THE ASIATIC PETROLEUM COMPANY (P. I.), LTD., PLAINTIFF AND APPELLEE, VS. ORLANES AND BANAAG TRANSPORTATION CO., INC., DEFENDANT AND APPELLANT. PARSONS HARDWARE COMPANY, INC., DE…

The
Asiatic Petroleum Company (P. I.), Ltd., brought this action against
the Orlanes and Banaag Transportation Co., Inc., to collect a certain
sum of money owed it for gasoline and oil which the defendant bought on
credit together with interest due thereon.

Upon the
plaintiff filing a bond, the court appointed the Philippine Trust
Company receiver for the defendant’s entire business consisting in the
operation of freight and passenger trucks on various lines. The
Philippine Trust Company immediately took possession of all the
equipment, accessories and other properties of the defendant and, in
turn, employed E. H. Teal to manage said transportation business, with
the approval of the court.

During the pendency of the suit,
various creditors of the defendant intervened therein and asked for the
payment of their respective claims. Many of these claims were secured
by mortgages constituted on personal property or on trucks which formed
part of the equipment of the defendant’s business. It happened,
however, that instead of filing complaints in intervention therein, the
said creditors sought to recover their credits through motions to that
effect. In the trial court, the defendant did not raise any question
relative to the procedure followed by the aforesaid creditors. However,
the court, motu proprio, treated the motions in question as
complaints in intervention and proceeded in accordance with the
provisions of the Code of Civil Procedure.

After the trial
and when all of the evidence had been presented therein, the court
rendered judgment sentencing the defendant to pay its proven debts,
together with interest thereon. During the pendency of the defendant’s
appeal, the said court ordered the execution of the judgment on the
ground that the defendant failed to file the required bond for a stay
thereof. The trucks and other equipment and accessories on which the
mortgages were constituted were sold and the proceeds thereof delivered
to the respective creditors.

It is unnecessary to state
herein the amount involved in each claim inasmuch as the defendant does
not question the correctness of the figures in its appeal. The
defendant appealed from the judgment thus rendered and from the
subsequent amendment thereto, as well as from the final order of the
court authorizing the sale and directing the application of the
proceeds thereof to the payment of the claims in the order stated
therein.

The defendant contends that the trial court erred:
(1) In ordering that its properties’ and business be placed under
judicial receivership immediately after the filing of the complaint;
(2) in appointing the Philippine Trust Company receiver for its
properties and business; (3) in converting the action, which is an
ordinary civil one, into an insolvency proceeding; (4) in rendering its
decision of October 26, 1931, and the subsequent amendment thereto; and
(5) in ordering the execution of the judgment in spite of the fact that
its properties and business were in custodia legis and that an appeal was taken therefrom.

The first two assignments of error may, in the light of sound logic, be
discussed jointly. The court appointed a receiver to take charge of the
properties and business of the defendant on the ground that the
plaintiff had established prima facie and by affidavit that
said defendant was on the verge of insolvency and that the remedy
granted was the most adequate and the most convenient means to preserve
such properties during the pendency of the suit, thus protecting the
interest of all parties concerned. The appointment made did not become
effective until after the plaintiff had filed the required bond. The
fact that the remedy was granted ex parte does not constitute a reversible error inasmuch as the Code of Civil Procedure authorizes it under just and reasonable motives.

It is not true that the ordinary action brought by the plaintiff has
been converted into an insolvency proceeding. All there was to it is
that the trial court treated the motions of the creditors as complaints
in intervention and we believe that by doing so the court did not
commit a substantial error sufficient to justify reversal of the
judgment rendered therein. We are of the opinion that the trial court
relied upon the provisions of section 2 of the Code of Civil Procedure
which prescribes a liberal interpretation of the provisions thereof as
well as of the proceedings thereunder, in order to assist the parties
in their right to obtain speedy justice.

The penultimate assignment of error is a mere corollary and therefore does not require further discussion.

The last assignment of error is likewise of no merit. Notwithstanding
the appeal taken by the defendant, the trial court had jurisdiction to
order the sale of the properties in the hands of the receiver, and the
execution of the judgments rendered therein, in accordance with the
provisions of section 144 of the Code of Civil Procedure. Said
execution was more or less proper inasmuch as the defendant failed to
file the bond required of him for a stay thereof. That the properties
of the defendant were then in the hands of a receiver is of no
consequence on the ground that, at any rate, the orders appealed from
were issued by one and the same court and therefore, the alleged
conflict, which is the ground for the prohibition sought, could not
legally exist.

The judgment and the order appealed from are hereby affirmed, with the costs against the defendant-appellant. So ordered.

Malcolm, Villa-Real, Hull, and Diaz, JJ., concur.