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Article 1291. Obligations maybe modified by:
Changing their object or principal conditions;
Substituting the person of the debtor;
Subrogating a third person in the rights of the creditor.
Novation- The total or partial extinction of an obligation through the creation of a new one which substitutes it.
Novation is a contract containing two stipulations
One to automatically extinguish or modify an existing obligation.
It can also be used to substitute a new obligation in its place.
KINDS OF NOVATION
According to origin:
1. Legal - that which takes place by operation of law.
2. Conventional - that which takes place by agreement of the parties.
According to how it is constituted:
1. Express - When it is so declared in unequivocal/clear terms.
EXAMPLE:
X is obliged to Y iPhone 14. Later the parties agreed instead of an iPhone 14 cellphone. A would give an iPhone 13.
2. Implied - when the old and the new obligations are essentially incompatible with each other.
- Even if no expressed terms about novation taking place, by the implied of the operation of the law, there is the extinguishment of the obligation because of incompatibility.
EXAMPLE:
X and Y entered into a contract where X was obliged to paint Y's Toyota Car in the color green. Later on, they decided to modify the agreement and change the color to pink. However, they did not specify whether X should still paint the car green or if the new color would replace the old one.
Because the new obligation to paint the car pink is incompatible with the old obligation to paint it green, the legal compensation operates to automatically extinguish the old obligation. Therefore, X is no longer required to paint the car green and is now obligated to paint it pink instead. This substitution of obligations is a result of legal compensation.
According to the subject:
1. Real or objective - when the object (or cause) or principal conditions of the obligation are changed.
Examples:
(1) Object/cause has been changed: X and Y entered into a contract where X was obliged to give Y a necklace. However, after a week, they decided to modify the agreement and change the object of the contract to a watch instead. This change in the object of the contract is a result of legal substitution of obligations.
(2) Principal Condition has been changed: X promised to give Y a laptop computer if Y finishes at the top of his class in college of law. Later on, they modified the agreement and changed the condition to graduating/completing his degree in Bachelor of Law. This change in the principal condition is a result of legal substitution of obligations.
2. Personal or subjective - when the person of the debtor is substituted and/or when a third person is subrogated in the rights of the creditor.
- change of the parties in substitution or a third person is subrogated.
Examples:
(1) Substitution in the person of the debtor: A owes B 50,000 but is unable to pay. After negotiations, A and B agree that T will take over the debt and become the new debtor. This change in the person of the debtor is a result of legal substitution of obligations.
(2) Subrogation: A owes B 50,000 but is unable to pay. Instead of pursuing legal action, B decides to assign his credit or rights to T, who will take over the debt and become the new creditor. This change through subrogation is a result of legal substitution of obligations.
3. Mixed - when the object and/or principal conditions of the obligation and the debtor or the creditor, or both the parties, are changed.
- change in object and parties
Example:
A initially owes B 50,000. However, they later reached an agreement where T would take over A's debt, but instead of paying the 50,000 in cash, T would offer a diamond ring of equal value.
Dual Function of Novation
Novation is a contract containing two stipulations;
1. one to extinguish or modify an existing obligation
2. and the other to substitute a new one in its novation is a contract containing two stipulations; 1. one to extinguish or modify an existing obligation and the other to substitute a new one in its place
Article 1292. In order that an obligation maybe extinguished by another which substitutes the same, it is imperative that it be so declared in unequivocal terms or that the old and the new obligations be on every point incompatible with each other.
Article 1292. In order that an obligation maybe extinguished by another which substitutes the same, it is imperative that it be so declared in unequivocal terms or that the old and the new obligations be on every point incompatible with each other.
REQUISITES OF NOVATION.
1. A previous valid obligation.
- It must be valid
2. Capacity and intention of the parties to modify or extinguish the obligation.
- The parties should not be incapacitated
- Parties who are incapacitated in entering into contracts cannot extinguish an obligation by the means of novation.
- Free disposal of the thing due and not incapacitated to enter into a contract
- There is an intention to modify or extinguish the old obligation
3. The modification or extinguishment of the obligation.
4. The creation of a new valid obligation.
-Validity of new obligation for novation to take place
Novation is Not Presumed. It must be clearly and unmistakably established either by the express agreement of the parties or acts of equivalent import or by the incompatibility of the two obligations with each other in every material aspect.
Article 1293. Novation which consists in substituting a new debtor in the place of the original one, may be made even without the knowledge or against the will of the latter, but not without the consent of the creditor. Payment by the new debtor gives him the rights mentioned in Articles 1236 and 1237.
Article 1293. Novation which consists in substituting a new debtor in the place of the original one, may be made even without the knowledge or against the will of the latter, but not without the consent of the creditor. Payment by the new debtor gives him the rights mentioned in Articles 1236 and 1237.
2 Kinds:
1. Substitution- when the person of the debtor is substituted; a third person will take place of the debtor
2. Subrogation- when a third person is subrogated in the rights of the creditor
TWO KINDS OF PERSONAL NOVATION
1. Substitution- when the person of the debtor is substituted; a third person will take place of the debtor.
2. Subrogation- A third person is subrogated in the rights of the creditor.
KINDS OF SUBSTITUTION
1. Expromission
Takes place when a third person of his own initiative and without the knowledge or against the will of the original debtor assumes the latter’s obligation with the consent of the creditor.
Payment by the new debtor gives him the right to beneficial reimbursement
Must come from a third person initiating/proposing
Original debtor is released from the obligation
Example:
Initially, Person X found themselves burdened with a debt of 10,000 owed to Person Y. However, after some negotiations, a mutually beneficial agreement was reached. This agreement involved a substitution of the debtor, where a third person, Person Z, would assume the debt on behalf of Person X. Instead of following the conventional method of repaying the owed amount in cash, Person Z proposed an alternative solution. They suggested paying the debt on behalf of Person X without their knowledge or against their will. As a result, Person X is released from liability, and Person Z has the right to be reimbursed the 10,000 they paid.
2. Delegacion
Takes place when the creditor accepts a third person to take place of the debtor at the instance of the debtor.
Here, all the parties, the old debtor, the new debtor, and the creditor must agree.
If the payment was made with the consent of the original debtor or on his own initiative, the new debtor is entitled to reimbursement and subrogation. (ART. 1237)
The old debtor initiates/propose the substitution to the creditor.
Ratification - giving consent to an agreement
Example:
Initially, Person X found themselves burdened with a significant debt of 10,000 owed to Person Y. However, after some intense negotiations, a mutually beneficial agreement was reached. This agreement involved a substitution of the debtor, where a third person, Person Z, would graciously assume the debt on behalf of Person X. Instead of following the conventional method of repaying the owed amount in cash, Person Z proposed an ingenious alternative solution. They suggested paying off the debt on behalf of Person X without their knowledge or against their will. As a result, Person X is now completely released from any liability, and Person Z has rightfully earned the right to be reimbursed the $50,000 they selflessly paid. This arrangement not only relieves Person X from their financial burden but also ensures that Person Y receives the full amount owed to them.
Article 1294. If the substitution is without the knowledge or against the will of the debtor, the new debtor’s insolvency or nonfulfillment of the obligation shall not give rise to any liability on the part of the original debtor.
Article 1294. If the substitution is without the knowledge or against the will of the debtor, the new debtor’s insolvency or nonfulfillment of the obligation shall not give rise to any liability on the part of the original debtor.
Effect of insolvency of the new debtor or non-fulfillment of the obligation in expromision.
It will not revive the action of the creditor against the old debtor whose obligation is extinguished by the assumption of the debt by the new debtor.
Remember, in expromision, the replacement of the debtor is not made at his own initiative.
The creditor cannot go after the old debtor if the third person is insolvent.
EXAMPLE:
Ana owes Ben P100,000. Thirdy offered to Ben that he would settle Ana's debt, and Ben accepted this offer, which effectively relieves Ana of her obligation. However, when Ben later asked Thirdy for the payment, Thirdy was unable to do so because he was insolvent. Consequently, Ben is unable to pursue legal action against Ana.
Article 1295. The insolvency of the new debtor, who has been proposed by the original debtor and accepted by the creditor, shall not revive the action of the latter against the original obligor, except when said insolvency was already existing and of public knowledge, or known to the debtor, when he delegated his debt.
Article 1295. The insolvency of the new debtor, who has been proposed by the original debtor and accepted by the creditor, shall not revive the action of the latter against the original obligor, except when said insolvency was already existing and of public knowledge, or known to the debtor, when he delegated his debt.
Effect of New Debtor’s Insolvency or Non-fulfillment of the Obligation in Delegacion.
The insolvency of the new debtor in case of delegacion, will not revive the obligation of the original debtor.
Effect of New Debtor’s Insolvency or Non-fulfillment of the Obligation in Delegacion.
The insolvency of the new debtor in case of delegacion, will not revive the obligation of the original debtor
GENERAL RULE: the old debtor is not liable to the creditor
Except:
1) the insolvency was already existing and of public knowledge (although it was not known to the old debtor) at the time of the delegacion; or
2) the insolvency was already existing and known to the old debtor (although it was not of public knowledge) at the time of delegacion.
EXAMPLE:
Dada owes Elaine 3,000 pesos. Dada suggested that Faith replace her as the debtor. If, at the time of this substitution, Faith was already insolvent, but this insolvency was not publicly known or known to Dada, Dada is not held responsible. Similarly, Dada is not liable if Faith's insolvency occurred after she took over the debt. However, if Faith's insolvency was either publicly known or known by Dada, Dada would still be responsible for the debt to Elaine.
Article 1296. When the principal obligation is extinguished in consequence of a novation, accessory obligations may subsist only insofar as they may benefit third persons who did not give their consent.
Article 1296. When the principal obligation is extinguished in consequence of a novation, accessory obligations may subsist only insofar as they may benefit third persons who did not give their consent.
Effect of Novation on Accessory Obligations.
When the principal obligation is extinguished in consequence of a novation, accessory obligations may subsist only insofar as they may benefit third persons who did not give their consent.
GENERAL RULE: The extinguishment of obligation by way of novation carries with it the extinguishment of the accessory obligations.
EXCEPTION: if the accessory obligation created in favor of a third person which remains in force unless said third person gives his consent to the novation.
REASON: a person should not be prejudiced by the act of another without his consent.
The accessory obligation will remain in force if it is for the benefit of a third person who did not give his consent.
The stipulation is made for the benefit of the third person who did not consent, accessory obligation will remain.
Stipulation for Pour Autrui is an accessory obligation which is created in favor of a third person, such that, if that stipulation in favor of a third person, the extinguishment of the principal obligation because of novation will not extinguish the accessory obligation, which is now the stipulation for Pour Autrie.
Since the stipulation in favor of a third person, then it would remain in force.
EXAMPLE:
Gavin owes Harold P1,000.00 with a 12% interest rate, while Harold owes Ian P120.00. The parties agreed that Gavin would pay the P120.00 interest to Ian, creating a stipulation in favor of a third party, Ian, as per Article 1311,par 2.
Later, Gavin and Harold entered into a new contract in which Gavin would provide Harold with an air conditioner as payment for the loan. Despite this novation, the obligation to pay the P120.00 interest to Ian remains in effect unless Ian consents to the novation.
Article 1297. If the new obligation is void, the original one shall subsist, unless the parties intended that the former relation should be extinguished in any event.
Article 1297. If the new obligation is void, the original one shall subsist, unless the parties intended that the former relation should be extinguished in any event.
Effect Where the New Obligation Void.
If the new obligation is void, the original one subsists/remains to be valid unless the parties intended that the former relation should be extinguished in any event.
EXCEPTION: where the parties intended that the old obligation should be extinguished in any event.
The rule is that there is no novation if the new obligation is void.
The original one shall subsist for the reason that the second obligation being inexistent, it cannot extinguish or modify the first.
EXAMPLE:
Jan owes Kin Php 1,000. Since Jan is unable to repay the debt, they both agreed to a new contract in which Jan would undertake illegal actions, such as kidnapping and killing Kin's enemy, in exchange for clearing his debt. However, the original debt between Jan and Kin will remain in force because the new agreement is void due to its violation of the law.
Article 1298. The novation is void if the original obligation was void, except when annulment may be claimed only by the debtor, or when ratification validates acts which are voidable.
Article 1298. The novation is void if the original obligation was void, except when annulment may be claimed only by the debtor, or when ratification validates acts which are voidable.
Effect Where the Old Obligation Void or Voidable.
If the old obligation void, the novation is also void because a void obligation cannot be novated because there is nothing to novate. But if it is only voidable or validated by ratification the novation is valid.
A void former obligation cannot be novated because there is nothing to novate.
EXAMPLE:
Lanie initially agreed to provide Melai with cocaine. Subsequently, they reached a new agreement in which Lanie would compensate Melai with P100,000 instead of delivering the cocaine. This novation is invalid because the original obligation, involving the illegal substance cocaine, is also void.
Article 1299. If the original obligation was subject to a suspensive or resolutory condition the new obligation shall be under the same condition, unless it is otherwise stipulated.
Article 1299. If the original obligation was subject to a suspensive or resolutory condition the new obligation shall be under the same condition, unless it is otherwise stipulated.
Presumption where original obligation subject to a condition.
If the original obligation is conditional (whether the condition is suspensive or resolutory) the novation must also be conditional the fulfillment (resolutory) or non-fulfillment (suspensive) of the condition affects the subsequent obligation the previous obligation is placed in the same category as a void obligation or an obligation which has already been extinguished.
If the suspensive condition is not fulfilled, the novation is valid; otherwise, it is not if obligations subject to different conditions.
If the conditions affecting both obligations can stand together, and they are all fulfilled, the effect is that the new obligation becomes demandable;
If only the condition affecting the first obligation is fulfilled, the previous obligation is revived, while the new obligation loses its force.
If only the condition affecting the second obligation is fulfilled, the effect is that there is no novation since the requisite of a previous valid and effective obligation would be lacking.
If the conditions affecting both obligations are incompatible with each other, it is evident that the effect of such incompatibility is the extinguishment of the first obligation so that only one obligation remains — the new obligation whose demandability or effectivity shall depend upon the fulfillment or non-fulfillment of the condition affecting it.
EXAMPLE:
Nina and Olive made a deal that if Olive successfully graduated from college, Nina would reward her with an iPhone 13. However, they later decided to change the terms of the agreement, opting to give Olive an iPhone 10 instead. The original obligation to provide an iPhone 13 was discharged because both parties agreed to the new condition of providing an iPhone 10.
Article 1300. Subrogation of a third person in the rights of the creditor is either legal or conventional. The former is not presumed, except in cases expressly mentioned in this Code; the latter must be clearly established in order that it may take effect.
Article 1300. Subrogation of a third person in the rights of the creditor is either legal or conventional. The former is not presumed, except in cases expressly mentioned in this Code; the latter must be clearly established in order that it may take effect.
SUBROGATION
Definition: the substitution of one person in the place of another with reference to a lawful claim or right, so that he who is substituted succeeds to the right of the other in relation to a debt or claim, including its remedies and securities. It contemplates full substitution such that it places the party subrogated in the shoes of the creditor, and he may use all means which the creditor could employ to enforce payment. (Loren-zo Shipping Corp. vs. Chubb and Sons, Inc., 431 SCRA 266 [2004].)
Note: A subrogee cannot succeed to a right not possessed by the subrogor.
Kinds:
From the viewpoint of cause or origin:
a. Conventional or Voluntary Subrogation — when it takes place by express agreement of the original parties (the debtor and the original creditor) and the third person (the new creditor) (Art. 1301.); or
b. Legal Subrogation — when it takes place without agreement but by operation of law. (Art. 1302.)
From the viewpoint of extent:
a. Total subrogation
b. Partial subrogation (there would be now two or more creditors)
Note: Conventional subrogation must be clearly established in order that it may take place. (Arts. 1292, 1300.) Legal subrogation is not presumed except in the cases expressly provided by law. (Art. 1302.)
Article 1301. Conventional subrogation of a third person requires the consent of the original parties and of the third person.
Article 1301. Conventional subrogation of a third person requires the consent of the original parties and of the third person.
Conventional or Voluntary Subrogation
For conventional or legal subrogation, the consent of ALL the parties is an essential requirement:
the debtor — because he becomes liable under the new obligation to a new creditor; and because his old obligation ends.
the old or original creditor — because his credit is affected and his right against the debtor is extinguished.
the new creditor — because he becomes a party to the obligation and may dislike or distrust the debtor.
Conventional Subrogation and Assignment of Credit Distinguished
Articles 1300 and 1301 do not exclude the power of the creditor (assignor) to transmit his rights without the consent of the debtor to another (assignee) who would then have the right to proceed against the debtor. In this case, there is assignment of credit (see Arts. 1624-1635.) but no subrogation.
ASSIGNMENT OF CREDIT
Definition: the process of transferring the right of the assignor to the assignee who would then have the right to proceed against the debtor. The assignment may be done gratuitously or onerously, in which case, it has an effect similar to that of a sale.
ASSIGNMENT OF CREDIT
(a) there is a transfer of the SAME credit which (the transfer did not extinguish the credit)
(b) does not require the consent of the debtor (mere notification to him would suffice)
(c) the effects with respect to the debtor begin from the date of notification
(d) the nullity or defects in the credit or right is not cured simply by assigning the same, because only the correlative right of the obligation is transmitted
CONVENTIONAL SUBROGATION
(a) a credit is extinguished and another appears
(b) requires the consent of the debtor so that it may fully produce legal effects
(c) effects begin from the time of novation itself, that is, from the moment all the parties have given their consent
(d) the nullity or defects of the old obligation may be cured by the novation or in such a way that the new obligation becomes entirely valid
Article 1302. It is presumed that there is legal subrogation:
When a creditor pays another creditor who is preferred, even without the debtor’s knowledge;
When a third person, not interested in the obligation, pays with the express or tacit approval of the debtor;
When, even without the knowledge of the debtor, a person interested in the fulfillment of the obligation pays, without prejudice to the effects of confusion as to the latter’s share.
Cases of legal subrogation.
In the three cases enumerated, subrogation takes place by operation of law even without the consent of the parties. Note that the subrogation is produced from payment which may be with or without the debtor’s knowledge or approval.
(1) “When a creditor pays another creditor who is preferred, even without the debtor’s knowledge.”
Example:
Hinata has two credits: one from Tobio, amounting to P1,250,000.00 which is secured by a mortgage on his land, another one from Kei, who is an ordinary creditor for P2,000,000.00. Kei, without the knowledge of Hinata, paid in full Hinata's debt from Tobio. In this case, Kei will be subrogated in the rights of Tobio. For this reason, Kei will himself now be a mortgage creditor amounting to P1,250,000.00, the same way as an ordinary creditor for P2,000,000.00. In the case if Hinata fails to pay his P1,250,000.00 debt, Kei can have the mortgage land foreclosed (this means, the land can be sold at public auction in which Kei can be paid from the proceeds thereof).
Note: Even if Kei paid with the knowledge of Hinata, the answer remains the SAME.
(2) “When a third person, not interested in the obligation, pays with the express or tacit approval of the debtor.”
Example:
Suppose in the same example, Kei is a friend of Hinata who has no connection with the contract between Hinata and Tobio yet paid in full the P1,250,000.00 debt with the approval of Hinata himself. With this, Kei is subrogated in the rights of Tobio.
(3) When, even without the knowledge of the debtor, a person interested in the fulfillment of the obligation pays, without prejudice to the effects of confusion as to the latter’s share.
Examples of persons “interested”:
a guarantor
the owner of the property mortgaged as security for the debtor’s debt
Examples:
(1) Using the same from the previous example, but in this case, Kei is a guarantor of Hinata. Kei as a person interested in the fulfillment of the obligation of Hinata for he will benefit by its extinguishment paid Tobio in full amount of P1,250,000.00, even without Hinata’s knowledge. With this, Kei is subrogated in Tobio’s place. Certainly, the guaranty is extinguished but the principal obligation still subsists. This is what the law pertains to regarding legal subrogation “without prejudice to the effects of confusion as to the latter’s (payor’s) share in the obligation.”
(2) Hinata and Kei are joint debtors of Tobio for the amount of P2,000,000.00. Without the knowledge of Hinata, Kei paid the debt in full. For this reason, Kei becomes a creditor of Hinata for P1,000,000.00, his share of the debt but not for the other P1,000,000.00, for which it is the portion of the debt which corresponds to Kei, which is extinguished by confusion or merger of rights.
Article 1303. Subrogation transfers to the person subrogated the credit with all the rights thereto appertaining, either against the debtor or against third persons, be they guarantors or possessors of mortgages, subject to stipulation in a conventional subrogation.
Article 1303. Subrogation transfers to the person subrogated the credit with all the rights thereto appertaining, either against the debtor or against third persons, be they guarantors or possessors of mortgages, subject to stipulation in a conventional subrogation.
Effect of legal subrogation
The credit and all the rights and actions, either against the debtor, or against third persons, be they guarantors or mortgagors, are transferred (hence, in the sense obligation remains exist, that is, it has not yet been extinguished or paid).
Example of the Effects of Subrogation:
Anthony is indebted to Benedict for P75,000.00. Colin is the guarantor. A stranger named Simon paid Benedict, in full amount, with the approval of both Anthony and Benedict. Simon is now subrogated in Benedict’s place. If the debtor Anthony cannot pay the P75,000.00, Simon can proceed against the guarantor, Colin.
Effect of Presence of a Suspensive Condition
This implies that if the transferred credit is subject to a suspensive condition, the new creditor cannot collect until after said condition is fulfilled.
Article 1304. A creditor, to whom partial payment has been made, may exercise his right for the remainder, and he shall be preferred to the person who has been subrogated in his place in virtue of the partial payment of the same credit.
Article 1304. A creditor, to whom partial payment has been made, may exercise his right for the remainder, and he shall be preferred to the person who has been subrogated in his place in virtue of the partial payment of the same credit.
Effect of partial subrogation
There are two creditors:
the old creditor who still remains a creditor as to balance of the debt (since only partial payment has been made to him). In case of insolvency of the debtor, he is given a preferential right under the above article to recover the remainder as against the new creditor;
the new creditor who is a creditor to the extent of what he had paid the creditor.
Example:
Ms. Beckett owes P150,000.00 cash from Mr. Darcy. Half of the debt was paid by Mr. William as approved by Ms. Beckett. There is a partial subrogation as to the amount of P5,000.00. With the balance amounting to P5,000.00, Mr. Darcy remains the creditor. With this, two credits subsist. In case of Ms. Beckett’s insolvency, Mr. Darcy is preferred to Mr. William. For this reason, Mr. Darcy shall be paid from Ms. Beckett’s asset ahead of Mr. William.
Nature of original creditor’s right of preference
The principles which govern preference between creditors under the Civil Code must be kept in mind. (Arts. 2236-2251.) The preference is only in the assets remaining with the debtor (not those already transferred to others. Preference creates simply a right of one creditor to be paid first the proceeds of the sale of property as against another creditor. It creates no lien on property and, therefore, gives no interest in property, specific or general, to the preferred creditor, but a preference in application of the proceeds after the sale. Therefore, the old creditor must assert his claim or preference over the assets only while they are still in the hands of the sheriff who has levied on the properties. If done later, the preference given to him by this article CEASES. (Molina vs. Somes,31 Phil. 76 [1915].)
Illustrative Case:
Abandonment by judgment creditor of his claim of preference in satisfying his credit out of property of debtor by releasing his levy and returning the property to him.
Facts: B and C each had a judgment against A (C by subrogation). The controversy between the two arose when it became necessary to determine whose judgment was entitled to preference with respect to the proceeds of the sale of certain specific property of the judgment debtor A, then in the hands of the sheriff, by virtue of an execution levied under B’s judgment. C was awarded judgment by the lower court declaring that he was entitled to preference. (Molina vs. Somes, 15 Phil. 133 [1910], supra.) B appealed, and, at that time or sometime prior thereto, released the levy under his judgment, and the property, which was the subject of the levy, was returned to A. Thereupon, C levied an execution of A’s property, and which was duly sold in accordance with law. The proceeds of the sale were turned over to him by the sheriff after deducting expenses and fees. B made no attempt to intervene in the proceedings to sell or to present to the sheriff a claim of preference with respect to the proceeds of the sale.
Subsequently, B secured a reversal of the judgment from which he had taken appeal.
Issue: Has B the right of preference over the property of A which had been levied upon and sold, or its equivalent?
Held: No. An action cannot be maintained to declare a preference either in the general or specific property of a debtor. It must relate to the proceeds of the sale of specific property of the debtor which has been seized by one creditor to satisfy his debt and as to which another creditor is urging his rightly of priority of payment. Preference consists merely in the right to be paid first, out of specific property, not a right to be paid first out of the general property of the debtor.
In this case at bar, B, instead of maintaining his levy, voluntarily released it and returned the property to A. This was in effect, an abandonment by B of any claim of preference, if one had ever been asserted by him. The moment that A received the property from the sheriff he had absolute control of it. He could sell it to whom he pleased and turned the money received therefrom over to C in payment of his judgment, or he could have turned the property over to C as payment or part payment of the judgment. B, having failed to present his claim to the sheriff or having neglected to take some other appropriate proceedings to establish against C his right of preference, and having permitted distribution of the proceeds of the sale without objection or intervention, lost his right of preference over A’s property sold under C’s execution. (Molina vs. Somes, 31 Phil. 76 [1915].)
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