G.R. No. 26635 , May 3, 1927
NICANOR JACINTO, plaintiff-appellee, vs. CONRADO DE LEON, ET AL., defendants-appellants.

Ponente: J. Romualdez

FACTS

Nicanor Jacinto (plaintiff) obtained a judgment against Frank W. Carpenter for a debt payable on December 15, 1923. Before this debt matured, on November 16, 1923, the sheriff (Conrado de Leon) levied and sold Carpenter’s property at a public auction to satisfy a prior judgment in favor of another creditor, Carl Hess. Jacinto, who was also the purchaser at this auction, presented a sworn claim to the sheriff before the sale, requesting the retention of P19,500 from the proceeds to secure his own not-yet-due claim against Carpenter. The sheriff ignored this claim and delivered the entire proceeds to Hess. Jacinto then sued the sheriff and his sureties for damages, alleging that the sheriff failed in his duty to retain the proceeds as requested. The trial court ruled in favor of Jacinto, ordering the defendants to pay him the amount of his judgment against Carpenter.

ISSUE

Did the sheriff have a legal obligation to retain the proceeds from the sale of Carpenter’s property based on Jacinto’s claim, given that Jacinto’s credit was not yet due and demandable at the time of the claim and the sale?

RULING

NO. The Supreme Court reversed the trial court’s decision.

The Court held that for a credit to be considered “preferred” under the provisions of the Civil Code (specifically Article 1924, which Jacinto invoked), it must already be due and demandable. Jacinto’s credit against Carpenter was payable on December 15, 1923, and was therefore not yet due when he filed his claim with the sheriff on November 16, 1923. Since it was not demandable, it could not be considered a preferred credit that could legally compel the sheriff to retain the proceeds from the execution sale in favor of another judgment creditor (Hess).

The Court further explained that the rules on preference of credits in Title XVII, Book IV of the Civil Code pertain to credits that are already due. The automatic maturity of all debts under Article 1915 of the Civil Code only applies in formal insolvency proceedings, which were not present in this case. Consequently, the sheriff had no legal duty to comply with Jacinto’s request for retention. Jacinto’s remedy was to wait until his credit became due and then pursue execution on his own judgment, not to interrupt the execution of a prior, matured judgment in favor of Hess.