Lilius v. Manila Road Company, G.R. No. 42551, September 4, 1935 Francis Xavier Sinon, Case No.

13 ALEKO E. LILIUS, for himself and as guardian ad litem of his minor hild, !ri"a Marianne Lilius, and SO#$A MARIA LILIUS, plaintiffs appellees, vs. MA#ILA RAILROA% COM&A#', !efen!ant. LAURA LI#%LE' S(UMA#, MA#ILA )I#E MERC(A#*S, L*%., !A#K O+ *(E &(ILI&&I#E ISLA#%S A#% MA#ILA MO*OR CO., I#C., intervenors appellants, an! ).(. )A*EROUS, M. MAR+ORI, $O(# R. MC+IE, $R., ERLA#,ER - ,ALI#,ER, I#C., &(ILI&&I#E E%UCA*IO# CO., I#C., (AMIL*O# !RO)# S(OE CO., ES*RELLA %EL #OR*E and EAS*ER# - &(ILI&&I#E S(I&&I#, A,E#CIES, L*%., intervenors appellees.

FACTS: In G.R. No. L-39587, Aleko E. Lilius, a well-known and reputed journalist, author and photographer and a staff correspondent in the Far East of the magazines The American Weekly of New York and The Sphere of London, his wife Sonja Maria Lilius, who helps edit Aleko s work, his translator, and acting secretar!, and their daughter, ri!a Marianne Lilius, met an accident, wherein their Studebaker car, collided with locomoti"e No# $%&, 'anila (ailroad )ompan! s train# *he! sustained life-threatening wounds, fractures and other injuries, which left them permanentl! disfigured and as a result thereof, Aleko suffered great financial loss as he was una+le to concentrate and write articles and short stories for the newspapers and magazines# *he ,upreme )ourt ruled in fa"or of Aleko Lilius, et al, awarding them in the amount of -&&,./.#0& as damages, including interest and costs# In G.R. No. "#55$, herein case, Laura Lindle! ,human, the 'anila 1ine 'erchants, Ltd#, the 2ank of the -hilippine Islands and the Manila Mo!or Co.% &n'., ha"e appealed from an order of the )ourt of First Instance of 'anila fi3ing the degree of preference of the claimants and distri+uting the proceeds of the judgment of this court in the case of Lilius vs. Manila Railroad Co. For its part, 'anila 'otor )o#, Inc# claims that the lower court erred in not holding their claims, e"idenced +! pu+lic instruments and final judgment, as preferred o"er all other claims against Aleko E# Lilius# In support of its claim of preference against the fund of Aleko E# Lilius was a 'er!i(ie) 'o*+ o( i!s ju),-en! against him in ci"il case No# 4%%.5 of the )ourt of First Instance of 'anila, together with a 'er!i(ie) 'o*+ o( !.e /ri! o( e0e'u!ion and the ,arnis.-en! issued +! "irtue of said judgment# *he alleged *u1li' )o'u-en! e"idencing its claim was not offered in e"idence +ut, in their +rief in this court, counsel for the 'otor )o#, Inc#, merely assume that its credit is e"idenced +! a pu+lic document dated ma! %0, %5&%, +ecause the court, in its judgment in said ci"il case No# 4%%.5, refers to a mortgage appearing in the evidence as Exhibit A, as the +asis of its judgment, without mentioning the date of the e3ecution of the e3hi+it# &SS2E: 1hether the reference to a mortgage appearing in a pu+lic document in a judgment, entitled to preference under article %5/4 of the )i"il )ode# 3EL4: N6# *his reference in said judgment to a mortgage is not competent or satisfactor! e"idence as against third persons upon which to +ase a finding that the 'anila 'otor )ompan!7s credit e"idenced +! a pu+lic document within the meaning of article %5/4 of the )i"il )ode# If the 'anila motor )o#, Inc#, desired to rel! upon a pu+lic document in the form of a mortgage as esta+lishing its preference in this case, it should ha"e offered that document in e"idence, so that the court might satisf! itself as to its nature and un8uestiona+l! fi3 the date of its e3ecution# 9nder section 5 of Act o. !5"# as amended by Act o. $%&' , a '.a!!el )oes no! .a5e !o 1e a'kno/le),e) 1e(ore a no!ar+ *u1li'. As a,ains! 're)i!ors an) su1se6uen! en'u-1ran'es% !.e la/ )oes re6uire an a((i)a5i! o( ,oo) (ai!. a**en)e) !o !.e -or!,a,e an) re'or)e) /i!. i!. A chattel mortgage ma!, howe"er, +e "alid as +etween the parties without such an affida"it of good faith# In !! Corpus (uris) %*$, the rule is e3pressl! stated that as +etween the parties and as to third persons who ha"e no rights against the mortgagor, no affida"it of good faith is necessar!# It will thus +e seen that under the law, a 5ali) -or!,a,e -a+ e0is! 1e!/een !.e *ar!ies /i!.ou! i!s 1ein, e5i)en'e) 1+ a *u1li' )o'u-en!.