TAN GIN SAN, PETITIONER, VS. ROSALIA A. TAN CARPIZO ADMINISTRATRIX OF THE INTESTATE OF TAN CUAN, DECEASED, HON. LEOVIGILDO B. MIJARES, JUDGE OF THE COURT OF FIRST INSTANCE OF ZA…

Tan Gin San versus Tan Carpizo

The Case

This is a petition for certiorari with a prayer for preliminary injunction, brought by Tan Gin San against Rosalia A. Tan Carpizo, in her capacity as administratrix of the intestate estate of Tan Cuan, and against the judge of the Court of First Instance of Zamboanga City. Tan Gin San holds a chattel mortgage over two buildings of strong materials that belonged to the deceased, Tan Cuan. After extrajudicial foreclosure, he sought possession of the buildings, while the widow and administratrix resisted him and claimed the rents. The tenants, caught between conflicting claims, deposited their rentals in court. The question that reaches us is whether the trial judge gravely abused his discretion in allowing the administratrix to withdraw those deposited rents. The case matters because it draws the line between a legitimate order giving the fruits of property to the one lawfully in possession, and the abuse condemned in an earlier interpleader ruling.

Procedural History

Three cases were pending before the Court of First Instance of Zamboanga City. In the first, the administratrix sought annulment of the chattel mortgage. In the second, Tan Gin San sought legal possession of the two buildings after extrajudicial foreclosure through the sheriff. In the second case, the court, on the administratrix's petition asserting the nullity of the foreclosure, impliedly annulled the foreclosure and declared her entitled to the return of the buildings upon posting a bond of 140,000 pesos. The bond was filed, and the sheriff redelivered possession to her in January 1957.

Because the buildings were leased to several tenants and the parties made conflicting claims on the rents, sixteen tenants filed a third case, an interpleader, depositing their monthly rentals with the clerk of court as they fell due. In that interpleader case, the respondent judge issued several orders, beginning February 16, 1957, authorizing the administratrix to withdraw and receive the deposited rents. Tan Gin San then came to the Supreme Court by petition for certiorari, alleging excess of jurisdiction or grave abuse of discretion and irreparable damage, and invoking the earlier ruling in Rivera versus Ocampo. A preliminary injunction was granted upon the filing of a suitable bond. The tenants raised no real interest, since they could not be made to pay twice, so the controversy narrowed to Tan Gin San against the administratrix, the judge being a mere nominal party.

Facts

Tan Cuan owned two buildings of strong materials in Zamboanga City. During his lifetime, a chattel mortgage over the buildings was reportedly executed in favor of Tan Gin San. Tan Cuan died, and his widow, Rosalia A. Tan Carpizo, became administratrix of his intestate estate. She denied that Tan Cuan executed the mortgage, and in any event claimed that one half of the property belonged to the conjugal partnership and that she had not signed the deed.

Tan Gin San caused the mortgage to be foreclosed extrajudicially through the sheriff and then sought possession of the buildings. The administratrix refused to surrender them. Acting on her petition, the trial court impliedly annulled the foreclosure and ordered the return of the buildings to her upon the posting of a bond of 140,000 pesos, to answer for the alleged unpaid loan and for any damage Tan Gin San might suffer. She posted the bond, and possession was restored to her in January 1957.

The buildings were leased to several tenants, and both sides claimed the rents. Sixteen tenants filed an interpleader and deposited their monthly rentals in court. The respondent judge then issued the challenged orders allowing the administratrix to withdraw those deposits, expressly giving effect to the earlier order awarding her possession. Tan Gin San's credit secured by the mortgage was 40,000 pesos with interest at six per cent beginning February 28, 1958, and at the time of the petition it did not exceed 46,000 pesos, well within the 140,000 peso bond.

Issues

• Whether or not the respondent judge had jurisdiction to order the delivery of the deposited rentals to the administratrix.
• Whether or not the respondent judge committed grave abuse of discretion in allowing the administratrix to withdraw the rents deposited in the interpleader case, even upon a bond.
• Whether or not the ruling in Rivera versus Ocampo, forbidding delivery of deposited money to one contestant even upon a bond, applies to bar the disputed orders.

Applicable Provisions

Article 544 of the New Civil Code, on the rights of a possessor in good faith, provides:

One who in good faith possesses property is entitled to the fruits received before the possession is legally interrupted.

The Court invokes this article to hold that rentals, being civil fruits, belong to the possessor in good faith, which is the administratrix restored to possession.

Ruling

On the first issue, the Court held that the trial court undoubtedly had jurisdiction, because the moneys were in court in a litigation properly within its competence, and no authority was cited to the contrary.

On the second issue, the Court found no abuse of discretion. The rentals accrued in and after December 1956, yet as early as November 1956 the court had declared and upheld the possessory right of the administratrix over the buildings, thereby overruling, temporarily at least, the claims of Tan Gin San as mortgage creditor. The right to possession includes the right to the use or the fruits thereof. Rentals are civil fruits and belong to the possessor in good faith. Moreover, and this the Court called conclusive, Tan Gin San himself considers Tan Cuan the owner of the buildings, so Tan Cuan, or his estate represented by Rosalia Tan, is entitled to the rents in the absence of better rights of Tan Gin San, which the latter has not shown.

On the third issue, the Court distinguished Rivera versus Ocampo. There, it was abuse of discretion to let one contestant take the deposited money even upon a bond, but that order was avowedly for the purpose of helping one of the claimants. Here, the withdrawal was permitted as a consequence of the court's previous order, final it seems, awarding possession of the rented premises to Rosalia Tan. A further distinction is that in Rivera the right to the money was disputed among several interested parties, whereas here the right of the owner and the possessor to the rents is reasonably clear. On the bond, the Court held that if the deposited rentals should be lost, the damage is a mere consequence of the return of possession and is chargeable against the 140,000 peso bond, which is amply sufficient to cover the credit of Tan Gin San.

Doctrine

A court that has custody of money deposited in a litigation within its competence acts within its jurisdiction in ordering its delivery, and certiorari will not lie absent grave abuse of discretion. The right to possession of property includes the right to its use and to its fruits. Rentals are civil fruits, and under Article 544 of the New Civil Code they belong to the possessor in good faith. The interpleader rule in Rivera versus Ocampo, that deposited money may not be delivered to one contestant even upon a bond, is not absolute. It yields where the order is not designed to help one claimant but follows as a consequence of a prior final order awarding possession, and where the right of the owner and possessor to the rents is reasonably clear rather than disputed among several parties. A bond posted to answer for damages arising from the return of possession secures the consequences of that return, including the loss of rents collected under it.

Disposition

The petition was denied, the injunction previously issued was dissolved, and costs were taxed against Tan Gin San, so the administratrix prevailed.

Remember This

Possession carries the fruits, and rentals as civil fruits belong to the possessor in good faith, so an order letting the party in possession withdraw deposited rents is not the abuse condemned in Rivera versus Ocampo. Examiners use this case to test the distinction between an interpleader order that helps a claimant and one that merely implements a prior final order of possession, and to test the reach of a bond posted for the return of possession.