Act No. 3962, enacted on December 2, 1932, amends Section 50 of the Philippine Insolvency Law. It establishes a prioritized list of preferred claims to be settled during insolvency proceedings, including necessary funeral expenses, debts for personal services, workmen's compensation claims, legal expenses, and government taxes. These claims must be paid in the specified order, with all other creditors receiving payments on a pro rata basis. The amendment aims to ensure fair treatment of specific claims in insolvency cases, reflecting the legislative intent to protect certain interests. The Act became effective upon its approval.
December 2, 1932
ACT NO. 3962
AN ACT AMENDING THE PROVISIONS OF SECTION FIFTY OF ACT NUMBERED NINETEEN HUNDRED AND FIFTY-SIX, KNOWN AS THE "INSOLVENCY LAW"
SECTION 1. Section fifty of Act Numbered Nineteen hundred and fifty-six, known as the "Insolvency Law", is hereby amended to read as follows: TAHcCI
"SEC. 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, 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, 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; TIaCcD
"(e) Debts, taxes, and assessments due the Insular Government;
"(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."
SECTION 2. This Act shall take effect upon its approval. TIDcEH
Approved: December 2, 1932