preferred credit although its impact is to move it from second priority to first priority in the order of preference established by Article 2244 of the Civil Code (Republic vs. Peralta, supra).

 In fact, under the Insolvency Law (Section 29) a creditor holding a mortgage or lien of any kind as security is not permitted to vote in the election of the assignee in insolvency proceedings unless the value of his security is first fixed or he surrenders all such property to the receiver of the insolvent's estate.

 In fine, the right to preference given to workers under Article 110 of the Labor Code cannot exist in any effective way prior to the time of its presentation in distribution proceedings. It will find application when, in proceedings such as insolvency, such unpaid wages shall be paid in full before the "claims of the Government and other creditors" may be paid. But, for an orderly settlement of a debtors assets, all creditors must be convened, their claims ascertained and inventoried, and thereafter the preferences determined in the course of judicial proceedings which have for their object the subjection of the property of the debtor to the payment of his debts or other lawful obligations. Thereby, an orderly determination of preference of creditors' claims is assured (Philippine Savings Bank vs. Lantin, No. L-33929, September 2, 1983, 124 SCRA 476); the adjudication made will be binding on all parties-in-interest, since those proceedings are proceedings in harmony.

BPI v. CA,

 In the instant case, the action of petitioner for foreclosure of real estate mortgage had been filed against respondent RUBY and was pending with the trial court when RUBY was placed by SEC under rehabilitation through the creation of a management committee pursuant to Sec. 6, par. (d), P.D. 902-A. In its order of 10 August 1984, SEC directed that all actions or claims against RUBY pending before any court, tribunal, branch or body be deemed suspended. On the basis of this order, the jurisdiction of the trial court over the case was also considered suspended. As a result, SEC acquired jurisdiction, which is bolstered by the fact that it had already appointed a rehabilitation receiver for the distressed corporation and had directed that all proceedings or claims against it be suspended.

 The doctrine in the PCIB case has since been abrogated. In Alemar's Sibal & Sons v. Elbinias, (G.R. No. 75414, 4 June 1990, 186 SCRA 94) BF Homes, Inc. v. Court of Appeals, (G.R. No. 77143, 3 October 1990, 190 SCRA 262) Araneta v. Court of Appeals, (G.R. No. 95253, 10 July 1992, 211 SCRA 390) and RCBC v. Court of Appeals, (G.R. No. 74851, 14 September 1992, 213 SCRA 830) we already ruled that whenever a distressed corporation asks SEC for rehabilitation and suspension of payments, preferred creditors may no longer assert such preference, but shall stand on equal footing with other creditors. Foreclosure shall be disallowed so as not to prejudice other creditors or cause discrimination among them. If foreclosure is undertaken despite the fact that a petition for rehabilitation has been filed, the certificate of sale shall not be delivered pending rehabilitation. If this has already been done, no transfer certificate of title shall likewise be effected within the period of rehabilitation. The rationale behind PD 902-A, as amended, is to effect a feasible and viable rehabilitation. This cannot be achieved if one creditor is preferred over the others.

 While it is recognized that petitioner is a preferred creditor whose claim is secured by a real estate mortgage on the properties of respondent RUBY, its right to enforce its claim in court is suspended with the placing by SEC of respondent under rehabilitation. This rule will enable the management committee or rehabilitation receiver to effectively exercise his/its power free from any judicial or extrajudicial interference that might unduly hinder the rescue of the distressed company.

Credits Annotated in Virtue of Judicial Order

Manabat v. Laguna Federation of Facomas, Inc., 1967