EUGEN MARSCHALL, AS JUDICIAL ADMINISTRATOR OF THE ESTATE OF WALTER TOEHL, DECEASED, PLAINTIFF AND APPELLANT, VS. CARL ANTHOLTZ ET AL.. DEFENDANTS. CARL ANTHOLTZ, APPELLANT.

This action was instituted in the Court of First Instance of the
City of Manila by Eugen Marschall, as administrator of Walter Toehl,
deceased, against Carl Antholtz and A. Murray & Co., Ltd., for the
purpose of recovering a parcel of land in the District of Santa Ana, of
the City of Manila, with the buildings, improvements, and machinery
thereon, consisting of an oil mill with its appurtenances, and to
obtain a decree annulling the Torrens title No. 27482, covering said
land and improvements, with pronouncement to the effect that said
property pertains to the estate of Walter Toehl, deceased, subject to a
certain mortgage thereon, and to recover the value of the reasonable
use and occupation of said property from October 2, 1926, as well as to
obtain an accounting from the defendant Carl Antholtz for the use of
said property and the proceeds of oil mill products sold by him, with
further appropriate general relief. The defendants answered with a
general denial and cross- complaint wherein Antholtz sought to recover
damages for the wrongful issuance of an attachment of property
belonging personally to himself, which attachment the plaintiff had
obtained at or about the time of the institution of the action.

Upon hearing the cause the trial court annulled title No. 27482 and
ordered that the properties which were the subject of the litigation
should be delivered to the plaintiff, subject to the payment of a claim
of P1,637.60 presented by Carl Antholtz against the oil mill business.
At the same time the court dismissed the cross-complaint of Antholtz.
From this judgment both parties appealed, the plaintiff assigning error
to the parts of the decision unfavorable to his contention, and
Antholtz assigning error to the failure of the court to allow damages
for the attachment levied on his own property.

Walter Toehl, for several years prior to his death on November
3,1926, was the Manila manager of Behn, Meyer & Co., H. Mij., a
foreign corporation engaged in business in the Philippine Islands. At
the same time Carl Antholtz was a chemist and oil technologist, also
living in Manila. Toehl appears to have been the owner of a parcel of
land, with a building thereon, located in the barrio of Punta, in the
District of Santa Ana, Manila. Being desirous of using this property in
a profitable way, Toehl, in January, 1926, contracted for the services
of Antholtz as manager of an oil mill to be operated on said property.
The agreement between them was that Toehl would furnish the capital
necessary for the business, which was estimated at P25,000, and
Antholtz would act as Toehl’s agent and manager at a salary of P500 per
month. In view of the fact that Toehl was then the manager of the firm
of Behn, Meyer & Co., H. Mij., and owed his services primarily to
that entity, he was desirous for his own name not to be used in the oil
mill to be established in Santa Ana. It was therefore agreed that
Antholtz would conduct the business in his own name. In accordance with
this agreement, Antholtz installed for Toehl a factory for the
manufacture of coconut oil on the property mentioned, and he proceeded
thereafter to operate the concern in his own name. On different dates
in the early months of 1926 Antholtz received from Toehl the sum of
P13,000. which was invested in the concern.

The business was apparently undercapitalized, and it became
necessary to borrow money. To facilitate transactions of this character
Toehl decided to establish the business in corporate form with a
capital, consisting of the land and building, already registered in the
name of Toehl, and the machinery, then being used in the business by
Antholtz. At this time Antholtz happened to be the owner and holder of
all the certificates of stock of a corporation known as A. Murray &
Co., Ltd., a concern without capital, which had totally ceased to
function. Its shares, therefore, were no longer of any value. With the
consent of Antholtz, Toehl assumed possession of the documents relating
to this corporation with a view to reviving it as corporate owner of
the oil plant above-mentioned. Having obtained possession of the
certificates of stock issued in the name of Antholtz, Toehl marked said
shares as cancelled and prepared a new certificate of stock for 496
shares in the name of his wife, Josefa Toehl. Four other several shares
were either issued, or intended to be issued, in blank, to four
directors of the intended corporation, but they were indorsed and
delivered to Mrs. Toehl. In order to start this old corporation on its
way as a solvent concern, Toehl transferred to it the parcel of land
above-mentioned, with the factory and machinery established thereon.
For the purposes of this step the factory was valued at P30,000, and
the machinery at P20,000, While the land itself was put in at P40,000.
That Toehl was the prime mover and actor in these steps is clearly
apparent from the uncontradicted testimony of Antholtz and documents
introduced in evidence as exhibits. Toehl died before the
rehabilitation of A. Murray & Co., Ltd., was completed, but a
conveyance was executed by Toehl placing the land, with improvements,
in the name of A. Murray & Co., Ltd., and the Torrens title to the
property now stands in the name of said company. Meanwhile Antholtz was
operating the oil mill under his contract with Toehl.

After Toehl’s death, or shortly prior thereto, it was found that he
was short in his accounts with Behn, Meyer & Co., H. Mij., to the
extent of about P150,000; and a claim for approximately this amount has
been allowed by the committee on claims in the estate of Toehl in
administration. There appears to have been only one other creditor of
his estate, whose claim is small in amount. After Toehl’s death the
then manager of Behn, Meyer & Co., H. Mij., procured Eugen
Marschall to be appointed administrator of the estate, and the present
action was instituted by him to recover possession of the oil mill
property above-mentioned and to hold Antholtz personally liable for
certain personal property pertaining to the oil mill and products of
the same which have been sold by Antholtz in the continuation of his
duties as manager.

The plaintiff’s case supposes that Toehl and Antholtz ¦were in
collusion and that the latter was cognizant of the fact that the money
which Toehl had put into the oil business in Santa Ana had been
feloniously embezzled by Toehl from his employer. As a consequence of
this supposed collusion, it is insisted for the plaintiff that Antholtz
is liable for everything which Toehl had taken from Behn, Meyer &
Co., H. Mij., and placed in jthe oil mill business, as well as for the
proceeds of the things sold by Antholtz after the death of Toehl. The
trial court found, and we concur in this conclusion, that there is no
sufficient proof of collusion between Antholtz and Toehl in the matter
of the misappropriation of any of the funds of Behn, Meyer & Co.,
H. Mij. It certainly would have been an astonishing manifestation of
lack of prudence on the part of Toehl to communicate to his own
employee the fact that the capital advanced for the use in the oil mill
business had been abstracted by Toehl from the coffers of Behn, Meyer
& Co., H. Mij. It seems to us that the slightest knowledge of human
nature is sufficient to suggest that Toehl would be particularly
careful not to put himself at the mercy of his manager by revealing to
him the fact that the capital invested was being wrongfully obtained by
Toehl; and a review of the evidence leads us to believe, as the trial
judge found, that Antholtz was wholly innocent of any guilty
participation in the embezzlements committed by Toehl.

The most debatable feature of the case is that which is concerned
with the liability of Antholtz for the proceeds of certain effects sold
by him after the death of Toehl, as well as the proceeds of the output
of the mill while Antholtz continued in the management. In section 711
of the Code of Civil Procedure it is declared that if any person,
before the granting of letters testamentary or of administration on the
estate of a deceased person, embezzles, or alienates, any of the
effects of such deceased person, such person shall be liable to an
action in favor of the executor or administrator of such estate for
double the value of the property sold, embezzled, or alienated, to be
recovered for the benefit of the estate. But this provision has
reference primarily to funds that are lost by embezzlement or
alienation, and it cannot be understood as making the manager of a
going concern liable for proceeds of sales applied by him to the proper
uses of the business, as occurred in this case. The proof shows that
the personal property other than the products of the mill, sold by
Antholtz in the manner mentioned, was sold with the consent of the
manager of Behn, Meyer & Co., H. Mij., and with the consent of the
administrator of Walter Toehl, and the proceeds of these sales, as well
as the proceeds of the products of the mill, were applied by Antholtz
to the obligations incurred by him in running the business, without the
improper diversion of a single cent. In article 280 of the Code of
Commerce, it is provided that a contract of agency shall not be
rescinded by the death or incapacity of the principal, although it may
be revoked by his representatives. As the oil mill in Santa Ana was a
going concern, it was apparently to the interest of all persons
concerned that its operation should continue, at least until the
authority of Antholtz should be revoked by the representative of Toehl,
which does not appear to have been done prior to the accomplishment of
the acts complained of. Nor was there error in the action of the trial
court in requiring the estate, as a condition of the taking over of
this property, that it should compensate or reimburse Antholtz to the
extent stated in the dispositive part of the appealed decision.

With respect to the appeal of Antholtz against the action of the
court in absolving the estate from the defendant’s counterclaim, we
note that the attachment, for the wrongful issuance of which damages
are sought, was sued out after Antholtz had announced his intention of
leaving the Philippine Islands, and it is untenable to say that the
attachment was malicious. In addition to this the damages sought are,
in the opinion of the court, either not clearly proved or are of a
character not to be recoverable in this action.

The judgment appealed from will be affirmed, and it is so ordered, without costs.

Malcolm, Villamor, Ostrand, Johns, Romualdez and Villa-Real, JJ., concur.