Unformatted text preview: plus 1,000 J. K. Pickering
shares as security.
When Lyons returned to the Philippines, he accepted the J. K. Pickering shares and sold them for
his own benefit. Also, he told Elser to let the Carriedo mortgage remain. Hence, Elser returned the
cancellation of the mortgage on the Carriedo property and took back from Fidelity & Surety Co. the new
mortgage on his property, the M. H. del Pilar property, together with the 1,000 J. K. Pickering shares.
Upon the death of Elser, Lyons filed an action under the presumption that since part of the money
used to obtain the San Juan property was a loan granted upon the mortgage of the Carriedo property, which
he coowns with Elser, he is entitled to a part (shares) of J. K. Pickering & Company.
The case for the plaintiff supposes that, when Elser placed a mortgage for P50,000 upon the equity
of redemption in the Carriedo property, Lyons, as half owner of said property, became, involuntarily the
owner of an undivided interest in the property acquired partly by that money; and in consideration of this
fact, he is entitled to the 446 and 2/3 shares of J. K. Pickering & Company, with the earnings thereon.
CFI dismissed the complaint. Plaintiff appealed to the SC.
W/N Lyons is entitled to his claimed shares of J.K. Pickering and its earnings as Elser’s partner,
by virtue of his half ownership of the Carriedo property which was used as security for the loan in the
acquisition of the San Juan Estate?
NO Affirmed the CFI decision.
In the purely legal aspect of the case, the position of the appellant is, in our opinion, untenable. If
Elser had used any money actually belonging to Lyons in this deal, he would under article 1724 of the Civil
Code and article 264 of the Code of Commerce, be obligated to pay interest upon the money so applied to
his own use. Under the law prevailing in this jurisdiction a trust does not ordinarily attach with respect to
property acquired by a person who uses money belonging to another (Martin...
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- Fall '14
- gutierrez hermanos, B.A. Finance Corporation