CHARTERED BANK OF INDIA, AUSTRALIA AND CHINA, PLAINTIFF AND APPELLEE, VS. DIONISIO CONSTANTINO AND 111 OTHERS, DEFENDANTS AND APPELLANTS.

On November 26, 1929, the Pananbutan Lumber & Plantation Company sold and
delivered to the Chartered Bank of India, Australia & China a considerable
quantity of lumber. However, on December 11, 1929, when the bank attempted to
export approximately 250,000 board feet of the lumber purchased by it from the
Pananbutan Lumber & Plantation Company, the bank was prevented from doing so
by the employees of the lumber company. The bank was then compelled to commence
an action in the Court of First Instance of Zamboanga, asking for the issuance
of a writ of injunction to enjoin the employees of the lumber company from
interfering with or impeding the bank in the exportation of the said lumber.
Upon the filing of a bond, the preliminary injunction was issued. Defendants’
answer to the complaint in that action prayed that the injunction be dissolved;
that plaintiff’s complaint be dismissed, with costs; and that the plaintiff be
ordered to pay the defendants the sum of P30,495.91, representing unpaid
salaries and wages for October, November, and a part of December, 1929, with
legal interest. From a judgment sustaining the legality of the issuance of the
injunction and absolving the plaintiff from defendants’ counterclaim, the
latter, 112 individuals in all, have taken this appeal.

It should further be explained that during the same period of time, the
employees of the Pananbutan Lumber & Plantation Company instituted an action
in the Court of First Instance of Zamboanga against their employer, the
Pananbutan Lumber & Plantation Company, to recover from it their unpaid
salaries and wages aggregating thirty odd thousand pesos. The Pananbutan Lumber
& Plantation Company was later declared in default and judgment was rendered
against it for the amount claimed by the said employees. The deplorable
situation of these employees will thus be understood, for they hold a judgment
against their employer undoubtedly of no monetary value, while the lumber
formerly owned by their employer has been transferred to the Chartered Bank of
India, Australia & China.

Counsel for the defendants submits two propositions, based respectively on
articles 1600 and 1922, paragraph 1, of the Civil Code. The first cited codal
article provides that: “Any person who has done work on personal property is
entitled to retain the same as a pledge until he is paid.” Here it is conceded
that the employees of the Pananbutan Lumber & Plantation Company have done
work on lumber, and that they«have not been paid for their work. On the other
hand, it is equally certain that the defendants were salaried employees and not
artisans paid for specific work done on personal property. The defendants were
paid for actual services rendered independent of the quality or quantity of the
finished product of their labor. Accordingly, article 1600 of the Civil Code is
not applicable, for the reason that salaried employees do not come within its
purview. Counsel for the appellants in his latest memorandum appears in a way to
concede the correctness of this view, but attempts to draw a distinction between
the right of a servant to retain the property of his master no matter of what
class, and the right of the servant to retain the property of his master on
which the servant has directly labored. But the distinction is more fancied than
real, and the basic principle of the civil law must be enforced.

On this point, the distinguished commentator Manresa in referring to article
1588 of the Civil Code has the following to say:

“The second class of lease of work and services according to the code is the
subject of the present section. The purpose of this lease is the performance of
work by contract or for a fixed price.

“The code does not begin by giving a general idea of the subject matter, but
by fixing its two distinguishing characteristics.

“But such an idea was not absolutely necessary, because the difference
between the lease of work by contract or for a fixed price and the lease of
services of hired servants or laborers is sufficiently clear. In the latter, the
direct object of the contract is the lessor’s labor; the acts in which such
labor consists, performed for the benefit of the lessee, are taken into account
immediately. In work done by contract or for a fixed price, the lessor’s labor
is indeed an important, a most important factor; but it is not the direct object
of the contract, nor is it immediately taken into account. The object which the
parties consider, which they bear in mind in order to determine the cause of the
contract, and upon which they really give their consent, is not the labor but
its result, the complete and finished work, the aggregate of the lessor’s acts
embodied in something material, which is the useful object of the contract.

“Hence, Laurent aptly notes this difference: in treating of the lease of
services of hired laborers, the law does not speak of risks, for the workman
never assumes them; the workman is paid for the labor he performs, whatever the
result of the work assigned to him, and even should it be destroyed by accident.
But in the lease in question, the price is stipulated taking into consideration
not the labor, but the finished work; the price is not payable until the work is
completed and accepted, and the same cannot lawfully be demandad if the work is
destroyed before it is finished and accepted.

“We do not think it necessary to distinguish further between the lease of
work by contract or for a fixed price and that other lease dealt with in the
preceding section.” (Manresa, Comentarios al Codigo Civil, vol. X, 3d ed.,
pp. 774, 775.)

It is, therefore, plain that the defendants cannot successfully invoke the
provisions of article 1600 of the Civil Code. Neither do we think that article
1922, paragraph 1, can prove of any avail to them. This paragraph provides :

“ART. 1922. With respect to determinate personal property of the debtor, the
following are preferred:

“1. Credits for the construction, repair, preservation, or purchase price of
personal property in the possession of the debtor, to the extent of the value of
the same.” But in the case before us the fact is that the credits of the
employees do not fall within any of the clauses of the article. The bank is a
bona fide purchaser which takes the property free from any lien. (Pena
vs. Mitchell [1908], 9 Phil., 587; Meyers vs. Thein [1910], 15 Phil.,
303.)

Before closing, it must be emphasized in a more direct manner that the
defendants have attempted to hinder the culmination of a commercial transaction
by taking the law into their own hands. Instead, in due season, they should have
resorted to a legal remedy. For instance, no judicial proceedings to determine
the priority of one creditor of the Pananbutan Lumber & Plantation Company
against another have been initiated. But the record discloses that the manager
of the Zamboanga branch of the bank offered to pay the wages of the employees of
the Pananbutan Lumber & Plantation Company for the month of October, 1929,
and it may be that, notwithstanding the trouble caused by the employees, the
bank would again make good on this offer. However, this would be simply an act
of grace, for legally speaking it has been conclusively demonstrated that the
bank had a right to obtain an injunction.

The judgment appealed from will be affirmed, without special pronouncement as
to costs in this instance.

Avanceña, C. J., Street, Villamor, Romualdez, Villa-Real, and
Imperial, JJ., concur.