Digest: BACHRACH MOTOR vs. TALISAY-SILAY MILLING

THE BACHRACH MOTOR CO., INC., vs.
TALISAY-SILAY MILLING CO., ET AL., defendants-appellees. 
THE PHILIPPINE NATIONAL BANK, intervenor-appellant.
G.R. No. 35223.September 17, 1931
 

Facts; Talisay-Silay Milling Co., Inc., was indebted to the Philippine National Bank. To secure the payment of its debt, it succeeded in inducing its planters, among whom was Mariano Lacson Ledesma, to mortgage their land to the creditor bank. To compensate those planters for the risk they were running with their property under the mortgage, the aforesaid central,  passed a resolution, undertook to credit the owners of the plantation thus mortgaged every year with a sum equal to two per centum of the debt secured according to yearly balance, the payment of the bonus being made at once, or in part from time to time, as soon as the central became free of its obligations to the aforesaid bank, and of those contracted by virtue of the contract of supervision, and had funds thereof.

Bachrach Motor Co., Inc., filed a complaint against the Talisay-Silay Milling Co., Inc., for the delivery of the amount P13,850 or promissory notes or other instruments or credit for that sum payable on June 30, 1930, as bonus in favor of Mariano Lacson Ledesma; and to render an accounting on the amount that the sugar central owed Mariano Lacson Ledesma.

The Philippine National Bank filed a third party claim alleging a preferential right to receive any amount which Mariano Lacson Ledesma might be entitled to from the Talisay-Silay Milling Co. as bonus, because that would be civil fruits of the land mortgaged to said bank by said debtor for the benefit of the central referred to, and by virtue of a deed of assignment, and ordered to deliver directly to PNB  said sum on account of the latter's credit against the aforesaid Mariano Lacson Ledesma.

Issue: Whether or not the bonus in question is civil fruits.

RULING: 

No. Article 355 of the Civil Code considers three things as civil fruits: First, the rents of buildings; second, the proceeds from leases of lands; and, third, the income from perpetual or life annuities, or other similar sources of revenue.

As the bonus in question is not rent of a building or of land, the only meaning of "civil fruits" left to be examined is that of "income" whether it is derived from the land mortgaged by Mariano Lacson Ledesma to the appellant bank for the benefit of the central; for it is not obtained from that land but from the resolution of the central granting it, it is not civil fruits of that land, and the bank's contention is untenable.

It is to be noted that the said bonus bears no immediate, but only a remote accidental relation to the land mentioned, having been granted as compensation for the risk of having subjected one's land to a lien in favor of the bank, for the benefit of the entity granting said bonus. If this bonus be income or civil fruits of anything, it is income arising from said risk, or, if one chooses, from Mariano Lacson Ledesma's generosity in facing the danger for the protection of the central, but certainly it is not civil fruits or income from the mortgaged property, which, as far as this case is concerned, has nothing to do with it. Hence, the amount of the bonus, according to the resolution of the central granting it, is not based upon the value, importance or any other circumstance of the mortgaged property, but upon the total value of the debt thereby secured, according to the annual balance, which is something quite distinct from and independent of the property referred to.