J. MCMICKING, SHERIFF OF MANILA, PLAINTIFF AND APPELLEE, VS. SPRUNGLI & CO. ET AL., DEFENDANTS AND APPELLANTS.

This is an appeal from an order of the Court of First Instance of the city of
Manila requiring the immediate execution of a judgment in another action.

It appears from the record in this case that Frank E. Fillis brought to the
Philippine Islands a circus consisting of several trained horses, dogs, and
monkeys, together with paraphernalia. Upon entering the port of Manila he gave a
bond to the Collector of Customs to export said animals and paraphernalia within
six months from date of entrance, or, in case of failure so to do, to pay the
duties thereon. E. J. Hawkes, William Ahern, and A. M. Timke became sureties for
Fillis upon said bond. The property was there-upon released by the Collector of
Customs and entered the Philippine Islands. Thereafter Fillis executed and
registered a chattel mortgage on all said property to Sprungli &Co. for the
sum of P2,500. Said mortgage was later foreclosed by the sheriff and the
property mentioned therein sold for P1,439.12. Said sum having come into the
hands of the sheriff, the Collector of Customs and other creditors of Frank E.
Fillis made claim thereto. The sheriff thereupon deposited the money in court
and began a proceeding to compel the various claimants to litigate their title
to the fund, Sprungli & Co. answered the complaint of the sheriff, setting
up its claim under the chattel mortgage and alleging that it had a preferred
claim to said fund. On the 29th of July, 1912, Sprungli & Co. received from
the sheriff all of said fund except P617 which was the sum claimed by the
Insular Collector of Customs as being the duty on the articles which Fillis had
imported into the Philippine Islands under bond.

At the time that Sprungli & Co. received from the sheriff said fund less
P617, the court, by agreement of Sprungli & Co. with the other creditors,
entered the following order:

“This cause coming on for hearing upon the petition of interpleader filed by
the sheriff of Manila, and the answers thereto of Sprungli & Co. and the
Insular Collector of Customs, both of whom appeared by their respective counsel,
after hearing the evidence and by agreement of both counsel.

“It is hereby ordered, That the said petitioner, the sheriff of
Manila, pay to the intervener, Sprungli & Co., the amount of funds now in
his hands less all proper costs and less also the sum of P617 claimed by the
other intervener, and that the disposition of said balance of P617 await the
termination of cause No. 9716 now pending in this court, wherein the recovery of
said P617 is being sought upon a bond executed to secure the payment of
same.”

The property brought into the Islands as aforesaid was not exported within
the time agreed and an action was accordingly brought by the Insular Collector
of Customs upon the bond to recover the sum named therein. This action was
numbered 9716 and is the one referred to in the above order. This action was
duly brought to trial and a judgment entered in favor of the Insular Collector
of Customs as follows:

“It is accordingly considered and adjudged that plaintiff have and recover
from defendants the sum of one thousand five hundred (P1,500) pesos, with
interest thereon at 6 per cent from July 15th, 1912, together with his costs,
but the clerk of the court is hereby directed to apply on said judgment the sum
of six hundred and seventeen pesos retained in his hands by this court’s order
of July 29th, 1912, in cause No. 9448.”

On the entry of the judgment just referred to, Sprungli & Co. objected to
the payment of said sum of P617 as directed by said judgment, setting up the
claim, that the money belonged to it. In view of this objection the sheriff made
a motion to the court setting forth that, by virtue of the order entered in the
above-entitled cause on the 29th of July, 1912, the amount of P617 was ordered
to be retained in his possession to await the termination of cause No. 9716;
that since the entry of said order cause No. 9716 had been decided and that the
judgment therein had ordered the said sum to be applied in partial satisfaction
of said judgment; that said decision had been appealed but that no supersedeas
bond had been given as required by the order approving the bill of exceptions;
that an execution had been issued upon said judgment at the request of the
plaintiff; that an attempt on the part of the sheriff to apply said amount in
the manner and form directed in the judgment in said cause No. 9716 had been met
with an objection from Sprungli & Co., it claiming that said money belonged
to it; and praying that the court make a final adjudication of said controversy.
Thereupon the court on the 14th of May, 1913, entered the order which furnishes
the basis of the present appeal, as follows:

“This cause came on for hearing upon plaintiff’s motion for a disposition of
the fund of P617 which by our order of July 29, 1912, was reserved pending the
determination of cause No. 9716, wherein the recovery of said amount was sought
on a bond executed to secure the payment of the same. The last named case was
placed in judgment on December 12, 1912, and it was there directed that said sum
be applied on said judgment. This clause in said judgment was inserted pursuant
to our order of July 29,1912, in cause No. 9448, which order was agreed to by
the attorneys for all parties in open court, after a discussion in which it was
agreed that the sum of P617 should be so applied. Such was the understanding of
the attorneys present at the time, and such was the purpose of the order of July
29. The objections to such application are accordingly overruled and the sheriff
Is directed forthwith to execute the judgment in cause No. 9716 in accordance
with its terms.”

The question before us arises upon the agreement which the parties made
relative to the disposition of the said sum of P617, which was reserved and held
in the hands of the sheriff pending the decision of cause No. 9716. The
appellant states its position as follows:

“The court may have thought that we intended, by the agreement, that Sprungli
& Co., through its attorneys, would comply and conform to the decision in
case No. 9716, but it is certainly mistaken, as the attorneys had no such
intention. If the attorneys for Sprungli & Co. had intended to agree to a
decision in another case they would certainly have come into that case and
defended the rights of their clients. Neither did the attorneys for the
Government understand that we were waiving our rights to a decision on the
merits in this case. The intention was to await the decision in case No. 9716,
and in case the Government was able to collect from the bondsmen the Government
would have an interest in the case, then this case was to have been tried and
the respective rights of the mortgagee under a duly registered mortgage on
property released by the Government upon a bond for the payment of the duties
thereon, could be submitted and decided.”

The appellee and the bondsmen state their position as follows:

“Sprungli & Co. had a large sum of money tied up for a long time and on
July 29, 1912, saw that unless they consented to take a chance relative to the
P617 that all this money would be tied up for a still longer period, and so Mr.
Arthur S. Allan then, but not now, with Messrs. O’Brien and DeWitt, attorneys
for Sprungli & Co., did actually consent to leave the question as to the
P617 to be determined by the court (Judge Lobingier in both cases) in cause No.
9716. It may be true that Mr. Allan did not expect cause No. 9716 to be decided
as it was, but he took that chance, and lost.”

The appellee and the bondsmen further say:

“Furthermore, the record does not show that ‘neither did the attorneys for
the Government understand that we were waiving our rights to a decision on the
merits in this case.’ But as a matter of fact that is exactly what the
attorneys for the Government did understand, as clearly shown by their
action in attempting to apply the P617 as directed.”

There being no stipulation in writing by the attorneys, we are unable to say
just what the wording of the agreement was. An interpretation of the agreement
is given in the order of the 29th of July. That interpretation itself is not
free from ambiguity and the order taken as a whole does not throw very much
light upon the controversy before us. It is necessary, therefore, to take into
consideration the facts and circumstances surrounding the parties at the time
the stipulation was made and the order thereon entered. It is clear that, if the
action upon the bond succeeded and the Government recovered, then the
controversy between the Government and Sprungli & Co. was at an end, as the
Government, having collected the bond, would have no further reason to dispute
with Sprungli & Co. the ownership of the P617. If, on the other hand, the
Government should have been defeated in that action, the duty would have
remained unpaid and there would have existed, accordingly, a reason on its part
for contesting with Sprungli & Co. the right to the said sum. The reason,
then, for awaiting the determination of cause No. 9716, which was the action on
the bond, is clear. As we have seen, if the action went one way it would
terminate decisively and finally the controversy between the Government and
Sprungli & Co. and the latter would be left free to receive the P617. If, on
the other hand, the suit went against the Government, then the right to the P617
would remain in as much doubt and uncertainty as if cause No. 9716 had not been
tried. There was not a single issue that could have been raised in that action
which would in any sense determine the right of the Government to the P617. The
action being one upon a bond, the issues were limited and special and could not
involve anything more than the due execution and the validity of the bond, its
breach, and the amount to be paid thereunder. It is clear, therefore, that the
determination of the action disfavorably to the Government could, in no manner,
assist in determining the controversy existing between the Government and
Sprungli & Co. It would seem, therefore, that it could not have been the
intention of the parties to the stipulation to be governed in their controversy
by the decision in case No. 9716, for, as we have already seen, the resolution
of the issues in that cause could have no possible bearing upon the issues
involved between them. Their purpose evidently was to await the termination of
cause No. 9716 to see whether or not the Government obtained its due from that
source, which occurrence would immediately end the controversy between the
Government and Sprungli & Co.

The order appealed from is reversed and the cause remanded to the court
whence it came, with instructions to proceed to the determination of the issues
raised by the pleadings in the action brought to determine the right to receive
the said sum of P617.

Arellano, C. J., Carson, Trent, and Araullo, JJ.,
concur.

Order reversed and cause remanded with
instructions.