INSOLVENCY OF THE LEYTE ASPHALT & MINERAL OIL CO., LTD., insolvent debtor. THE LEYTE ASPHALT & MINERAL OIL CO., LTD., appellee, vs. BLOCK, JOHNSTON & GREENBAUM, creditors-appellants; G.R. No. L-29755 December 14, 1928

Topic: Article 18. In matters which are governed by the Code of Commerce and special laws, their deficiency shall be supplied by the provisions of this Code

FACTS:

1. Motion to dismiss insolvency proceedings.

ISSUE:

Whether Judge Jose de la Rama, presiding over Branch II, had jurisdiction to take cognizance of the insolvency of the Leyte Asphalt and Mineral Oil Co., Ltd., under the Insolvency Law, Act No. 1956, there being pending before Judge Guillermo Pablo presiding over Branch III, a certain receivership proceeding, under section 176 of Act No. 190, to which the said Leyte Asphalt and Mineral Oil Co., Ltd., had agreed.

RULING:

YES. The court did not err in assuming jurisdiction of the present proceeding and in not dismissing it.

Act No. 190 or the Law of Civil Procedure is general in character, while the Insolvency Law, Act No. 1956 is a special law and the rule is that on a specific matter the special law shall prevail over the general law, which shall be resorted to only to supply deficiencies in the former. (Art. 16, Civil Code.)

With respect to the acts of the Board of Directors of the Leyte Asphalt and Mineral Oil Co., Ltd., since this corporation is subject to the receivership proceeding, we do not think them illegal because the appointment of a receiver does not dissolve the corporation, nor bar the exercise of its corporate rights. (Teal Motor Co. and Teal vs. Court of First Instance of Manila, 51 Phil., 549.)

The fact that under section 52 of the Insolvency Law the appellee corporation cannot obtain its discharge, is not a bar to this insolvency proceeding pursuing its course for the reasons stated. The error, if error it be, of the trial court in holding that the prohibition contained in section 52 of this Insolvent Law against discharging a corporation is applicable only to banking corporations and those as to which there are special provisions for their liquidation in case of insolvency, is not prejudicial to the appellants in our opinion.