G.R. No. 38097         December 7, 1933
THE ASIATIC PETROLEUM COMPANY (P. I.), LTD., plaintiff-appellee, vs. ORLANES AND BANAAG TRANSPORTATION CO., INC., defendant-appellant.

FACTS

The Asiatic Petroleum Company sued Orlanes and Banaag Transportation Co., Inc. to collect a debt for gasoline and oil purchased on credit. Upon plaintiff’s application and filing of a bond, the trial court appointed the Philippine Trust Company as receiver over the defendant’s entire truck transportation business to preserve its properties, finding the defendant was on the verge of insolvency. During the suit, various creditors, some holding mortgages on the defendant’s trucks, filed motions to recover their credits. The trial court treated these motions as complaints in intervention. After trial, the court rendered judgment ordering the defendant to pay its proven debts. The court later ordered the execution of the judgment and the sale of the mortgaged trucks, as the defendant failed to file a bond to stay execution. The defendant appealed, contesting the receivership, the treatment of the motions as interventions, and the execution of the judgment.

ISSUE

1. Whether the trial court erred in appointing a receiver ex parte.
2. Whether the trial court erred in treating the creditors’ motions as complaints in intervention, thereby converting an ordinary civil action into an insolvency proceeding.
3. Whether the trial court erred in ordering the execution and sale of the properties despite the appeal and the properties being in custodia legis.

RULING

The Supreme Court affirmed the trial court’s judgment and orders.
1. No error in the receivership. The appointment was authorized by the Code of Civil Procedure upon a prima facie showing by affidavit that the defendant was on the verge of insolvency, and it was the most adequate means to preserve the properties for the benefit of all parties. The fact that it was granted ex parte was permissible under the law.
2. No error in treating the motions as interventions. The trial court did not convert the action into an insolvency proceeding. It properly relied on the Code of Civil Procedure’s directive for liberal interpretation of proceedings to secure a just, speedy disposition. Treating the motions as interventions was a procedural step to adjudicate all related claims in one action and did not constitute a reversible error.
3. No error in ordering execution and sale. Under Section 144 of the Code of Civil Procedure, the trial court retained jurisdiction to order the sale of properties in the hands of the receiver and to execute the judgment despite the appeal, especially since the defendant failed to file a bond to stay execution. There was no legal conflict as both the receivership and the execution orders were issued by the same court.

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