Normandy vs. Duque 29 SCRA 385 | August 29, 1969 | Barredo, J. Consolidated Petitioners (1): PILAR M.

NORMANDY, in her own behalf and of others similarly situated, as well as of the World War II Veterans Enterprises, Inc., & LORENZO B. CAMINS, plaintiffsappellees Respondents (1): CALIXTO DUQUE, CLARO P. LIZARDO, FLORENCIO SELGA, ALBERTO RAMOS, MANUEL BUENAFE & FILIPINAS MERCHANDISING CORPORATION, defendants-appellees; Petitioners (2): JOSE COCHINGYAN, SR. and SUSANA COCHINGYAN, intervenorsappellees Respondents (2): RAMON E. SAURA, former first receiver-appellant. Summary: Saura was appointed as a receiver in another Civil Case (see below) for the WARVETS. After 3 years of service without compensation, Saura resigned as the receiver, and approved by the court. Thereafter, he asked the court that he be paid compensation. The lower court granted this, and fixed the amount of 10,000 pesos as his compensation as receiver. Subsequently, he filed a second motion for reimbursement, asking that the court reimburse him for the sum he paid to a clerk that he employed during the course of his duty as a receiver. The lower court denied this, and said that since a previous amount of 10,000 pesos was already fixed, and any sum in addition to that would be improper. He is also estopped from claiming any amount without prior approval from the court. The Supreme Court agreed with the lower court, and reiterated its ruling. The SC added that there is more reason to deny his motion for reimbursement because Saura hired the clerk without prior leave of court. Decision of lower court affirmed. Facts: Saura was appointed receiver (Note: He is the Former first receiver) of the World War II Veterans Enterprises, Inc. (WARVETS) on 1960 by the lower court in CivCase No. 34998. He was required to post a bond of 50k. His functions as indicated are: o "Generally to do and perform such acts respecting the property, assets and transactions" of the organization "as the court may authorize." During his term, Saura went to Japan by authority of the lower court's order dated October 12, 1960 for the purpose of: o Checking on the reported undervaluation of goods shipped to the WARVETS; and o Preparing the shipment of the goods which had not yet been committed.

For this trip, he incurred around 9k pesos worth of expenses, and was ordered by the lower court to be reimbursed. The reimbursement order is as follows: o The order permits the claim for reimbursement as part of the receiver's compensation as such receiver. It does not prohibit the reimbursement of the expenses before the payment of the receiver's compensation, and it is only fair and just that at least the expenses which the receiver advanced, if found reasonable and necessary, be reimbursed as soon as the funds of the WARVETS permit. For a continuous period of three years performing his duty, he received no other fee or compensation from WARVETS (except for the reimbursed one). Hence, on 1963 (3 years after appointment), he asked the lower court to fix his compensation, as well as that of his co-receiver Ofilada. The lower court denied this, hence he asked for reconsideration. Without awaiting action on his MR, Saura filed another motion, on May 28, 1964, resigning from his post as receiver and praying that the lower court accept it and at the same time fix the amount of his fees and compensation as receiver. On June 5, 1964, the motion was approved and he was discharged as the receiver and his compensation was fixed at P10,000. The pertinent portions of the order of the court are: o No one objected to his withdrawal and compensation; o The defendants in this case (Warvets) themselves asked for the removal of Saura as the receiver; o Jose and Susana Cochingyan shall advance the amount of 10k for the account of WARVETS. After this, a certain Atty. Magno appeared. He presented into the lower court a motion for the payment of attorney's fees to him in the amount of P10,000.00 for his alleged services as legal counsel for Saura when he was still a receiver. Saura filed another motion for the payment and cancellation of his receiver's bond (yung 50k kanina) and for the reimbursement to him of the sum of P2,030.00 which he paid out of his personal funds as premium for said bond from Sept 1960-1964. TC: Allowed only 1k compensation to Magno, and granted the whole amount prayed for by Saura (2,030). The following is the reasoning of the TC (in case sir asks): o Ramon E. Saura is himself a lawyer and he did not have to retain legal counsel. If he did, the matter should be for his own account, particularly because it was a unilateral act on Saura's part to get Magno as his lawyer in the receivership. o Nevertheless, the Court is not unaware that Atty. Magno did in fact work for Saura, for the former appeared in Court and signed pleadings for Saura as receiver. o Wherefore, in fairness to Atty. Magno, it is hereby ordered that he be paid P1,000.00 from the funds under receivership. If he is not satisfied with this amount, he can go after Saura. After two months, Saura filed ANOTHER motion for reimbursement, for the amount he allegedly paid as compensation of a clerk, a certain Melchor Ordoo whom he employed when he was still a receiver, at the rate of P120.00 a month, or a total of P5,236.00.

o This is because his work involves voluminous paper and legal work. o Ordono served as the typist-stenographer, messenger, filing clerk, utility clerk, and records clerk. Lower court denied this second motion for reimbursement (although nobody opposed), reasoning that the Court has previously ordered the payment of 10k as compensation for Saura for his services. Any amount in addition thereto would be improper. o He is now estopped from claiming any further amount as compensation for alleged clerical services employed by him as such receiver without prior approval or authority of this Court. Hence, this appeal.

Issue/Held: Whether or not Saura is entitled to the second reimbursement NO Dispositive Portion: WHEREFORE, the order appealed from is affirmed, with costs against appellant. Ratio: A receiver is a representative of the court appointed for the purpose of preserving and conserving the property in litigation and prevent its possible destruction or dissipation if it were left in the possession of any of the parties. The receiver is not the representative of any of the parties but of all of them to the end that their interests may be equally protected with the least possible inconvenience and expense. It is inherent in the office of a receiver not only that he should act at all times with the diligence and prudence of a good father of a family but should also not incur any obligation or expenditure without leave of the court and it is the responsibility of the court to supervise the receiver and see to it that he adheres to the above standard of his trust and limits the expenses of the receivership to the minimum. For these reasons, it is generally the receivership court that is in a better position to determine whether a particular expenditure is reasonable and satisfied or not and its ruling thereon may not be disturbed by this Court. The motion in question of the receiver was not opposed by any of the parties. It is to be observed, however, that the records show that the court a quo had previously allowed or approved reimbursements to the receiver of expenditures made by him in connection with the performance of his duties, more particularly, for a trip made to Japan and for the fees of a lawyer who had allegedly assisted him, notwithstanding he is a lawyer himself. o Besides, the court a quo fixed the total compensation to the appellant receiver at P10,000.00 for his services as such and said amount, from all appearances, is agreeable to everyone, including appellant. (Note: The SC refers again to the reasoning of the lower court, and said that---) We find these reasons to be cogent enough in the premises, specially because appellant's alleged employment of a clerk was made without prior leave of court. <- (IMPT!!! Hence, it is better if the receiver obtained a leave of court before employing the receiver!!)

In these circumstances, it cannot be said that the court a quo abused its discretion, much less gravely.

FOOTNOTE SUMMARY: CIVCASE No. 34998 (I think this is important too because this will illustrate the circumstances leading to the appointment of Saura as receiver) This is a case filed by Normandy as well as of the WARVETS against defendants Duque, etc (look at Respondents (1)). to set aside certain contracts between WARVETS and the Respondents. Cochingyan spouses intervened, petitioned for the appointment of a receiver, and was granted. The following bulletpoints are the background facts/reasons leading to the appointment of a receiver: o The Cabinet approved the proposal of the WARVETS to undertake the procurement and sale of specific items of reparation goods from Japan, valued at $8,000,000.00, in order to generate trust funds for the benefit of veterans, war widows and orphans as contemplated in the Reparations Agreement between the Philippines and Japan, and RA 1789. o Hence, WARVETS and Cochingyan entered into an agreement. Cochingyan was given the right to dispose of the reparation goods aforementioned with marginal profits given to WARVETS, 40% and 60% depending on the classification of the items.. o WARVETS also entered into a contract with Filipinas Merchandising whereby Filipinas will negotiate the sale and distribution of the goods. WARVETS will also receive marginal profits. o "By reason of these overlapping contracts, Cochingyans filed a specific performance suit against WARVETS. However, this case was subsequently dismissed after the agreed to settle Filipinas assigned to in favor of the Cochingyans all its rights and privileges under its two contracts, and whereby WARVETS agreed to receive greatly reduced marginal profits, from the Cochingyans, of 20% and 25% on non-unclassified and unclassified items, respectively. Thus, as a result of the confusion that resulted in the execution of these various contracts, the ultimate beneficiaries, namely, the veterans, war widows and orphans would suffer losses equivalent to a decrease or reduction in expected profits, from 40% and 60%, to 20% and 25%, or roughly P3,400,000.00 to P6,600,000.00. o It cannot be said that the original profits of 40% and 60% assigned under the contract with the Cochingyans of November 4, 1957 would be hard to realize, for it is common knowledge that imported goods command very high prices much above their procurement costs, and because the Cochingyans would not have sacrificed time, energy and expenses in filing their performance suit, Civil Case No. 34392 of this Court, against the World War II Veterans Enterprises, Inc. had they not been sure that they could easily obtain those percentage gains and at the same time make a safe margin of profits for themselves. As things now stand, the interest of the beneficiaries cannot be amply protected by the World War II

Veterans Enterprises, Inc. which naturally feels bound to support its commitment under the Memorandum of Settlement aforementioned. o "For the above reasons, the Court considers the petition for the appointment of a receiver to be well founded, and the same is, therefore, hereby granted. .