Luzon Lumber vs. Quiambao

11/8/2019 PHILIPPINE REPORTS ANNOTATED VOLUME 94
[No. L-5638. March 30, 1954]
LUZON LUMBER and HARDWARE COMPANY, INC.,

plaintiff and appellee, vs. MANUEL QUIAMBAO,
VIRGINIA SANTIAGO, AND REHABILITATION
FINANCE CORPORATION, defendants.
REHABILITATION FINANCE CORPORATION,
defendant and appellant.
1. OBLIGATIONS AND CONTRACTS; CREDITS;

REFECTIONARY CREDITS INTERPRETED.—Under
our jurisprudence, the term or phrase refection credits
(refaccionarios) used or employed in article 1923 of the old
Civil Code refers to and includes not only materials used
for repair or reconstruction, but those used for new
construction as well.
2. ID.; ID.; ID.; ID.; REFECTION CREDIT, NOT A NEW

RIGHT; CIVIL CODE OF 1889 GOVERNS.—The lien of
one furnishing building materials used in a building or
construction, whether old or new, comes under article
1923 of the old Civil Code, and not under article 1922 of
the same Code. Since refection credit is provided for and
included in the old Civil Code of 1889, said lien (refection
credit) is not a right granted for the first time under
article 2242 (4) of the new Civil Code (Republic Act 386) so
as to come under the contemplation of article 2253 in the
sense that the provisions of the new Civil Code should
govern it although the acts or events which gave rise
thereto may have occurred under the old Civil Code.
3. ID.; ID.; ID.; MORTGAGE CREDIT; PREFERENCE OF

CREDITS GOVERNED BY THE OLD CIVIL CODE.—
The deed of mortgage having been recorded in 1948 and
the building materials having been furnished in 1948 and
1949, that is to say, before the
664
664 PHILIPPINE REPORTS ANNOTATED
www.central.com.ph/sfsreader/session/0000016e44f36ed3771a19aa003600fb002c009e/t/?o=False 1/17
Luzon Lumber & Hardware Co., Inc. vs. Quiambao, et al.
promulgation of the new Civil Code in 1950, the preference

of credits or liens has to be governed by the old Civil Code.
4. ID.; ID.; ID.; MORTGAGE CREDIT INCLUDING NEW

OR FUTURE IMPROVEMENTS ON REGISTERED
LAND, WHEN VESTED; ENJOYS PREFERENCE OVER
REFECTION CREDIT.—When a mortgage is made to
include new or future improvements on registered land,
said lien attaches and vests not at the time said
improvements are constructed but on the date of the
recording and registration of the deed of mortgage. The
mortgage lien of the Rehabilitation Finance Corporation
on all the improvements, having vested on the day and
hour the mortgage was registered—about one month
before plaintiff began furnishing materials for
construction—it enjoyed preference over the refection
credit of plaintiff in point of time.
APPEAL from a judgment of the Court of First Instance of

Tarlac. De Aquino, J.
The facts are stated in the opinion of the Court.
Sixto de la Costa for appellant.
Jose M. Ruiz for appellee.
MONTEMAYOR, J.:
Manuel Quiambao and his wife Virginia Santiago,
owners of three lots in the province of Tarlac covered by
Certificates of Title Nos. 22607, 4217 and 4218, mortgaged
the said lots on July 20, 1948, in favor of the Rehabilitation
Finance Corporation (RFC) to secure the payment of a loan
in the amount of P37,000 which sum was to be spent for
the construction of two buildings,—one for a hotel and the
other for residence. The mortgage was registered on
September 13th of the same year. The two buildings were
subsequently constructed on the lot covered by Certificate
of Title No. 22607. Upon violation of the terms of the
mortgage the RFC foreclosed the same and in the auction
sale, said RFC as highest bidder was awarded the
mortgaged properties for the total sum of P31,000 followed
by the issuance of the corresponding Transfer Certificates
of Title. The hotel and residence buildings were valued at
P18,000 and P4,000, respectively.
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VOL. 94, MARCH 30, 1954 665

Luzon Lumber & Hardware Co., lnc. vs. Quiambao, et al.
In the edification of the two buildings the spouses bought

on credit construction materials valued at about P7,000
from the plaintiff Luzon Lumber & Hardware Co. Said
building materials were furnished by the lumber company
between October 1948 and March 1949. Only P3,500 of this
amount was paid, leaving an unpaid balance of P3,456.50.
To recover this balance including interests and attorney's
fees the lumber company filed this suit against the spouses,
the complaint being later amended so as to include the
RFC as party defendant. According to the RFC said
amendment was made about a week af ter the auction sale
of the foreclosed properties. After hearing, the Court
of.First Instance of Tarlac rendered judgment ordering the
defendant spouses Manuel and Virginia to pay to the
plaintiff lumber company the sum of P3,456.49 with legal
interests and in default of such payment by them, the RFC
was ordered to pay to plaintiff out of the proceeds of the
sale of the hotel and the house, the said sum of P3,456.49
together with. the corresponding legal interests thereon.
The RFC is appealing from that decision with the following
assignment of errors:
FIRST ERROR
The trial court erred in finding that the preference of plaintiff's

credit is declared for the first time in the new Civil Code, and in
consequently deciding that the order of preference therein should
govern.
SECOND ERROR
The trial court erred in finding that while plaintiff's credit is

declared for the first time in the new Civil Code and that it
prejudices or impairs a "vested right", it should, nevertheless,
prevail over appellant's because both rights are not "of same
origin".
THIRD ERROR
The trial court erred in ordering the appellant, upon default of

the defendants-spouses, to deliver to the appellee the sum the
latter claims as the balance of the unpaid purchase price due from
said spouses.
666

The theory of the plaintiff, which theory was upheld by the

trial court is that its credit enjoyed preference over that of
the mortgage credit of the RFC under articles 2242 and
2253 of the new Civil Code (Republic Act No. 386) which for
purposes of reference we are reproducing below.
"ART. 2242. With reference to specific immovable property and

real rights of the debtor, the following claims, mortgages and liens
shall be preferred, and shall constitute an encumbrance on the
immovable or real right:
* * * * * * *
(4) Claims of furnishers of materials used in the construction,

reconstruction, or repair of buildings, canal or other
works, upon said buildings, canals or other works;
(5) Mortgage credits recorded in the Registry of Property,
upon the real estate mortgaged;
* * * * * * *
"ART. 2253. The Civil Code of 1889 and other previous laws
shall govern rights originating, under said laws, from acts done or
events which took place under their regime, even though this
Code may regulate them in a different manner, or may not
recognize them. But if a right be declared for the first time in this
Code, it shall be effective at once, even though the act or event
which give rise thereto may have been done or may have occurred
under the prior legislation, provided said new right does not
prejudice or impair any vested or acquired right, of the same
origin."
The trial court further held that the credit of the plaintiff
enjoyed preference over the mortgage credit of the RFC in
point of time, because the mortgage lien of the RFC vested
only after the construction of the two buildings while the
lien of the plaintiff vested immediately at the moment it
furnished the materials. And as to the proviso found in the
last part of article 2253 of the new Civil Code referring to
vested rights of the same origin, said court ruled that the
origins of the two credits were different and distinct, the
origin of the credit of the
667
VOL. 94, MARCH 30, 1954 667

plaintiff being that of purchase and sale while that of the

RFC was a contract of mortgage.
After a careful study of the case we are constrained to

agree with the counsel of the appellant RFC that the two
articles in the new Civil Code above reproduced may not be
applied in the instant case for the reason that the credit of
the plaintiff is not a new right or one declared for the first
time, a condition required by Article 2253 of the new Civil
Code for its enforcement and application, because said
right was already provided for by article 1923 of the old
Civil Code particularly paragraphs 3 and 5 which read as
follows:
"3. Mortgage and refection credits entered and

recorded in the Registry of Deeds, with respect to
the property mortgaged, or which has been the
subject-matter of the refection;"
"5. Refection credits not entered or recorded, with
respect to the real estate upon which the refection
was made, and only with respect to other credits
different from those mentioned in the four next
preceding paragraphs."
The question now to be decided is whether the furnishing of

lumber and building materials by the plaintiff for the
construction of the two buildings of the spouses falls under
refection credit mentioned in paragraphs 3 and 5 above
reproduced. The RFC contends and we agree to its
contention that it is so included. In the case of Director of
Public Works vs. Sing Juco, 53 Phil., 205, this Court thru
Justice Street said that in a precise and technical sense,
refectionary credit is primarily an indebtedness incurred in
the repair or reconstruction of something and does not
ordinarily include an entirely new work, but that Spanish
jurisprudence appears to have sanctioned in certain cases
this broader view to include a new work or construction.
The word "refaccionario" from which come the English
translation of "refectionary" is derived from the Latin verb
"refacio", "refacere", meaning "rehacer" which implies the
idea of reconstruction or repair for reason of destruction or
deterioration. As already said,
668

that was the original idea of the word "refectionary". The

liberal interpretation of the refectionary credit to include
new construction is upheld in the ENCICLOPEDIA
JURÍDICA ESPAÑOLA, p. 890, from which we quote with

favor the following:
"En el orden civil, los términos de la cuestión son diferentes; el

crédito refaccionario, a pesar de su verdadera finalidad, de
acuerdo con la significación etimológica, esta permitido para obra
nueva, pues la ley de Partida emplea las palabras "fazer' y
"refazer', la jurisprudencia sanciona casos de obra nueva, y el
Código civil, sin distinguir, otorga prelación al crédito de carácter
refaccionario, y en consecuencia, sea por obra nueva o por
reconstrucción de obra anterior."
And this view is shared by our Code Commission which

prepared the new Civil Code. In its Report on the proposed
Civil Code of the Philippines (now our new Civil Code)
which went into effect in 1950, referring to article 2242 of
the new Code, it said that the new encumbrances in said
article are Nos. 2, 3, 6, 7 and 9, meaning to say that
paragraph 4 referring to claims of furnishers of materials
used in the construction, reconstruction or repair of
building which as invoked by the plaintiff and applied by
the trial court is not a new provision, clearly implying that
it was already provided for in article 1923, paragraphs 3
and 5 under refectionary credits. This liberal view and
interpretation of refectionary credit is in consonance with
principles of justice and fairness, for there seems to be no
valid reason why one furnishing material for purposes of
repair or reconstruction should be given preference while
another furnishing material on new construction is not
given the same consideration.
With respect to the holding of the trial court that in
point of time the credit of the plaintiff enjoys priority over
that of the RFC for the reason that according to said court
the lien of the plaintiff vested when the materials were
furnished while the mortgage credit of the RFC vested only
when the buildings were constructed, we must
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VOL. 94, MARCH 30, 1954 669

not forget that according to the facts of the case the loan of
P37,000 was given to the spouses to construct the two
buildings, and that under the terms of the deed of
mortgage, not only the lots but also all the improvements
now existing or which may hereafter be constructed on the
mortgaged property are included. In other words, the
mortgage in favor of the defendant RFC not only enjoyed

the presumption provided by law (Art. 1877 of the old Civil
Code, now article 2127 of the new Civil Code and articles
110 and 111 of the Spanish Mortgage Law) that a mortgage
includes all improvements on the land mortgaged when the
obligation falls due, but there was an express stipulation to
include all buildings and improvements thereafter to be
constructed on the mortgaged premises. This lien on all
improvements vested on the day and hour the mortgage
was registered—about one month before plaintiff began
furnishing materials for construction. One of the purposes
of the creation of the RFC was to finance the construction
and reconstruction of buildings for purposes of
rehabilitation. We may even take judicial notice of the fact
that the security of the loans from the RFC is based mainly
on the buildings and constructions themselves, and that to
assure that the loans are spent for the said construction,
the money is sometimes given on the installment basis,
that is, so much money is released by the RFC as the
construction progresses. This is to show the intimate
relation between an RFC loan and the construction
financed. by it, for purposes of security.
In the discussion of this case among the members of this
Tribunal, there was a suggestion, even a contention that
the credit of the plaintiff herein might be made to fall
under article 1922 of the old Civil Code which provides as
follows:
"ART. 1922. With respect to determine personal property of the

debtor, the following are preferred:
670

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 we believe that the two buildings in question
constructed partly with building materials furnished by the
plaintiff may not be considered as personal property under
article 1922. Once said building materials were used in the
construction and had become part of the building, they lost
their classification as personal property and become real
property. It is true that in the case of Unson vs. Orquije, et

al., 50 Phil., 160, this Tribunal applied the provision of
article 1922, paragraph 1, referring to the purchase price of
personal property in the possession of the debtor
(machinery and grinder sold to the Capiz Central and
installed in its building), the reason being that said
machinery and grinder did not lose their form and
substance and they preserved their identity. Besides, they
could easily be removed from the building of the Central.
May the same thing be said in the present case as
regards the building materials which went into the
construction of the hotel and the house? The answer can be
given only in the negative. Said materials had already
become part of the two buildings either as posts, frames,
floor, partition, roof, etc. They have lost their form and
identity and had become part of the buildings which are
real property.
Article 334, paragraph 3, old Civil Code, classifies as
real property anything permanently annexed to any
immovable property in such manner that it cannot be
separated therefrom without breakage of material or injury
to the object. Can the lumber used for the posts, frame,
floor, partition, etc., be removed from the two buildings
without injury to the said structures? They cannot. And it
must be remembered that though the materials furnished
by the plaintiff are valued at about
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VOL. 94, MARCH 30, 1954 671

P7,000, the present claim of the plaintiff for the balance of

sales price of his building materials is only P3,456.49, less
than one-sixth of the total value of the two buildings as
bought by the RFC at the auction sale, namely, P22,000.
There is another circumstance in this case which greatly
weakens plaintiff's claim. While as already stated,
appellant RFC's mortgage which included the two
buildings in question was recorded in September 1948,
thus serving as notice to third parties including the
plaintiff, the latter began furnishing building materials for
the construction of the two buildings only in October 1948,
that is the month following, and what is more, the evidence
fails to show that it was ever recorded in the' Registry of
Deeds, so that said refection credit comes not under
paragraph 3 of article 1923 of the old Civil Code, as does
the RFC mortgage, but under paragraph 5 of the same
article under unregistered and unrecorded refection

credits.
Still another aspect of the case to be considered is that
in the foreclosure proceedings, inasmuch as of July 1950,
the spouses had a total unpaid account of P41/732.16 with
the RFC, and the latter bought the mortgaged properties
for P31,000, there is still a balance of n.0,732.16 owing to
the RFC, an amount of almost three times the claims of the
plaintiff against the same spouses.
In conclusion we hold that (1) under our jurisprudence,
the term or phrase refection credits (refaccionarios) used or
employed in article 1923 of the old Civil Code refers to and
includes not only materials used for repair or
reconstruction, but those used for new construction, as
well; (2) the lien of one furnishing building materials used
in a building or construction whether old or new, comes
under article 1923 of the old Civil Code, and not under
article 1922 of the same Code; (3) that being provided for
and included in the old Civil Code of 1889, said lien
(refection credit) is not a right granted for the first time
under article 2242 (4) of the new Civil Code (Republic
672

Act 386) so as to come under the contemplation of article

2253 in the sense that the provisions of the new Civil Code
should govern it although the acts or events which gave
rise thereto may have occurred under the old Civil Code; (4)
that the deed of mortgage Herein having been recorded in
1948 and the building materials having been furnished in
1948 and 1949, that is to say, before the promulgation of
the new Civil Code in 1950, the preference of credits or
liens has to be governed by the old Civil Code; and (5) when
a mortgage is made to include new or future improvements
on registered land, said lien attaches and vests not at the
time said improvements are constructed but on the date of
the recording and registration of the deed of mortgage.
In view of the foregoing, the decision appealed from is
modified by dismissing the complaint as against the
defendant-appellant Rehabilitation Finance Corporation,
with costs.
Parás, C. J., Bengzon, Padilla, Bautista Angelo,

Labrador, and Concepcion, JJ., concur.
DIOKNO, M., disidente:
Los hechos en este caso están estipulados y son como sigue:
"That the true indebtedness of Manuel Quiambao and Virginia

Santiago for lumber and materials taken from the Luzon Lumber
and Hardware Co. Inc., Tarlac, used in building their hotel and
residential house located in the barrio San Nicolas, Tarlac, Tarlac,
on their property covered by Transfer Certificate of Title No.
22607 is P3,456.49 which was their outstanding balance;
"That Manuel Quiambao and Virginia Santiago Quiambao had
not yet paid the above sum, even after repeated demands;
"That for the purpose of constructing the two buildings referred
to in the amended complaint, the defendant Rehabilitation
Finance Corporation granted a loan of P37,000 to the spouses,
Manuel Quiambao and Virginia Santiago (Virginia Quiambao) on
the security of a first mortgage on their property covered by
Transfer Certificates of Title Nos. 22607, 4217 and 4218 of the
land records
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VOL. 94, MARCH 30, 1954 673

of the province of Tarlac, including the two buildings to be

constructed out of the proceeds of said loan;
"That said mortgage contract was duly registered in the Office
of the Register of Deeds of Tarlac and noted on the certificates of
title aforementioned;
"That the mortgagor spouses having violated the terms of said
mortgage contract, the Rehabilitation Finance Corporation
foreclosed the mortgage under Act No. 3135, as amended, and at
the auction sale held at Tarlac, Tarlac, on July 17, 1950 the
Provincial Sheriff awarded the mortgage property to the
Rehabilitation Finance Corporation as the highest bidder for the
total sum of P31,000;
"That the mortgagor spouses having violated the terms of said
mortgage contract, the Rehabilitation Finance Corporation
foreclosed the mortgage under Act No. 3135, as amended, and at
the auction sale held at Tarlac, Tarlac, on July 17, 1950 the
Provincial Sheriff awarded the mortgage property to the
Rehabilitation Finance Corporation as the highest bidder for the
total sum of P31,000; * * *" (Record on Appeal, pp. 11-13)
La sentencia apelada dispone lo que sigue:
"* * * the Court renders judgment ordering the defendantspouses,

Manuel Quiambao and Virginia Santiago, to pay to plaintiff,
Luzon Lumber and Hardware Co., Inc., the sum of F3,456.49

together with legal interests thereon at the rate of 6 per cent per
annum from the date of the commencement of this action until
full payment of the indebtedness, and in defect of such payment
by the defendants-spouses, Manuel Quiambao and Virginia
Santiago, the defendant Rehabilitation Finance Corporation is
hereby ordered to pay to plaintiff, Luzon Lumber and Hardware
Co., Inc., out of the proceeds of F3,456.49, together with the
corresponding legal interests thereon. Defendants-spouses
Manuel Quiambao and Virginia Santiago, shall pay the costs of
this action." * * * (Record on Appeal, pp. 23-24)
Y la mayoría de este Tribunal se propone enmendar la

sentencia precedente—
"By dismissing the complaint as against the defendant-appellant

Rehabilitation Finance Corporation, with cost."
Me veo obligado a disentir de esta decision porque me

produce la sensación de que se enriquece la RFC con ma-
674

teriales usados en la construcción de los edificios que son de

la demandante y no de los deudores de la RFC y que no
están pagados, lo cual me parece a mí contraria a la recta
conciencia, y pernicioso al curso ordinario de los negocios.
Contraria a la recta conciencia, porque se sabe que la
RFC se lleva materiales que son de otros y no de sus
deudores, lo cual es lucrarse a costa ajena.
Y pernicioso al curso ordinario de los negocios, porque
mientras es de fomentar las construcciones de edificios por
el beneficio que traen a los trabajadores y a la industria de
los materiales de construcción, y en el comercio no es lo
corriente exigir pago adelantado o al contado, la RFC podía
muy bien haberse protegido condicionando las entregas de
efectivo a los esposos Quiambao a la prueba previa de
haberse pagado los materiales y mano de obra anteriores,
como acostumbran, y en cierto modo requiere la ley, los
propietarios que edifican mediante contratistas. La
doctrina que establece la decision—que va contra Io que el
antiguo y el nuevo Código Civil preceptúan como lo justo—
producira en mi humilde opinion rémora en la Industria.
Dirigiendo ahora mi atención a las fases legales de la
cuestión, me causa extrañeza que se atribuya al proveedor
de materiales interés sobre el edificio. Su interés, desde el
principio hasta el fin, es sobre el valor de los materiales que

suministró, cuya aplicación y cuantía están estipuladas, y
cuya identificación esta establecida por las facturas
Exhs. A a A-52. El proveedor no reclama la devolución
de los materiales, para que se requiera una identificación
más precisa dentro del edificio en que se emplearon; nadie
duda que están allí; tampoco duda nadie lo que valen. Se
necesita algo más, para que se pueda recuperar su valor?
Responde a algún fin práctico exigir una identificación
pieza por pieza? Si todo esto es sutileza de mal pagador, y
no me parece que pueda honradamente caber duda de
675
VOL. 94, MARCH 30, 1954 675

ello, entonces estamos llevando nuestro legalismo a un

extremo peligroso a la existencia de la justicia misma.
El antiguo Código Civil, que era el vigente cuando
tuvieron lugar las transacciones de que nos ocupamos, dice
que "los créditos se clasificarán, para su graduación y pago,
por el orden que en este capítulo se establecen" (art. 1921).
Y seguidamente dispone en el artículo 1922:
"ART. 1922. Con relación a determinados bienes muebles del

deudor, gozan de préferencia:
1. ° Los créditos por construcción, reparaci6n conservación o
precio de venta de bienes muebles que están en poder del deudor,
hasta donde alcance el valor de los mismos."
Un crédito es algo incorpóreo, idea que se concibe y existe

en nuestra mente y en nuestra conciencia, que si esta
relacionada con algo que es o fué material no es, en si
mismo, cosa material susceptible de identificación, para
que pueda decirse que la identificación es cosa esencial
para la preferencia en el cobro. Esto indica lo absurdo de
requerir que la cosa conserve su identidad. Pero se me dirá
seguramente que el artículo trata de créditos por
construcción de muebles determinados donde fueron
empleados, y la identidad de éstos debe constar; dándolo
por supuesto, a los fines del argumento, entonces, en tal
caso no es necesario, que el trozo de madera que se ha
suministrado, digámoslo por vía de ejemplo, convertido en
tablas y pilaretes, y mezclados con otros del deudor y de
otras personas, perdiendo así identidad para que el
proveedor siga gozando de la preferencia que por este
artículo se establece. La que no debe perder su identidad es

la cosa donde fueron empleados.
Hace diferencia que con 'los materiales que se
suministraró se contribuyó a levantar, no un mueble, sino
un inmueble? Han quedado por eso inmuebles los
materiales de construcción que son bienes muebles por
excelencia? El sentido de justicia de la humanidad cambia
con ese detalle?
676

En el asunto de Urquijo contra Unson, 50 Jur. Fil., 168 se

trataba de maquinarias vendidas que por su destino se
quedaron bienes inmuebles. A pesar de eso, esta Corte
reconoció a los vendedores de las maquinarias derecho
preferente con arreglo al artículo 1922, caso 1.° del Código
Civil, y resolviendo la cuestión dispuso:
"For the foregoing, it is adjudged:
"(a) That the right of preference of the appellants Urquijo,

Zuloaga and Escubi is only on the value (art. 1922, par.
No. 1, of the Civil Code), which must first be proven, of the
machinery sold by them to the Capiz Central which has
not been paid for and which was included among other
property of the Capiz Central in the sale of the same; and
that in no case must the preference exceed the sum of
thirty thousand pesos (P30,000), the only amount on
which they claim a preference.
"(b) That the claim of the appellees Timoteo Unson and Clara
Lacson, Jose Altavas and Antonio Belo, by reason of the
fact that the attachments secured by them were declared
valid and held to constitute liens, are also preferential in
character and must be paid in fu-11 out of the available
funds of the insolvent estate after the extinction and
payment of the credit of the appellants Urquijo, Zuloaga
and Escubi, and with preference over any and all other
ordinary unpaid claims, following in the payment of the
claims of the appellees, the order of the dates of the
respective attachments."
"In virtue whereof the judgment appealed from is hereby

affirmed in so far as it is in harmony herewith and reversed in so
far as it is not, and it is ordered that the record be remanded to
the court of origin for further proceedings in accordance herewith.
So ordered." (Unson vs. Urquijo, Zuloaga & Escubi, 60 Phil., 160,

177.)
Obvio parece que la identidad de la cosa suministrada no

era importante; lo que importaba era su valor no pagado.
En el presente caso la identidad de la cosa suministrada y
su valor no están disputados. Para que se vea mejor lo
absurdo del argumento vamos a simplificar nuestro caso
con un ejemplo. Supongamos que lo que el proveedor
suministró fueron postes de molave, y que estos son los
únicos postes que se usaron en los dos edificios.
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VOL. 94, MARCH 30, 1954 677

Los postes se convirtieron por su destino en inmuebles al

incorporarse en los edificios, justamente como las
maquinarias de Urquijo en la decision citada. La identidad
de los postes es cosa indisputable e indisputada. En el caso
del ejemplo, se reconocerá el derecho preferente del
proveedor sobre el valor de los postes? La contestacion
afirmativa echará por los suelos la decision de la mayoría
que aquí se propone, y esa contestación afirmativa es
ineludible. Ahora, aplicando el ejemplo a nuestro caso, hay
alguna duda que, si preciso fuese, el proveedor puede
identificar por lo menos la gran parte de los materiales que
suministró? Las facturas los identifican, nadie disputa que
se usaron en los dos edificios de referencia, y hasta su valor
esta fuera de toda discusión. No se identificaron en autos
con más exactitud, por la razon manifiesta que era perder
tiempo, porque lo que importaba era su valor, y el convenio
sobre el valor implica convenio sobre su identidad. Tengo
para mí que la decision del caso de Urquijo leída y
entendida racionalmente, es decisiva para la justa
resolución del caso que nos ocupa.
La decision proyectada dice que lo que es aplicable en
este caso es el artículo 1923 del antiguo Código Civil que
dice:
"ART. 1923. Con relación a determinados bienes inmuebles y

derechos reales del deudor, gozan de preferencia: • • •
"3.° Los créditos hipotecarios y refaccionarios, anotados e
inscritos en el Registro de la Propiedad, sobre los bienes
hipotecados o que hubiesen sido objeto de la refacción."
Al argüir sobre este artículo la decision propuesta incurre,

en mi humilde opinion, en un tremendo error. Cuando la
ley habla de crédito anotado e inscrito en el registro supone

que la cosa sobre que recae existe y preexiste en el registro.
Es absurdo pensar lo contrario. Pero en autos, cuando el 13
de Septiembre de 1948 se registro la hipoteca de la RFC no
existían aún los edificios, y es por tanto absurdo suponer
crédito hipotecario sobre
678

cosa que aún estaba en el aire. La ficción legal no llega al

extremo de dar vida a lo que no existe. Existirá la hipoteca
cuando la cosa tenga existencia en el registro. De igual
modo, cuando la ley habla de anotación e inscripción de un
crédito refaccionario supone que la cosa sobre que recae ya
existe registrada, pues de otro modo tendríamos el
espectáculo de una ley exigiendo imposibles. Esto despierta
en la mente la idea de que refacción en este inciso significa
lo que dice, esto es—
"Refaccionario, del verbo latino refacio refacere, rehacer, es un

adjetivo que unido al substantivo crédito lo califica por su
aplicación a reconstruir o reparar lo que antes hecho, es necesario,
por razón de destrucción o deterioro, rehacer.
"El crédito puede prevenir de préstamo metálico o ser el precio
de servicios, trabajos o materiales empleados, siendo, en todo caso
requisito necesario que se invierta aquél y éstos en la obra, pues
la característica de esa clase de crédito es su confusion con la cosa
en razón al mayor valor que por esa confusion debe adquirir. * * *
"El crédito refaccionario se produce como yuxtaposición de
valor, y la plusvalía no esta afecta a créditos ni derechos
anteriores que recayeron y afectaron al valor que la cosa antes
tuviera, sin perjuicio de extenderse al valor que después adquiere,
salvando el interés causa de ese mayor valor, o sea, respetando
como extraño, o si se quiere como preferente, el crédito que
produjo aquella plusvalía.
"Para mejor comprender el carácter jurídico del derecho que
entraña el crédito refaccionario, puede asimilárselo al del jus
retentionis, porque si bien la cosa refaccionada esta en poder ajeno
y la retención para el cobro no tiene lugar, a tanto equivale el
derecho preferente de cobro por concepto análogo al de retención,
pues el ju£ retentionis, en puridad, se basa en un privilegio por
razón de un derecho o crédito cuya inversion esta formando parte
de la cosa que se retiene * * *"—26 Enciclopedia Jurídica
Española, pp. 888, 889, artículo de Carlos Lopez de Haro.
Al militar el significado del crédito refaccionario a creditos

por rehacer o reparar, no solamente se esta en el sentido
ordinario de la palabra, sino también se guardan
disposiciones pertinentes de la Ley Hipotecaria que aún
679
VOL. 94, MARCH 30, 1954 679

sigue rigiendo en nuestro país (Art. 1880, Código Civil

Dicen los artículos 110 y 111 de la Ley Hipotecaria:
ART. 110. La hipoteca se extiende a las accessiones naturales, a

las mejoras, a los frutos pendientes y rentas no percibidas al
vencer la obligation, y al importe de las indemnizaciones
concedidas o debidas al propietario por los aseguradores de los
bienes hipotocados o en virtud de expropiación por causa de
utilidad pública.
ART. 111. Conforme a lo dispuesto en el artículo anterior, se
entenderán hipotecados juntamente con la finca, aunque no se
mencionen en el contrato, siempre que corresponden al
propietario; * * *
2.° Las mejoras que consisten en nuevas plantaciones, obras de
riego o desagüe, obras de reparación, seguridad, transformación,
comodidad, adorno o elevación de los edificios, y cualesquiera
otras semejantes que no consistan en agregación, de terrenos,
excepto por accession natural, o en nueva construcción de edificios
donde antes no los hubiere." * * *
El artículo 110 arriba transcrito concuerda con el artículo

1877 del antiguo Código Civil.
Obsérvese la excepción bien clara: "Las mejoras * * * que
no consistan * * * en nueva construcción de edificios donde
antes no los hubiere". Art. 111, párr. 2.°)
Es por eso porqué con razón dijo esta Corte en Director
of Public Works vs. Sing Juco, 53 Phil., 205, 213-14:
"* * * It may be "observed, however, that in a precise and

technical sense, this credit is not exactly of the nature of the
refectionary credit as known to the civil law. In the civil law the
refectionary credit is primarily an indebtedness incurred in the
repair or reconstruction of something previously made, such
repair or reconstruction being made necessary by the
deterioration or destruction of the thing as it formerly existed.
The conception does not ordinarily include an entirely new work,
* * *"
Y no cabe acoger la extension del significado a nuevas

construcciones de que habla el artículo de la Enciclopedia
Jurídica Española arriba citado, no tan solo por su extrema
generalidad, que no permite su comprobación en la
jurisprudencia que alude, sino sobre todo por la
indisputable razón de que es inaceptable porque va contra
un precepto
680

De Leon vs. Imperial, et al.
claro y terminante de la Ley Hipotecaria que arriba se ha

transcrito.
En la decision proyectada se admite que si el crédito
refaccionario de que habla el artículo 1933 no comprende el
caso de autos, entonces es un derecho nuevo el que trae el
artículo 2242, inciso (4), del nuevo Código Civil que debe
beneficiar el proveedor de materiales conforme al artículo
2253 del mismo. Estoy conforme con este criterio, en el
supuesto que el artículo 1922, inciso 1.°, no fuese aplicable.
Creo que en derecho y en equidad la sentencia apelada
debe confirmarse en todas partes.
Pablo, M., conforme.
Judgment modified.
________________
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11/8/2019 PHILIPPINE REPORTS ANNOTATED VOLUME 94

[No. L-5638. March 30, 1954]

LUZON LUMBER and HARDWARE COMPANY, INC.,

1. OBLIGATIONS AND CONTRACTS; CREDITS;

2. ID.; ID.; ID.; ID.; REFECTION CREDIT, NOT A NEW

3. ID.; ID.; ID.; MORTGAGE CREDIT; PREFERENCE OF

664 PHILIPPINE REPORTS ANNOTATED

Luzon Lumber & Hardware Co., Inc. vs. Quiambao, et al.

promulgation of the new Civil Code in 1950, the preference

4. ID.; ID.; ID.; MORTGAGE CREDIT INCLUDING NEW

APPEAL from a judgment of the Court of First Instance of

VOL. 94, MARCH 30, 1954 665

In the edification of the two buildings the spouses bought

The trial court erred in finding that the preference of plaintiff's

The trial court erred in finding that while plaintiff's credit is

The trial court erred in ordering the appellant, upon default of

666 PHILIPPINE REPORTS ANNOTATED

The theory of the plaintiff, which theory was upheld by the

"ART. 2242. With reference to specific immovable property and

(4) Claims of furnishers of materials used in the construction,

VOL. 94, MARCH 30, 1954 667

plaintiff being that of purchase and sale while that of the

After a careful study of the case we are constrained to

"3. Mortgage and refection credits entered and

The question now to be decided is whether the furnishing of

688 PHILIPPINE REPORTS ANNOTATED

that was the original idea of the word "refectionary". The

JURÍDICA ESPAÑOLA, p. 890, from which we quote with

"En el orden civil, los términos de la cuestión son diferentes; el

And this view is shared by our Code Commission which

VOL. 94, MARCH 30, 1954 669

mortgage in favor of the defendant RFC not only enjoyed

"ART. 1922. With respect to determine personal property of the

670 PHILIPPINE REPORTS ANNOTATED

1. Credits for the construction, repair, preservation, or

property. It is true that in the case of Unson vs. Orquije, et

VOL. 94, MARCH 30, 1954 671

P7,000, the present claim of the plaintiff for the balance of

article under unregistered and unrecorded refection

672 PHILIPPINE REPORTS ANNOTATED

Act 386) so as to come under the contemplation of article

Parás, C. J., Bengzon, Padilla, Bautista Angelo,

DIOKNO, M., disidente:

Los hechos en este caso están estipulados y son como sigue:

"That the true indebtedness of Manuel Quiambao and Virginia

VOL. 94, MARCH 30, 1954 673

of the province of Tarlac, including the two buildings to be

La sentencia apelada dispone lo que sigue:

"* * * the Court renders judgment ordering the defendantspouses,

Luzon Lumber and Hardware Co., Inc., the sum of F3,456.49

Y la mayoría de este Tribunal se propone enmendar la

"By dismissing the complaint as against the defendant-appellant

Me veo obligado a disentir de esta decision porque me

674 PHILIPPINE REPORTS ANNOTATED

teriales usados en la construcción de los edificios que son de

principio hasta el fin, es sobre el valor de los materiales que

VOL. 94, MARCH 30, 1954 675

ello, entonces estamos llevando nuestro legalismo a un

"ART. 1922. Con relación a determinados bienes muebles del