Bisaya Land Transportation Co v. Geronimo

CASTRO, J.:

The instant petition for certiorari seeks to annul the order of respondent judge, dated August 17, 1968, denying petitioners' motion to discharge the receiver of the Bisaya Land Transportation Co., Inc. The facts pertinent to the action are as follows: On March 21, 1959, the Republic of the Philippines, through the then Solicitor General Edilberto Barot, in the Court of First Instance of Manila, filed a petition for quo warranto, docketed as ;special Civil Case No. 39766, for the dissolution of Bisaya Land Transportation Company, a corporation organized on or about June 10, 1935, under Act No. 1459, otherwise known as the Corporation Law, for the principal purpose of engaging in the business of land and water transportation, with its domicile and principal place of business in Cebu City. The petition, after making proper allegations, also prayed for the appointment of a receiver. Herein private respondent Miguel Cuenco (a co-respondent therein) filed his answer with a cross-claim against herein petitioners (respondents therein) praying that the same time for the appointment of a receiver without bond for the purpose or preserving the assets of respondent corporation.

To said cross-claim, a motion to dismiss was flied by petitioners, the resolution of which was held in abeyance until after trial on the merits. Prior to private respondent Miguel Cuenco's answer, a motion to dismiss the petition for quo warranto was filed by petitioners which was, however, denied; so that on September 25, 1959, they filed their answer to the petition for quo warranto. Also, on October 19, 1959, petitioners filed their answer to the cross-claim of Miguel Cuenco.

Thereafter, various incidents transpired, which for purposes of the present action, need not be mentioned. On February 28, 1962, therein respondent Corporation filed a motion for judgment on consent manifesting its consent to and moving for judgment to be rendered ordering the demolition and liquidation of petitioner Bisaya Land Transportation Company, Inc. Private respondent Miguel Cuenco filed his answer agreeing to such judgment but urging the appointment of a receiver. Subsequently.

a motion to withdraw the motion for judgment on consent was filed by petitioners on May 27, 1963 which was objected to by private respondent Miguel Cuenco who pressed for the appointment of a receiver. This was, in turn, objected to by petitioner corporation. On December 3, 1963, the motion to withdraw judgment on consent was denied by the lower court which, however, granted receivership after hearing.

From this order, petitioner corporation riled a petition for certiorari with the Court of Appeals (CA-G.R. No. 33266-R), which issued an ex- parte writ of preliminary injunction enjoining the lower court from enforcing its order of Decembers 1963. On January 29, 1968, this Court, in G.R. No. L-23012, annulled all the proceedings in the Court of Appeals in CA-G.R. No. 33266-R, on the ground that the latter court had no jurisdiction over said case. On October 20, 1966, the then Solicitor General Barredo (now Supreme Court Justice), filed a motion for dismissal of the quo warranto proceedings, to which motion private respondent Miguel Cuenco interposed an opposition.

Notwithstanding this opposition, the court below issued a resolution dated April 3, 1968 granting the motion for the dismissal of the action for quo warranto, dismissing private respondent Miguel Cuenco's cross-claim; and ruling, with respect to the receivership, that Once this order becomes final, the receiver is hereby ordered to render a complete accounting of his receivership to the Court within thirty days for the purpose of turning over the management of the corporation to its board of Directors. Private respondent Miguel Cuenco appealed the resolution to this Court (docketed as G.R. No. L-31490) insofar as it granted the motion for dismissal of the quo warranto and dismissed his cross-claim. After the perfection of that appeal, petitioners filed with the court below a motion to discharge receiver, allegedly under Section 4, Rule 39 of the Revised Rules of Court, concomitantly praying for the issuance of a writ of preliminary injunction to restrain the receiver from further continuing as such, to which an objection was raised by private respondent Miguel Cuenco.

Petitioner replied thereto and on August 17, 1968, the trial judge denied said motion to discharge receiver. Dissatisfied, petitioners resorted to this Court for a writ of certiorari asking that the order of August 17, 1968. be annulled and that the lower court be ordered to discharge the receiver.

Petitioner rest their case on the following propositions: (1) Respondent judge's order of April 3, 1968 is a judgment in receivership action which is covered by Section 4, Rule 39 of the Revised Rules of Court which provides, "a ... judgment in a receivership action ... shall riot be stayed after its rendition or before an appeal is taken or during the pendency of an appeal,"

and receivership - being an ancillary or provisional remedy must perforce be discharged by the dismissal of the main action for quo warranto ; (2) a full consideration of the motives of respondent Miguel Cuenco when he sought the appointment of a receiver would show that the continuous maintenance of the same would yield serious effects and consequences that will cause irreparable injury or injustice to the petitioners who are entitled to as much consideration as the private respondent Miguel Cuenco; (3) that the pleadings submitted in the lower court show the presence of adverse claim of petitioners to a greater portion of the assets in question, so that the constitution and continuous existence of the receivership although protective of the rights of herein respondent Miguel Cuenco would, on the other hand, cause disproportionate injury to the rights of herein petitioners; (4) that the findings of fraud made by the court a quo cannot bind the petitioners; and (5) the facts and circumstances of the case do not justify the maintenance of the receivership and the respondent judge, therefore, should have immediately ordered the termination of the same.

Private respondent Miguel Cuenco, in equally impressive arguments embodied in his very exhaustive memorandum, meets the above propositions, and asserts, in brief, that: (1) the motion to discharge receiver having been filed with the lower court after the perfection of the appeal, the court a quo had lost jurisdiction to entertain the same; (2) the appeal necessarily precluded the discharge of the receiver; (3) petitioners cannot execute the appealed resolution of April 3, 1968 by conveniently resorting to certiorari; (4) petitioners do not have any cause of action for certiorari in view of the fact that no motion for reconsideration had been previously filed by them with the court below; (5) the provisions of the Rules of Court cited by petitioners (Section 4, Rule 39) do not support their motion to discharge receiver but, on the contrary, is a legal ground for maintaining the receiver during the pendency of the appeal; (6) that the resolution of the lower court which has already been appealed cannot be amended partially during the pendency of the appeal by a recourse to certiorari, and (7) that irreparable injury will be inflicted upon the stockholders and the public, in general, if the receiver would be discharged.

Quite irrelevantly, private respondent Miguel Cuenco also raises the issue of erroneous dismissal of the quo warranto case by the respondent judge. Upon the above matters, these are, in brief, our conclusions: The issues position by both parties relative to the propriety or impropriety of the appointment of the receiver in question as well as of the dismissal of the quo warranto case do not appear to be of first impression.ℒαwρhi৷ As mentioned earlier, the "Resolution" of April 3, 1968 was the subject of an appeal by private respondent Miguel Cuenco docketed as G.R. No. L- 31490, entitled "Republic of the Philippines, Petitioner-Appellee, versus Bisaya Land Transportation Co., Inc., et al., Respondents-Appellees.

Miguel Cuenco, Respondent-Crossclaimant-Appellant." Although the appeal concerns the resolution only insofar as it granted the motion for the dismissal of the quo warranto action and dismissed private respondent Miguel Cuenco's cross-claim, facts, circumstances, and issues (except the technical and procedural points impleaded by the parties herein) similar to those of the instant petition were directly and indirectly exhibited, and this Court, after a careful, mature and extensive deliberation on the arguments brought forth by the parties, promulgated a Decision on January 6, 1978, the dispositive portion of which reads as follows:

ACCORDINGLY, without prejudice to the rights of the private parties herein to take proper steps to enforce whatever causes of action they may have against each other, the order of the lower court embodied in its 'Resolution dated April 3, 1968, granting the Solicitor General's motion to dismiss the quo warranto proceedings and dismissing appellant Miguel Cuenco's cross-claim, is hereby upheld; the receivership on the respondent corporation's property and assets is hereby ordered terminated, effective upon the lapse of thirty (30) days from the date of promulgation of this decision; and the receiver is directed to render, within three (3) months from the finality of this decision, a full and complete accounting to the Board of Directors of the respondent corporation. No costs. The above decision is replete with pronouncements on the identical issues raised- the doctrines enunciated therein apply to the case at bar. We, therefore, find it unecessary to further discuss the questions herein raised on the circumstances that led to the appointment of the receiver and the dismissal of the quo warranto case. More importantly, the instant petition is for the purpose of annulling the order of the respondent judge denying the petitioners' petition to discharge the receiver. In other words, it seeks the termination of the receivership. The decision adverted above, in bold relief, decrees the termination of the receivership of the petitioner corporation's assets and property effective upon the lapse of thirty (30) days from the date of the promulgation of the decision. With this, a determination of the merits of the instant petition has become purely moot and academic. As things now stand, the decision above adverted to sets firmly the entire core of the instant petition, and our jurisprudence does not countenance any further lengthy discussion, for it has been held, in a line of cases, that this Court will not decide purely academic questions1 the other legal procedural and technical issues presented by both parties need not therefore occupy our attention. ACCORDINGLY, the petition for certiorari is hereby dismissed. No costs. Muñoz Palma, Martin, Fernandez and Guerrero, JJ., concur. Makasiar, J., took no part.