8/19/2019 Criado vs. Guttierez Hermanos

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Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

G.R. No. L-28613 October 5, 1928

ORIA ERMANOS ! COMPA"IA EN LI#UI$ACION, plaintiff-appellee,vs.GUTIERRE% ERMANOS, defendant-appellant.

Eduardo Gutierrez Repide for appellant.Jose Avanceña for appellee.

 

STREET, J.:

This action was instituted on April !, "!#, in the Court of $irst %nstance of Manila b& 'ria (er)anos * Co., of +aoan, a)ar, a

reular )ercantile partnership in liuidation, for the purpose of annullin certain /ud)ents lon ao rendered aainst it in favor ofthe defendant herein, 0utierre1 (er)anos, li2ewise a eneral )ercantile partnership, of the Cit& of Manila, and for the purpose ofrecoverin da)aes alleed to have resulted to the plaintiff fro) the wronful prosecution of said litiation aainst the plaintiff.

3pon hearin the cause the trial court ave /ud)ent in favor of the plaintiff, declarin of no leal effect the /ud)ents which werethe sub/ect of attac2 as well as all orders and proceedins that had been had in co)pliance therewith4 also orderin the defendant,0utierre1 (er)anos, to return to 'ria (er)anos * Co. certain properties which had been attached b& 0utierre1 (er)anos in thecourse of the sa)e litiation, or the value thereof in the a)ount of P#5,666, with leal interest fro) Auust 7, "!"7, and reuirin0utierre1 (er)anos to deliver to 'ria (er)anos * Co. the further su) of P"8,888.88, with leal interest fro) 9ece)ber !, "!"",until paid, and with the costs of the litiation. $ro) this order the defendant, 0utierre1 (er)anos, appealed.

%t appears that on Auust ", "!6!, 0utierre1 (er)anos instituted an action in the Court of $irst %nstance of Manila :case No. #;!ecution b& the sheriff of the Province of a)ar onNove)ber "6, "!"7. At this sale the propert& of the debtor was brouht in b& the /ud)ent creditor, 0utierre1 (er)anos, for a totalvalue of about P87,587.

 Another fact which now needs to be drawn into the liht of da& fro) the archives of the past is, that after the propert& which hadbeen transferred fraudulentl& to Manuel 'ria & 0on1ale1 was sei1ed under attach)ent at the instance of 0utierre1 (er)anos, thisfir) collected fro) a $rench insurance co)pan& the su) of P"8,888.88, as the face value of a polic& of insurance upon thelaunch Comillas, belonin to 'ria (er)anos * Co.

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 As a result of the attach)ent above referred to the fir) of 'ria (er)anos * Co. was stripped of its available assets even before /ud)ent was rendered in the upre)e Court on ?anuar& 5, "!"!, affir)in the earlier /ud)ent re)ained, as it re)ains until thisda&, unsatisfied of record. Accordinl&, when the five-&ear period allowed b& law for the issuance of e>ecution on the /ud)ent wasabout to e>pire, 0utierre1 (er)anos caused an action to be instituted to revive the /ud)ent pursuant to section 55# of the Code ofCivil Procedure4 and on ?une "#, "!5, the Court of $irst %nstance of Manila rendered /ud)ent revivin and )a2in effective theold /ud)ent rendered in civil case No. #;!. 3nder the revived /ud)ent 'ria (er)anos * Co. was ad/uded to pa& to 0utierre1(er)anos the su) of P"8",=7=.85, with leal interest thereon fro) Nove)ber "6 "!"7. About three &ears after this /ud)ent ofrevival had been entered the action now before us was beun.

3nder the decision which we are now called upon to review, the fir) of 0utierre1 (er)anos, which with ood reason had lonconsidered itself to be the creditor of 'ria (er)anos * Co. in a lare a)ount, and had been repeatedl& declared to its adversar& inthe a)ount of abut half a )illion pesos. The occasion of this e>traordinar& eruption, dislocatin ad/udicated rihts and carr&inpotential destruction in its wa2e, is found in the view which the trial court too2 of the leal effects of an incident now to be e>plained,datin bac2 to the &ear "!"". %n this connection it appears that, after litiation had been beun in the &ear "!6! b& 0utierre1(er)anos to recover the balance due the) in current account fro) 'ria (er)anos * Co., the clai) aainst said fir) wasconsidered b& the )anaer of 0utierre1 (er)anos to be of doubtful collection or of slow pa&)ent4 and in order to retire said assetfro) active capital of the fir), it was deter)ined to carr& the ite) to a special account entitled @Accounts Receivable in +iuidation.@Moreover, in effectin this transfer, it was )ade to appear that the clai) pertained to the several )e)bers of the fir) in theproportion of their respective shares in the capital of the fir). This transfer was effected on 9ece)ber !, "!"", b& No. "7=5,entered on the ?ournal of 0utierre1 (er)anos :E>hibit Athl&, that, as a conseuence of such annul)ent, 'ria (er)anos * Co., thedefndant in said litiation and the plaintiff herein, is entitled to restitution of the propert& which had been ta2en fro) it under theattach)ent in "!"7, or in default thereof, its value in the a)ount of P#5,666, the sa)e bein the value ascribed to it in the sale of

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"!"6 b& 'ria (er)anos * Co. to Manuel 'ria & 0on1ale1 a transfer which was held b& this court to have been fraudulent andfictitious.

%n the interest of /ustice and the interit& of /udicial proceedins, we are constrained to record the fact that we can accept none ofthese propositions and )uch less the conclusion derived therefro). The artificialit& of the line of reasonin indicated )ust be)anifest to an&one4 and but for the success that attended the effort in the Court of $irst %nstance, one would have supposed that thisatte)pt to subvert, with )aterial so tenuous, the sole)n ad/udications of )ore than twelve &ears was visionar& in the e>tre)e. %nsection =68 of our Code of Civil Procedure it is declared that even the upre)e Court shall not reverse a /ud)ent on appeal on

for)al or technical rounds. Much )ore )ust this idea be effective in dealin with litiation that has passed into the finalit& of /ud)ent.

%t should be borne in )ind that the )e)bers of a partnership are the ulti)ate owners of its assets4 and the circu)stance that underentr& No. "7=5 the rihts of the )e)bers of the fir) of 0utierre1 (er)anos were severed and their shares in the clai) assined tothe), in the proportion of their respective interests in the fir), did not concern 'ria (er)anos * Co., in the least. Moreover, it will beobserved, in confir)it& with the entr& itself, that 0utierre1 (er)anos assu)ed chare of the collection of the clai), which showsthat it was intended for the fir) to continue the conduct of the litiation in its own na)e a reservation in no sense unlawful. Ta2inthe entr& as a whole, it should be interpreted to )ean that as the clai) should be collected, the proceeds would be divided a)onthe partners in proper proportions. The idea that an& fraud was intended or co))itted b& 0utierre1 (er)anos in )a2in entr& No."7=5 or in continuin thereafter to prosecute the clai) in the fir) na)e aainst 'ria (er)anos * Co. is preposterous. %f there was afraud, who has been hurtF Certainl& not the debtor 'ria (er)anos * Co., the plaintiff in this case.

3pon strippin the case of its e)bellish)ents, the plaintiffGs contention in the end co)es to this, that under section ""5 of ur Code of Civil Procedure, litiation should be conducted in the na)e of the real part& in interest. This )eans of course that where an

assinable riht has been transferred before action brouht, the proceedin ouht to be instituted in the na)e of the assinee4 andwhere an assin)ent is effected pendente lite, it is proper to have substitution should not be effected and the transfer of the riht ofaction should not be brouht to the attention of the court, the oriinal plaintiff, if successful in the litiation, would hold the fruits ofthe action as a sort of trustee for the use and benefit of his assinee. But it would be surprisin doctrine to hold that where theassinee has assented to the continued prosecution of the action b& the oriinal plaintiff, the defendant can nullif& the /ud)ent,after litiation has been concluded, on the round that the interest in litiation had been transferred. Hhen this feat is atte)pted, thedefendant can be properl& )et b& the proposition that if an& irreularit& was co))itted in the prosecution of the case, it was, as tohi) error without in/ur&. Certainl& it cannot be contended that the t ransfer of a riht of action pendente lite affects the /urisdiction ofthe court. But reardless of these considerations, we are of the opinion that entr& No. "7=5 ouht not to be considered as anassin)ent for the purpose of reuirin the several partners in the fir) of 0utierre1 (er)anos to be substituted in the record asplaintiffs. He thin2 it clear that the fir) entit& had precisel& the sa)e facult& to represent the partners after that entr& was )ade, asbefore.

The /ud)ent appealed fro) )ust be reversed, and it is so ordered, with costs aainst the appellee.

Johnson, alcolm, illamor, "strand, Romualdez and illa#Real, JJ., concur.