EN BANC
EUGENIO
BONAPLATA,
Petitioner,
G.
R.
No. 1278
August
1, 1903
-versus-
BYRON S.
AMBLER,
JUDGE OF THE
COURT
OF FIRST INSTANCE OF MANILA
AND J.
MCMICKING,
CLERK OF THE COURT OF FIRST INSTANCE
OF MANILA,
Respondents.
D E C I S I
O N
McDONOUGH, J :
This was a Motion
for Judgment
on the Pleadings in a proceeding in which the plaintiff prays that a
peremptory
order be issued by this Court against Judge Ambler, commanding him, as
Judge of the Court of First Instance of Manila, to immediately cause to
be issued and subscribed a writ of execution for the enforcement of
plaintiff's
judgment against Fulgencio Tan Tonco for the sum of 1,541 Pesos,
Mexican
currency, which judgment was recovered January 13,1903, and against the
defendant J. McMicking, as clerk of the said Court of First Instance of
Manila, commanding him to issue and subscribe a writ of execution,
sealed
with the seal of the Court of First Instance of Manila, for the
enforcement
of plaintiff's said judgment.
The
facts upon which
this application is based are undisputed. The plaintiff, on January
13,1903,
recovered a judgment in the Court of First Instance of Manila, in an
action
for debt against Fulgencio Tan Tonco, amounting to 1,541 Pesos, Mexican
currency. No exceptions were taken or filed against said judgment, nor
was a motion for a new trial made; and the judgment is now in full
force
and effect.
After
the rendition
and entry of said judgment the plaintiff repeatedly requested the
defendants
above named to duly issue a writ of execution to satisfy the judgment
of
the plaintiff against said Fulgencio Tan Tonco, which request was
refused.
The defendants, by their attorney, state, as their reason for such
refusal,
that on the 18th day of December, 1902, one Sergia Reyes instituted a
suit
against said Fulgencio Tan Tonco, in the Court of First Instance of
Manila,
for an indebtedness amounting to the sum of $1,500, Mexican currency,
and
in the complaint alleged that the said defendant was insolvent; that
several
creditors had sued him; that the assets of his business consisted of
real
estate, contracts for buildings [many partly completed], equities in
real
estate, and other property of the value of about $200,000, Mexican
currency;
that said property was in good condition and that it was in the
interest
of creditors to retain the actual status of the business; that under
proper
management the business could be conducted at a good and satisfactory
profit,
and pay a greater portion of said defendant's creditors, if not all;
that
the management of the said business was in the hands of the defendant,
who was unable to give it necessary care and attention; that for
various
causes the business had been losing money; that the debts of said
defendant
amounted to $250,000, Mexican currency; that the assets of the business
were then more than enough to pay the indebtedness, but if said
business
were managed by the said defendant it will be dissipated and wasted,
and
therefore the plaintiff in that action prayed for the appointment of a
receiver to take charge of the said business and conduct the same
subject
to the orders of the Court.
The said
Fulgencio
Tan Tonco, personally and by his attorney, appeared in Court, on the
said
18th day of December, 1902, and accepted service of the complaint in
said
cause, and thereafter and on the 19th day of December, 1902, Antonio
Torres
was appointed receiver of the business, property, rights, and credits
of
said Tan Tonco; and thereafter, having given a sufficient bond and
taken
the prescribed oath, the said receiver took possession of all the
property
of said Tan Tonco, and under the direction of and pursuant to an order
of said Byron S. Ambler, as Judge of the Court of First Instance of
Manila,
undertook to care for, run, manage, and operate said business the same
as theretofore run and operated by said defendant, and to employ such
persons
and make such payments and disbursements as needed. It was further
ordered
that the said defendant and other persons be restrained and enjoined
from
interfering with said property; and the said Tan Tonco was and still
continued
to be enjoined from taking possession of or in any way interfering with
said property, and said J. McMicking, as such clerk, was and is
restrained
from issuing an execution upon the said judgment of Tan Tonco.
As a
general rule the
appointment of a receiver is an equitable remedy, and before such
remedy
is resorted to, except in certain prescribed cases hereinafter
mentioned,
the legal remedy must be exhausted. Courts of equity do not encourage
proceedings
or actions which are not in conformity with the usual practice, which
are
unnecessary, and at the same time are calculated to such costs and
expenses.
[Hart vs. Times, 3 Edwards, Chancery, 226; Congden vs. Lee, 3 Edwards,
Chancery, 304].
In the Congden
case
the plaintiff sought equitable relief in an action for debt after an
execution
had been returned unsatisfied; but the plaintiff and the sheriff knew
that
the debtor had real estate which was subject to levy and sale. The
Court
held that it was the duty of the plaintiff to exhaust his legal remedy
by selling the real estate on the execution, and it not appearing that
there would be a deficiency on the sale, the Court had no jurisdiction
to appoint a receiver of the rents.
It may
be that very
special circumstances may exist, in a given case, involving great
danger
of loss, such as may be caused by a debtor's nonresidence, which will
justify
the appointment of a receiver, but the case at bar is not one of that
character;
the claim of the plaintiff, Sergia Reyes, amounted to only $1,500,
Mexican
currency, whereas the property of Tan Tonco was valued at $200,000
Mexican
currency, and it does not appear that there were any judgments against
him having priority to that of said plaintiff, or that the plaintiff's
judgment could not be collected in full. Under these conditions, the
allegation
in the complaint that the defendant, Tan Tonco, could not give his
business
"necessary care and attention," that he was "losing money," and that if
the business was to be continued under his management it would be
"dissipated
and wasted," might be cause for applying for an appointment of a
committee,
but it certainly is not good cause for turning over to a receiver
$200,000
worth of property in an action to recover a debt of $1,500. What was
undertaken,
in this action, amounts practically to a bankruptcy proceeding - the
placing
by the court of the property of the defendant in the hands of a
receiver
for the purpose, after paying costs, fees, and expenses, of
distributing
that property among creditors.
Bankruptcy
proceedings,
however, are forbidden until a law shall be enacted for these Islands.
[Sec. 524 of the Code of Civil Procedure].
The
learned counsel
for the defendants in this mandamus proceeding claims that Section 174
of this Code makes provision for the appointment of a receiver in this
case. That Section authorizes the appointment of a receiver [1] in
certain
corporation cases; [2] where the plaintiff has an interest in the
property
or fund which is the subject of the action, etc.; [3] in an action to
foreclose
a mortgage; [4] and, finally, whenever in other cases it shall appear
to
the court that the appointment of a receiver is the most feasible means
of preserving and administering the property which is the subject of
the
litigation during the pendency of the action.
The
subject of the
action of the plaintiff Sergia Reyes was an indebtedness of $1,500 due
to her by the defendant. and the legitimate object was the collection
of
that debt. Until after judgment and execution, which was not issued,
the
plaintiff could not have had any interest in any property or fund of
the
defendant; nor until after the return of the execution unsatisfied
could
she have had any interest in the preservation of the defendant's
property
- property which was not the subject of the litigation. The plaintiff
in
this mandamus proceeding was not a party to the action of Reyes vs.
Tan Tonco, and he is not, therefore, bound by the order appointing
a receiver made therein.
It is
not necessary
in this proceeding to determine the further effect of that order, or to
decide what its effect may be on all those creditors who consented to
the
appointment of the receiver, who acquiesced in his control, management,
and disposition of the defendant's property, or on other persons who
dealt
with him as such receiver.
This
court simply
decides
that the plaintiff, Eugenio Bonaplata, is entitled to have an execution
issue on his said judgment. The Motion for Judgment on the Pleadings is
granted, and judgment for the plaintiff will be entered accordingly,
with
costs against the respondents.
Arellano, C.J.,
Torres, Cooper, Willard and Mapa, JJ., concur. |