Ernest Berg, Plaintiff and appellant vs. Valentin Teus, defendant and Apellee, G.R. No. L-2987, February 20, 1951

Media

Part of The Lawyers Journal

Title: Ernest Berg, Plaintiff and appellant vs. Valentin Teus, defendant and Apellee, G.R. No. L-2987, February 20, 1951
extracted text: court below for �rther proceeding. The way is left open to the defendant. to ask for the arrest or stay of execu tion in the eyent of an :i.dverse monetary judgment, and for the plaintiff to impugn anew, if necessary, the con. stitutionality of Executive Orders Nos. 25 and 32 and Re public Act No. 342 andlor their being still in force. TD.; ID.: TD. - ln Medim1 v,1 Santos (L-1280, May 20, 1947, 44 Off. Gaz., No. 10, 3811), it was held that an action for the recovery of a �ruck with prayer for payment of its value in case the truck was n0l returned, could proceed notwithstanding the moratorium law The court observed that the indemnity sough!: was a subsidiary liability and would not come into being unless and until decision ren dered against the defendants for such payment. In Moy:i vs. Barton (L-745, Aug. 27, 1947, 45 Off. Gaz., No. 1,227-), the court said that when the cause of action was in part covered by the moratorium and in part not, it was not unjust to render judgment for the payment of the entire obligation with the understanding that execution with res pect to the amounts that had fallen due before March 10, 1945, would be stayed. In the case of Alejo v. Gomez CL-1969, May 30, 1949), the court ruled that suit for un lawful detainer and rents in a.rrears was not affected by the moratorium, the recovery of the unpaid rentals, it was said, being accessory to the main action. And, lastly, in Realty Investments, Inc. ct al vs. Villanueva et al (L-1949, Oct. 31, 1949), the court, citing the above-mentioned eases, decided tl1a.t the court should go ahead with the trial of the action on the merits without prejudice to the right of the dcicndant to arrest the execution should one for pay ment of money be issued. In that case the pbin tiff, which had sold to the defendant a piece of land on :installment basis, was demanding pay. ment of the installments still unpaid (installments whir.:l the defendant claimed to have fully settled with the Ja panese alien property custodian). or, in default, restora tion of the ownership :md possession of the property. Ir. revoking the lower court's order of dismiss..}, it is point.., ed out that De Venecia vs. General <L-894, 44 Off. Gaz., 4912) and Ma-ao Sugar Central Co. V. Barrios et al <L1539, 45 Off. Gaz., 2144) were distinguisha!Jk from Moya v;,i. Barton, Medina vs. Santos, and Alejo v. Gomez in thn! the suits in the first two named cases had for their sole object the enforcement :;:f a monetary obligation. The ca� at bar falls withiu the relaxed rule of the Supreme Court's late decisions. V I Ernest Berg, Plaintiff and Appellant vs. Valentin Teus, Defendant and Appeflee, G. R. No. L-2987, February 20, 1951. 1. OBLIGATION AND CONTRACTS; MORATORIUM; RE CEIVERSHIP. - Plaintiff presented a petition to put the premises and chattel in litigation in the ha.nds of a re ceiver, petition which appears of urgent character. Defend ant opposed the motion for receivership aud moved for dismissal of the complaint on the grounds that plaintiff's cause of action had not accrued by reason of Executive Orders Nos. 25 and 32, on moratorium. The Iow,:,r court opines tha.t Executive Order Nos. 25 and 32 were still in force unaffected by Republic Act No. 342 as to debts contracted during the Japanes� occuupation. Plaintiff contends that those executive orders had passed out of existence by the disappearance of the emergency contem plated thereby. HELD: Decision on this question can be deferred. For the purpose of this case, Executive Orders Nos. 25 and 32 are assumed to be still in full force a.nd effect. This is done to pave the way for and hasten action on the petition to put the premises and chattels involved in the hands of a receiver. The constitutionality of Execu tive Orders Nos. 25 and 32 and Republic Act. No. 342 and allied issues r.an wait. These issues a.re delicate and would require prolonged study and deliberation. Besides, there is a pending bill in Congress repealing those executive or ders and law. The fact that the appointment of a r.s ceiver is an ancillary remedy is one powerful reason why the case should be dismissed. Case is remanded to the Alva J. Hill for appellant. J. Pere::. Cardenas for appellee, DECI SI O N TUASON, J.: This appeal is from an order of the Court of First Instance of Ilocos Sur dismissing the above-entitled action by res.son of Executive Order· No. 25, as amended by Executive Order 32, on morn tori um. Ernest Berg brought the action against Valentin Teus to fore close a real estate and chattel mortgage exe<:uted in November, 1944, to secure six promiS'Sory notes of the aggregate value of PS0,000 and pa.yable on demand two years after declaration of armistice between the United States and Japan. An amended or supplementary complaint was later admitted against the defend ant's objectior.. The complaints recited that by stipulation of the parties, the mortgage!" had undertaken, among other things, to in sure and pay the taxes on the mortgaged properties; not to alienate, sell, lease, <'ncumber or in any manner dispose thereof; and to keep and maintain the said properties in good order and repair; but that, it was a.lleged, he (defendant) had failed to keep taxes fully paid; had made material ::.Iterations on the premises, ?.nd l1ad sold and conveyed them to Central A7:ucarera Jel Norte. It further alleged that the mortgagor had agreed that fhould he fail to perform any of his obligatiims as stipulated, "'the mortgage shall be deemed to be automatically foreclo!:E:d this mortgage either extrajudici;.liy, even after the death of the Mortgage!", in pursua.nce of the provisions of Act No. 3135, as amended;" and 011 the basis of this agreement it was prayed that the mortgage is declared auto132 THE LA WYERS JOURNAL March 31, 1954 matically fore<:losed and the pla.intiff entitled to immediate pos session of the properties in question. In a separate motion Berg';, attorney also asked for the appointment. of a receiver. Counsel for the defrndant having moved for the dismissal of the complaint on the grounds that plai11tiff's cause of action hs.d not accrued by reason of the ex-:i.:utive order hereinbefore cited, and having opposed the motion for re�eiver£hip, Judg.? Zoilo Hilario entered an order holding that as to the collection of the six notes the suit had been prematurely brought, but setting the cause for trial on the merits Jxcause, according to His Honor, the reasons alleged in the motion to dismiss were not "indubitable" with ref erence to the appointment of n receiver sought by the plaintiff. As we understand this order, its 1·csult was that the moratorium ought not to interfere with the pl!lintiff's motion for appointment of receiver. However that may be, the plaintiff subsequently filed a "com plete compla..int" in which the original complaint and the amend ed or supplementary complaint wel'e consolidated. This "complete complaint", which was admitted without objection, apparently was supposed to have restored the case to its original status. Con sequently the attorney for the defendant filed a new motion to dis miss; and Judge Luis Ortega, who hs.d replaced Judge Hilario, ignoring the latter's order entered the order now on appeal by which the entir� action was quashed on the theory ·advanced in the motion to dismiss. The new order was silent on both the application for receiv�rship and the prayer that the plaintiff be adjudged authorized by the terms of the mortgage to foreclose it extrajudicially and seize the pro9erties. Judge Ortega opined that Exuutive Orders Nos. 25 and 32 were still in force unaff1:cted by Republic Act No. 342 as to debts contracted during the Japanese -xcupation. Plaintiff contended that those executive orden had passed out of existence by the disappea.rance of the emergency contemplated thereby, 2.nd the con te-ntion is reiterated in Chis instance. But from the view we take of the cai.e, decision on this question can be deferred. For the purpose of the present decision, we will assume that Executive Orders Nos. 25 and 32 are still in full force and eHect. This we do to pave the way for and hasten action on the pt'tition to put the premises a:i.d 'chattels involved in the hands of a receiver, pe.. tition which appears of urgent character. The constitutionality of Executive Orders Nos. 25 and :l2 and Republic Act No. 342 and allied issues can wait. These issues are delicate and would re quire prolonged study and ddiberation. Besides, there is g. 11ending bill in Congress repealing those executive orders and law. In Ricardo Medina v. Amb!'osiri Santos, G. R. No. 1-1280, May 26, 1947, 44, No. 10 Off. Gaz., 3811, it was held that an action for the recovery of a truck with prayer for payment of its value in case the truck was not returned could proce<!d notwithstanding the moratorium law. The Court observed thnt the indemnity sought was a subsidiary liability and would not come into being unless and until decision was rendered against the defenda.nts for such payment. In Moya v. Barton, G. R. No. I,...745, August 27, 1947, 45, No. 1, Off. Gaz., 237, the Court said tha.t when the cause of action was in part covered by the moratorium and in part not, it was n'lt unjust to render judgment for the payment of the entire obligation with the undet"stnnding that execution .witl, respect to the amounts that had fallen due before March 10, 1945, would be stayed. In the case of Alejo v. Gomez, G. R. No. 1-1969, Ma.y 30, 1949, the Court ruled that suit for unlawful detainer and rents in ar rears was not affected by the moratorium, the recovery of the unpaid rentals, it was said, being accessory to the main action. And, lastly, in Realty Investments, Inc. et al. v. Mariano Villa nueva et al., G. R. No. L-1U49, Octol>er 31, 1949, the Court citing the above-mentiC'ned c:ises decided that the court should go ahead with the trial of the action on the merits without prejudice t.o the right of th� defendant to arrest the execution should one for payment of money be issued. In that case the plaintiff, which had sold to the defendant a. piece of land on installments basis, was demanding payment of the ilistallments still unpaid, (inst.;ill ment which the defendant cla.imed to have fully settled with th(, Japanese alien property custodian) or, in default, restoration of the ownenihip a.nd possession of the property. In revoking the lower court's order of dismissal, we pointed out that De Venecia v. General, G. R. No. L-894, 44 Off. Gaz., 4912, and Mao Sugar Central Co. v. Conrado Barrios et al., G. R. No. L-01539, 45 Off. Gaz., 2444, were distinguishable from Moya v. Barton, Medina v. Santos, a.nd Alejo v. Gomez, in that the suits in the first two named cases had for their sole object the enforcement of a monetary obligation. The case at bar falls within the relaxed rule of this Court's later decisions. The alleged violation of the conditions of the mortgage contract, if true, make it, necessary if not imperative, for the protection of the interest of the plaintiff, that the mortgaged properties be placed in the custody of the court. The fact that the appointment of a receiver, as the defendant emphasizes, is an an cillary remedy is precisely one powerful reason why the ca.se should not be dismissed. Because receivership is an auxiliary re medy dismissal of the main action would eliminate the only basis for the appointment of receiver and thus completely bar the door to any relief from mischiefs. UndH the circumstances of the case, the least tha.t should have been done, if t.hat were feastble as a matter of procedure, was to adopt the steps which Judge Hilario had proposed to do. Judge Hilario evidentiy saw the grave injustice to the plaintiff and the irrepa.rable injury to which his rights would be exposed if an indefinite suspension of the entire proceeding were df':crced. In suspending the l'ight of creditor to enforce his right the President and Congress he.cl no idea of depriving him of all means of preventing the tlei=truction or alienation of the security for the debts, destruction which would virlually write off, in some cases, the whole credit, H that were the intention, it is doubtful if the order'S nnd the law in,,oked could stand the test of cnnstitutionalit�·. The ordel' appealed from will Lhf'lrefore be reversed and the casf': remand�d to the court below for further proceeding according kl the tenor of this decision. We leave the way open to the defendant to uik for the arrest or stay of execution in the event of an adverse monetary judgment, and for the plaintiff to impugn anew, if necu. sary, the constitutionality of Executive Orders Nos. 25 and 32 and Hepublic Act No. 342 and/or their being still in force. CQsts of this appeal will be charged against the appellee. Mora.n, Paras, Ftiria, Pabln, Bengz.on•; Padilla; Montemllyori R(yes, J1igo, and Ba"tista Angdo - J.J. concur. i March 31, 1954 THE LA WYERS JOURNAL 183
Date: 1954
Rights