1.   Equitable claims under Section 48
2.   Preferred claims with respect to specific movable property and specific immovable property
3.   Preferred  claims  as  to  the  encumbered  property  of  the debtor  which  shall  be  paid  in  the  order  named  in  Article 2244 CC
4.   Common  or  ordinary  credits  which  shall  be  paid  pro  rata regardless of the dates under Article 2245 CC
5.   With respect to specific movable and immovable property, the taxes due the State shall first be established


1.   Paraphernal property belonging to the wife of the insolvent
2.   Property  held  by the insolvent  on deposit,  administration, lease or usufruct
3.   Merchandise held by the debtor on commodatum
4.   Negotiable instruments for collection or remittance
5.   Money held by the debtor for remittance
6.   Amounts  due  the  insolvent  for  sales  or  merchandise  on commission
7.   Merchandise  bought  by  the  insolvent  on  credit  where  no delivery  is  made  or  where  the  right  of  ownership  or possession has been retained by the seller
8.   Goods or chattels wrongfully taken by the insolvent or the amount of the value thereof


SECTION 48.    Property not belonging to insolvent; Dowry; Paraphernalia  property.  —  Merchandise,  effects,  and  any other  kind  of  property  found  among  the  property  of  the insolvent, the ownership of which has not been conveyed to him  by a legal and irrevocable title,  shall be considered to be the property of other persons and shall be placed at the disposal of its lawful owners on order of the court made at the  hearing  mentioned  in  section  forty-three  or  at  any ordinary  hearing,  if  the  assignee  or  any  creditor  whose right  in  the  estate  of  the  insolvent  has  been  established shall petition in writing for such hearing and the court in its discretion  shall  so  order,  the  creditors,  however,  retaining such rights in said property as belong to the insolvent, and ubrogating him whenever they shall have complied with all obligations concerning said property.

The following shall be included in this section:

1.    Dowry property inestimado and such property estimado which may remain in the possession of the husband where the  receipt  thereof  is  a  matter  of  record  in  a  public instrument  registered  under  the  provisions  of  sections twenty-one  and  twenty-seven  of  the  Code  of  Commerce  in force.

2.      Paraphernal   property   which   the   wife   may   have acquired   by   inheritance,   legacy,   or   donation   whether remaining   in   the   form   in   which   it   was   received   or subrogated  or  invested  in  other  property,  provided  that such investment or subrogation has been registered in the registro mercantile in accordance with the provisions of the sections  of  the  Code  of  Commerce  mentioned  in  the  next preceding paragraph.

3.     Property  and  effects  deposited  with  the  bankrupt,  or administered,  leased,  rented,  or  held  in  usufruct  by  him.

4.     Merchandise  in  the  possession  of  the  bankrupt,  on commission,  for  purchase,  sale,  forwarding,  or  delivery.  

5.      Bills   of   exchange   or   promissory   notes   without endorsement  or  other  expression  transferring  ownership remitted        to        the        insolvent        for        collection  

6.     Money  remitted  to  the  insolvent,  otherwise  than  on current account, and which is in his possession for delivery to a definite person in the name and for the account of the remitter or for the settlement of claims which are to be met at the unsolvent's domicile.

7.    Amounts due the insolvent for sales of merchandise on commission,  and  bills  of  exchange  and  promissory  notes derived  therefrom  in  his  possession,  even  when  the  same are not made payable to the owner of the merchandise sold, provided it is proven that for the obligation to the insolvent is  derived  therefrom  and  that  said  bills  of  exchange  and promissory  notes  were  in  the  possession  of  the  insolvent for account of the  owner  of the  merchandise to be cashed and  remitted,  in  due  time,  to  the  said  owner;  all  of  which shall  be  a  legal  presumption  when  the  amount  involved  in any such sale shall not have been credited on the books of both  the  owner  of  the  merchandise  and  of  the  insolvent.

8.    Merchandise bought on credit by the insolvent so long as the actual delivery thereof has not been made to him at his store or at any other place stipulated for such delivery, and  merchandise the bills  of lading  or shipping receipts  of which have been sent him after the same  has  been loaded by  order  of  the  purchaser  and  for  his  account  and  risk.

In  all  cases  arising  under  this  paragraph  assignees  may retain  the  merchandise  so  purchased  or  claim  it  for  the creditors   by   paying   the   price   thereof   to   the   vendor.

9.     Goods  or  chattels  wrongfully  taken,  converted,  or withheld  by  the  insolvent  if  still  existing  in  his  possession or        the        amount        of        the        value        thereof.

SECTION  49.     Creditors  sharing  pro  rata.  —  All  creditors, except  those  whose  claims  are  mentioned  in  the  next following section, whose debts are duly proved and allowed shall  be  entitled  to  share  in  the  property  and  estate  pro rata, after the property belonging to other persons referred to  in  the  last  in  preceding  section  has  been  deducted therefrom,    without    priority    or    preference    whatever:

Provided, That any debt proved by any person liable as bail, surety, guarantor, or otherwise, for the debtor, shall not be paid  to  the  person  so  proving  the  same  until  satisfactory evidence shall be produced of the payment of such debt by such  person  so  liable,  and  the  share  to  which  such  debt would be entitled may be paid into court, or otherwise held, for  the  benefit  of  the  party  entitled  thereto,  as  the  court may direct.

SECTION 50.    The following are the preferred claims which shall        be        paid        in        the        order        named:

(a)     Necessary  funeral  expenses  of  the  debtor,  or  of  his wife, or children who are under their parental authority and have no property of their own, when approved by the court;

(b)      Debts   due   for   personal   services   rendered   the insolvent  by  employees,  laborers,  or  domestic  servants immediately  preceding  the  commencement  of  proceedings in insolvency;

(c)     Compensation  due  the  laborers  or  their  dependents under  the  provisions  of  Act  Numbered  Thirty-four  hundred and  twenty-eight,  known  as  the  Workmen's  Compensation Act, 22 as amended by Act Numbered Thirty-eight hundred and  twelve,  and  under  the  provisions  of  Act  Numbered Eighteen    hundred    and    seventy-four,    known    as    the Employees' Liability Act 23 and of other laws providing for payment   of   indemnity   for   damages   in   cases   of   labor accidents;

(d)      Legal   expenses,   and   expenses   incurred   in   the administration  of  the  insolvent's  estate  for  the  common interest  of  the  creditors,  when  properly  authorized  and approved by the court;

(e)      Debts,   taxes,   and   assessments   due   the   Insular Government; 24

(f)    Debts, taxes, and assessments due to any province or provinces of the Philippine Islands;

(g)    Debts, taxes, and assessments due to any municipality or       municipalities       of       the       Philippine       Islands;

All other creditors shall be paid pro rata.