McMicking vs. Banco Espanol, 13 Phil
429, G.R. No. 5029, April 1, 1909
Subject: Transportation Law
FACTS
In 1907, Sanchez and Cue Suan owned the
Hock-Tay steamship. They borrowed P3,000 from El Banco Español-Filipino and
provided a chattel mortgage as security. The mortgage was recorded in the
port's collector of customs and register of property. In October, El Banco
Español-Filipino delivered the mortgage to Manila's sheriff, requesting the
ship's sale. The sheriff informed the mortgagors of the request and the ship
would be sold in accordance with the law. The sale was scheduled for October
27th, and the steamer was sold to the highest bidder for P30,000. The
transaction was documented in various records.
ISSUE
Whether or not appellant has liens existing in
this case.
RULING
Yes, the appellant has existing liens.
Under Article 580 of the Code of Commerce, the
wages of the crew and expenses incurred for the ship during the last voyage
have a preference over the claim of a mortgagee.
In this case, this reference is known as a
legal lien and takes priority over a lien created by giving the ship as
security for money borrowed. The sale of a ship under a mortgage does not
affect the right of prior lien holders, and their remedies lie in foreclosing
their liens against the ship itself.
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