Receivership

RECEIVERSHIP
G.R. No. 6305
September 26, 1911
COMPAIA GENERAL DE TABACOS DE FILIPINAS, plaintiff-appellee,

vs.
ROMANA GAUZON and JUAN D. POMAR, defendants.
JUAN D. POMAR, receiver-appellant.
M. Fernandez Yamson, for appellant.
A. P. Seva, for appellee.
Militis Lex Fraterniy and Honor Society (Receivership Rule 59)
JOHNSON, J.:
The present appeal is made by the defendant Juan D. Pomar, as receiver, against the order of the
Hon. Albert e. McCabe, judge of the Province of Occidental Negros, disallowing certain items in the
final account of the said receiver.
It appears from the record that the defendant, Romana Gauzon, on the 10th day of September, 1904,
executed and delivered to the plaintiff (Compaia General de Tabacos de Filipinas) a mortgage upon
an hacienda known as "San Jose," in the municipality of San Carlos, in the Province of Occidental
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Negros. The said defendant (Romana Gauzon) having failed to pay the said mortgage, the plaintiff
(Compaia General de Tabacos de Filipinas), on the 22d day September, 1905, commenced an action
for the foreclosure of said mortgage, and asked, in addition to the foreclosure of the mortgage, that a
receiver be appointed to take change of the property in question, pending the said action. On the
same day (22nd of September, 1905) the Hon. Vicente Jocson, after hearing the petition filed in said
cause, appointed the said defendant, Juan D. Pomar, an employee of the plaintiff, receiver of the
property involved in said foreclosure proceedings. Said foreclosure proceedings continued to a
termination. The result of said proceedings may be found in two decisions of this court, the cases of
La Compaia General de Tabacos de Filipinas vs. Ganzon (13 Phil. Rep., 472) and La Compaia
General de Tabacos de Filipinas vs. Ganzon (13 Phil. Rep., 481). The facts relating to the foreclosure
proceedings and the judgment therein are not important in the present cause, further than to show
the history of the transactions of the receiver, the defendant, Juan D. Pomar.
After the termination of the receivership, the court required of the receiver (Juan D. Pomar) a report
and an accounting of his operations as receiver. It appears from the record that the lower court had a
good deal of trouble in securing a final report. The receiver apparently acted as though his only
responsibility was to the plaintiff (Compaia General de Tabacos de Filipinas); however, finally the
lower court secured what appears to be a final accounting by the receiver, upon the 9th or 10th day
of August, 1909. The report of the receiver contained many items.
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After a careful consideration of the various items of the account of the receiver, Judge McCabe
allowed the following items of said account
2. Cutting and grinding, according to report of commissioners
1. Care of cane before cutting
8,565.97
P1,522.30
3. Fuel
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150.00
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4. Expenses in Iloilo, according to receiver's Exhibit B
5. Storage
2,591.28
428.28
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6. Insurance
428. 28
7. Selling commission
648. 28
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8. Judgment for plaintiff in cause No. 249
9,187.80
9. Receiver's pay
1,000.00
Total
24,522.04
or about the first Tuesday of November, 1909, the sum of P7,883.76, a balance which he ought to
have had in his possession. From the order allowing said items only the defendant appealed to this
court and made the following assignments of error: .
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RECEIVERSHIP
I. The court erred in reducing to P8,565.97 the P22,944.73 spent by the receiver for cutting,
hauling, and manufacture of 8,005.58 piculs of sugar, for packing, transportation and storage
thereof, and insurance and selling commission thereon.
IV. The court erred in reducing to P1,000 the P4,860.87 which the receiver claimed as
compensation for his services.
V. The court erred in holding that the order appointing the receiver does not extend his
powers beyond those prescribed in section 175 of Act No. 190.
II. The court erred in not allowing the item of P147.86 paid out by the receiver as interest on
money borrowed to cover the first expenses of his receivership.
III. The court erred in not approving the disbursement made by the receiver of the P3,001.94
delivered to the aparceros as their share of the crop.
With reference to the first assignment of error, it will be noted that the receiver presented an account
for cutting, grinding, etc., of the sugar cane upon the hacienda, over which he had control as receiver,
amounting to P22,944.73. Judge McCabe refused to allow that amount for cutting and grinding, etc.,
of said sugar cane, upon the ground that it was an unreasonable charge. The parties in the lower
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RECEIVERSHIP
court agreed to the appointment of three commissioners for the purpose of ascertaining the
reasonable cost of cutting, grinding, etc., of the sugar cane upon the said hacienda. The
commissioners were duly appointed, the plaintiff selecting one, the defendant another and the court
selecting the third. In due time and after due deliberation, the commissioners etc., of the said sugar
cane per pico was P1.07. There were 8,005.58 picos of sugar cane, which calculated at the rate of per
pico for cutting, grinding, etc., would amount to P8,565.97, which amount the lower court allowed the
receiver. The commissioners appointed by the lower court were men who had experience in the
cutting and grinding of sugar cane. It was the duty of the receiver to harvest the sugar cane at least
possible cost to the owners of the crop. There is much proof in the record to indicate that the receiver
did not harvest the crop of sugar cane as expeditiously as he should have done. There is no proof in
the record which shows that the amount estimated by the said commissioner for the cutting, grinding,
etc., of the sugar cane in question, was not a reasonable amount for that expense. We find nothing in
the record which justifies us in modifying the decision of the lower court with reference to this first
assignment of error.
With reference to the second assignment of error, it appears that the receiver attempted to charge
P147.86, as interest on money borrowed by him during his administration as receiver. There is no
proof in the record which shows that it was necessary for him to borrow money to properly conserve
the interests of the owners and creditors interested in the administration of the hacienda. The lower
court correctly said, "a receiver has no authority to borrow money unless the same is expressly given
by the court." We would be inclined, however, to allow this amount (P147.86) had the necessity been
fully demonstrated for borrowing the money. In the absence of authority expressly given and
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RECEIVERSHIP
especially in the absence of proof of the absolute necessity for incurring this item of expense, we
refuse to modify the conclusions of the lower court with respect to this item.
With reference to the third assignment of error above noted, the receiver included in his account the
item of P3,001.94, being the amount, according to this statement, of money and effects delivered
to "los aparceros de la hacienda" during his administration. It is a well known custom among sugar
growers in the Philippine Islands, that the aparceros plant and cultivate sugar cane at their own
expense, receiving one-half of the sugar produced and delivering the other half to the owner land. It is
also a well known custom that the owners of the land from time to time advance money and effects to
the aparceros, deducting the value of the same from the value of the sugar after the same is
harvested. In the present case it appears that the receiver delivered one-half of the sugar to
theaparceros without deducting the amount of money and effects advanced to them. If he, in fact,
advanced to theaparceros the said sum (P3,001.94) he should have deducted it from the amount due
said aparceros, and not have attempted to collect the same from the amount due the owner of the
hacienda, prejudicing the owner of the hacienda thereby. Here again the receiver exceeded his
authority. Nevertheless we would be inclined to allow this amount (P3,001.94) if it were a just charge
against the administration of the hacienda. But, as was said above, it is not a just charge against the
owner of the hacienda. This amount should have been collected from theaparceros. Judge McCabe
committed no error in disallowing this item in the account of the receiver.
With reference to the fourth assignment of error above noted, it will be seen that the receiver
included in his account the sum of P4,860.87 as compensation for his administration as receiver. The
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RECEIVERSHIP
lower court disallowed that amount but did allow him the sum of P1,000 as his just compensation as
receiver. The lower court, in the appointment of the receiver, did not fix any sum for his
compensation; neither is it customary for courts in appointing receivers to fix their compensation in
advance. Their compensation is a matter which is always left to the sound discretion of the court, to
be allowed from time to time. The receiver attempted to recover as his compensation 15 per cent of
the value of the sugar. The lower court found that the amount of P4,860. 87 was an unreasonable
amount to be allowed as compensation for the services of the receiver in the present case. The court
found that the receiver might have done all the work which he did do in the course of his
administration as receiver in one hundred days. The Code of Procedure in Civil Actions allows
administrators of estates of deceased persons the sum of P4 a day for the time actually employed in
the administration of the estate. The lower court, following this provision of the law, believing the
present case to be somewhat analogous, allowed the receiver P4 a day for his services. The lower
court also allowed an additional amount, the basis of which does not clearly appear in the record,
making the total compensation of the receiver the sum of P1,000. Against that order the owner of the
hacienda did not appeal. Considering the negligent manner in which the receiver administered the
hacienda, as appears from the record, as well as his negligence in complying with the various orders
of the court with reference to rendering accounts, we are of the opinion that the sum of P1,000 is, in
fact, more than a just compensation for his services. In view, however, of the fact that the owner of
the hacienda did not appeal from the order of the court allowing said sum (P1,000) we approve the
finding of the lower court.
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RECEIVERSHIP
With reference to the fifth assignment of error above noted, the appellant seems to believe that
section 175 of the Code of Procedure in Civil Actions gave him full power to administer the property
placed under his control as receiver as he might deem wise and necessary, without any intervention
on the part of the court or of the interested parties. The appellant evidently overlooked the phrase of
said article which says: "The receiver shall have, under the control of the court in which the action is
pending, power, etc." The judge of the lower court in his decision goes into detail at length and cites
authorities extensively, for the purpose of showing the general duties, powers and responsibilities of
receivers, evidently for the purpose of instructing receivers in his district. The receiver is generally
defined to be "an indifferent person between the parties litigant, appointed by the court and on behalf
of all the parties, and not of the plaintiff or defendant only, to receive and hold the thing or property
in litigation, pending the suit (Booth vs. Clark, 17 How. (U. S.),322, 331), to receive the rents, issues or
profits of the land or thing in question (Both vs. Clark, supra), to receive the rents or other income, to
hold possession and control of the property which is the subject matter of the litigation, and to
dispose of the same or deliver it to such person or persons as may be directed by the court.
(Wiswall vs. Kunz, 173 Ill., 110.)" The reports of the decisions of the courts are filled with decisions
supporting the above doctrine. The receiver is said to be the arm and hand of the courta part of the
machinery of the court, by which the rights of parties are protected. He is required not only to
preserve the property, but to protect the rights of all of the parties interested. If he is not versed in
the law, he should secure legal advice, with the permission of the court and in case of doubt should
advise with the court and receive direction.
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RECEIVERSHIP
After a full consideration of the above assignments of error, in connection with the facts contained in
the record, we find no reason for changing or modifying the decision of the lower court, and the same
is hereby affirmed, with costs.
THE BELGIAN CATHOLIC MISSIONARIES, INC., plaintiff-appellee,

vs.
MAGALLANES PRESS, INC., ET AL., defendants.
JOSE MARIA MEMIJE, appellant.
Torres, Mapa and Moreland, JJ., concur.

G.R. No. L-25729
November 24, 1926
Antonio M. Opisso, Romualdez Hermanos and Luciano de la Rosa for appellant.

Cavanna, Aboitiz & Agan for appellee.
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RECEIVERSHIP
VILLA-REAL, J.:
against the defendant Jose Ma. Memije is final and absolute; and that the plaintiff recover the
amount of the fire insurance policies of the defendant "Magallanes Press, Inc.," which, or the
representatives of which, is hereby ordered to endorse said insurance policies to the plaintiff,
with the costs of the proceedings against the defendants, with the exception of J.P. Heilbronn
Co., Inc. It is so ordered.
This is an appeal by Jose Marie Memije from a judgment of the Court of First Instance of Manila the
dispositive part of which is as follows:
For all the foregoing, the court is of the opinion that the plaintiff has a right to the relief
prayed for in its complaint. Wherefore, judgment is rendered declaring that Exhibits C and D,
that is, the mortgage deeds in question in this proceeding, in so far as they prejudice the
rights of the plaintiff, are null and void; that the preliminary injunction issued in this case
In support of his appeal, the appellant assigns the following supposed errors as committed by the
lower court in its judgment, to wit: (1) The court erred in overruling the demurrer filed by this
defendant to the complaint in this action; (2) the trial court erred in giving the plaintiff corporation
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RECEIVERSHIP
possession of the property mortgaged to this appellant without following the necessary proceedings
or complying with the provisions of the law; (3) the trial court erred in issuing the writ of preliminary
injunction against the appellant and E. E. Elser, restraining the former from receiving from the latter,
or the latter from delivering to the former, the amount of the insurance policies covering the property
mortgaged to the appellant, which was damaged by the fire that occurred in the establishment of the
Magallanes Press, Inc; (4) the trial court erred in giving to the unnecessary intervention of the
Magallanes Press, Inc., in the execution of the deed Exhibit C an interpretation which is neither based
upon law nor upon the contract; (5) the trial court erred in ordering the suspension of the foreclosure
of the appellant's mortgage on the property of the Magallanes Press, Inc.; (6) the trial court erred,
under the facts proven in this case, in applying article 1297 of the Civil Code; (7) the trial court erred
in finding in its decision that the defendant Jose Ma. Memije should not have executed the documents
Exhibits C and D without taking into account the rights of the plaintiff corporation, The Belgian
Catholic Missionaries, Inc; (8) the trial court erred in declaring Exhibits C and D null and void in so far
as they prejudice the rights of the plaintiff, over whose credit that of the herein appellant is
preferential; in declaring the writ of preliminary injunction issued against the defendant Jose Ma.
Memije final and absolute; in giving judgment for the plaintiff to recover the amount of the fire
insurance policies of the defendant the Magallanes Press, Inc; and (9) the trial court erred in not
making any pronouncement as to the counterclaim and cross-complaint of the defendant Jose Ma.
Memije in this action, nor taking the same into consideration and rendering judgment thereon in favor
of said defendant.
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RECEIVERSHIP
The oral evidence has not been forwarded to this court so that we are compelled to base our opinion
exclusively upon the documentary evidence and the facts found and stated by the trial court in its
judgment.
installment or the interest earned on the unpaid balance, the whole amount of the indebtedness shall
become due, and the maker shall pay the payee an additional sum equivalent to 15 per cent of the
total balance, for attorney's fee and expenses of collection, forfeiting all right of exemption.
It appears that on December 1, 1921, the Magallanes Press, through its manager H. Camena,
executed a promissory note in favor of J. P. Heilbronn & Co., Inc., for the sum of P3,472.92, with
interest at 10 per cent per annum, payable at the rate of P250 a month, plus the interest earned on
the unpaid balance, until the whole amount of the indebtedness shall have been paid, the first
payment to be made on January 1, 1922, with the condition that upon the failure to pay any monthly
On the same date, December 1, 1921, the said Magallanes Press, through its managers H. Camena,
also executed a promissory note in favor of J. P. Heilbronn & Co., Inc., for the sum of P10,715.77, with
interest at 12 per cent per annum, payable at the rate of P500 a month, together with the interest
earned on the unpaid balance, until the whole amount of the indebtedness shall have been paid, the
first payment to be made on January 1, 1922, with the condition that upon the failure to pay any
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RECEIVERSHIP
monthly installment or the interest earned on the unpaid balance, the whole amount of the
indebtedness shall become due, and the maker shall pay the payee an additional sum equal to 15 per
cent of the total balance for attorney's fee and expenses of collection, forfeiting all right of exemption.
To secure the payment of said promissory notes which amounted to a total of P14,188.69, H. Camena,
as general manager of the Magallanes Press, executed a chattel mortgage on all of the printing
machinery and its accessories, belonging to the said Magallanes Press, in favor of J. P. Heilbronn &
Co., Inc.
One June 19, 1922, the Magallanes Press Co., Inc., successor to the Magallanes Press, with all the
latter's rights and obligations, through its duly authorized president, E. F. Clemente, executed a
chattel mortgage on the same printing machinery ad its accessories in favor of the Belgian Catholic
Missionaries Co., Inc., which the Magallanes Press had mortgaged to J. P. Heilbronn & Co., Inc., to
secure the payment of a loan of P30,500, with interest at 12 per cent per annum, which the said
Magallanes Press & Co., Inc., had obtained from the Belgian Catholic Missionaries Co., Inc., the
duration of the mortgage loan being one year from the execution of the mortgage deed.
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RECEIVERSHIP
In December, 1922 the appellant Jose Ma. Memije made a loan in the sum of P2,000 to E. F. Clemente
which was paid on account of the indebtedness of the Magallanes Press to J. P. Heilbronn & co., Inc.,
together with the sum of P1,641 which A. F. Mendoza owed said E. F. Clemente.
On the occasion of the issuance of the writ of attachment in civil cause No. 23818 of the Court of First
Instance of Manila, entitled Jose Ma. Cavanna vs. the Magallanes Press Co., Inc., the defendant Jose
Ma. Memije, on February 21, 1923, filed an intervention in said case.
All the promissory note executed by the Magallanes Press in favor of J. P. Heilbronn & Co., Inc., having
been overdue for non-payment of the installments as well as the respective chattel mortgage, the
said J. P. Heilbronn & Co., Inc., transferred all its mortgage credit against the Magallanes Press to Jose
Ma. Memije in consideration of the sum of P8,280.90, the balance of said mortgage credit.
On March 14, 1923, Enrique Clemente, as manager of the Megallane Press Co., Inc., executed a deed
in favor of Jose Ma. Memije by virtue of which the chattel mortgage which was given by the
Magallanes Press in favor of J. P. Heilbronn & Co., Inc., and transferred by the latter to Jose Ma.
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Memije, was made to cover an additional loan of P5,895.79, which included the sum of P2,000 which
said Jose Ma. Memije had advanced said Enrique Clemente in December, 1922.
respective insurance policies, which amounted to P7,686.45, but due to the issuance of the abovementioned writ of preliminary injunction, payment could not be made.
On April 21, 1923, a fire occurred in the building where the pointing machinery, its accessories and
other personal property of the Magallanes Press Co., Inc., were located and which were covered by
said chattel mortgages. Said property was insured, and the insurance policies covering it were
endorsed to J. P. Heilbronn & Co., Inc., upon the execution of the chattel mortgage thereon in favor of
the latter. When J. P. Heilbronn & Co., Inc., transferred its mortgage credit to Jose Ma. Memije it, in
turn, endorsed said insurance policies to him. The insurance companies were disposed to pay the
Due to the filing of the complaint in the present case on May 9, 1923, and the issuance of the writ of
preliminary injunction on May 10th of the same year, Jose Ma. Memije was unable to collect the
amount of the insurance policies, and when he was summoned under the complaint on May 14, 1923,
he made demand on the Magallanes Press Co., Inc., for the payment of his mortgage credit on the
same date the manager of said corporation, E. F. Clemente, permitted the secretary of the said
corporation to place the property covered by the mortgage into the hands of the said Jose Ma. Memije
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RECEIVERSHIP
in order that the same might be sold, but the sale could not be consummated due to the issuance of
the said writ of preliminary injunction.
The first question raised by the defendant and appellant has reference to the overruling of the
demurrer filed by him to complaint.
One of the grounds of said demurrer was that the complaint in this case did not allege facts sufficient
to constitute a cause of action against the said defendant, in that, notwithstanding the fact that the
said complaint was instituted to annul the document of transfer of the mortgage credit Exhibit C, it
was not alleged in the said complaint that the defendant Jose Ma. Memije had any intention to
defraud the interests of the plaintiff corporation, which was absolutely impossible due to the nature of
the transaction and the preferential character of the mortgage credit of J. P. Heilbronn & Co., Inc.
As to this paragraph of the complaint, the plaintiff company having known of the existence of a
chattel mortgage in favor of J. P. Heilbronn & Co., Inc., the latter, either as the first or as the second
mortgage, had a perfect right to transfer its mortgage credit, without the knowledge or consent of
any other mortgagee, inasmuch as whoever acquired it, would have exactly the same status as the
transferor with the same rights and obligations. The fact, therefore, that the Magallanes Press Co.,
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RECEIVERSHIP
Inc., had consented to the transfer of the mortgage credit of J. P. Heilbronn & Co., Inc., to Jose Ma.
Memije, does not constitute a fraud that an vitiate the said transfer, inasmuch as the order of
preference of the mortgages has not been altered, and its allegations does not constitute a cause of
action to annul the said transfer.
In regard to the allegation contained in the ninth paragraph of the complaint, it is very clear that the
increase made by Jose Ma. Memije in the mortgage credit acquired by him from J.P. Heilbronn & Co.,
Inc., and the extension made by the Magallanes Press, Inc., of the mortgage to said additional credit
without the knowledge or consent of the plaintiff company, as second mortgagee, prejudices the
credit of the latter, inasmuch as the security for the payment of said credit was reduced as to it, and,
therefore, constitute a fraud that vitiates the contract of extension of the mortgage evidence by the
deed Exhibit D, rendering it void.lawphil.net
The facts allege in paragraph 9 of the complaint are sufficient to constitute a cause of action of
nullity, and the lower court did nor err in overruling the demurrer filed by the defendant Jose Ma.
Memije.
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RECEIVERSHIP
In regard to the second assignment of error, it appears that the defendant Jose Ma. Memije having
attempted to foreclose the mortgage, by which the mortgage credit acquired by him from J. P.
Heilbronn & Co., Inc., was secured, in order to recover not only the original credit but also the
increase, the Belgian Catholic Missionaries Co., Inc., filed a complaint, with a petition for a writ of
preliminary injunction against the sheriff, in whose hands the foreclosure of the mortgage was placed.
The writ of preliminary injunction having been issued, upon the filing of a bond in the sum of P15,000,
and there being no person more interested in the conservation and custody of the property covered
by the mortgage than said plaintiff company, being the largest creditor, it applied and obtained from
the court the possession of the same.
Contrary to the contention of the appellant, this case is not one of replevin but simply a proceeding
instituted by the plaintiff for the deposit of the property in litigation, upon the filing of a bond, said
plaintiff, acting as a receiver by authority of the court, being the person most interested in the
conservation and care of the same (sec. 174, Act No. 190; 11 C. J., 726).
The lower court, therefore, did not err in authorizing the plaintiff company to take possession of the
personal property in litigation upon the filing of a bond sufficient to secure the conservation or value
thereof.
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The third assignment of error raises the question as to the preference of right between the plaintiff
company and the defendant over the mortgaged property and the amount of the insurance policies
covering a part thereof which was destroyed by fire.
this second mortgage had been executed, the payment of the mortgage credit of J.P. Heilbronn & Co.,
Inc., became due, which credit had been reduced to the sum of P8,280,90 through partial payments,
and the herein defendant-appellant Jose Ma. Memije acquired said mortgage credit and increased it
by P5,895.59 of which increase P2,000 was a previous loan.
As we have seen in the statement of the pertinent facts necessary for the clear and accurate solution
of the questions of law involved in the present appeal, the firm of J. P. Heilbronn & Co., Inc., had a
mortgage credit against the Magallanes Press for the sum of P14,186.69, secured by a first chattel
mortgage. The plaintiff company, the Belgian Catholic Missionaries Co., Inc., also had a mortgage
credit for the amount of P30,500, secured by a second mortgage on the same personal property. After
There is no question but that J. P. Heilbronn & Co., Inc., at the time of the transfer of this mortgage
rights to Jose Ma. Memije, had a preferential right over that of the Belgian Catholic Missionaries Co.,
Inc., for the remainder of the amount of the mortgage credit, that is, P8,280.90. The plaintiff company
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had a preferential right to the rest of the value of the mortgaged property after deducting the
remaining mortgage credit of J. P. Heilbronn & Co., Inc.
The increase of P5,895.59 made by the defendant Jose Ma. Memije in favor of the Magallanes Press
Co., Inc., and the extension of the mortgage thereto, are not only subordinate to the mortgage credit
of the plaintiff company, being subsequent in time and in registration, but said increase in the
security is also void. The increase of the mortgage security becomes a new mortgage in itself,
inasmuch as the original mortgage did not contain any stipulation in regard to the increase of the
mortgage credit, and even if it did, said increase would take effect only from the date of the increase.
A mortgage that contains a stipulation in regard to future advances in the credit will take effect only
from the date the same are made and not from the date of the mortgage (11 C. J., 448; 5 R. C. L.,
420-421). In accordance with the provisions of section 5 of Act No. 1508, known as the Chattle
Mortgage Law, the parties to the original deeds swore that the same was mortgaged "to secure the
obligations specified therein and for no other purpose." Neither the increase in question, nor the
extension of the mortgage to secure the payment of the same is specified in the deed, consequently
said extension is void. "Where the statute provides that the parties to a chattel mortgage must make
oath that the debt is a just debt, honestly due and owing from the mortgagor to the mortgagee, it is
obvious that a valid mortgage cannot be made to secure a debt to be thereafter contacted." (11 C. J.,
448.)
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Briefly, therefore, we have the following:
(c) That as to the increase of P5,895.59, the right of the defendant Jose Ma. Memije is that of
an ordinary creditor.
(a) That Jose Ma. Memije has a preferential right to the value of the chattels mortgage and
the amount of the insurance policies up to the sum of P8,280.90;
(b) That the plaintiff corporation, the Belgian Catholic Missionaries Co., Inc., has a right to the
remainder of the value of said chattels and the insurance policies up to the amount of
P30,500, after deducting the preferential credit of Jose Ma. Memije;
In regard to the damages claimed by the defendant in his counterclaim and which is the subjectmatter of his remaining assignments of error, said defendant has a right to interest at 12 per cent on
the P8,280.90 the amount of the mortgage credit acquired by him from J. P. Heilbronn & Co., Inc., from
February 26, 1923, the date of the acquisition until fully paid.
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For the foregoing reasons, the judgment appealed from is revoked and it is ordered the another be
entered declaring all the mortgages overdue, and the mortgage credit of Jose Ma. Memije preferential
over that of the Belgian Catholic Missionaries Co., Inc., up to the amount of P8,280.90, with interest at
the rate of 12 per cent per annum from February 26, 1923, until fully paid; the mortgage credit of the
Belgian Catholic Missionaries Co., Inc., for the sum of P30,500 with interest at the rate of 12 per cent
per annum, from June 19, 1922, until fully paid, plus the sum of P3,000 for attorney's fees, over the
additional credit of Jose Ma. Memije for P5,895.59; and ordering the foreclosure of the said mortgages
by selling the mortgaged property at public auction, to the proceeds of which shall be added the
amount of the insurance policies and the above-mentioned credits in the order of preference above
established, without special pronouncement as to costs. So ordered.
Avancea, C. J., Johnson, Street, Ostrand and Johns, JJ., concur.

G.R. No. L-29295
October 22, 1928
J. M. PO PAUCO, plaintiff,
vs.
DOLORES SIGUENZA, ET AL., defendants.
WISE & CO., intervenor-appellant.
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Block, Johnston and Greenbaum for the intervenor.
Roman J. Lacson for receiver-appellee National Bank.
judgment and agreement the court issued a writ of execution for the remaining sum of P59,270.55 on
November 19, 1926.
ROMUALDEZ, J.:
In another civil case before the same court, No. 6416, Wise & Co., Ltd., had on October 18, 1926
obtained judgment against the herein plaintiff J. M. Po Pauco for the sum of P10,572.80 with legal
interest thereon, execution of said judgment having been ordered in those proceedings, which has not
yet, even partially, been paid.
In this case, J.M. Po Pauco obtained final judgment in his favor against Dolores Siguenza and Mariano
Aguilar for the sum of P72,278.01, both parties agreeing to deduct therefrom the sum of P13,007.46
which is the net value of the sugar cane belonging to said defendants and attached by the plaintiff
and manufactured by the Philippine National Bank, the receiver of the said product. By virtue of said
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RECEIVERSHIP
On October 23, 1927, Wise & Co., Ltd., intervened in this case praying that the Philippine National
Bank, the receiver of the said sum of P13,007.46, be ordered to satisfy the judgment in favor of the
said petitioner Wise & Co., Ltd., against J.M. Po Pauco, out of the sum deposited with it, Po Pauco's
right and interest in the judgment of this case now before us having been preliminary attached in civil
case No. 6416, on August 6, 1926.
Opposition was filed to said petition by the Philippine National Bank alleging that said bank has a
preferential right over the surplus of the sale of the sugar delivered to it as receiver, and also that the
Hibila Trading Corporation obtained judgment against the said J. M. Po Pauco, in civil case No. 3197 of
the Court of First Instance of Occidental Negros, holding that the rights of the Hibila Trading
Corporation over the sugar harvest of 1923-1924 and 1924-1925 of the spouses Dolores Siguenza and
Mariano Aguilar in the San Agustin Estate, are preferential over those of J. M. Po Pauco and, therefor,
the latter is not at all entitled to any of the surplus remaining from the sale of said sugar; and that
said Hibila Trading Corporation is an interested party which must be summoned before the motion of
Wise & Co., Ltd., can be heard, which corporation must institute an ordinary action to establish
whatever right it may have to the surplus of the sugar in question. 1awph!l.net
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RECEIVERSHIP
The court of First Instance of Iloilo denied the motion of Wise & Co., Ltd., granting it permission to
institute an action against the Philippine National Bank and the Hibila Trading Corporation in order to
determine which has the better right to the net proceeds of the sale of said sugar.
receiver, on the other hand, is a special officer, appointed in relation to and within a certain case or
action, and whose duties are limited to his sphere of action, and do not extend further than the case
in which he was appointed.
Wise & Co., Ltd., appeals from said ruling making several assignments of error.
For this reason, while the funds in the custody of a sheriff may be within the reach of processes
coming from other judicial proceedings, such is not the case with respect to those under the custody
of a depositary. From which it follows that those who, as in the present case, have any claim to
property or sum in the possession of a receiver, must appear in the same proceeding in which said
receiver discharges his duties, and there, by motion or petition, allege and prove their claims.
It should not be forgotten that the sum mentioned is in the custody of a receiver and not of a sheriff.
The sheriff is a court officer of a general character who is not appointed for a certain judicial case; the
sheriff is an officer who exercises or can exercise his functions within the limits of his jurisdicition. A
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RECEIVERSHIP
The order appealed from is reversed and it is ordered that this proceeding be remanded to the court
of origin in order that, without the necessity of commencing a new action, the interested parties be
given an opportunity to set forth and prove their alleged preferential rights over the sum in
controversy.
G.R. No. L-2987
February 20, 1951
ERNEST BERG, plaintiff-appellant,

vs.
VALENTIN TEUS, defendant-appellee.
Without any special pronouncement as to costs. So ordered.

Johnson, Street, Malcolm, Ostrand and Villa-Real, JJ., concur.
Alva J. Hill for appellant.

J. Perez Cardeas for appellee.
Page 28
RECEIVERSHIP
TUAZON, J.:
This appeal is from an order of the Court of First Instance of Ilocos Sur dismissing the above-entitled
action by reason of Executive Order No. 25, as amended by Executive Order No. 32, on moratorium.
Ernest Berg brought the action against Valentin Teus to foreclose a real estate and chattel mortgage
executed in November, 1944, to secure six promissory notes of the aggregate value of P80,000 and
payable on demand two years after declaration of armistice between the United States and Japan. An
amended or supplementary complaint was later admitted against the defendant's objection. The
complaints recited that by stipulations of the parties, the mortgagor had undertaken, among other
things, to insure and pay the taxes on the mortgaged properties; not to alienate, sell, lease,
encumber or in any manner dispose thereof; and to keep and maintain the said properties in good
order and repair; but that, it was alleged, he (defendant) had failed to keep taxes fully paid; had made
material alterations on the premises, and had sold and conveyed them to Central Azucarera del
Norte. It was further alleged that the mortgagor had agreed that should he fail to perform any of his
obligations as stipulated, "the mortgage shall be deemed to be automatically foreclosed and the
mortgagee may forthwith proceed to foreclose this mortgage either extrajudicially, even after the
death of the mortgagor, in pursuance of the provisions of Act No. 3135, as amended;" and on the
basis of this agreement it was prayed that the mortgage be declared automatically foreclosed and the
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RECEIVERSHIP
plaintiff entitled to immediate possession of the properties in question. In a separate motion Berg's
attorney also asked for the appointment of a receiver.
understand this order, its result was that the moratorium ought not to interfere with the plaintiff's
motion for appointment of receiver.
Counsel for the defendant having moved for the dismissal of the complaint on the grounds that
plaintiff's cause of action had not accrued by reason of the executive orders herein before cited, and
having opposed the motion for receivership, Judge 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 because, according to His Honor, the reasons alleged in the motion to dismiss were not
"indubitable" with reference to the appointment of a receiver sought by the plaintiff. As we
However that may be, the plaintiff subsequently filed a "complete complaint" in which the original
complaint and the amended or supplementary complaint were consolidated. This "complete
complaint", which was admitted without objection, apparently was supposed to have restored the
case to its original status. Consequently the attorney for the defendant filed a new motion to dismiss;
the Judge Luis Ortega, who had replaced Judge Hilario, ignoring the latter's order entered the order
now on appeal by which the entire action was quashed on the theory advanced in the motion to
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RECEIVERSHIP
dismiss. The new order was silent on both the application for receivership and the prayer that the
plaintiff be adjudged authorized by the terms of the mortgage to foreclose it extrajudicially and seize
the properties.
Judge Ortega opined that Executive Orders Nos. 25 and 32 were still in force unaffected by Republic
Act No. 342 as to debts contracted during the Japanese occupation. Plaintiff contended that those
executive orders had passed out of existence by the disappearance of the emergency contemplated
thereby, and the contention is reiterated in his instance. But from the view we take of the case,
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 effect. This we do to pave the way for
and hasten action on the petition to put the premises and chattels involved in the hands of a receiver,
petition which appears of urgent character. The constitutionality of Executive Orders Nos. 25 and 32
and Republic Act No. 342 and allied issues can wait. These issues are delicate and would require
prolonged study and deliberation. Besides, there is a pending bill in Congress repealing those
executive orders and law.
In Medina vs. Santos (78 Phil., 464; 44 Off. Gaz., [No. 10] 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
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RECEIVERSHIP
proceed notwithstanding the moratorium law. The court observed that the indemnity sought was a
subsidiary liability and would not come into being unless and until decision was rendered against the
defendant for such payment.
In the case of Alejo vs. Gomez (83 Phil., 969), the court ruled that suit for unlawful detainer and rents
in arrears was not affected by the moratorium, the recovery of the unpaid rentals, it was said, being
accessory to the main action.
In Moya vs. Barton (79 Phil., 14; 45 Off Gaz., [No. 1] 237), 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 respect to the amounts
that had fallen due before March 10, 1945, would be stayed.
And, lastly, in Realty Investments Inc. et al. vs. Villanueva et al., (84 Phil., 842; 47. Off. Gaz., 1844),
the court, citing the above-mentioned cases decided that the court should go ahead with the trial of
the action on the merits without prejudice to the right of the defendant to arrest the execution should
one for payment of money be issued. In that case plaintiff, which had sold to the defendant a piece of
land on installment basis, was demanding payment of the installments still unpaid, (installments
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RECEIVERSHIP
which the defendant claimed to have fully settled with the Japanese alien property custodian) or, in
default, restoration of the ownership and possession of the property. In revoking the lower court's
order of dismissal, we pointed out that the De Vencia vs. General, (78 Phil., 780; 44 Off. Gaz., 4912),
and Ma-ao Sugar Central Co., Inc. vs. Barrios, (79 Phil., 666; 45 Off. Gaz., 2444), were distinguishable
from Moya vs. Barton, Medina vs. Santos, and Alejo vs. 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 violations 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 ancillary remedy is
precisely one powerful reason why the case should not be dismissed. Because receivership is an
auxiliary remedy dismissal of the main action would eliminate the only basis for the appointment or
receiver and thus completely bar the door to any relief from mischiefs.
Under the circumstances of the case, the least that should have been done, if that were feasible as a
matter of procedure, was to adopt the steps which Judge Hilario had proposed to do. Judge Hilario
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evidently saw the grave injustice to the plaintiff and the irreparable injury to which his rights would be
exposed if an indefinite suspension of the entire proceeding were decreed.
In suspending the right of creditor to enforce his right the President and Congress had no idea of
depriving him of all means of preventing the destruction or alienation of the security for the debt,
destruction which would virtually write off, in some cases, the whole credit. If that were the intention,
it is doubtful if the orders and the law invoked could stand the test of constitutionality.
The order appealed from will therefore be reversed and the case remanded to the court below for
further proceeding according to the tenor of this decision. We leave the way open to the defendant to
ask for the arrest or stay of execution in the event of an adverse monetary judgment, and for the
plaintiff to impugn anew, if necessary, the constitutionality of Executive Orders Nos. 25 and 32 and
Republic Act No. 342 and/or their being still in force. Costs of this appeal will be charged against the
appellee.
Moran, C. J., Paras, Feria, Pablo, Bengzon, Padilla, Montemayor, Reyes, Jugo and Bautista Angelo,
JJ., concur.
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JULIO A. VIVARES and G.R. No. 155408
MILA G. IGNALING,
Petitioners,
Present:
QUISUMBING, J., Chairperson,
- versus - CARPIO,
CARPIO MORALES,
TINGA, and
VELASCO, JR., JJ.
ENGR. JOSE J. REYES, Promulgated:
Respondent.
February 13, 2008
x-----------------------------------------------------------------------------------------x
DECISION
VELASCO, JR., J.:
The Case
The kernel dispute in this petition under Rule 45 is the legality of the May 22, 2001 Resolution [1] of the
Camiguin Regional Trial Court (RTC), Branch 28 in Civil Case No. 517, which placed the estate of
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Severino Reyes under receivership. The Court of Appeals (CA) saw it differently in CA-G.R. SP No.
67492its June 18, 2002 Decision[2]recalled the RTC directive on the appointment of the receiver,
prompting Julio Vivares and Mila Ignaling to file the petition at bar to convince the Court to reinstate
the receivership.
On May 12, 1992, Torcuato died with a last will and testament executed on January 3, 1992. In Reyes
v. Court of Appeals,[3] we affirmed the November 29, 1995 CA Decision, admitting the will for probate.
Petitioner Vivares was the designated executor of Torcuatos last will and testament, while petitioner
Ignaling was declared a lawful heir of Torcuato.
The Facts
Severino Reyes was the father of respondent Jose Reyes and Torcuato Reyes. Upon the death of
Severino, respondent and Torcuato came upon their inheritance consisting of several properties. They
had an oral partition of the properties and separately appropriated to themselves said properties.
Believing that Torcuato did not receive his full share in the estate of Severino, petitioners instituted an
action for Partition and Recovery of Real Estate before the Camiguin RTC, Branch 28 entitled Julio A.
Vivares, as executor of the estate of Torcuato J. Reyes and Mila R. Ignaling, as heir v. Engr. Jose J.
Reyes and docketed as Civil Case No. 517. With the approval of the trial court, the parties agreed that
properties from the estate of Severino, which were already transferred in the names of respondent
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and Torcuato prior to the latters death on May 12, 1992, shall be excluded from litigation. In short,
what was being contested were the properties that were still in the name of Severino.
On November 24, 1997, for the purpose of collating the common properties that were disputed, the
trial court directed the formation of a three-man commission with due representation from both
parties, and the third member, appointed by the trial court, shall act as chairperson. The disputed
properties were then annotated with notices of lis pendens upon the instance of petitioners.
name several common properties. Petitioners also averred that respondent fraudulently antedated,
prior to May 12, 1992, some conveyances and transfers to make it appear that these were no longer
part of the estate of Severino under litigation. They further claimed that respondent was and is in
possession of the common properties in the estate of Severino, and exclusively enjoying the fruits and
income of said properties and without rendering an accounting on them and turning over the share
pertaining to Torcuato. Thus, petitioners prayed to place the entire disputed estate of Severino under
receivership. They nominated a certain Lope Salantin to be appointed as receiver.
On March 15, 2000, petitioners filed a Motion to Place Properties in Litigation under
Receivership[4] before the trial court alleging that to their prejudice respondent had, without prior
court approval and without petitioners knowledge, sold to third parties and transferred in his own
On March 23, 2000, respondent filed his Opposition to Place the Estate of Severino Reyes under
Receivership,[5] denying that he had fraudulently transferred any property of the estate of Severino
and asserting that any transfer in his name of said properties was a result of the oral partition
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between him and Torcuato that enabled the latter as well to transfer several common properties in his
own name.
On May 24, 2000, petitioners filed their Offer of Exhibits in support of their motion for receivership. On
the same date, the trial court issued an Order [6] granting petitioners motion and appointed Salantin as
receiver conditioned on the filing of a PhP 50,000 bond. Respondent filed a motion for
reconsideration, contending that the appointment of a receiver was unduly precipitate considering
that he was not represented by counsel and thus was deprived of due process.
On August 4, 2000, the trial court allowed respondent to present his evidence to contest petitioners
grounds for the appointment of a receiver, and the trial court set the reception of respondents
evidence for September 4, 2000. However, on August 24, 2000, respondent filed a motion for
postponement of the September 4, 2000 scheduled hearing on the ground that he was in the United
States as early as July 23, 2000 for medical examination. On September 5, 2000, the trial court
denied respondents motion for postponement and reinstated its May 24, 2000 Order.
On September 19, 2000, respondent filed a Manifestation with Motion to Discharge Receiver,
reiterating the circumstances which prevented him from attending the September 4, 2000 hearing
and praying for the discharge of the receiver upon the filing of a counterbond in an amount to be
fixed by the court in accordance with Section 3, Rule 59 of the 1997 Revised Rules on Civil
Procedure. On October 10, 2000, petitioners filed their undated Opposition to Motion to Discharge
Receiver.
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Subsequently, respondent filed a Motion to Cancel Notice of Lis Pendens which was annotated on Tax
Declaration (TD) No. 112 covering Lot No. 33 allegedly belonging exclusively to him. Respondent
asserted in the motion that an adjacent property to Lot No. 33, particularly a portion of Lot No. 35,
which is owned by a certain Elena Unchuan, was erroneously included in Lot No. 33 and,
consequently, was subjected to the notice of lis pendens. Petitioners filed their Opposition to the
Motion to Cancel Lis Pendens.
Consequently, on May 22, 2001, the trial court issued a Resolution, denying respondents motions to
discharge receiver and cancel the notice of lis pendens in TD No. 112.Respondent seasonably filed a
partial motion for reconsideration of the May 22, 2001 Resolution, attaching copies of deeds of sale
executed by Torcuato covering several common properties of the estate of Severino to prove that he
and Torcuato had indeed made an oral partition of the estate of their father, Severino, and thus
allowing him and Torcuato to convey their respective shares in the estate of Severino to third persons.
On October 19, 2001, the trial court heard respondents motion for partial reconsideration, and on the
same date issued an Order denying the motion for partial reconsideration on the ground that
respondent failed to raise new matters in the motion but merely reiterated the arguments raised in
previous pleadings.
Aggrieved, respondent filed a Petition for Certiorari before the CA, assailing the May 22, 2001
Resolution and October 19, 2001 Order of the RTC.
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The Ruling of the Court of Appeals
On June 18, 2002, the CA rendered the assailed Decision, sustaining respondents position and granted
relief, thus:
WHEREFORE, premises considered, the Petition is hereby GRANTED. The Resolution dated 22 May
2001 of the Regional Trial Court of Camiguin, Branch 28 in Civil Case No. 517 is hereby reversed and
set aside. The court-appointed receiver, Lope Salantin, is discharged upon the posting by petitioner of
a counterbond in the amount of P100,000.00. The notice of lis pendens in Tax Declaration 112, in so
far as it covers the property of Elena Unchuan, is cancelled. Let this case be remanded to the court a
quo for further proceedings.[7]
In reversing the trial court, the CA reasoned that the court a quo failed to observe the well-settled rule
that allows the grant of the harsh judicial remedy of receivership only in extreme cases when there is
an imperative necessity for it. The CA thus held that it is proper that the appointed receiver be
discharged on the filing of a counterbond pursuant to Sec. 3, Rule 59 of the 1997 Revised Rules on
Civil Procedure.
Moreover, the CA ratiocinated that respondent has adequately demonstrated that the appointment of
the receiver has no sufficient basis, and further held that the rights of petitioners over the properties
in litigation are doubly protected through the notices of lis pendens annotated on the titles of the
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RECEIVERSHIP
subject properties. In fine, the appellate court pointed out that the appointment of a receiver is a
delicate one, requiring the exercise of discretion, and not an absolute right of a party but subject to
the attendant facts of each case. The CA found that the trial court abused its discretion in appointing
the receiver and in denying the cancellation of the notice of lis pendens on TD No. 112, insofar as it
pertains to the portion owned by Unchuan.
Aggrieved, petitioners in turn interposed a Motion for Reconsideration that was denied through the
assailed September 24, 2002 CA Resolution.
Thus, this petition for review on certiorari is before us, presenting the following issues for
consideration:
I
WHETHER OR NOT THE ANNOTATION OF A NOTICE OF LIS PENDENS PRECLUDES THE APPOINTMENT
OF A RECEIVER WHEN THERE IS A NEED TO SAFEGUARD THE PROPERTIES IN LITIGATION.
II
WHETHER OR NOT A DULY APPOINTED RECEIVER OF PROPERTIES IN LITIGATION SHOULD BE
DISCHARGED SIMPLY BECAUSE THE ADVERSE PARTY OFFERS TO POST A COUNTERBOND.
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III
WHETHER OR NOT THE CANCELLATION OF A NOTICE OF LIS PENDENS ANNOTATED ON TAX
DECLARATION NO. 112 IS CONTRARY TO LAW. [8]
The Courts Ruling
The petition must be denied. Being closely related, we discuss the first and second issues together.
Receivership not justified

We sustain the CA ruling that the trial court acted arbitrarily in granting the petition for appointment
of a receiver as there was no sufficient cause or reason to justify placing the disputed properties
under receivership.
First, petitioners asseverate that respondent alienated several common properties of Severino without
court approval and without their knowledge and consent. The fraudulent transfers, they claim, were
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antedated prior to May 12, 1992, the date of Torcuatos death, to make it appear that these properties
no longer form part of the assets of the estate under litigation in Civil Case No. 517.
credence to the transfers executed by Torcuato but distrust to those made by respondent would be
highly inequitable as correctly opined by the court a quo.
Petitioners position is bereft of any factual mooring.
Indeed, receivership is a harsh remedy to be granted only in extreme situations. As early as 1914, the
Court already enunciated the doctrinal pronouncement in Velasco & Co. v. Gochuico & Co. that courts
must use utmost circumspection in allowing receivership, thus:
Petitioners miserably failed to adduce clear, convincing, and hard evidence to show the alleged fraud
in the transfers and the antedating of said transfers. The fact that the transfers were dated prior to
the demise of Torcuato on May 12, 1992 does not necessarily mean the transfers were attended by
fraud. He who alleges fraud has the burden to prove it.
Moreover, respondent has adduced documentary proof that Torcuato himself similarly conveyed
several lots in the estate of Severino based on the oral partition between the siblings. To lend
The power to appoint a receiver is a delicate one and should be exercised with extreme caution and
only under circumstances requiring summary relief or where the court is satisfied that there is
imminent danger of loss, lest the injury thereby caused be far greater than the injury sought to be
averted. The court should consider the consequences to all of the parties and the power should not be
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RECEIVERSHIP
exercised when it is likely to produce irreparable injustice or injury to private rights or the facts
demonstrate that the appointment will injure the interests of others whose rights are entitled to as
much consideration from the court as those of the complainant.[9]
Petitioners cannot now impugn the oral partition entered into by Torcuato and respondent and hence
cannot also assail the transfers made by respondent of the lots which were subject of said agreement,
considering that Torcuato also sold properties based on said verbal arrangement. Indeed, the parties
agreed that the civil action does not encompass the properties covered by the oral partition. In this
factual setting, petitioners cannot convince the Court that the alleged fraudulent transfers of the lots
made by respondent, which purportedly form part of his share in Severinos estate based on the
partition, can provide a strong basis to grant the receivership.
Second, petitioner is willing to post a counterbond in the amount to be fixed by the court based on
Sec. 3, Rule 59 of the 1997 Rules of Civil Procedure, which reads:
Sec. 3. Denial of application or discharge of receiver.The application may be denied, or the receiver
discharged, when the adverse party files a bond executed to the applicant, in an amount to be fixed
by the court, to the effect that such party will pay the applicant all damages he may suffer by reason
of the acts, omissions, or other matter specified in the application as ground for such
appointment. The receiver may also be discharged if it is shown that his appointment was obtained
without sufficient cause.
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Anchored on this rule, the trial court should have dispensed with the services of the receiver, more so
considering that the alleged fraud put forward to justify the receivership was not at all established.
Petitioners advance the issue that the receivership should not be recalled simply because the adverse
party offers to post a counterbond. At the outset, we find that this issue was not raised before the CA
and therefore proscribed by the doctrine that an issue raised for the first time on appeal and not
timely raised in the proceedings in the lower court is barred by estoppel. [10] Even if we entertain the
issue, the contention is nevertheless devoid of merit. The assailed CA decision supported the
discharge of the receiver with several reasons including the posting of the counterbond. While the CA
made a statement that the trial court should have discharged the appointed receiver on the basis of
the proposed counterbond, such opinion does not jibe with the import of Sec. 3, Rule 59. The rule
states that the application may be denied or the receiver discharged. In statutory construction, the
word may has always been construed as permissive. If the intent is to make it mandatory or
ministerial for the trial court to order the recall of the receiver upon the offer to post a counterbond,
then the court should have used the word shall. Thus, the trial court has to consider the posting of the
counterbond in addition to other reasons presented by the offeror why the receivership has to be set
aside.
Third, since a notice of lis pendens has been annotated on the titles of the disputed properties, the
rights of petitioners are amply safeguarded and preserved since there can be no risk of losing the
property or any part of it as a result of any conveyance of the land or any encumbrance that may be
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made thereon posterior to the filing of the notice of lis pendens.[11] Once the annotation is made, any
subsequent conveyance of the lot by the respondent would be subject to the outcome of the litigation
since the fact that the properties are under custodia legis is made known to all and sundry by
operation of law. Hence, there is no need for a receiver to look after the disputed properties.
On the issue of lis pendens, petitioners argue that the mere fact that a notice of lis pendens was
annotated on the titles of the disputed properties does not preclude the appointment of a receiver. It
is true that the notice alone will not preclude the transfer of the property pendente lite, for the title to
be issued to the transferee will merely carry the annotation that the lot is under litigation. Hence, the
notice of lis pendens, by itself, may not be the most convenient and feasible means of preserving or
administering the property in litigation. However, the situation is different in the case at bar. A
counterbond will also be posted by the respondent to answer for all damages petitioners may suffer
by reason of any transfer of the disputed properties in the future. As a matter of fact, petitioners can
also ask for the issuance of an injunctive writ to foreclose any transfer, mortgage, or encumbrance on
the disputed properties. These considerations, plus the finding that the appointment of the receiver
was without sufficient cause, have demonstrated the vulnerability of petitioners postulation.
Fourth, it is undisputed that respondent has actual possession over some of the disputed properties
which are entitled to protection. Between the possessor of a subject property and the party asserting
contrary rights to the properties, the former is accorded better rights. In litigation, except for
exceptional and extreme cases, the possessor ought not to be deprived of possession over subject
property. Article 539 of the New Civil Code provides that every possessor has a right to be respected
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RECEIVERSHIP
in his possession; and should he be disturbed therein he shall be protected in or restored to said
possession by the means established by the laws and the Rules of Court. In Descallar v. Court of
Appeals, we ruled that the appointment of a receiver is not proper where the rights of the parties, one
of whom is in possession of the property, are still to be determined by the trial court. [12]
In view of the foregoing reasons, we uphold the CA ruling that the grant of the receivership was
without sufficient justification nor strong basis.
Anent the third issue that the cancellation of the notice of lis pendens on TD No. 112 is irregular as
Lot No. 33 is one of the disputed properties in the partition case, petitioners position is correct.
The CA made a factual finding that the property of Unchuan was erroneously included in Lot No. 33,
one of the disputed properties in Civil Case No. 517. It then ruled that the annotation of lis
pendens should be lifted.
This ruling is bereft of factual basis.
The determination whether the property of Unchuan is a part of Lot No. 33 and whether that portion
really belongs to Unchuan are matters to be determined by the trial court.Consequently, the notice
of lis pendens on TD No. 112 stays until the final ruling on said issues is made.
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WHEREFORE, the petition is PARTLY GRANTED. The June 18, 2002 CA Decision in CA-G.R. SP No.
67492 is AFFIRMED with MODIFICATION insofar as it ordered the cancellation of the notice of lis
pendens in TD No. 112. As thus modified, the appealed CA Decision should read as follows:
No costs.
WHEREFORE, premises considered, the Petition is hereby PARTLY GRANTED. The Resolution dated
22 May 2001 of the Regional Trial Court of Camiguin, Branch 28 in Civil Case No. 517 is hereby
reversed and set aside. The court-appointed receiver, Lope Salantin, is discharged upon the posting
by petitioner of a counterbond in the amount of PhP 100,000. The notice of lis pendens in TD No.
112, including the portion allegedly belonging to Elena Unchuan, remains valid and
effective. Let this case be remanded to the court a quo for further proceedings in Civil Case No. 517.
EVELINA G. CHAVEZ and G.R. No. 174356

AIDA CHAVEZ-DELES,
Petitioners, Present:
Carpio, J., Chairperson,
- versus - Brion,
Del Castillo,
Abad, and
SO ORDERED.
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Perez, JJ.
COURT OF APPEALS and
ATTY. FIDELA Y. VARGAS, Promulgated:
Respondents.
January 20, 2010
x --------------------------------------------------------------------------------------- x
DECISION
ABAD, J.:
This case is about the propriety of the Court of Appeals (CA), which hears the case on appeal, placing
the property in dispute under receivership upon a claim that the defendant has been remiss in
making an accounting to the plaintiff of the fruits of such property.
The Facts and the Case
Respondent Fidela Y. Vargas owned a five-hectare mixed coconut land and rice fields in
Sorsogon. Petitioner Evelina G. Chavez had been staying in a remote portion of the land with her
family, planting coconut seedlings on the land and supervising the harvest of coconut
and palay. Fidela and Evelina agreed to divide the gross sales of all products from the land between
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RECEIVERSHIP
themselves. Since Fidela was busy with her law practice, Evelina undertook to hold in trust for Fidela
her half of the profits.
But Fidela claimed that Evelina had failed to remit her share of the profits and, despite demand to
turn over the administration of the property to Fidela, had refused to do so.Consequently, Fidela filed
a complaint against Evelina and her daughter, Aida C. Deles, who was assisting her mother, for
recovery of possession, rent, and damages with prayer for the immediate appointment of a receiver
before the Regional Trial Court (RTC) of Bulan, Sorsogon.[1] In their answer, Evelina and Aida claimed
that the RTC did not have jurisdiction over the subject matter of the case since it actually involved an
agrarian dispute.
After hearing, the RTC dismissed the complaint for lack of jurisdiction based on Fidelas admission that
Evelina and Aida were tenants who helped plant coconut seedlings on the land and supervised the
harvest of coconut and palay. As tenants, the defendants also shared in the gross sales of the
harvest. The court threw out Fidelas claim that, since Evelina and her family received the land already
planted with fruit-bearing trees, they could not be regarded as tenants. Cultivation, said the court,
included the tending and caring of the trees. The court also regarded as relevant Fidelas pending
application for a five-hectare retention and Evelinas pending protest relative to her three-hectare
beneficiary share.[2]
Dissatisfied, Fidela appealed to the CA. She also filed with that court a motion for the appointment of
a receiver. On April 12, 2006 the CA granted the motion and ordained receivership of the land, noting
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that there appeared to be a need to preserve the property and its fruits in light of Fidelas allegation
that Evelina and Aida failed to account for her share of such fruits. [3]
Parenthetically, Fidela also filed three estafa cases with the RTC of Olongapo City and a complaint for
dispossession with the Department of Agrarian Reform Adjudication Board (DARAB) against Evelina
and Aida. In all these cases, Fidela asked for the immediate appointment of a receiver for the
property.
The Issues Presented
1. Whether or not respondent Fidela is guilty of forum shopping considering that she had earlier filed
identical applications for receivership over the subject properties in the criminal cases she filed with
the RTC of Olongapo City against petitioners Evelina and Aida and in the administrative case that she
filed against them before the DARAB; and
2. Whether or not the CA erred in granting respondent Fidelas application for receivership.
The Courts Ruling
Petitioners present the following issues:
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One. By forum shopping, a party initiates two or more actions in separate tribunals, grounded on the
same cause, trusting that one or the other tribunal would favorably dispose of the matter. [4] The
elements of forum shopping are the same as in litis pendentia where the final judgment in one case
will amount to res judicata in the other. The elements of forum shopping are: (1) identity of parties, or
at least such parties as would represent the same interest in both actions; (2) identity of rights
asserted and relief prayed for, the relief being founded on the same facts; and (3) identity of the two
preceding particulars such that any judgment rendered in the other action will, regardless of which
party is successful, amount to res judicata in the action under consideration.[5]
Here, however, the various suits Fidela initiated against Evelina and Aida involved different causes of
action and sought different reliefs. The present civil action that she filed with the RTC sought to
recover possession of the property based on Evelina and Aidas failure to account for its fruits. The
estafa cases she filed with the RTC accused the two of misappropriating and converting her share in
the harvests for their own benefit. Her complaint for dispossession under Republic Act 8048 with the
DARAB sought to dispossess the two for allegedly cutting coconut trees without the prior authority of
Fidela or of the Philippine Coconut Authority.
The above cases are similar only in that they involved the same parties and Fidela sought the placing
of the properties under receivership in all of them. But receivership is not an action. It is but an
auxiliary remedy, a mere incident of the suit to help achieve its purpose. Consequently, it cannot be
said that the grant of receivership in one case will amount to res judicata on the merits of the other
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cases. The grant or denial of this provisional remedy will still depend on the need for it in the
particular action.
Two. In any event, we hold that the CA erred in granting receivership over the property in dispute in
this case. For one thing, a petition for receivership under Section 1(b), Rule 59 of the Rules of Civil
Procedure requires that the property or fund subject of the action is in danger of being lost, removed,
or materially injured, necessitating its protection or preservation. Its object is the prevention of
imminent danger to the property. If the action does not require such protection or preservation, the
remedy is not receivership.[6]
Here Fidelas main gripe is that Evelina and Aida deprived her of her share of the lands produce. She
does not claim that the land or its productive capacity would disappear or be wasted if not entrusted
to a receiver. Nor does Fidela claim that the land has been materially injured, necessitating its
protection and preservation. Because receivership is a harsh remedy that can be granted only in
extreme situations,[7] Fidela must prove a clear right to its issuance. But she has not. Indeed, in none
of the other cases she filed against Evelina and Aida has that remedy been granted her. [8]
Besides, the RTC dismissed Fidelas action for lack of jurisdiction over the case, holding that the issues
it raised properly belong to the DARAB. The case before the CA is but an offshoot of that RTC
case. Given that the RTC has found that it had no jurisdiction over the case, it would seem more
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prudent for the CA to first provisionally determine that the RTC had jurisdiction before granting
receivership which is but an incident of the main action.
G.R. No. 106473 July 12, 1993
WHEREFORE, the Court GRANTS the petition. The Resolutions dated April 12, 2006 and July 7, 2006
of the Court of Appeals in CA-G.R. CV 85552, are REVERSEDand SET ASIDE.
ANTONIETTA O. DESCALLAR, petitioner,

vs.
THE HON. COURT OF APPEALS and CAMILO F. BORROMEO, respondents.
The receivership is LIFTED and the Court of Appeals is directed to resolve CA-G.R. CV 85552 with
utmost dispatch.
Gilberto C. Alfafara for petitioner.
SO ORDERED.
Bernadito A. Florido for private respondent.
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GRIO-AQUINO, J.:
Assailed in this petition for review on certiorari is the decision dated July 29, 1992 of the Court of
Appeals in CA-G.R. SP No. 27977, affirming the orders dated March 17, 1992 and April 27, 1992 of the
trial court in Civil Case No. MAN-1148, granting respondent's petition for receivership and denying
petitioner's motion for reconsideration thereof.
On August 9, 1991, respondent Camilo Borromeo, a realtor, filed against petitioner a civil complaint
for the recovery of three (3) parcels of land and the house built thereon in the possession of the
petitioner and registered in her name under Transfer Certificates of Title Nos. 24790, 24791 and
24792 of the Registry of Deeds for the City of Mandaue. The case was docketed as Civil Case No.
MAN-1148 of the Regional Trial Court, Branch 28, Mandaue City.
In his complaint, Borromeo alleged that he purchased the property on July 11, 1991 from Wilhelm
Jambrich, an Austrian national and former lover of the petitioner for many years until he deserted her
in 1991 for the favors of another woman. Based on the deed of sale which the Austrian made in his
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favor, Borromeo filed an action to recover the ownership and possession of the house and lots from
Descallar and asked for the issuance of new transfer certificates of title in his name.
In her answer to the complaint, Descallar alleged that the property belongs to her as the registered
owner thereof; that Borromeo's vendor, Wilhelm Jambrich, is an Austrian, hence, not qualified to
acquire or own real property in the Philippines. He has no title, right or interest whatsoever in the
property which he may transfer to Borromeo.
On March 5, 1992, Borromeo asked the trial court to appoint a receiver for the property during the
pendency of the case. Despite the petitioner's opposition, Judge Mercedes Golo-Dadole granted the
application for receivership and appointed her clerk of court as receiver with a bond of P250,000.00.
Petitioner filed a motion for reconsideration of the court's order, but it was denied.
Petitioner sought relief in the Court of Appeals by a petition for certiorari (CA-G.R. SP No. 27977
"Antonietta O. Descallar vs. Hon. Mercedes G. Dadole, as Judge, RTC of Mandaue City, Branch 28, and
Camilo F. Borromeo").
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On July 29, 1992, the Court of Appeals dismissed the petition for certiorari.
In due time, she appealed the Appellate Court's decision to this Court by a petition for certiorari under
Rule 45 of the Rules of Court.
In a nutshell, the issue in this appeal is whether the trial court gravely abused its discretion in
appointing a receiver for real property registered in the name of the petitioner in order to transfer its
possession from the petitioner to the court-appointed receiver. The answer to that question is yes.
The Court is amazed that the trial court and the Court of Appeals appear to have given no importance
to the fact that the petitioner herein, besides being the actual possessor of the disputed property, is
also the registered owner thereof, as evidenced by TCTs Nos. 24790, 24791, and 24792 issued in her
name by the Register of Deeds of Mandaue City on December 3, 1987. Her title and possession
cannot be defeated by mere verbal allegations that although she appears in the deed of sale as
vendee of the property, it was her Austrian lover, Jambrich, who paid the price of the sale of the
property (Sinoan vs. Sorogan, 136 SCRA 407). Her Torrens certificates of title are indefeasible or
incontrovertible (Sec. 32, P.D. 1529).
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Even if it were true that an impecunious former waitress, like Descallar, did not have the means to
purchase the property, and that it was her Austrian lover who provided her with the money to pay for
it, that circumstance did not make her any less the owner, since the sale was made to her, not to the
open-handed alien who was, and still is, disqualified under our laws to own real property in this
country (Sec. 7, Art. XII, 1987 Constitution). The deed of sale was duly registered in the Registry of
Deeds and new titles were issued in her name. The source of the purchase money is immaterial for
there is no allegation, nor proof, that she bought the property as trustee or dummy for the monied
Austrian, and not for her own benefit and enjoyment.
There is no law which declares null and void a sale where the vendee to whom the title of the thing
sold is transferred or conveyed, paid the price with money obtained from a third person. If that were
so, a bank would be the owner of whatever is purchased with funds borrowed from it by the vendee.
The holding of the trial court and the Court of Appeals that Jambrich, notwithstanding his legal
incapacity to acquire real property in the Philippines, is the owner of the house and lot which his
erstwhile mistress, Antonietta, purchased with money she obtained from him, is a legal heresy.
In view of the above circumstances, we find the order of receivership tainted with grave abuse of
discretion. The appointment of a receiver is not proper where the rights of the parties (one of whom is
in possession of the property), are still to be determined by the trial court.
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Relief by way of receivership is equitable in nature, and a court of equity will not ordinarily appoint a
receiver where the rights of the parties depend on the determination of adverse claims of legal title to
real property and one party is in possession. (Calo, et al. vs. Roldan, 76 Phil., 445).
Only when the property is in danger of being materially injured or lost, as by the prospective
foreclosure of a mortgage thereon for non-payment of the mortgage loans despite the considerable
income derived from the property, or if portions thereof are being occupied by third persons claiming
adverse title thereto, may the appointment of a receiver be justified (Motoomul vs. Arrieta, 8 SCRA
172).
In this case, there is no showing that grave or irremediable damage may result to respondent
Borromeo unless a receiver is appointed. The property in question is real property, hence, it is neither
perishable or consummable. Even though it is mortgaged to a third person, there is no evidence that
payment of the mortgage obligation is being neglected. In any event, the private respondent's rights
and interests, may be adequately protected during the pendency of the case by causing his adverse
claim to be annotated on the petitioner's certificates of title.
Another flaw in the order of receivership is that the person whom the trial judge appointed as receiver
is her own clerk of court. This practice has been frowned upon by this Court:
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The respondent judge committed grave abuse of discretion in connection with the appointment of a
receiver. . . . The instant case is similar to Paranete vs. Tan, 87 Phil. 678 (1950) so that what was
there said can well apply to the actuations of the respondent judge. . . . "We hold that the respondent
judge has acted in excess of his jurisdiction when he issued the order above adverted to. That order,
in effect, made the clerk of court a sort of a receiver charged with the duty of receiving the proceeds
of sale and the harvest of every year during the pendency of the case with the disadvantage that the
clerk of court has not filed any bond to guarantee the faithful discharge of his duties as depositary;
and considering that in actions involving title real property, the appointment of a receiver cannot be
entertained because its effect would be to take the property out of the possession of the defendant,
except in extreme cases when there is clear proof of its necessity to save the plaintiff from grave and
irremediable loss of damage, it is evident that the action of the respondent judge is unwarranted and
unfair to the defendants. (Mendoza vs. Arellano, 36 Phil. 59; Agonoy vs. Ruiz, 11 Phil. 204; Aquino vs.
Angeles David, 77 Phil. 1087; Ylarde vs. Enriquez, 78 Phil. 527; Arcega vs. Pecson, 44 Off. Gaz., [No.
12], 4884, 78 Phil. 743; De la Cruz vs. Guinto, 45 Off. Gaz. pp. 1309, 1311; 79 Phil. 304). (Abrigo vs.
Kayanan, 121 SCRA 20).
During the pendency of this appeal, Judge Dadole rendered a decision in Civil Case No. MAN-1148
upholding Borromeo's claim to Descallar's property, annulling the latter's TCTs Nos. 24790, 24791 and
24792 and ordering the Register of Deeds of Mandaue City to issue new ones in the name of
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Borromeo. This circumstance does not retroactively validate the receivership until the decision
(presumably now pending appeal) shall have attained finality.
WHEREFORE, finding grave abuse of discretion in the order of receiver which the respondent Court of
Appeals affirmed in its decision of July 29, 1992 in CA-G.R. SP No. 27977, the petition for certiorari is
hereby GRANTED and the decision of the appellate court, as well as the order dated March 17, 1992
of the Regional Trial Court of Mandaue City, Branch 28, in Civil Case No. MAN-1148, are hereby
ANNULLED and SET ASIDE. Costs against the private respondent.
SO ORDERED.
Cruz, Bellosillo and Quiason, JJ., concur.

Making Enterprises, Inc. v. Marfori, G.R. No. 152239, 17 August 2011
Before us is a petition for review on certiorari assailing the July 24, 2000 Decision[1]of the Court of
Appeals (CA) in CA-G.R. SP No. 43076. The CA had ordered the issuance of writs of certiorari and
prohibition permanently enjoining the prosecution of Jose Marfori in Criminal Case Nos. 170660 to
170676 before the Metropolitan Trial Court (MeTC) of Caloocan City, and ordered the appointment of a
receiver in Civil Case No. 94-70092, pending before the Regional Trial Court (RTC) of Manila. Likewise
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assailed is the appellate courts Resolution [2]dated February 12, 2002, denying petitioners motion for
reconsideration.
improvements found on the leased premises shall become the PPAs sole property. Marfori then
incurred huge expenses for the rehabilitation of the building and leased some portions of the building
to the PPA.
The antecedent facts follow:

On June 4, 1984, Jose F. Marfori acquired a five-storey commercial building, known as the Marsman
Building, from the Development Bank of the Philippines. As the land on which the building stood was
owned by the Philippine Ports Authority (PPA), Marfori entered into a contract of lease of the said lot
with the PPA. The contract was for a period of twenty-five (25) years, renewable for a similar period,
and was subject to the condition that upon the expiration of lease, the building and all other
Thereafter, on April 10, 1987, Marfori executed a dacion en pago and assignment of rights
transferring the ownership of the Marsman Building to Making Enterprises, Inc. (Making), on the
condition that Making would assume all of Marforis obligations.[3] Making was represented by its
General Manager, Cristina Lee, and Executive Vice-President, Angelita Ma. Tamano, in the said
transaction.
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Marforis wife, Emerenciana, alleged that she did not consent to the transfer of the Marsman Building
to Making. She claimed that the building is part of their conjugal property as it was acquired during
their marriage.[4] On April 12, 1994, she filed with the RTC of Manila a complaint against Making, the
spouses Joaquin and Angelita Tamano, the spouses Lester and Cristina Lee, and the PPA for Recovery
of Ownership, Annulment of Contract with Damages, Receivership, Accounting and Preliminary
Injunction with Prayer for Restraining Order.[5] She sought, among others, to annul the dacion en
pago and assignment of rights and prayed for the appointment of a receiver to preserve the rentals of
the building. She also prayed for the issuance of a writ of preliminary injunction to enjoin the PPA from
paying its rentals to Making and from approving the transfer of the Marsman Building.
In an Order[6]dated October 18, 1995, Judge Catalino Castaeda, Jr. of the RTC, Branch 17, of Manila
denied the prayer for the issuance of a writ of preliminary injunction and the application for
receivership.
The RTC noted that in 1987, Emerencianas complaint for the same cause of action was dismissed by
the RTC, Branch 51, of Manila for improper venue. [7] The RTC was not convinced that she would indeed
suffer grave injustice and irreparable damages if a writ of injunction enjoining the PPA from paying
rentals to Making and approving the transfer of the Marsman Building is not issued considering that
she re-filed her complaint only on April 12, 1994, or more than six years after her first complaint was
dismissed.As regards her prayer for the appointment of a receiver, the RTC held that the appointment
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of a receiver is an equitable relief and a court of equity will not ordinarily appoint a receiver where the
rights of the parties depend on the determination of adverse claims of legal title to real property and
one party is in possession.
Emerenciana moved for reconsideration of the order. However, the RTC denied the motion.[8]
Meanwhile, with regard to the criminal cases mentioned at the outset, records show that in 1987,
Marfori issued twenty-two (22) checks in favor of Cristina Lee. Lee deposited the checks to her
account with the Philippine Bank of Communications, but the same were dishonored for the reason of
Account Closed. Thus, she filed complaints against Marfori for estafa and violation of Batas Pambansa
Blg. 22 with the Prosecutor's Office of Caloocan City. [11]
Not satisfied, Emerenciana filed before the CA a petition for certiorari and receivership with prayer for
preliminary injunction, which was docketed as CA-G.R. SP No. 39161.On March 29, 1996, however, the
CA dismissed the petition for being insufficient in form and substance.[9] Reconsideration of the dismissal
was likewise denied in a Resolution dated November 29, 1996.[10]
Before he could be arraigned, Marfori sought reinvestigation of the criminal cases against him, arguing that
he was not given the opportunity to present controverting evidence to prove that the checks were already
paid or liquidated.[12]The RTC granted Marforis motion and ordered the Office of the City Prosecutor to
conduct a reinvestigation. Upon reinvestigation, Assistant City Prosecutor Afable E. Cajigal rendered a joint
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resolution,[13]which was later approved by City Prosecutor Gabriel N. Dela Cruz, finding cause to dismiss the
criminal complaints against Marfori. On August 11, 1995, Asst. City Prosecutor Cajigal filed a motion to
dismiss before the RTC of Caloocan City, which motion was granted by Judge Emilio L. Leachon, Jr. on the
same date.[14]
Claiming that she was not notified of the order for reinvestigation, Angelita Ma. Tamano moved to set
aside the joint resolution.[15]Prosecutor Cajigal then reversed his previous findings and recommended
the setting aside of the joint resolution and dismissal order. [16]Said resolution was approved by
1st Assistant City Prosecutor Rosauro Silverio. Thus, Asst. City Prosecutor Cajigal filed seventeen (17)
informations for violation of B.P. 22 against Marfori before the MeTC of Caloocan City. [17] Warrants for
Marforis arrest were also issued by Judge Marcelino L. Sayo.
Aggrieved, Marfori filed with the Caloocan City RTC a petition [18] for certiorari and injunction with
prayer for temporary restraining order against Judge Sayo; Asst. City Prosecutors Cajigal, Silverio and
Dela Cruz; and Making, who was represented by Tamano. Marfori maintained that all the checks were
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drawn in favor of Cristina Lee, but the prosecutors deliberately made it appear in the new
informations that the checks were drawn in favor of Making. He prayed that Judge Sayo be enjoined
from proceeding with the trial of the criminal cases and that the informations for violation of B.P. 22,
as well as the warrants of arrest, be declared void.
Meanwhile, on November 27, 1996, Marfori and his wife had filed with this Court a Consolidated
Petition[21]docketed as G.R. No. 126841 asking among others, for the appointment of a receiver to
preserve the rentals collected from the Marsman Building and the issuance of an injunction to enjoin
the implementation of the warrants of arrest issued against him. Respondents argued that the filing of
the criminal cases against Marfori had no factual and legal justification and hence, should be
enjoined.
Making, represented by Tamano, filed a motion to dismiss arguing that the general rule is that a
criminal prosecution may not be restrained by injunction.[19]
In an Order dated April 18, 1997, the RTC granted Makings motion and dismissed Marfori's petition. [20]
The Court, after finding no special and important reasons for it to take cognizance of the case in the
first instance, referred the petition to the CA for consideration and adjudication on the merits. [22]
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On February 16, 1998, respondents filed an Amended Consolidated Petition [23]with the CA. They added
that Judge Castaeda, Jr. likewise erred in denying in Civil Case No. 94-70092 their motion to present
crucial documents wherein Tamano allegedly made a declaration against her interest. They likewise
reiterated in their amended petition their prayer for the appointment of a receiver to take over,
manage, and administer the Marsman Building.
she and her husband filed a petition with the Supreme Court involving the same subject matter and
the same issues as in Emerencianas earlier petition in CA-G.R. SP No. 39161. Petitioners alleged that
respondents hid the real purpose of their action by cleverly lumping together the civil and the
criminal cases in their Consolidated Petition.
On July 24, 2000, the CA rendered the assailed Decision, to wit:
In their Comment, petitioners countered that respondents had lost all their rights to the building after
they ceded it to Making in 1987. Petitioners also charged respondents with forum shopping.[24]They
argued that when Emerencianas application for a writ of preliminary injunction and receivership was
denied by the RTC, she appealed the denial to the CA. When she failed to obtain a favorable action,
WHEREFORE, premises considered, the petition filed by petitioners Jose and Emerenciana Marfori is
hereby GRANTED, and judgment rendered as follows:
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1)
That writs of certiorari and prohibition be issued permanently enjoining the further prosecution
of Criminal Case Nos. 170660 to 170676, inclusive, against petitioner Jose Marfori; and
The CA brushed aside petitioners' argument that respondents were guilty of forum shopping, holding
that technical rules of procedure must be relaxed in the interest of substantial justice.
2)
That, after posting of a bond in an amount to be determined by the Trial Court, let a receiver be
appointed in Civil Case No. 94-70092, to take custody, manage, and administer the Marsman Building
and all rents collected therefrom, during the pendency of the proceedings.
As to the order granting the prayer for the appointment of a receiver, the CA ruled that respondents
have sufficiently proven their interest in the Marsman Building. The CA found that unless a receiver is
appointed, there is a danger of loss or material injury considering that petitioners possess absolute
control of the building.
SO ORDERED.[25]
Meanwhile, as to the criminal cases, the CA ruled that the public prosecutors gravely abused their
discretion when they set aside the earlier resolution recommending the dismissal of the criminal cases
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against Marfori based solely on the ground that Tamano was not given the chance to comment on
Marforis motion for reinvestigation. The CA noted that in the joint resolution, the prosecutors thoroughly
studied the case and concluded that the checks subject of the criminal cases were not issued with
valuable consideration since it was impossible for Marfori to have been indebted or for petitioners to
lend the amount of P4,051,518.08 stated in the checks because the complainants/Making Enterprises
only earnedP49,352.95 in 1987.
WHEREFORE, the motions are hereby DENIED. However, in order to ensure that the objectives of Sec.
1 (a) Rule 59, the basis of Our decision, will be carried out effectively, the trial court is DIRECTED to
appoint [as] a receiver, after compliance of the bond requirement, a private banking institution which
shall exercisepowers as such pursuant to Sec. 6, Rule 59 of the Rules of Court.
Petitioners filed motions for reconsideration questioning the appointment of a receiver [26]and the order
permanently enjoining the further prosecution of Marfori in Criminal Case Nos. 170660 to 170676.
[27]
However, the CA denied both motions in its Resolution of February 12, 2002 as follows:
Hence, the present petition.
SO ORDERED.[28]
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Essentially, petitioners present the following issues: (1) Whether the CA erred in granting the
application for the appointment of a receiver for the Marsman Building; and (2) Whether the CA erred
in permanently enjoining the criminal prosecution of Jose Marfori.
We grant the petition.
At the outset, we note that the CA erred in taking cognizance of respondents consolidated petition as
respondents are guilty of deliberate forum shopping. We note that the petition for appointment of a
receiver for the Marsman Building was originally filed by Emerenciana before the RTC of Manila in Civil
Case No. 94-70092. The RTC denied the prayer for the issuance of a writ of preliminary injunction and
the application for receivership. Emerenciana filed a motion for reconsideration, which was denied by
the RTC. She then filed a petition for certiorari and receivership with prayer for preliminary injunction
before the CA docketed as CA-G.R. SP No. 39161. In a Resolution dated March 29, 1996, the petition
was dismissed for being insufficient in form and substance. She sought reconsideration of the
dismissal, and her motion was likewise denied by the CA on November 29, 1996.
However, records show that two days earlier, or on November 27, 1996, while her motion for
reconsideration of the CA resolution dismissing her petition was still pending resolution before the CA,
she and her husband filed with this Court a consolidated petition, praying for the appointment of a
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receiver over the Marsman Building. Clearly, CA-G.R. SP No. 39161 was still pending with the CA when
respondents filed their consolidated petition with this Court.
Moreover, we note that respondents were not candid when they stated in their certification of nonforum shopping that there is no other action or proceeding involving the same issues that is pending
before this Court, the CA, or any other tribunal or agency. [29]
There is forum-shopping when as a result of an adverse decision in one forum, or in anticipation
thereof, a party seeks a favorable opinion in another forum through means other than appeal or
certiorari. Forum-shopping exists when two or more actions involve the same transactions, essential
facts, and circumstances; and raise identical causes of action, subject matter, and issues. Forumshopping exists when the elements of litis pendentia are present or where a final judgment in one
case will amount to res judicata in the other.[30] Thus, there is forum-shopping when, between an
action pending before this Court and another one, there exist: (1) identity of parties, or at least such
parties as represent the same interests in both actions, (2) identity of rights asserted and relief
prayed for, the relief being founded on the same facts, and (3) the identity of the two preceding
particulars is such that any judgment rendered in the other action will, regardless of which party is
successful, amount to res judicata in the action under consideration; said requisites also constitutive
of the requisites for auter action pendant or lis pendens.[31]
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Applying the above test, there is no question that there is identity of parties, cause of action and
reliefs sought between the consolidated petition in G.R. No. 126841 and the petition in CA-G.R. SP No.
39161. For resorting to forum shopping, the consolidated petition of the spouses Marfori should have
been dismissed with prejudice.
But even on the merits, the application for an appointment of a receiver must be denied.
An application for the appointment of a receiver under Section 1(a), Rule 59 of the 1997 Rules of Civil
Procedure, as amended, requires that the property or fund subject of the action is in danger of being
lost, removed, or materially injured, necessitating its protection or preservation. Section 1 provides,
SECTION 1. Appointment of receiver.Upon a verified application, one or more receivers of the property
subject of the action or proceeding may be appointed by the court where the action is pending, or by
the Court of Appeals or by the Supreme Court, or a member thereof, in the following cases:
(a) When it appears from the verified application, and such other proof as the court may require, that
the party applying for the appointment of a receiver has an interest in the property or fund which is
the subject of the action or proceeding, and that such property or fund is in danger of being lost,
removed, or materially injured unless a receiver be appointed to administer and preserve it;
xxxx
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Here, respondents submit that they have satisfactorily established their legal right over the Marsman
Building. They alleged that the building and the income and rentals thereof are in danger of being
lost, removed or materially injured by the apathy, neglect and fraudulent design of petitioners
thereby rendering the appointment of a receiver both urgent and imperative. [32] However, they failed
to show how the building as well as the income thereof would disappear or be wasted if not entrusted
to a receiver. They were not able to prove that the property has been materially injured, necessitating
its protection and preservation. Because receivership is a harsh remedy that can be granted only in
extreme situations,[33] respondents must prove a clear right to its issuance. This they failed to do.
We furthermore observe that in granting the appointment of a receiver, the CA merely concluded that
respondents have sufficiently proven that they have an interest in the Marsman Building. It further
held that unless a receiver is appointed, there is a danger of loss or material injury, considering that
petitioners presently possess absolute control of the building and the rentals accruing
thereof. However, there was no justification on how the CA arrived at its conclusion.
It must be stressed that the issue of the validity of the dacion en pago and assignment of rights
executed by Marfori in favor of Making still has to be resolved in Civil Case No. 94-70092. Until the
contract is rescinded or nullified, the same remains to be valid and binding. Thus, we agree with the
RTC when it held that courts of equity will not ordinarily appoint a receiver where the rights of the
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parties depend on the determination of adverse claims of legal title to real property and one party is
in possession.
delicto). Only civil liability predicated on a source of obligation other than the delict, if any, survived
the death of the accused, which the offended party can recover by means of a separate civil action. [36]
As regards the second issue, the Court finds no longer necessary to pass upon the correctness of the
order of the CA permanently enjoining the prosecution of Jose Marfori in Criminal Case Nos. 170660 to
170676 before the MeTC of Caloocan City. The Court notes that during the pendency of this petition,
Jose Marfori passed away on October 2, 2004. [34]Pursuant to Article 89, paragraph 1[35] of the Revised
Penal Code, as amended, the death of Marfori totally extinguished his criminal liability. Because
Marfori died even before arraignment and trial, there is no relevance in declaring the extinction as
well of civil liability that was based exclusively on the crime for which an accused is convicted (i.e., ex
WHEREFORE, the petition for review on certiorari is PARTLY GRANTED. The July 24, 2000 Decision and
February 12, 2002 Resolution of the Court of Appeals inCA-G.R. SP No. 43076, insofar as they ordered
the appointment of a receiver in Civil Case No. 94-70092, are hereby REVERSED and SET ASIDE. In
view of the death of Jose Marfori, Criminal Case Nos. 170660 to 170676 before the Metropolitan Trial
Court of Caloocan City are hereby ordered DISMISSED.
No pronouncement as to costs.
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SO ORDERED.
subscribe a writ of execution, sealed with the seal of the Court of First Instance of Manila, for the
enforcement of plaintiff's said judgment.
G.R. No. 1278, Bonaplata v. Ambler and McMicking, 2 Phil. 392

This was a motion for judgment on the pleadings in a proceeding in which the plaintiff prays that a
peremptory order be issued by this court against Judge Ambler, commanding him, as judge of the
Court of First Instance of Manila, to immediately cause to be issued and subscribed a writ of execution
for the enforcement of plaintiff's judgment against Fulgencio Tan Tonco for the sum of 1,541 pesos,
Mexican currency, which judgment was recovered January 13, 1903, and against the defendant J.
McMicking, as clerk of the said Court of First Instance of Manila, commanding him to issue and
The facts upon which this application is based are undisputed. The plaintiff, on January 13, 1903,
recovered a judgment in the Court of First Instance of Manila, in an action for debt against Fulgencio
Tan Tonco, amounting to 1,541 pesos, Mexican currency. No exceptions were taken or filed against
said judgment, nor was a motion for a new trial made; and the judgment is now in full force and
effect.
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After the rendition and entry of said judgment the plaintiff repeatedly requested the defendants
above named to duly issue a writ of execution to satisfy the judgment of the plaintiff against said
Fulgencio Tan Tonco, which request was refused. The defendants, by their attorney, state, as their
reason for such refusal, that on the 18th day of December, 1902, one Sergia Reyes instituted a suit
against said Fulgencio Tan Tonco, in the Court of First Instance of Manila, for an indebtedness
amounting to the sum of $1,500, Mexican currency, and in the complaint alleged that the said
defendant was insolvent; that several creditors had sued him; that the assets of his business
consisted of real estate, contracts for buildings (many partly completed), equities in real estate, and
other property of the value of about $200,000, Mexican currency; that said property was in good
condition and that it was in the interest of creditors to retain the actual status of the business; that
under proper management the business could be conducted at a good and satisfactory profit, and pay
a greater portion of said defendant's creditors, if not all; that the management of the said business
was in the hands of the defendant, who was unable to give it necessary care and attention; that for
various causes the business had been loosing money; that the debts of the said defendant amounted
to $250,000, Mexican currency; that the assets of the business were then more than enough to pay
the indebtedness, but if said business were managed by the said defendant it will be dissipated and
wasted, and therefore the plaintiff in that action prayed for the appointment of a receiver to take
charge of the said business and conduct the same subject to the order of the court.
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The said Fulgencio Tan Tonco, personally and by his attorney, appeared in court, on the said 18th day
of December, 1902, and accepted service of the complaint in said cause, and thereafter and on the
19th day of December, 1902, Antonio Torres was appointed receiver of the business, property, rights,
and credits of said Tan Tonco; and thereafter, having given a sufficient bond and of all the property of
said Tan Tonco, and under the direction of and pursuant to an order of said Byron S. Ambler, as judge
of the Court of First Instance of Manila, undertook to care for, run, manage, and operate said business
the same as therefore run and operated by said defendant, and to employ such persons and make
such payments and disbursements as needed. It was further ordered that the said defendant and
other persons be restrained and enjoined from interfering with said property; and the said Tan Tonco
was and still continued to be enjoined from taking possession of or in any way interfering with said
property, and said J. McMicking, as such clerk, was and is restrained from issuing an execution upon
the said judgment of Tan Tonco.
As a general rule the appointment of a receiver is an equitable remedy, and before such remedy is
resorted to, except in certain prescribed cases hereinafter mentioned, the legal remedy must be
exhausted. Courts of equity do not encourage proceedings or actions which are not in conformity with
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the usual practice, which are necessary and at the same time are calculated to swell costs and
expenses. (Hart vs. Times, 3 Edwards, Chancery, 226; Congden vs. Lee, 3 Edwards, Chancery, 304.)
In the Congden case the plaintiff sought equitable relief in an action for debt after an execution had
been returned unsatisfied; but the plaintiff and the sheriff knew that the debtor had real estate which
was subject to levy and sale. The court held that it was the duty of the plaintiff to exhaust his legal
remedy by selling the real estate on the execution, and it not appearing that there would be a
deficiency on the sale, the court had no jurisdiction to appoint a receiver of the rents.
It may be that very special circumstances may exist, in a given case, involving great danger of loss,
such as may be caused by a debtor's nonresidence, which will justify the appointment of a receiver,
but the case at bar is not one of that character; the claim of the plaintiff, Sergia Reyes, amounted to
only $1,500, Mexican currency, whereas the property of Tan Tonco was valued at $200,000, Mexican
currency, and it does not appear that there were any judgments against him having priority to that of
said plaintiff, or that the plaintiff's judgment could not be collected in full. Under these conditions, the
allegation in the complaint that the defendant, Tan Tonco, could not give his business "necessary care
and attention," that he was "losing money," and that if the business was to be continued under his
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management it would be "dissipated and wasted," might be cause for applying for an appointment of
a committee, but it certainly is not good cause for turning over to a receiver $200,000 worth of
property in an action to recover a debt of $1,500. What was undertaken, in this action, amounts
practically to a bankruptcy proceeding the placing by the court of the property of the defendant in
the hands of a receiver for the purpose, after paying costs, fees, and expenses, of disturbing that
property among creditors.
Bankruptcy proceedings, however, are forbidden until a law shall be enacted for these Islands. (Sec.
524 of the Code of Civil Procedure.)
The learned counsel for the defendants in this mandamus proceeding claims that section 174 of this
Code makes provision for the appointment of a receiver in this case.
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That section authorizes the appointment of a receiver (1) in certain corporation cases; (2) where the
plaintiff has an interest in the property of fund which is the subject of the action, etc; (3) in an action
to foreclose a mortgage; (4) and, finally, whenever in other cases it shall appear to the court that the
appointment of a receiver is the most feasible means of preserving and administering the property
which is the subject of the litigation during the pendency of the action.
execution, which was not issued, the plaintiff could not have had interest in any property or fund of
the defendant; nor until after the return of the execution unsatisfied could she have had any interest
in the preservation of the defendant's property property which was not the subject of the litigation.
The plaintiff in this mandamus proceeding was not a party to the action of Reyes vs. Tan Tonco, and
he is not, therefore, bound by the order appointing a receiver made therein.
The subject of the action of the plaintiff Sergia Reyes was an indebtedness of $1,500 due to her by
the defendant, and the legitimate object was the collection of that debt. Until after judgment and
It is not necessary in this proceeding to determine the further effect of that order, or to decide what
its effect may be on all those creditors who consented to the appointment of the receiver, who
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acquiesced in his control, management, and disposition of the defendant's property, or on other
persons who dealt with him as such receiver.
Arellano, C.J., Torres, Cooper, Willard, and Mapa, JJ., concur.

G.R. No. L-2349
This court simply decides that the plaintiff, Eugenio Bonaplata, is entitled to have an execution issue
on his said judgment. The motion for judgment on the pleadings is granted, and judgment for the
plaintiff will be entered accordingly, with costs against the respondents.
October 22, 1948
FRED M. HARDEN, petitioner,

vs.
THE DIRECTOR OF PRISONS, respondent.
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Vicente J. Francisco for petitioner.
First Assistant Solicitor General Roberto A. Gianzon and Solicitor Felix V. Makasiar for respondent.
Claro M. Recto for the intervenor.
It appearing that the defendant Fred M. Harden has not up to this date complied with the orders of
this court of October 7, 1947 and March 27, 1948;
As prayed for, the court orders the arrest of the defendant Fred M. Harden as well as his confinement
at the New Bilibid Prisons, Muntinlupa, Rizal, until he complies with the aforementioned orders.
TUASON, J.:
The petitioner, Fred M. Harden, is being confined in prison for contempt of court by virtue of an order
of the following tenor:
The proceedings for contempt arose in a civil case between Mrs. Harden as plaintiff and the petitioner
and another person as defendants, commenced on July 12, 1941, and involving the administration of
a conjugal partnership, payment of alimony, and accounting. In that case, a receiver was appointed
and a preliminary injunction was issued restraining Fred M. Harden and his codefendant, Jose
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Salumbides, from transferring or alienating, except for a valuable consideration and with the consent
of the court first had and obtained, moneys, shares of stock, and other properties and assets, real or
personal, belonging to the aforesaid partnership, and which might be found in the names of said
defendants or either of them.
On September 9, 1947, Mrs. Harden moved the court to order Harden to return all these amounts and
to redeposit them with the Manila branch of the Chartered Bank of India, Australia & China. On
October 7, 1947, Judge Pea granted the motion in an order worded as follows:
On various dates in 1946, Fred M. Harden transferred to the Hongkong & Shanghai Banking
Corporation and the Chartered Bank of India, Australia & China, both in Hongkong, over P1,000,000 in
drafts or cash; to Virginia Recreation Center, Long Beach, California, P20,196.80, and to an unknown
person, P50,000.
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Wherefore, finding the motion of the plaintiff of September 9, 1947, to be well founded, for the
purpose of preserving the status quo and in order that the amounts above referred to may stand
ready to answer for any legitimate claims of the Government in the form of taxes, the aforementioned
motion is hereby ordered to return, within a period of 15 days from the receipt of a copy hereof, the
amount of P1,000,608.66 to the Philippines and to redeposit the same with the accounts of the Plaza
Lunch at the Manila Branch of the Chartered Bank of India, Australia and China, with the
understanding that upon failure to comply with this order he will be declared in contempt of court.
modification of that of October 7, 1947, directing Harden "to deposit with the Manila Branch of the
Chartered Bank of India, Australia & China within five days from receipt of a copy of this order the
money and drafts that he has actually in Hongkong, without prejudice to passing upon later on the
different amounts that the defendant has spent according to his attorney, after he has submitted to
the court an itemized account of those expenses.
After a petition for certiorari was instituted by Harden in the Supreme Court and decided, and after
various motions were filed and heard, Judge Pea, on March 27, 1948, entered an order, which was a
With respect to the plaintiff's motion filed on March 16, 1948 praying that Fred M. Harden be ordered
to deliver the certificate covering the 368,553 Balatoc Mining Company shares either to the Clerk of
In the same order there was this decree:
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this Court or to the receiver in this case for safekeeping after his compliance with the order of January
17, 1948, the Court, after considering the different pleadings filed, denies defendant's motion for
extension of time to register the said certificate of stock, thereby maintaining its order of January 17,
1948. The said defendant is further ordered, after the registration of the said certificate, to deposit
the same with the Manila Branch of the Chartered Bank of India, Australia and China.
The last part of the order was the culmination of another series of motions with their corresponding
hearings. The facts taken from the pleading were in brief as follows:
In a motion dated May 28, 1947, the receiver appointed in the main case prayed that the certificates
of stock of the conjugal partnership, among them 368,553 shares of the Balatoc Mining Co., alleged to
be in the possession of defendant Harden, be ordered turned over to him (receiver) so that he might
have them registered in pursuance of the provisions of Republic Act No. 62. On June 7, 1947, the court
"authorized" Harden "to register not later than June 30, 1947 the stock certificates in his possession,
notifying the court afterwards of such action.
On July 28, 1947, Mrs. Harden complained that her husband failed to comply with the above order and
prayed that he be ordered to show cause why he should not be declared in contempt. On August 1,
1947, Harden filed a perfunctory compliance, and in order dated August 2, 1947, he was required to
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"make a detailed report of the stock certificates which have been duly registered in accordance with
Republic Act No. 62." In his "compliance" dated August 7, 1947, Harden stated that he had been
granted an extension until December 31, 1947, within which to register the Balatoc Mining Co. shares
under Republic Act No. 62.
In a motion dated January 7, 1948, the receiver informed the court that, notwithstanding the
expiration on December 31, 1947, of Harden's extended time to comply with Republic Act No. 62, the
records of the Balatoc Mining Co. showed that the certificate had not been registered as of January 7,
1948; and upon his request, an order dated January 17, 1948, was issued giving Harden "an extension
until March 31, 1948 within which to comply with the Order dated June 7, 1947."
In a motion dated March 15, 1948, Mrs. Harden prayed for the reasons therein stated, that defendant
Harden "be ordered to deliver the certificates covering the 368,553 Balatoc Mining Co. shares either
to the Clerk of this Court or to the Receiver herein for safekeeping, immediately after registering them
pursuant to Republic Act No. 62." On March 24, 1948, Harden filed a motion stating that the
registration of shares of stock under Republic Act No. 62 had been extended until June 30, 1948, and
prayed that he "be allowed to register the stock certificates in question within such period as by law
or regulations is or may be provided."
It was at this stage of the case that the present petitioner was committed to jail.
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Broadly speaking, the grounds for relief by habeas corpus are only (1) deprivation of any fundamental
or constitutional rights, (2) lack of jurisdiction of the court to impose the sentence, or (3) excessive
penalty. (Santiago vs. Director of Prisons, 1 L-1083, Jan. 30, 1947, 44 Off. Gaz., 1231.)
The fact that the property is in a foreign country is said to deprive the court of jurisdiction, the
remedy in such case being, it is contended, ancillary receivership. We can not agree with this view.
While a court can not give its receiver authority to act in another state without the assistance of the
courts thereof (53 C. J., 390-391), yet it may act directly upon the parties before it with respect to
property beyond the territorial limits of its jurisdiction, and hold them in contempt if they resist the
court's orders with reference to its custody or disposition (Id. 118)
Whether the property was removed before or after the appointment of the receiver is likewise
immaterial.
In Sercomb vs. Catlin, 21 N. E., 606-608, the Supreme Court of Illinois said:
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It is true that the property attached is beyond the jurisdiction of the courts of this state, but the
appellant, who caused it to be attached, is in this state, and within the jurisdiction of its courts. If the
superior court had no power to reach the goods in Newton's hands, it had the power to reach
appellant, who sought to prevent its receiver from getting possession of the goods. It makes no
difference that the property was in a foreign jurisdiction.
The facts of that case as stated in the decision were as follows:
On April 14, 1887, in the case of Ada S. Havens et al. vs. Caleb Clapp et al. then pending in said
superior court, the appellee was appointed receiver of all the property and effects, real and personal,
of the defendants therein, Caleb Clapp and Thomas Davies. Prior to that date Clapp and Davies had
forwarded, on consignment, to Elijah E. Newton, an auctioneer and commission merchant in
Washington city, in the District of Columbia, a lot of jewelry, watches and silverware, to be by him
disposed of for their benefit. So far as appears to the contrary, the goods so consigned were still in
the possession of Newton at Washington when the order was entered on April 7, 1887, for the
commitment of appellant for contempt. Within a week or 10 days after his appointment as receiver,
appellee gave notice of such appointment to Newton, and demanded a return of the goods. On May
18, 1887, the Meriden Britannia Company, a corporation organized under the laws of the state of
Connecticut, being a creditor of Clapp and Davies, commenced an attachment suit against them for
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the amount of its claim in the Supreme Court of the District of Columbia, and attached the goods in
the hands of Newton.
The penalty complained of is neither cruel, unjust nor excessive. In Ex-parte Kemmler, 136 U. S., 436,
the United States Supreme Court said that "punishments are cruel when they involve torture or a
lingering death, but the punishment of death is not cruel, within the meaning of that word as used in
the constitution. It implies there something inhuman and barbarous, something more than the mere
extinguishment of life.
The punishment meted out to the petitioner is not excessive. It is suitable and adapted to its
objective; and it accords with section 7, Rule 64, of the Rules of Court which provides that "when the
contempt consists in the omission to do an act which is yet in the power of the accused to perform, he
may be imprisoned by order of a superior court until he performs it.
If the term of imprisonment in this case is indefinite and might last through the natural life of the
petitioner, yet by the terms of the sentence the way is left open for him to avoid serving any part of it
by complying with the orders of the court, and in this manner put an end to his incarceration. In these
circumstances, the judgment can not be said to be excessive or unjust. (Davis vs. Murphy [1947] 188
P., 2nd, 229-231.) As stated in a more recent case (De Wees [1948], 210 S.W., 2d, 145-147), "to order
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that one be imprisoned for an indefinite period in civil contempt is purely a remedial measure. Its
purpose is to coerce the contender to do an act within his or her power to perform. He must have the
means by which he may purge himself of the contempt." The latter decision cites Stanley vs. South
Jersey Realty Co., 83 N.J. Eq. 300, 90 A., 1042, 1043, in which the theory is expressed in this
language:
which he many discharge himself. As quaintly expressed, the imprisoned man "carries the keys to his
prison in his own pocket."
In a "civil contempt" the proceeding is remedial, it is a step in the case the object of which is to
coerce one party for the benefit of the other party to do or to refrain from doing some act specified in
the order of the court. Hence, if imprisonment be ordered, it is remedial in purpose and coercive in
character, and to that end must relate to something to be done by the defendant by the doing of
The failure of the order of commitment to state that the acts which the contemner fails to do are still
in his power to perform, does not void the order of imprisonment. Section 7 of Rule 64 does not
require such finding to appear in the order, unlike section 1219 of the Code of Civil Procedure of
California on which the petitioner's contention is rested. Petitioner is in error in saying that section
237 of the former Philippine Code of Civil Procedure, from which section 7 of Rule 64, supra, has been
copied, was of California origin. Former Justice Fisher is authority for the statement that section 237 of
Act No. 190 was borrowed from section 1456 of the Ohio Code of Civil Procedure. (Fisher's Code of
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Civil Procedure, 3rd ed., p. 136.) The exact similarity in substance though not in language between
the two provisions is a confirmation of this statement.
At any rate, the order of commitment contains the alleged missing element if it is taken, as it should
be taken, in connection with the orders of October 7, 1947, and March 27, 1948, and with the charges
for contempt. It expressly gives non-compliance with the two last mentioned orders as the grounds for
the warrant of commitment, and thus by reference makes them part of it. The orders of October 7,
1947, and March 27, 1948, in turn clearly specify the acts with the petitioner was commanded to
fulfill. It is equally clear from these orders that in the opinion of the court the petitioner is in a position
to bring back to the Philippines from Hongkong part of the cash and the Balatoc shares he had
remitted to that colony.
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Whether or not in truth the court's findings are supported by sufficient evidence is a different matter;
it is a matter of fact which can not be reviewed by habeas corpus.
In a long line of decisions, this Court has steadfastly held that habeas corpus does not lie to correct
errors of fact or law. (Slade Perkins vs. Director of Prisons, 58 Phil., 271; Quintos vs. Director of
Prisons, 55 Phil., 304; Toronto Felipe vs. Director of Prisons, 24 Phil., 121; Gutierrez Repide vs.
Peterson, 3 Phil., 276; Santiago vs. Director of Prisons, L-1083, 1 44 Off. Gaz., 1231; McMicking vs.
Schields, 238 U.S. 99. 41 Phil., 971; Tinsley vs. Anderson, 43 Law. ed., 91.) When a court has
jurisdiction of the offense charged and of the party who is so charged, its judgment, order or decree is
not subject to collateral attack by habeas corpus. the writ of habeas corpus can not be made to
perform the function of a writ of error; and this holds true even if the judgment, orders or decree was
erroneous, provided it is within the jurisdiction of the court which rendered such judgment or issued
such an order or decree. (Slade Perkins vs. Director of Prisons, supra; Santiago vs. Director of
Prisons, supra.) So whether the act charged has been committed or can still be performed is
conclusively determined by the order or judgment of the trial court in the proceeding wherein the
petitioner for habeas corpus is adjudged in contempt. (Ex-parteFisher, 206 S.W. 2d. 1000.).
The petition is denied with costs.
Moran, C.J., Ozaeta, Paras, Feria, Pablo, Bengzon, Briones and Montemayor, JJ., concur.
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[G.R. No. 125008. June 19, 1997]
COMMODITIES STORAGE & ICE PLANT CORPORATION, SPOUSES VICTOR & JOHANNAH
TRINIDAD, petitioners, vs. COURT OF APPEALS, JUSTICE PEDRO A. RAMIREZ, CHAIRMAN
and FAR EAST BANK & TRUST COMPANY, respondents.
DECISION
PUNO, J.:
In this petition for certiorari, petitioner seeks to annul and set aside the decision and resolution of the
Court of Appeals[1] in CA-G.R. SP No. 36032 dismissing the complaint in Civil Case No. 94-72076 before
the Regional Trial Court, Branch 9, Manila.
The facts show that in 1990, petitioner spouses Victor and Johannah Trinidad obtained a loan
of P31,000,000.00 from respondent Far East Bank & Trust Company to finance the purchase of the
Sta. Maria Ice Plant & Cold Storage in Sta. Maria, Bulacan. The loan was secured by a mortgage over
the ice plant and the land on which the ice plant stands. Petitioner spouses failed to pay their
loan. The bank extrajudicially foreclosed the mortgage and the ice plant was sold by public bidding on
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March 22, 1993. Respondent bank was the highest bidder.It registered the certificate of sale on
September 22, 1993 and later took possession of the property.
On November 22, 1993, petitioner spouses filed Civil Case No. 956-M-93 against respondent bank
before the Regional Trial Court, Malolos, Bulacan for reformation of the loan agreement, annulment of
the foreclosure sale and damages.[2] The trial court dismissed the complaint for petitioners' failure to
pay the docket fees. The dismissal was without prejudice to refiling of the complaint.[3]
On October 28, 1994, petitioners filed Civil Case No. 94-72076 against respondent bank before the
Regional Trial Court, Branch 9, Manila for damages, accounting and fixing of redemption period. [4] As a
provisional remedy, petitioners filed on November 16, 1994 an "Urgent Petition for
Receivership." They alleged that respondent bank took possession of the ice plant forcibly and
without notice to them; that their occupation resulted in the destruction of petitioners' financial and
accounting records making it impossible for them to pay their employees and creditors; the bank has
failed to take care of the ice plant with due diligence such that the plant has started emitting
ammonia and other toxic refrigerant chemicals into the atmosphere and was posing a hazard to the
health of the people in the community; the spouses' attention had been called by several people in
the barangay who threatened to inform the Department of Environment and Natural Resources should
they fail to take action. Petitioners thus prayed for the appointment of a receiver to save the ice plant,
conduct its affairs and safeguard its records during the pendency of the case. [5]
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Instead of an answer, respondent bank filed on November 25, 1994 a "Motion to Dismiss and
Opposition to Plaintiff's Petition for Receivership." It alleged that the complaint states no cause of
action and that venue had been improperly laid. It also alleged that petitioners failed to pay the
proper docket fees and violated the rule on forum-shopping.[6]
contractor, maintainer and installer is appointed receiver. Accordingly, upon the filing and approval of
the bond of TWO MILLION (P2,000,000.00) pesos which shall answer for all damages defendant may
sustain by reason of the receivership, said Ricardo Pesquera is authorized to assume the powers of a
receiver as well as the obligation as provided for in Rule 59 of the Rules of Court after taking his oath
as such receiver.
In an order dated December 13, 1994, the trial court granted the petition for receivership and
appointed petitioners' nominee, Ricardo Pesquera, as receiver. The order disposed as follows:
SO ORDERED."[7]
"WHEREFORE, premises considered the Urgent Petition for Receivership is GRANTED and Mr. Ricardo
Pesquera to whose appointment no opposition was raised by the defendant and who is an ice plant
Respondent bank assailed this order before the Court of Appeals on a petition for certiorari. On
January 11, 1996, the Court of Appeals annulled the order for receivership and dismissed petitioners'
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Reconsideration was denied on May 23, 1996.[8] Hence, this petition.
complaint for improper venue and lack of cause of action. The dispositive portion of the decision
reads:
Section 1 of Rule 59 of the Revised Rules of Court provides that:

"WHEREFORE, the petition for certiorari is GRANTED. Accordingly, the assailed order dated December
13, 1994 (Annex A, petition) is ANNULLED and SET ASIDE and respondent's complaint in Civil Case No.
94-72076 in the respondent court (Annexes F, petition; 4, comment), is DISMISSED. Costs against
respondents except the court.
"Sec. 1. When and by whom receiver appointed.-- One or more receivers of the property, real or
personal, which is the subject of the action, may be appointed by the judge of the Court of First
Instance in which the action is pending, or by a Justice of the Court of Appeals or of the Supreme
Court, in the following cases:
SO ORDERED."
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(a) When the corporation has been dissolved, or is insolvent, or is in imminent danger of insolvency,
or has forfeited its corporate rights;
(c) When it appears in an action by the mortgagee for the foreclosure of a mortgage that the property
is in danger of being wasted or materially injured, and that its value is probably insufficient to
discharge the mortgage debt, or that the parties have so stipulated in the contract of mortgage;
(b) When it appears from the complaint or answer, and such other proof as the judge may require,
that the party applying for the appointment of receiver has an interest in the property or fund which is
the subject of the action, and that such property or fund is in danger of being lost, removed or
materially injured unless a receiver be appointed to guard and preserve it;
(d) After judgment, to preserve the property during the pendency of the appeal, or to dispose of it
according to the judgment, or to aid execution when the execution has been returned unsatisfied or
the judgment debtor refuses to apply his property in satisfaction of the judgment, or otherwise carry
the judgment into effect;
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(e) Whenever in other cases it appears that the appointment of a receiver is the most convenient and
feasible means of preserving, administering, or disposing of the property in litigation."
A receiver of real or personal property, which is the subject of the action, may be appointed by the
court when it appears from the pleadings or such other proof as the judge may require, that the party
applying for such appointment has (1) an actual interest in it; and (2) that (a) such property is in
danger of being lost, removed or materially injured; or (b) whenever it appears to be the most
convenient and feasible means of preserving or administering the property in litigation. [9]
A receiver is a person appointed by the court in behalf of all the parties to the action 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. [10] The appointment of a receiver is
not a matter of absolute right. It depends upon the sound discretion of the court[11] and is based on
facts and circumstances of each particular case. [12]
Petitioners claim that the appointment of a receiver is justified under Section 1 (b) of Rule 59. They
argue that the ice plant which is the subject of the action was in danger of being lost, removed and
materially injured because of the following "imminent perils":
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"6.1 Danger to the lives, health and peace of mind of the inhabitants living near the Sta. Maria Ice
Plant;
6.2 Drastic action or sanctions that could be brought against the plaintiff by affected third persons,
including workers who have claims against the plaintiff but could not be paid due to the numbing
manner by which the defendant took the Sta. Maria Ice Plant;
6.3 The rapid reduction of the Ice Plant into a scrap heap because of evident incompetence, neglect
and vandalism."[13]
A petition for receivership under Section 1 (b) of Rule 59 requires that the property or fund which is
the subject of the action must be in danger of loss, removal or material injury which necessitates
protection or preservation. The guiding principle is the prevention of imminent danger to the
property. If an action by its nature, does not require such protection or preservation, said remedy
cannot be applied for and granted.[14]
In the instant case, we do not find the necessity for the appointment of a receiver. Petitioners have
not sufficiently shown that the Sta. Maria Ice Plant is in danger of disappearing or being wasted and
reduced to a "scrap heap." Neither have they proven that the property has been materially injured
which necessitates its protection and preservation.[15] In fact, at the hearing on respondent bank's
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motion to dismiss, respondent bank, through counsel, manifested in open court that the leak in the
ice plant had already been remedied and that no other leakages had been reported since. [16] This
statement has not been disputed by petitioners.
plant" does not concern the ice plant itself. These claims are the personal liabilities of petitioners
themselves. They do not constitute "material injury" to the ice plant.
At the time the trial court issued the order for receivership of the property, the problem had been
remedied and there was no imminent danger of another leakage. Whatever danger there was to the
community and the environment had already been contained.
The "drastic sanctions" that may be brought against petitioners due to their inability to pay their
employees and creditors as a result of "the numbing manner by which [respondent bank] took the ice
Moreover, the receiver appointed by the court appears to be a representative of

petitioners. Respondent bank alleges that it was not aware that petitioners nominated one Mr.
Pesquera as receiver.[17] The general rule is that neither party to a litigation should be appointed as
receiver without the consent of the other because a receiver should be a person indifferent to the
parties and should be impartial and disinterested. [18] 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.[19]
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The power to appoint a receiver must be exercised with extreme caution. There must be a clear
showing of necessity therefor in order to save the plaintiff from grave and irremediable loss or
damage.[20] It is only when the circumstances so demand, either because there is imminent danger
that the property sought to be placed in the hands of a receiver be lost or because they run the risk of
being impaired, endeavouring to avoid that the injury thereby caused be greater than the one sought
to be avoided.[21]
The Court of Appeals correctly found that the trial court gravely abused its discretion in issuing the
order for receivership. The respondent court, however, went further and took cognizance of
respondent bank's motion to dismiss. And finding merit in the motion, it dismissed the
complaint. Petitioners now claim that the respondent court should have refrained from ruling on the
motion to dismiss because the motion itself was not before it. [22]
Again, we reject petitioners' contention. The motion to dismiss is anchored on improper venue, lack of
cause of action and forum-shopping. We agree with the respondent court that the question of venue
relates to the principal action and is prejudicial to the ancillary issue of receivership. Although the
grounds for dismissal were not specifically raised before the appellate court, the said court may
consider the same since the petition for receivership depends upon a determination thereof. [23]
In their complaint, petitioners prayed for the following:
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"WHEREFORE, in view of the foregoing, it is respectfully prayed that after trial on the merits judgment
be rendered:
1. Ordering the Defendant to pay COMMODITIES actual and compensatory damages in the amount of
PESOS: TWO MILLION FIVE HUNDRED THOUSAND and 00/100 (P2,500,000.00);
2. Ordering the Defendant to pay Plaintiffs moral damages in the amount of PESOS: TWO MILLION and
00/100 (P2,000,000.00) to compensate the Plaintiffs for the anxiety and besmirched reputation
caused by the unjust actuations of the Defendant;
3. Ordering the Defendant to pay Plaintiffs nominal and exemplary damages in the amount of
PESOS: FIVE HUNDRED THOUSAND and 00/100 (P500,000.00) to deter the repetition of such unjust
and malicious actuations of the Defendant;
4. In order to restore the legal right of the Plaintiff COMMODITIES to redeem its foreclosed
property, a right which COMMODITIES has been unjustly deprived of by the malicious and
bad faith machinations of the Defendant, compelling the Defendant to produce the
correct, lawful, official and honest statements of account and application of
payment. Concomitantly, ordering the Defendant to accept the redemption of the
foreclosed properties pursuant to Rule 39 of the Revised Rules of Court in conjunction
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with Act 3135, within the prescribed period for redemption, said period to commence from
the date of receipt by the Plaintiff COMMODITIES of the correct, lawful, official and honest
statements of account and application of payments;
5. Ordering the Defendant to pay attorney's fees in the amount of PESOS: THREE HUNDRED
THOUSAND (P300,000.00); and costs of litigation.
Other reliefs and remedies just and equitable under the circumstances are likewise prayed for." [24]
Petitioners pray for two remedies: damages and redemption. The prayer for damages is based on
respondent bank's forcible occupation of the ice plant and its malicious failure to furnish them their
statements of account and application of payments which prevented them from making a timely
redemption.[25] Petitioners also pray that respondent bank be compelled to furnish them said
documents, and upon receipt thereof, allow redemption of the property. They ultimately seek
redemption of the mortgaged property. This is explicit in paragraph 4 of their prayer.
An action to redeem by the mortgage debtor affects his title to the foreclosed property. If the action is
seasonably made, it seeks to erase from the title of the judgment or mortgage debtor the lien
created by registration of the mortgage and sale.[26] If not made seasonably, it may seek to recover
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ownership to the land since the purchaser's inchoate title to the property becomes consolidated after
expiration of the redemption period.[27] Either way, redemption involves the title to the foreclosed
property. It is a real action.
Where the action affects title to the property, it should be instituted in the Regional Trial Court where
the property is situated. The Sta. Maria Ice Plant & Cold Storage is located in Sta. Maria, Bulacan. The
venue in Civil Case No. 94-72076 was therefore laid improperly.
Section 2 of Rule 4 of the Revised Rules of Court provides:
Finally, there is no merit in petitioners' claim that the respondent bank is no longer the real party in
interest after selling the ice plant to a third person during the pendency of the case.Section 20 of Rule
3 of the Revised Rules of Court provides that in a transfer of interest pending litigation, the action
may be continued by or against the original party, unless the court, upon motion, directs the
transferee to be substituted in the action or joined with the original party. The court has not ordered
the substitution of respondent bank.
"Sec. 2. Venue in Courts of First Instance.-- (a) Real actions.-- Actions affecting title to, or for recovery
of possession, or for partition or condemnation of, or foreclosure of mortgage on, real property, shall
be commenced and tried in the province where the property or any part thereof lies." [28]
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IN VIEW WHEREOF, the decision dated January 11, 1996 and resolution dated May 23, 1996 of the
Court of Appeals in CA-G.R. SP No. 36032 are affirmed. Costs against petitioners.
SO ORDERED.
Regalado, (Chairman), Romero, Mendoza, and Torres, Jr., JJ., concur.
G.R. No. L-252
March 30, 1946
TRANQUILINO CALO and DOROTEO SAN JOSE, petitioners,

vs.
ARSENIO C. ROLDAN, Judge of First Instance of Laguna, REGINO RELOVA and TEODULA
BARTOLOME,respondents.
Zosimo D. Tanalega for petitioners.
Estanislao A. Fernandez for respondents Relova and Bartolome.
No appearance for respondent Judge.
FERIA, J.:
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This is a petition for writ of certiorari against the respondent Judge Arsenio C. Roldan of the Court First
Instance of Laguna, on the ground that the latter has exceeded his jurisdiction or acted with grave
abuse of discretion in appointing a receiver of certain lands and their fruits which, according to the
complainant filed by the other respondents, as plaintiffs, against petitioners, as defendants, in case
No. 7951, were in the actual possession of and belong to said plaintiffs.
1. That the plaintiffs and the defendants are all of legal age, Filipino citizens, and residents of Pila,
Laguna; the plaintiffs are husband and wife..
The complaint filed by plaintiffs and respondents against defendants and petitioners in the Court of
First Instance of Laguna reads as follows:
xxx
2. That the plaintiff spouses are the owners and the possessors of the following described parcels of
land, to wit:.
xxx
xxx
3. That parcel No. (a) described above is now an unplanted rice land and parcel No. (b) described in
the complaint is a coconut land, both under the possession of the plaintiffs..
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4. That the defendants, without any legal right whatsoever and in connivance with each other,
through the use of force, stealth, threats and intimidation, intend or are intending to enter and work
or harvest whatever existing fruits may now be found in the lands above-mentioned in violation of
plaintiff's in this case ineffectual..
5. That unless defendants are barred, restrained, enjoined, and prohibited from entering or harvesting
the lands or working therein through ex-parte injunction, the plaintiffs will suffer injustice, damages
and irreparable injury to their great prejudice..
6. That the plaintiffs are offering a bond in their application for ex-parte injunction in the amount of
P2,000, subject to the approval of this Hon. Court, which bond is attached hereto marked as Annex A
and made an integral part of this complaint..
7. That on or about June 26, 1945, the defendants, through force, destroyed and took away the
madre-cacao fencer, and barbed wires built on the northwestern portion of the land designated as
parcel No. (b) of this complaint to the damage and prejudice of the plaintiffs in the amount of at least
P200..
Wherefore, it is respectfully prayed:.
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(a) That the accompanying bond in the amount of P2,000 be approved;
(d) That the defendants be condemned jointly and severally to pay the plaintiffs the sum of P200 as
damages; and.
(b) That a writ of preliminary injunction be issued ex-parte immediately restraining, enjoining and
prohibiting the defendants, their agents, servants, representatives, attorneys, and, (or) other persons
acting for and in their behalf, from entering in, interfering with and/or in any wise taking any
participation in the harvest of the lands belonging to the plaintiffs; or in any wise working the lands
above-described;
(c) That judgment be rendered, after due hearing, declaring the preliminary injunction final;.
(e) That plaintiffs be given such other and further relief just and equitable with costs of suit to the
defendants.
The defendants filed an opposition dated August 8, 1945, to the issuance of the writ of preliminary
injunction prayed for in the above-quoted complaint, on the ground that they are owners of the lands
and have been in actual possession thereof since the year 1925; and their answer to the complaint
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filed on August 14, 1945, they reiterate that they are the owners and were then in actual possession
of said property, and that the plaintiffs have never been in possession thereof.
The hearing of the petition for preliminary injunction was held on August 9, 1945, at which evidence
was introduced by both parties. After the hearing, Judge Rilloraza, then presiding over the Court of
First Instance of Laguna, denied the petition on the ground that the defendants were in actual
possession of said lands. A motion for reconsideration was filed by plaintiffs on August 20, 1945, but
said motion had not yet, up to the hearing of the present case, been decided either by Judge
Rilloraza, who was assigned to another court, or by the respondent judge.
The plaintiffs (respondents) filed on September 4, 1945, a reply to defendants' answer in which,
among others, they reiterate their allegation in the complaint that they are possessors in good faith of
the properties in question.
And on December 17, plaintiffs filed an urgent petition ex-parte praying that plaintiffs' motion for
reconsideration of the order denying their petition for preliminary injunction be granted and or for the
appointment of a receiver of the properties described in the complaint, on the ground that (a) the
plaintiffs have an interest in the properties in question, and the fruits thereof were in danger of being
lost unless a receiver was appointed; and that (b) the appointment of a receiver was the most
convenient and feasible means of preserving, administering and or disposing of the properties in
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litigation which included their fruits. Respondents Judge Roldan, on the same date, December 17,
1945, decided that the court would consider the motion for reconsideration in due time, and granted
the petition for appointment of and appointed a receiver in the case.
The question to be determined in the present special civil action of certiorari is, whether or not the
respondent judge acted in excess of his jurisdiction or with grave abuse of discretion in issuing the
order appointing a receiver in the case No. 7951 of the Court of First Instance of Laguna; for it is
evident that there is no appeal or any other plain, speedy, and adequate remedy in the ordinary
course of the law against the said order, which is an incidental or interlocutory one.
It is a truism in legal procedure that what determines the nature of an action filed in the courts are
the facts alleged in the complaint as constituting the cause of the action. The facts averred as a
defense in the defendant's answer do not and can not determine or change the nature of the
plaintiff's action. The theory adopted by the plaintiff in his complaint is one thing, and that of the
defendant in his answer is another. The plaintiff has to establish or prove his theory or cause of action
in order to obtain the remedy he prays for; and the defendant his theory, if necessary, in order to
defeat the claim or action of the plaintiff..
According to the complaint filed in the said case No. 7951, the plaintiff's action is one of ordinary
injunction, for the plaintiffs allege that they are the owners of the lands therein described, and were in
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actual possession thereof, and that "the defendants without any legal right whatever and in
connivance with each other, through the use of force, stealth, threat and intimidation, intend or are
intending to enter and work or harvest whatever existing fruits may be found in the lands above
mentioned in violation of plaintiffs' proprietary rights thereto;" and prays "that the defendants, their
agents, servants, representatives, and other persons acting for or in their behalf, be restrained,
enjoined and prohibited from entering in, interfering with, or in any way taking any participation in the
harvest of the lands above describe belonging to the plaintiffs."
That this is the nature of plaintiffs' action corroborated by the fact that they petitioned in the same
complaint for a preliminary prohibitory injunction, which was denied by the court in its order dated
August 17, 1945, and that the plaintiffs, in their motion for reconsideration of said order filed on
August 20 of the same year, and in their urgent petition dated December 17, moving the court to
grant said motion for reconsideration, reiterated that they were actual possessors of the land in
question.
The fact that plaintiffs, in their reply dated September 4, after reiterating their allegation or claim that
they are the owners in fee simple and possessors in good faith of the properties in question, pray that
they be declared the owners in fee simple, has not changed the nature of the action alleged in the
complaint or added a new cause of action thereto; because the allegations in plaintiffs' reply were in
answer to defendants' defenses, and the nature of plaintiffs' cause of action, as set forth in their
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complaint, was not and could not be amended or changed by the reply, which plaintiffs had the right
to present as a matter of course. A plaintiff can not, after defendant's answer, amend his complaint
by changing the cause of action or adding a new one without previously obtaining leave of court
(section 2, Rule 17)..
Respondents' contention in paragraph I of their answer that the action filed by them against
petitioners in the case No. 7951 of the Court of First Instance of Laguna is not only for injunction, but
also to quiet title over the two parcels of land described in the complaint, is untenable for the reasons
stated in the previous paragraph. Besides, an equitable action to quiet title, in order to prevent
harrassment by continued assertion of adverse title, or to protect the plaintiff's legal title and
possession, may be filed in courts of equity (and our courts are also of equity), only where no other
remedy at law exists or where the legal remedy invokable would not afford adequate remedy (32
Cyc., 1306, 1307). In the present case wherein plaintiffs alleged that they are the owners and were in
actual possession of the lands described in the complaint and their fruits, the action of injunction filed
by them is the proper and adequate remedy in law, for a judgment in favor of plaintiffs would quiet
their title to said lands..
The provisional remedies denominated attachment, preliminary injunction, receivership, and delivery
of personal property, provided in Rules 59, 60, 61, and 62 of the Rules of Court, respectively, are
remedies to which parties litigant may resort for the preservation or protection of their rights or
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interest, and for no other purpose, during the pendency of the principal action. If an action, by its
nature, does not require such protection or preservation, said remedies can not be applied for and
granted. To each kind of action or actions a proper provisional remedy is provided for by law. The
Rules of Court clearly specify the case in which they may be properly granted. .
Attachment may be issued only in the case or actions specifically stated in section 1, Rule 59, in order
that the defendant may not dispose of his property attached, and thus secure the satisfaction of any
judgment that may be recovered by plaintiff from defendant. For that reason a property subject of
litigation between the parties, or claimed by plaintiff as his, can not be attached upon motion of the
same plaintiff..
The special remedy of preliminary prohibitory injunction lies when the plaintiff's principal action is an
ordinary action of injunction, that is, when the relief demanded in the plaintiff's complaint consists in
restraining the commission or continuance of the act complained of, either perpetually or for a limited
period, and the other conditions required by section 3 of Rule 60 are present. The purpose of this
provisional remedy is to preserve thestatus quo of the things subject of the action or the relation
between the parties, in order to protect the rights of the plaintiff respecting the subject of the action
during the pendency of the suit. Because, otherwise or if no preliminary prohibition injunction were
issued, the defendant may, before final judgment, do or continue the doing of the act which the
plaintiff asks the court to restrain, and thus make ineffectual the final judgment rendered afterwards
granting the relief sought by the plaintiff. But, as this court has repeatedly held, a writ of preliminary
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injunction should not be granted to take the property out of the possession of one party to place it in
the hands of another whose title has not been clearly established..
A receiver may be appointed to take charge of personal or real property which is the subject of an
ordinary civil action, when it appears that the party applying for the appointment of a receiver has an
interest in the property or fund which is the subject of the action or litigation, and that such property
or fund is in danger of being lost, removed or materially injured unless a receiver is appointed to
guard and preserve it (section 1 [b], Rule 61); or when it appears that the appointment of a receiver is
the most convenient and feasible means of preserving, administering or disposing of the property in
litigation (section 1 [e] of said Rule). The property or fund must, therefore be in litigation according to
the allegations of the complaint, and the object of appointing a receiver is to secure and preserve the
property or thing in controversy pending the litigation. Of course, if it is not in litigation and is in
actual possession of the plaintiff, the latter can not apply for and obtain the appointment of a receiver
thereof, for there would be no reason for such appointment.
Delivery of personal property as a provisional remedy consists in the delivery, by order of the court, of
a personal property by the defendant to the plaintiff, who shall give a bond to assure the return
thereof or the payment of damages to the defendant in the plaintiff's action to recover possession of
the same property fails, in order to protect the plaintiff's right of possession of said property, or
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prevent the defendant from damaging, destroying or disposing of the same during the pendency of
the suit.
Undoubtedly, according to law, the provisional remedy proper to plaintiffs' action of injunction is a
preliminary prohibitory injunction, if plaintiff's theory, as set forth in the complaint, that he is the
owner and in actual possession of the premises is correct. But as the lower court found at the hearing
of the said petition for preliminary injunction that the defendants were in possession of the lands, the
lower court acted in accordance with law in denying the petition, although their motion for
reconsideration, which was still pending at the time the petition in the present case was heard in this
court, plaintiffs insist that they are in actual possession of the lands and, therefore, of the fruits
thereof.
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From the foregoing it appears evident that the respondent judge acted in excess of his jurisdiction in
appointing a receiver in case No. 7951 of the Court of First Instance of Laguna. Appointment of a
receiver is not proper or does not lie in an action of injunction such as the one filed by the plaintiff.
The petition for appointment of a receiver filed by the plaintiffs (Exhibit I of the petition) is based on
the ground that it is the most convenient and feasible means of preserving, administering and
disposing of the properties in litigation; and according to plaintiffs' theory or allegations in their
complaint, neither the lands nor the palay harvested therein, are in litigation. The litigation or issue
raised by plaintiffs in their complaint is not the ownership or possession of the lands and their fruits. It
is whether or not defendants intend or were intending to enter or work or harvest whatever existing
fruits could then be found in the lands described in the complaint, alleged to be the exclusive
property and in the actual possession of the plaintiffs. It is a matter not only of law but of plain
common sense that a plaintiff will not and legally can not ask for the appointment or receiver of
property which he alleges to belong to him and to be actually in his possession. For the owner and
possessor of a property is more interested than persons in preserving and administering it.
Besides, even if the plaintiffs had amended their complaint and alleged that the lands and palay
harvested therein are being claimed by the defendants, and consequently the ownership and
possession thereof were in litigation, it appearing that the defendants (now petitioners) were in
possession of the lands and had planted the crop or palay harvested therein, as alleged in paragraph
6 (a) and (b) of the petition filed in this court and not denied by the respondent in paragraph 2 of his
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answer, the respondent judge would have acted in excess of his jurisdiction or with a grave abuse of
discretion in appointing a receiver thereof. Because relief by way of receivership is equitable in
nature, and a court of equity will not ordinarily appoint a receiver where the rights of the parties
depend on the determination of adverse claims of legal title to real property and one party is in
possession (53 C. J., p. 26). The present case falls within this rule..
defendant before the final adjudication of the rights of the parties, the appointment should be made
only in extreme cases and on a clear showing of necessity therefor in order to save the plaintiff from
grave and irremediable loss or damage. (34 Cyc., 51, and cases there cited.) No such showing has
been made in this case as would justify us in interfering with the exercise by trial judge of his
discretion in denying the application for receiver. (36 Phil., 59, 63, 64.).
In the case of Mendoza vs. Arellano and B. de Arellano, this court said:
Although the petition is silent on the matter, as the respondents in their answer allege that the Court
of First Instance of Laguna has appointed a receiver in another case No. 7989 of said court, instituted
by the respondents Relova against Roberto Calo and his brothers and sisters, children of Sofia de Oca
and Tranquilino Calo (petitioner in this case), and submitted copy of the complaint filed by the
Appointments of receivers of real estate in cases of this kind lie largely in the sound discretion of the
court, and where the effect of such an appointment is to take real estate out of the possession of the
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plaintiffs (now respondents) in case No. 7989 (Exhibit 9 of the respondents' answer), we may properly
express and do hereby express here our opinion, in order to avoid multiplicity of suits, that as the
cause of action alleged in the in the complaint filed by the respondents Relova in the other case is
substantially the same as the cause of action averred in the complaint filed in the present case, the
order of the Court of First Instance of Laguna appointing a receiver in said case No. 7989 was issued
in excess of its jurisdiction, and is therefore null and void.
In view of all the foregoing, we hold that the respondent Judge Arsenio C. Roldan of the Court of First
Instance of Laguna has exceeded his jurisdiction in appointing a receiver in the present case, and
therefore the order of said respondent judge appointing the receiver, as well as all other orders and
proceedings of the court presided over by said judge in connection with the receivership, are null and
void.
As to the petitioners' petition that respondents Relova be punished for contempt of court for having
disobeyed the injunction issued by this court against the respondents requiring them to desist and
refrain from enforcing the order of receivership and entering the palay therein, it appearing from the
evidence in the record that the palay was harvested by the receiver and not by said respondents, the
petition for contempt of court is denied. So ordered, with costs against the respondents.
Moran, C. J., Ozaeta, Jaranilla, De Joya, Pablo, Perfecto, Hilado, and Bengzon, JJ., concur.
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G.R. No. L-1401
June 25, 1947
Azarias M. Padilla for petitioners.

V. M. Ruiz for respondents.
RODOLFO YLARDE, FLOR DE VIDA YLARDE, represented by Maria Cruz as guardian ad

litem, and JULIA YLARDE, petitioners,
vs.
JUAN ENRIQUEZ, Judge of First Instance of Nueva Ecija, BIENVENIDO SABADO, MAGDALENA
SABADO and APOLINARIO SABADO, respondents.
TUASON, J.:
This is a petition for certiorari to vacate an appointment of a receiver by order of the Court of First
Instance of Nueva Ecija. A preliminary injunction has been granted by us restraining the carrying out
of the order. The appointment would authorize the receiver to take possession of a parcel of land and
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to "preserve and administer the crops or products thereon and to perform all acts necessary and
incident thereto during the pendency of this case."
None of the pleadings filed in the main case are before us, except a copy of a supplemental
complaint, and the reference to the pleadings in the proceeding at bar furnishes indefinite and scanty
information on their contents. However, the application for certiorari, the answer, and the various
court orders relative to the appointment of a receiver afford sufficient data to serve as basis for a
decision.
It seems that Eugenia Ylarde was the legal or common law wife of one Simplicio Rosario, now
deceased. It would also seem that in his life time, during his marriage or cohabitation with Eugenia
Ylarde, Rosario was granted a free patent to a homestead measuring fifteen hectares. This is the land
or it is a part of this land that is involved in this litigation. According to the respondents' answer to the
application for certiorari, in 1938, after Eugenia Ylarde's legal or common-law husband died, "an
extrajudicial partition (was) executed" by Eugenia Ylarde "wherein she falsely declared under oath
that she was the sole heiress of the estate in question." Following that so-called extrajudicial partition
a transfer certificate of title was issued in Eugenia Ylarde's name cancelling the original document.
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In September, 1945, Bienvenido Sabado, Magdalena Sabado and Apolinario Sabado, apparently
Simplicio Rosario's collateral relatives, brought the action against Eugenia Ylarde. The application
for certiorari describes the action as one "relating to the ownership of a piece of property." The
respondents in this proceeding brand this statement, in their answer, as incorrect, "the true fact being
that the action refers (1) to the recovery of land. . . ., and (2) for the recovery of damages in the
amount of P50,000." It also appears that during the pendency of the action or before there is
uncertainty in the allegations as to the time and the parties two or three other so-called
extrajudicial partitions were made whereby a portion of three hectares out of the entire tract was
alloted to the Sabados. These partitions are repudiated and sought to be annulled as fraudulent in a
supplemental complaint filed by the respondents herein in the principal case.
On December 17, 1946, Eugenia Ylarde died, and she has been substituted as party defendant by
Rodolfo Ylarde, Flor de Vida Ylarde through a guardian ad litem, and Julia Ylarde. The record does not
reveal the degree of relationship between these new defendants and the deceased Eugenia Ylarde.
The Ylardes, petitioners herein and defendants in the main case, allege that they are and have been
in the possession of the part of the land which corresponded to them or to Eugenia Ylarde in the
partition, while the Sabados entered upon the possession of their share upon the signing of the
settlements. The respondents' (the Sabados') attorney denies in a strong and improper language that
the petitioners are in "physical" possession of the property in dispute. But from the use of the
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adjective "physical" we are to presume that the respondents admit that the Ylardes enjoy some kind
of possession, say, possession through representatives, croppers or tenants. Be that as it may, from
the very nature of the remedy of receivership which the Sabados applied for, from their claim of
P50,000 damages, and from their allegations we cannot avoid the conclusion that their adversaries
and their adversaries' predecessor-in-interest do have the possession. The opposite theory would be
an incongruity.
Upon these facts we shall proceed to state our opinion.
"The appointment of a receiver, because of its drastic nature and of its character as a special remedy
under our Code of Civil Procedure, is a power which should be exercised with great caution."
(Philippine Motor Alcohol Corp. and Palanca vs. Mapa, 64 Phil., 714.) "Where the effect of the
appointment of a receiver is to take real estate out of the possession of the defendant before the final
adjudication of the rights of the parties, the appointment should be made only in extreme cases and
on a clear showing of necessity therefor in order to save the plaintiff from grave and irremediable loss
or damages." (Mendoza vs. Arellano and B. de Arellano, 36 Phil., 59.) Of equal application is "the rule
that a court should not, by means of a preliminary injunction, transfer property in litigation from the
possession of one party to another . . . where the legal title is in dispute and the party having
possession asserts ownership in himself." (Gordillo and Martinez vs. Del Rosario, 39 Phil., 829;
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Evangelista vs. Pedreas, 27 Phil., 648; Palafox vs. Madamba, 19 Phil., 444; Devesa vs. Arbes, 13 Phil.,
273; 53 C.J., 26.) If, save in exceptional cases, a preliminary injunction is improper where real
property is involved, receivership is even more so because it is harsher, more drastic and more costly
than an injunction. It has been said that "of all the extraordinary remedies authorized by law, the
appointment of a receiver is the most drastic and far-reaching in its effect." (Delcambre vs. Murphy, 5
S.W. [2d], 789-791, cited as a footnote in 53 C.J., 20.)
No special circumstances are present which would take this case out of the rule enunciated in the
foregoing decisions.
Those decisions are rooted in a positive provision of the former Code of Civil Procedure which is now
found in section 1 (b), Rule 61, of the Rules of Court. According to this section it is necessary in
granting the relief of receivership that the "property or fund (be) in danger of being lost, removed or
materially injured."
The land which is the subject matter of the suit here is not in any danger of disappearing or being
wasted. There is no pretense that it has any permanent improvements or fixtures which produce
income, rents or profits to be collected or preserved. At the most a bond with sufficient sureties would
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be adequate to protect the plaintiffs from any possible injury consequent upon being deprived of the
possession of the property.
The fact that there are harvested or standing crops to which the plaintiffs lay claim does not improve
their position. If anything, the existence of such crops adds to the inequity and injustice of the
measure. Section 1 (b) of Rule 61 requires that the party applying for the appointment of receiver
should have "an interest in the property which is the subject of the action. "We take this rule to
envision actual, existing interest. Except for the plaintiffs' alleged title to the land, (which, as we have
pointed out, may not be taken away from the defendants), the plaintiffs' relation to the products is
that of complete strangers. These products are short-time crops which have been planted and raise
exclusively by the defendants personally or through others. They cost painstaking care and diligent
industry to raise and, it is said, have exacted an investment of P1,000 per hectare. There is no
partnership or anything of the sort formed between the plaintiffs and the defendants by contract or
by operation of law in their pretended ownership of the land, the plaintiffs have no title to a single
onion or cabbage planted on or harvested from it, or to any part of the proceeds of the crops, or to
the management of the enterprise. Their title to the crops is contingent upon their success in proving
their asserted title to the soil, which is still to be decided. And even if they should ultimately succeed
in that, their rights to the products would still be dependent upon many factors yet undetermined.
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These observations bring to mind another well-recognized principle in matters of receivership which
has been overlooked. A receiver, it has been repeatedly held, should not be granted where the injury
resulting therefrom would probably be greater than the injury ensuing from leaving the possession of
the property undisturbed. (53 C.J., 37.)
This doctrine fits into the case at bar. The court would place in the hands of a receiver to administer,
crops to plant and raise which, as we have seen, the defendants have spent considerable money and
attention with the plaintiffs contributing nothing beyond their allegation that they own the ground.
The receivership would have the defendants replaced in working or looking after the working of the
land by a man who is said to live in Manila and whose ability and experience in farming is, to say the
least, has not been demonstrated. The court has not apparently given thought to where the receiver,
if he continued the planting and raising of onions and other crops, would get the wherewithal. Would
he sell the crops and use the money realized therefrom to finance the enterprise? If that money be
insufficient would he borrow if he could? And the Court has not made any provision if indeed it
would be practical to make such provision at this stage of the litigation regarding the distribution of
profits or losses which would be the more probable outcome of the intended arrangement.
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The allegations in the application for an appointment of a receiver reveals, in our opinion, additional
reasons for denying it. As we have said, we gather from these allegations that Eugenia Ylarde had
been in possession of the land and had been cultivating it and applying its products to her own use to
the exclusion of the plaintiffs. Judging by the amount of damages asked by the plaintiffs, that
possession and the enjoyment of the products by Eugenia Ylarde must have lasted a long time. If
Eugenia Ylarde's possession was tolerated so long as to make possible the accumulation of P50,000
damages, we see no special reason why the status quo should not be maintained now that the cause,
as we gather from the pleadings, has entered the trial stage.
It would seem that the application for receivership was motivated by Eugenia Ylarde's death; and the
burden of the application is that the present defendants are not Eugenia's lawful heirs, besides the
plaintiffs' claim for enormous damages. But receivership is not a legal or proper substitute for an
appointment of a judicial administrator or for a relief to secure the payment of damages. Other
remedies are indicated to protect rights based on these considerations. And the allegation that the
present defendants are not entitled to succeed to Eugenia Ylarde's rights and interest in the property
in litigation is a matter with which the plaintiffs have little to do. Juridically, it concerns Eugenia
Ylarde's relatives, devisees or legatees alone. The plaintiffs have to rely on the strength of their case
and not on the weakness of their adversaries'. Procedurally, the way is open to the plaintiffs to move
for the appointment of an administrator of Eugenia Ylarde's estate, or to amend their complaint by
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bringing in as defendants those who, according to them, have a better right to inherit from the
decedent. As a matter of fact, if the defendants' allegation in their application for certiorari is correct
that they have been substituted for Eugenia Ylarde the change must have been accomplished by
an amendment of the complaint by the plaintiffs themselves. If this be the case, the plaintiffs are
assuming two inconsistent positions which they are not allowed to do.
Other objections of legal, practical and equitable character might be adduced against the receivership
in question. What has been said is enough to show that the court's discretion, in our opinion, has not
been exercised in accordance with law and with established principles and practice. It has apparently
not given a careful and full consideration to all the facts of the case and the harmful and serious
consequences of its order in contrast to the possible less injurious effects on the plaintiffs of a
decision to leave matters as they are.
The objection that the petitioners have a remedy by appeal is not well-taken. An appointment of a
receiver is an interlocutory matter; and an appeal from an order making such appointment can be
interposed only after final judgment is rendered. In this case on appeal would be of no avail to
prevent the enforcement of the order before damage which the petitioners seek to avoid had been
done. (See II Comments on the Rules of Court By Moran, p. 18, and cases cited.)
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Upon the foregoing considerations, we hold that the court below abused its discretion in appointing a
receiver. The appointment is revoked, with costs against the respondents other than the respondent
Judge.
Moran, C.J., Pablo, Perfecto, Hontiveros, and Padilla, JJ., concur.
G.R. No. L-3430
ROCHA & CO., Sociedad en Comandita, plaintiff,

vs.
A. S. CROSSFIELD, Judge of the Court of First Instance of Manila, and FRANCISCO T.
FIGUERAS,defendants.
Chicote and Miranda, for plaintiff.
Coudert Brothers, for defendants.
August 7, 1906
WILLARD, J.:
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On the 25th of January, 1906 Francisco T. Figueras, one of the defendants, commenced in the Court of
First Instance of Manila an action against Rocha & Co. in which he alleged, among other things, that in
1898 a limited partnership had been formed under the name of "Carman & Co.;" that he and two
others were general partners and that there were various special partners; that in accordance with
the terms of the articles of partnership any one of the partners had the right to withdrawn from the
partnership upon six months' notice; that upon giving the said notice his participation in the profits of
the partnership should cease but that his capital should draw interest at the market rate until it was
returned, and that it should be returned in four installments, one part upon giving notice, the second
part six months after the notice, the third part twelve months after the notice, and the fourth part
eighteen months after the notice. He further alleged that on the withdraw from the partnership and
waived his right to receive at the time the fourth part of his capital and consented that the fourth part
should be paid at the end of six months. It was further alleged that on the 15th day of February, 1904,
the partnership of Carman & Co., was reorganized under the name of Rocha & Co., which latter
company assumed all the debts and liabilities of Carman & Co., and took possession of all its assets.
The complaint alleged that the plaintiff's participation in the business consisted (1) of the capital
which he had paid in, P12,000 (2) his proportionate part of a reserve fund, and (3) his proportionate
part of a sinking fund, and that he was entitled to receive from the partnership the sum of
P51,484.17; that the partnership alleged that his interest did not exceed P34,218.22, and on the 2d
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day of August, 1904, the partnership paid, and the plaintiff received, one-fourth of the amount which
the partnership admitted that the plaintiff was entitled to.
undivided or of any interest in the physical property which belonged to the partnership and which
consisted of lorchas, launches, and cascos, nor was there any allegation that he had any lien upon
any of this property.
The prayer of the complaint is as follows:

Therefore the plaintiff prays that judgment be granted in his favor in the amount of P43,574.95, with
interest at 6 per cent per annum from August 2, 1904, and costs of this action.
There was no allegation in the complaint that the partnership of Carman & Co., was dissolved by the
withdrawal of Figueras, nor was there any allegation that after that withdrawal he was the owner of an
It is apparent that the real controversy between the parties is over the right of Figueras to receive his
proportionate part of the reserve fund and of the sinking fund.
Notwithstanding the want of these allegations, Figueras, after the presentation complaint and after
the defendants had demurred thereto, made an application to the court below for the appointment of
a receiver of the property of Rocha & Co. A receiver was appointed who afterwards took possession of
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the entire property of Rocha & Co., and thereupon Rocha & Co., commenced this original action of
certiorari in this court, asking that the proceedings in reference to the appointment of a receiver be
certified of this court and that after such certification they be examined and that the order appointing
the receiver be declared void because the court making it had no jurisdiction to appoint such receiver.
A preliminary injunction was granted by one of the justices of this court restraining the receiver and
the defendants in this action from taking further proceedings in the matter during the pendency
thereof.
this court requiring the court below to send to it all of the proceedings in the case relating to the
appointment of the receiver. Those proceedings have been remitted, a hearing has been had thereon,
and the case is now before us for final disposition.
The defendants, having been cited, appeared and answered the complaint, admitting practically all of
the facts alleged therein, a hearing was had upon said complaint and answer, and order was made by
(1) When a corporation has been dissolved, or is insolvent, or is in imminent danger of insolvency, or
has forfeited its corporate rights.
Section 174 of the Code of Civil Procedure is as follows:

SEC. 174. When a receiver may be appointed. A receiver may be appointed in the following cases:
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(2) Where it is made to appear by the complaint or answer, and by such other proof as the judge may
require, that the party making the application for the appointment of receiver has an interest in the
property or fund which is the subject of the action and it shown that the property or fund is in danger
of being lost, removed, or materially injured unless a receiver shall be appointed to guard and
preserve it.
(3) In an action by the mortgagee for the foreclosure of a mortgaged where it appears that the
property is in danger of being wasted or materially injured and that its value is probably insufficient to
discharge the mortgage debt.
(4) Whenever in other cases it shall be made to appear to the court that the appointment of a
receiver is the most convenient and feasible means of preserving and administering the property
which is the subject of litigation during the pendency of the action.
The case at bar does not fall within any of the provisions of this section. There is no allegation in the
complaint, as has been before stated, that the plaintiff is the owner of any of the property of Rocha &
Co., nor is there any allegation that he has any lien thereon, nor are there any facts alleged in the
complaint from which it could be inferred that he was owner of such property or had any lien thereon.
On the contrary, from the facts that are alleged in the complaint it would seem that his separation
from the partnership of Carman & Co., left that partnership as a going concern and did not dissolve it.
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The effect of the provisions of the articles of partnership which are referred to in the complaint is that
after the withdrawal of any partner the remaining partners became the owners of all the assets of the
partnership and he became a general creditor of the partnership.
After this action had been commenced in this court, and after a preliminary injunction had been
issued as aforesaid, Figueras applied to the court below for leave to amend his complaint in the action
therein opening and such leave was granted. This amendment, having been made after the action
was commenced in this court and after a receiver was appointed, can not be considered.
In one of the orders made by the court below relating to the receiver, its authority for making it was
based on paragraphs 2 and 4 of section 174 of the Code of Civil Procedure above quoted. In a
subsequent order this ground was abandoned and the appointment was based on paragraph 1 of said
section, the court holding that a special partnership was corporation within the meaning of said
section 174. This claim can not be sustained and, in fact, it was not urged in the argument of this case
in this court.
The case not being one in which a receiver could be appointed, the order making such appointment
was void and was beyond the jurisdiction of the court, although that court had jurisdiction of the main
action has been settled adversely to the defendants in this suit by the case of Bonaplata vs. Ambler
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(2 Phil. Rep., 392). (See also Encarnacion vs. Ambler,1 2 Off Gaz., 490; Findlay & Co., vs. Ambler, 2 2
Off. Gaz., 491).
That certiorari is the proper remedy in such a case was decided in the case of Blanco vs. Ambler 3 (2
Off. Gaz., 281, 492.)
The order of the court below appointing a receiver in this case was illegal and void, and it all
proceedings taken therein are hereby annulled. Let judgment be entered to that effect in favor of the
plaintiff in this action and against the defendants, and with costs against the defendant, Figueras. At
the expiration of ten days let judgment be entered in accordance herewith. So ordered.
Arellano C.J., Torres, Mapa, Carson and Tracey, JJ., concur.
In the argument in this court it was claimed that this extraordinary remedy would not lie because the
plaintiff, Rocha & Co., had a right to appeal from the order appointing a receiver, although that appeal
could not be taken until a final judgment had been entered in the case. That argument is answered by
what is said in the case of Yangco vs. Rohde (Phil. Rep., 404).
G.R. No. L-3791
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November 29, 1950
RECEIVERSHIP
AGUSTINA PARANETE, PERINO VILLAR, PEDRO HERNANDEZ, COMEDES DALLATON,
VALERIANO MILLANO, FELISIANA NAVARRO, and EDUARDO B. OCAMPO Petitioners,
vs. BIENVENIDO A. TAN, Judge, Court of First Instance of Rizal, Rizal City Branch, FELIX
ALCARAS, FRUCTUOSA VASQUEZ, MAXIMA VASQUEZ, NORBERTA VASQUEZ and THE
PROVINCIAL SHERIFF OF RIZAL,Respondents.
BAUTISTA ANGELO, J.:
Emiliano M. Ocampo for petitioners.

Jose E. Morales for respondents Felix Alcaras, and Fructuosa, Maxima and Norberta, all surnamed
Vasquez.
On January 16, 1950, Felix Alcaras, Fructuosa Vasquez Maxima Vasquez filed a case in the Court of
First Instance of Rizal for the recovery of five parcels of the land against Agustina Paranete and six
other codefendants, (civil case No. 1020 ). On January 28, 1950, plaintiffs filled a petition for a writ of
preliminary injunction for the purpose of ousting the defendants from the lands in litigation and of
This is a petition for a writ of prohibition wherein petitioner seeks to enjoin the respondent judge from
enforcing his order of March 4, 1950, on the ground that the same was issued in excess of his
jurisdiction.chanroblesvirtualawlibrary chanrobles tual
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having themselves placed in possession thereof. The petition was heard ex parte and as a result the
respondent judge issued the writ of injunction requested. On February 28, 1950, the defendants
moved for the reconsideration of the order granting the writ, to which plaintiff objected, and after due
hearing, at which both parties appeared with their respective counsel, the respondent judge
reconsidered his order, but required the defendants to render an accounting of the harvest for the
year 1949, as well as all future harvests, and if the harvest had already been sold, to deposit the
proceeds of the sale with the clerk of court, allowing the plaintiff or their representative to be present
during each harvest. This order was issued on March 4, 1950. Defendants again filed a motion for the
reconsideration of this order, but it was denied, hence the petition under
consideration.chanroblesvirtualawlibrary chanrobles virtual law library
The question to be determined is whether or not the respondent judge exceeded his jurisdiction in
issuing his order of March 4, 1950, under the terms and conditions set forth
above.chanroblesvirtualawlibrary chanrobles virtual law library
We hold that the respondent judge has acted in excess jurisdiction when he issued the order above
adverted to. That order, in effect, made the clerk of court a sort of a receiver charged with the duty of
receiving the proceeds of sale and the harvest of every year during the pendency of the case with the
disadvantage that the clerk of court has not filed any bond to guarantee the faithful discharge of his
duties as depositary; and considering that in actions involving title to real property, the appointment
of a receiver cannot be entertained because its effect would be to take the property out of the
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possession of the defendant, except in extreme cases when there is clear proof of its necessity to
save the plaintiff from grave and irremediable loss or damage, it is evident that the action of the
respondent judge is unwarranted and unfair to the defendants. (Mendoza vs. Arellano vs.36 Phil., 59;
Agonoy vs. Ruiz, 11 Phil., 204; Aquino vs. Angeles David, 77 Phil., 1087; Ylarde vs. Enriquez, 78 Phil.,
527; Arcega vs. Pecson, 44 Off. Gaz., (No. 12), 4884, 78 Phil., 743; De La Cruz vs. Guinto, 45 Off. Gaz.,
pp. 1309; 1311; 79 Phil., 304.) Moreover, we find that Agustina Paranete, one of the defendants, has
been in possession of the lands since 1943, in the exercise of her rights as owner, with her
codefendants working for her exclusively as tenants, and that during all these years said Agustina
Paranete had made improvements thereon at her own expense. These improvements were made
without any contribution on the part of the plaintiffs. The question of ownership is herein involved and
both parties seem to have documentary evidence in support of their respective claims, and to order
the defendants to render an accounting of the harvest and to deposit the proceeds in case of sale
thereof during the pendency of the case would be to deprive them of their means of livelihood before
the case is decided on the merits. The situation obtaining is such that it does not warrant the placing
of the lands in the hands of a neutral person as is required when a receiver is appointed. To do so
would be unfair and would unnecessarily prejudice the
defendants.chanroblesvirtualawlibrary chanrobles virtual law library
While the respondent judge claims in his order of March 25, 1950, that he acted as he did because of
a verbal agreement entered into between the lawyers of both parties, we do not consider it necessary
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to pass on this point because the alleged agreement is controverted and nothing about it has been
mentioned by the respondent judge in his order under
consideration.chanroblesvirtualawlibrary chanrobles virtual law library
[G.R. No. 203585. July 29, 2013.]
Wherefore, petition is hereby granted. The court declares the order of the respondent judge of March
4, 1950 null and void and enjoins him from enforcing it as prayed for in the
petition.chanroblesvirtualawlibrary chanrobles virtual law library
Paras, Feria, Pablo, Bengzon, Padilla, Tuason, Montemayor, Reyes, and Jugo, JJ., concur.
MILA CABOVERDE TANTANO and ROSELLER CABOVERDE, petitioners, vs. DOMINALDA

ESPINA-CABOVERDE, EVE CABOVERDE-YU, FE CABOVERDE-LABRADOR, and JOSEPHINE E.
CABOVERDE, respondents.
DECISION
VELASCO, JR., J p:
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The Case
Assailed in this petition for review under Rule 45 are the Decision and Resolution of the Court of
Appeals (CA) rendered on June 25, 2012 and September 21, 2012, respectively, in CA-G.R. SP. No.
03834, which effectively affirmed the Resolutions dated February 8, 2010 and July 19, 2010 of the
Regional Trial Court (RTC) of Sindangan, Zamboanga del Norte, Branch 11, in Civil Case No. S-760,
approving respondent Dominalda Espina-Caboverde's application for receivership and appointing the
receivers over the disputed properties.
Petitioners Mila Caboverde Tantano (Mila) and Roseller Caboverde (Roseller) are children of
respondent Dominalda Espina-Caboverde (Dominalda) and siblings of other respondents in this case,
namely: Eve Caboverde-Yu (Eve), Fe Caboverde-Labrador (Fe), and Josephine E. Caboverde
(Josephine).
Petitioners and their siblings, Ferdinand, Jeanny and Laluna, are the registered owners and in
possession of certain parcels of land, identified as Lots 2, 3 and 4 located at Bantayan, Sindangan and
Poblacion, Sindangan in Zamboanga del Norte, having purchased them from their parents, Maximo
and Dominalda Caboverde. 1 cdphil
The Facts
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The present controversy started when on March 7, 2005, respondents Eve and Fe filed a complaint
before the RTC of Sindangan, Zamboanga del Norte where they prayed for the annulment of the Deed
of Sale purportedly transferring Lots 2, 3 and 4 from their parents Maximo and Dominalda in favor of
petitioners Mila and Roseller and their other siblings, Jeanny, Laluna and Ferdinand. Docketed as Civil
Case No. S-760, the case was raffled to Branch 11 of the court.
In their verified Answer, the defendants therein, including Maximo and Dominalda, posited the validity
and due execution of the contested Deed of Sale.
During the pendency of Civil Case No. S-760, Maximo died. On May 30, 2007, Eve and Fe filed an
Amended Complaint with Maximo substituted by his eight (8) children and his wife Dominalda. The
Amended Complaint reproduced the allegations in the original complaint but added eight (8) more
real properties of the Caboverde estate in the original list.
As encouraged by the RTC, the parties executed a Partial Settlement Agreement (PSA) where they
fixed the sharing of the uncontroverted properties among themselves, in particular, the adverted
additional eight (8) parcels of land including their respective products and improvements. Under the
PSA, Dominalda's daughter, Josephine, shall be appointed as Administrator. The PSA provided that
Dominalda shall be entitled to receive a share of one-half (1/2) of the net income derived from the
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uncontroverted properties. The PSA also provided that Josephine shall have special authority, among
others, to provide for the medicine of her mother.
The parties submitted the PSA to the court on or about March 10, 2008 for approval. 2 CaAIES
Before the RTC could act on the PSA, Dominalda, who, despite being impleaded in the case as
defendant, filed a Motion to Intervene separately in the case. Mainly, she claimed that the verified
Answer which she filed with her co-defendants contained several material averments which were not
representative of the true events and facts of the case. This document, she added, was never
explained to her or even read to her when it was presented to her for her signature.
On May 12, 2008, Dominalda filed a Motion for Leave to Admit Amended Answer, attaching her
Amended Answer where she contradicted the contents of the aforesaid verified Answer by declaring
that there never was a sale of the three (3) contested parcels of land in favor of Ferdinand, Mila,
Laluna, Jeanny and Roseller and that she and her husband never received any consideration from
them. She made it clear that they intended to divide all their properties equally among all their
children without favor. In sum, Dominalda prayed that the reliefs asked for in the Amended Complaint
be granted with the modification that her conjugal share and share as intestate heir of Maximo over
the contested properties be recognized. 3
The RTC would later issue a Resolution granting the Motion to Admit Amended Answer. 4
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On May 13, 2008, the court approved the PSA, leaving three (3) contested properties, Lots 2, 3, and 4,
for further proceedings in the main case.
Fearing that the contested properties would be squandered, Dominalda filed with the RTC on July 15,
2008 a Verified Urgent Petition/Application to place the controverted Lots 2, 3 and 4 under
receivership. Mainly, she claimed that while she had a legal interest in the controverted properties
and their produce, she could not enjoy them, since the income derived was solely appropriated by
petitioner Mila in connivance with her selected kin. She alleged that she immediately needs her legal
share in the income of these properties for her daily sustenance and medical expenses. Also, she
insisted that unless a receiver is appointed by the court, the income or produce from these properties
is in grave danger of being totally dissipated, lost and entirely spent solely by Mila and some of her
selected kin. Paragraphs 5, 6, 7, and 8 of the Verified Urgent Petition/Application for
Receivership 5 (Application for Receivership) capture Dominalda's angst and apprehensions: TIcEDC
5.That all the income of Lot Nos. 2, 3 and 4 are collected by Mila Tantano, thru her collector Melinda
Bajalla, and solely appropriated by Mila Tantano and her selected kins, presumably with Roseller E.
Caboverde, Ferdinand E. Caboverde, Jeanny Caboverde and Laluna Caboverde, for their personal use
and benefit;
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6.That defendant Dominalda Espina Caboverde, who is now sickly, in dire need of constant medication
or medical attention, not to mention the check-ups, vitamins and other basic needs for daily
sustenance, yet despite the fact that she is the conjugal owner of the said land, could not even enjoy
the proceeds or income as these are all appropriated solely by Mila Tantano in connivance with some
of her selected kins;
7.That unless a receiver is appointed by the court, the income or produce from these lands, are in
grave danger of being totally dissipated, lost and entirely spent solely by Mila Tantano in connivance
with some of her selected kins, to the great damage and prejudice of defendant Dominalda Espina
Caboverde, hence, there is no other most feasible, convenient, practicable and easy way to get,
collect, preserve, administer and dispose of the legal share or interest of defendant Dominalda Espina
Caboverde except the appointment of a receiver . . .;
xxx xxx xxx
9.That insofar as the defendant Dominalda Espina Caboverde is concerned, time is of the utmost
essence. She immediately needs her legal share and legal interest over the income and produce of
these lands so that she can provide and pay for her vitamins, medicines, constant regular medical
check-up and daily sustenance in life. To grant her share and interest after she may have passed
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away would render everything that she had worked for to naught and waste, akin to the
saying "aanhin pa ang damo kung patay na ang kabayo." HDaACI
Jeanny. The court, however, expressed its aversion to a party to the action acting as receiver and
accordingly asked the parties to nominate neutral persons. 7
On August 27, 2009, the court heard the Application for Receivership and persuaded the parties to
discuss among themselves and agree on how to address the immediate needs of their mother. 6
On February 8, 2010, the trial court issued a Resolution granting Dominalda's application for
receivership over Lot Nos. 2, 3 and 4. The Resolution reads:
On October 9, 2009, petitioners and their siblings filed a Manifestation formally expressing their
concurrence to the proposal for receivership on the condition, inter alia, that Mila be appointed the
receiver, and that, after getting the 2/10 share of Dominalda from the income of the three (3) parcels
of land, the remainder shall be divided only by and among Mila, Roseller, Ferdinand, Laluna and
As regards the second motion, the Court notes the urgency of placing Lot 2 situated at Bantayan,
covered by TCT No. 46307; Lot 3 situated at Poblacion, covered by TCT No. T-8140 and Lot 4 also
situated at Poblacion covered by TCT No. T-8140, all of Sindangan, Zamboanga del Norte under
receivership as defendant Dominalda Espina Caboverde (the old and sickly mother of the rest of the
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parties) who claims to be the owner of the one-half portion of the properties under litigation as her
conjugal share and a portion of the estate of her deceased husband Maximo, is in dire need for her
medication and daily sustenance. As agreed by the parties, Dominalda Espina Caboverde shall be
given 2/10 shares of the net monthly income and products of the said properties. 8 cDHAaT
In the same Resolution, the trial court again noted that Mila, the nominee of petitioners, could not
discharge the duties of a receiver, she being a party in the case. 9Thus, Dominalda nominated her
husband's relative, Annabelle Saldia, while Eve nominated a former barangay kagawad, Jesus Tan. 10
Petitioners thereafter moved for reconsideration raising the arguments that the concerns raised by
Dominalda in her Application for Receivership are not grounds for placing the properties in the hands
of a receiver and that she failed to prove her claim that the income she has been receiving is
insufficient to support her medication and medical needs. By Resolution 11 of July 19, 2010, the trial
court denied the motion for reconsideration and at the same time appointed Annabelle Saldia as the
receiver for Dominalda and Jesus Tan as the receiver for Eve. The trial court stated:
As to the issue of receivership, the Court stands by its ruling in granting the same, there being no
cogent reason to overturn it. As intimated by the movant-defendant Dominalda Caboverde, Lots 2, 3
and 4 sought to be under receivership are not among those lots covered by the adverted Partial
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Amicable Settlement. To the mind of the Court, the fulfilment or non-fulfilment of the terms and
conditions laid therein nonetheless have no bearing on these three lots. Further, as correctly pointed
out by her, there is possibility that these Lots 2, 3, and 4, of which the applicant has interest, but are
in possession of other defendants who are the ones enjoying the natural and civil fruits thereof which
might be in the danger of being lost, removed or materially injured. Under this precarious condition,
they must be under receivership, pursuant to Sec. 1 (a) of Rule 59. Also, the purpose of the
receivership is to procure money from the proceeds of these properties to spend for medicines and
other needs of the movant defendant Dominalda Caboverde who is old and sickly. This circumstance
falls within the purview of Sec. 1(d), that is, "Whenever in other cases it appears that the
appointment of a receiver is the most convenient and feasible means of preserving, administering, or
disposing of the property in litigation."
Both Annabelle Saldia and Jesus Tan then took their respective oaths of office and filed a motion to fix
and approve bond which was approved by the trial court over petitioners' opposition. EaCSTc
Undaunted, petitioners filed an Urgent Precautionary Motion to Stay Assumption of Receivers dated
August 9, 2010 reiterating what they stated in their motion for reconsideration and expressing the
view that the grant of receivership is not warranted under the circumstances and is not consistent
with applicable rules and jurisprudence. The RTC, on the postulate that the motion partakes of the
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nature of a second motion for reconsideration, thus, a prohibited pleading, denied it via a Resolution
dated October 7, 2011 where it likewise fixed the receiver's bond at PhP100,000 each. The RTC
stated:
ANNABELLE DIAMANTE-SALDIA, and Resolution dated 29 July 2011 denying the herein defendants'
(petitioners therein) motion for reconsideration of the 24 May 2011 Resolution, both, for lack of merit.
In its latterResolution, the Court of Appeals states:
[1]The appointed receivers, JESUS A. TAN and ANNABELLE DIAMANTE-SALDIA, are considered duly
appointed by this Court, not only because their appointments were made upon their proper
nomination from the parties in this case, but because their appointments have been duly upheld by
the Court of Appeals in itsResolution dated 24 May 2011 denying the herein defendants' (petitioners
therein) application for a writ of preliminary injunction against the 8 February 2010Resolution of this
Court placing the properties (Lots 2, 3 and 4) under receivership by the said JESUS A. TAN and
A writ of preliminary injunction, as an ancillary or preventive remedy, may only be resorted to by a

litigant to protect or preserve his rights or interests and for no other purpose during the pendency of
the principal action. But before a writ of preliminary injunction may be issued, there must be a clear
showing that there exists a right to be protected and that the acts against which the writ is to be
directed are violative of the said right and will cause irreparable injury. CaSHAc
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Unfortunately, petitioners failed to show that the acts of the receivers in this case are inimical to their
rights as owners of the property. They also failed to show that the non-issuance of the writ of
injunction will cause them irreparable injury. The court-appointed receivers merely performed their
duties as administrators of the disputed lots. It must be stressed that the trial court specifically
appointed these receivers to preserve the properties and its proceeds to avoid any prejudice to the
parties until the main case is resolved, Hence, there is no urgent need to issue the injunction.
xxx xxx xxx

WHEREFORE, premises considered, this Court RESOLVES, as it is hereby RESOLVED, that:
1.The defendants' "Urgent Precautionary Motion to Stay Assumption of Receivers" be DENIED for lack
of merit. Accordingly, it being patently a second motion for reconsideration, a prohibited pleading, the
same is hereby ordered EXPUNGED from the records;
ACCORDINGLY, the motion for reconsideration is DENIED for lack of merit.

SO ORDERED.
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2.The "Motion to Fix the Bond, Acceptance and Approval of the Oath of Office, and Bond of the
Receiver" of defendant Dominalda Espina Caboverde, be GRANTED with the receivers' bond set and
fixed at ONE HUNDRED THOUSAND PESOS (PhP100,000.00) each. 12 HDIaET
It should be stated at this juncture that after filing their Urgent Precautionary Motion to Stay
Assumption of Receivers but before the RTC could rule on it, petitioners filed a petition
for certiorari with the CA dated September 29, 2010 seeking to declare null and void the February 8,
2010 Resolution of the RTC granting the Application for Receivership and its July 19, 2010 Resolution
denying the motion for reconsideration filed by petitioners and appointing the receivers nominated by
respondents. The petition was anchored on two grounds, namely: (1) non-compliance with the
substantial requirements under Section 2, Rule 59 of the 1997 Rules of Civil Procedurebecause the
trial court appointed a receiver without requiring the applicant to file a bond; and (2) lack of factual or
legal basis to place the properties under receivership because the applicant presented support and
medication as grounds in her application which are not valid grounds for receivership under the rules.
On June 25, 2012, the CA rendered the assailed Decision denying the petition on the strength of the
following premises and ratiocination:
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Petitioners harp on the fact that the court a quo failed to require Dominalda to post a bond prior to
the issuance of the order appointing a receiver, in violation of Section 2, Rule 59 of the Rules of
court which provides that:
SEC. 2.Bond on appointment of receiver. Before issuing the order appointing a receiver the
court shall require the applicant to file a bond executed to the party against whom the application is
presented, in an amount to be fixed by the court, to the effect that the applicant will pay such party
all damages he may sustain by reason of the appointment of such receiver in case the applicant shall
have procured such appointment without sufficient cause; and the court may, in its discretion, at any
time after the appointment, require an additional bond as further security for such damages. aHTEIA
The Manifestation dated September 30, 2009 filed by petitioners wherein "they formally manifest[ed]
their concurrence" to the settlement on the application for receivership estops them from questioning
the sufficiency of the cause for the appointment of the receiver since they themselves agreed to have
the properties placed under receivership albeit on the condition that the same be placed under the
administration of Mila. Thus, the filing of the bond by Dominalda for this purpose becomes
unnecessary.
It must be emphasized that the bond filed by the applicant for receivership answers only for all
damages that the adverse party may sustain by reason of the appointment of such receiver in case
the applicant shall have procured such appointment without sufficient cause; it does not answer for
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damages suffered by reason of the failure of the receiver to discharge his duties faithfully or to obey
the orders of the court, inasmuch as such damages are covered by the bond of the receiver.
As to the second ground, petitioners insist that there is no justification for placing the properties
under receivership since there was neither allegation nor proof that the said properties, not the fruits
thereof, were in danger of being lost or materially injured. They believe that the public respondent
went out of line when he granted the application for receivership for the purpose of procuring money
for the medications and basic needs of Dominalda despite the income she's supposed to receive
under the Partial Settlement Agreement.
The court a quo has the discretion to decide whether or not the appointment of a receiver is
necessary. In this case, the public respondent took into consideration that the applicant is already an
octogenarian who may not live up to the day when this conflict will be finally settled. Thus, We find
that he did not act with grave abuse of discretion amounting to lack or excess of jurisdiction when he
granted the application for receivership based on Section 1(d) of Rule 59 of the Rules of Court. DAESTI
A final note, a petition for certiorari may be availed of only when there is no appeal, nor any plain,
speedy and adequate remedy in the ordinary course of law. In this case, petitioners may still avail of
the remedy provided in Section 3, Rule 59 of the said Rule where they can seek for the discharge of
the receiver.
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FOR REASONS STATED, the petition for certiorari is DENIED.
The Issues
SO ORDERED. 13
Petitioners raise the following issues in their petition:
Petitioners' Motion for Reconsideration was also denied by the CA on September 21, 2012. 14
(1)Whether or not the CA committed grave abuse of discretion in sustaining the appointment of a
receiver despite clear showing that the reasons advanced by the applicant are not any of those
enumerated by the rules; and
Hence, the instant petition, petitioners effectively praying that the approval of respondent
Dominalda's application for receivership and necessarily the concomitant appointment of receivers be
revoked.
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(2)Whether or not the CA committed grave abuse of discretion in upholding the Resolution of the RTC
and ruling that the receivership bond is not required prior to appointment despite clear dictates of the
rules.
We have repeatedly held that receivership is a harsh remedy to be granted with utmost
circumspection and only in extreme situations. The doctrinal pronouncement inVelasco & Co. v.
Gochico & Co is instructive:
The Court's Ruling
The petition is impressed with merit. CcSTHI
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much consideration from the court as those of the complainant. 15
grave abuse of discretion amounting to lack or excess of jurisdiction when it granted the application
for receivership since it was justified under Sec. 1 (d), Rule 59 of the Rules of Court, which states:
To recall, the RTC approved the application for receivership on the stated rationale that receivership
was the most convenient and feasible means to preserve and administer the disputed properties. As a
corollary, the RTC, agreeing with the applicant Dominalda, held that placing the disputed properties
under receivership would ensure that she would receive her share in the income which she
supposedly needed in order to pay for her vitamins, medicines, her regular check-ups and daily
sustenance. Considering that, as the CA put it, the applicant was already an octogenarian who
may not live up to the day when the conflict will be finally settled, the RTC did not act with
Section 1.Appointment of a receiver. Upon a verified application, one or more receivers of the
property subject of the action or proceeding may be appointed by the court where the action is
pending, or by the Court of Appeals or by the Supreme Court, or a member thereof, in the following
cases:
xxx xxx xxx
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(d)Whenever in other cases it appears that the appointment of a receiver is the most
convenient and feasible means of preserving, administering, or disposing of the property
in litigation. (Emphasis supplied.)
Indeed, Sec. 1 (d) above is couched in general terms and broad in scope, encompassing instances not
covered by the other grounds enumerated under the said section.16 However, in granting
applications for receivership on the basis of this section, courts must remain mindful of the basic
principle that receivership may be granted only when the circumstances so demand, either because
the property sought to be placed in the hands of a receiver is in danger of being lost or because they
run the risk of being impaired, 17 and that being a drastic and harsh remedy, receivership must be
granted only when there is a clear showing of necessity for it in order to save the plaintiff from grave
and immediate loss or damage. 18 aTCAcI
Before appointing a receiver, courts should consider: (1) whether or not the injury resulting from such
appointment would probably be greater than the injury ensuing if the status quo is left undisturbed;
and (2) whether or not the appointment will imperil the interest of others whose rights deserve as
much a consideration from the court as those of the person requesting for receivership. 19
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Moreover, this Court has consistently ruled that where the effect of the appointment of a receiver is to
take real estate out of the possession of the defendant before the final adjudication of the rights of
the parties, the appointment should be made only in extreme cases. 20
After carefully considering the foregoing principles and the facts and circumstances of this case, We
find that the grant of Dominalda's Application for Receivership has no leg to stand on for reasons
discussed below.
on this ground is not only unwarranted but also an arbitrary exercise of discretion because financial
need and like reasons are not found in Sec. 1 of Rule 59 which prescribes specific grounds or reasons
for granting receivership. The RTC's insistence that the approval of the receivership is justified under
Sec. 1 (d) of Rule 59, which seems to be a catch-all provision, is far from convincing. To be clear, even
in cases falling under such provision, it is essential that there is a clear showing that there is
imminent danger that the properties sought to be placed under receivership will be lost, wasted or
injured.
First, Dominalda's alleged need for income to defray her medical expenses and support is not a valid
justification for the appointment of a receiver. The approval of an application for receivership merely
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Second, there is no clear showing that the disputed properties are in danger of being lost or
materially impaired and that placing them under receivership is most convenient and feasible means
to preserve, administer or dispose of them.
anything else to prove that the disputed properties were in danger of being wasted or materially
injured and that the appointment of a receiver was the most convenient and feasible means to
preserve their integrity. cCaATD
Based on the allegations in her application, it appears that Dominalda sought receivership mainly
because she considers this the best remedy to ensure that she would receive her share in the income
of the disputed properties. Much emphasis has been placed on the fact that she needed this income
for her medical expenses and daily sustenance. But it can be gleaned from her application that, aside
from her bare assertion that petitioner Mila solely appropriated the fruits and rentals earned from the
disputed properties in connivance with some of her siblings, Dominalda has not presented or alleged
Further, there is nothing in the RTC's February 8 and July 19, 2010 Resolutions that says why the
disputed properties might be in danger of being lost, removed or materially injured while in the hands
of the defendants a quo. Neither did the RTC explain the reasons which compelled it to have them
placed under receivership. The RTC simply declared that placing the disputed properties under
receivership was urgent and merely anchored its approval on the fact that Dominalda was an elderly
in need of funds for her medication and sustenance. The RTC plainly concluded that since the
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purpose of the receivership is to procure money from the proceeds of these properties to
spend for medicines and other needs of the Dominalda, who is old and sickly, this
circumstance falls within the purview of Sec. 1 (d), that is, "Whenever in other cases it
appears that the appointment of a receiver is the most convenient and feasible means of
preserving, administering, or disposing of the property in litigation."
Verily, the RTC's purported determination that the appointment of a receiver is the most convenient
and feasible means of preserving, administering or disposing of the properties is nothing but a hollow
conclusion drawn from inexistent factual considerations. cDIHES
Third, placing the disputed properties under receivership is not necessary to save Dominalda from
grave and immediate loss or irremediable damage. Contrary to her assertions, Dominalda is assured
of receiving income under the PSA approved by the RTC providing that she was entitled to receive a
share of one-half (1/2) of the net income derived from the uncontroverted properties. Pursuant to the
PSA, Josephine, the daughter of Dominalda, was appointed by the court as administrator of the eight
(8) uncontested lots with special authority to provide for the medicine of her mother. Thus, it was
patently erroneous for the RTC to grant the Application for Receivership in order to ensure Dominalda
of income to support herself because precisely, the PSA already provided for that. It cannot be overemphasized that the parties in Civil Case No. S-760 were willing to make arrangements to ensure that
Dominalda was provided with sufficient income. In fact, the RTC, in its February 8, 2010 Resolution
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granting the Application for Receivership, noted the agreement of the parties that "Dominalda
Espina Caboverde shall be given 2/10 shares of the net monthly income and products of
said properties." 21
Finally, it must be noted that the defendants in Civil Case No. S-760 are the registered owners of the
disputed properties that were in their possession. In cases such as this, it is settled jurisprudence that
the appointment should be made only in extreme cases and on a clear showing of necessity in order
to save the plaintiff from grave and irremediable loss or damage. 22 TcSCEa
This Court has held that a receiver should not be appointed to deprive a party who is in possession of
the property in litigation, just as a writ of preliminary injunction should not be issued to transfer
property in litigation from the possession of one party to another where the legal title is in dispute
and the party having possession asserts ownership in himself, except in a very clear case of evident
usurpation. 23
Furthermore, this Court has declared that the appointment of a receiver is not proper when the rights
of the parties, one of whom is in possession of the property, depend on the determination of their
respective claims to the title of such property 24 unless such property is in danger of being materially
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injured or lost, as by the prospective foreclosure of a mortgage on it or its portions are being occupied
by third persons claiming adverse title. 25
It must be underscored that in this case, Dominalda's claim to the disputed properties and her share
in the properties' income and produce is at best speculative precisely because the ownership of the
disputed properties is yet to be determined in Civil Case No. S-760. Also, except for Dominalda's claim
that she has an interest in the disputed properties, Dominalda has no relation to their produce or
income.
By placing the disputed properties and their income under receivership, it is as if the applicant has
obtained indirectly what she could not obtain directly, which is to deprive the other parties of the
possession of the property until the controversy between them in the main case is finally
settled. 26 This Court cannot countenance this arrangement.
To reiterate, the RTC's approval of the application for receivership and the deprivation of petitioners of
possession over the disputed properties would be justified only if compelling reasons exist.
Unfortunately, no such reasons were alleged, much less proved in this case.
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In any event, Dominalda's rights may be amply protected during the pendency of Civil Case No. S-760
by causing her adverse claim to be annotated on the certificates of title covering the disputed
properties. 27
As regards the issue of whether or not the CA was correct in ruling that a bond was not required prior
to the appointment of the receivers in this case, We rule in the negative. aAcHCT
Respondents Eve and Fe claim that there are sufficient grounds for the appointment of receivers in
this case and that in fact, petitioners agreed with them on the existence of these grounds when they
acquiesced to Dominalda's Application for Receivership. Thus, respondents insist that where there is
sufficient cause to appoint a receiver, there is no need for an applicant's bond because under Sec. 2
of Rule 59, the very purpose of the bond is to answer for all damages that may be sustained by a
party by reason of the appointment of a receiver in case the applicant shall have procured such
appointment without sufficient cause. Thus, they further argue that what is needed is the
receiver's bond which was already fixed and approved by the RTC. 28 Also, the CA found that there
was no need for Dominalda to file a bond considering that petitioners filed a Manifestation where they
formally consented to the receivership. Hence, it was as if petitioners agreed that there was sufficient
cause to place the disputed properties under receivership; thus, the CA declared that petitioners were
estopped from challenging the sufficiency of such cause.
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The foregoing arguments are misplaced. Sec. 2 of Rule 59 is very clear in that before issuing the order
appointing a receiver the court shall require the applicant to file a bond executed to the party against
whom the application is presented. The use of the word "shall" denotes its mandatory nature; thus,
the consent of the other party, or as in this case, the consent of petitioners, is of no moment. Hence,
the filing of an applicant's bond is required at all times. On the other hand, the requirement of a
receiver's bond rests upon the discretion of the court. Sec. 2 of Rule 59 clearly states that the
court may, in its discretion, at any time after the appointment, require an additional bond as further
security for such damages. ETaSDc
WHEREFORE, upon the foregoing considerations, this petition is GRANTED. The assailed CA June 25,
2012 Decision and September 21, 2012 Resolution in CA-G.R. SP No. 03834 are
hereby REVERSED and SET ASIDE. The Resolutions dated February 8, 2010 and July 19, 2010 of the
RTC, Branch 11 in Sindangan, Zamboanga del Norte, in Civil Case No. S-760, approving respondent
Dominalda Espina-Caboverde's application for receivership and appointing the receivers over the
disputed properties are likewise SET ASIDE.
SO ORDERED.
Peralta, Abad, Mendoza and Leonen, JJ., concur.
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[G.R. No. 203585. July 29, 2013.]
MILA CABOVERDE TANTANO and ROSELLER CABOVERDE, petitioners, vs. DOMINALDA
ESPINA-CABOVERDE, EVE CABOVERDE-YU, FE CABOVERDE-LABRADOR, and JOSEPHINE
E. CABOVERDE, respondents.
DECISION
VELASCO, JR., J p:
The Case
Assailed in this petition for review under Rule 45 are the Decision and Resolution of the Court of
Appeals (CA) rendered on June 25, 2012 and September 21, 2012, respectively, in CA-G.R. SP. No.
03834, which effectively affirmed the Resolutions dated February 8, 2010 and July 19, 2010 of the
Regional Trial Court (RTC) of Sindangan, Zamboanga del Norte, Branch 11, in Civil Case No. S-760,
approving respondent Dominalda Espina-Caboverde's application for receivership and appointing the
receivers over the disputed properties.
The Facts
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Petitioners Mila Caboverde Tantano (Mila) and Roseller Caboverde (Roseller) are children of
respondent Dominalda Espina-Caboverde (Dominalda) and siblings of other respondents in this case,
namely: Eve Caboverde-Yu (Eve), Fe Caboverde-Labrador (Fe), and Josephine
E. Caboverde (Josephine).
Petitioners and their siblings, Ferdinand, Jeanny and Laluna, are the registered owners and in
possession of certain parcels of land, identified as Lots 2, 3 and 4 located at Bantayan, Sindangan and
Poblacion, Sindangan in Zamboanga del Norte, having purchased them from their parents, Maximo
and Dominalda Caboverde. 1 cdphil
The present controversy started when on March 7, 2005, respondents Eve and Fe filed a complaint
before the RTC of Sindangan, Zamboanga del Norte where they prayed for the annulment of the Deed
of Sale purportedly transferring Lots 2, 3 and 4 from their parents Maximo and Dominalda in favor of
petitioners Mila and Roseller and their other siblings, Jeanny, Laluna and Ferdinand. Docketed as Civil
Case No. S-760, the case was raffled to Branch 11 of the court.
In their verified Answer, the defendants therein, including Maximo and Dominalda, posited the validity
and due execution of the contested Deed of Sale.
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During the pendency of Civil Case No. S-760, Maximo died. On May 30, 2007, Eve and Fe filed an
Amended Complaint with Maximo substituted by his eight (8) children and his wife Dominalda. The
Amended Complaint reproduced the allegations in the original complaint but added eight (8) more
real properties of the Caboverde estate in the original list.
uncontroverted properties. The PSA also provided that Josephine shall have special authority, among
others, to provide for the medicine of her mother.
As encouraged by the RTC, the parties executed a Partial Settlement Agreement (PSA) where they
fixed the sharing of the uncontroverted properties among themselves, in particular, the adverted
additional eight (8) parcels of land including their respective products and improvements. Under the
PSA, Dominalda's daughter, Josephine, shall be appointed as Administrator. The PSA provided that
Dominalda shall be entitled to receive a share of one-half (1/2) of the net income derived from the
Before the RTC could act on the PSA, Dominalda, who, despite being impleaded in the case as
defendant, filed a Motion to Intervene separately in the case. Mainly, she claimed that the verified
Answer which she filed with her co-defendants contained several material averments which were not
representative of the true events and facts of the case. This document, she added, was never
explained to her or even read to her when it was presented to her for her signature.
The parties submitted the PSA to the court on or about March 10, 2008 for approval. 2 CaAIES
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On May 12, 2008, Dominalda filed a Motion for Leave to Admit Amended Answer, attaching her
Amended Answer where she contradicted the contents of the aforesaid verified Answer by declaring
that there never was a sale of the three (3) contested parcels of land in favor of Ferdinand, Mila,
Laluna, Jeanny and Roseller and that she and her husband never received any consideration from
them. She made it clear that they intended to divide all their properties equally among all their
children without favor. In sum, Dominalda prayed that the reliefs asked for in the Amended Complaint
be granted with the modification that her conjugal share and share as intestate heir of Maximo over
the contested properties be recognized. 3
The RTC would later issue a Resolution granting the Motion to Admit Amended Answer. 4
On May 13, 2008, the court approved the PSA, leaving three (3) contested properties, Lots 2, 3, and 4,
for further proceedings in the main case.
Fearing that the contested properties would be squandered, Dominalda filed with the RTC on July 15,
2008 a Verified Urgent Petition/Application to place the controverted Lots 2, 3 and 4 under
receivership. Mainly, she claimed that while she had a legal interest in the controverted properties
and their produce, she could not enjoy them, since the income derived was solely appropriated by
petitioner Mila in connivance with her selected kin. She alleged that she immediately needs her legal
share in the income of these properties for her daily sustenance and medical expenses. Also, she
insisted that unless a receiver is appointed by the court, the income or produce from these properties
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is in grave danger of being totally dissipated, lost and entirely spent solely by Mila and some of her
selected kin. Paragraphs 5, 6, 7, and 8 of the Verified Urgent Petition/Application for
Receivership 5 (Application for Receivership) capture Dominalda's angst and apprehensions: TIcEDC
5.That all the income of Lot Nos. 2, 3 and 4 are collected by Mila Tantano, thru her collector Melinda
Bajalla, and solely appropriated by Mila Tantano and her selected kins, presumably with Roseller
E. Caboverde, Ferdinand E. Caboverde, Jeanny Caboverde and Laluna Caboverde, for their personal
use and benefit;
6.That defendant Dominalda Espina Caboverde, who is now sickly, in dire need of constant medication
or medical attention, not to mention the check-ups, vitamins and other basic needs for daily
sustenance, yet despite the fact that she is the conjugal owner of the said land, could not even enjoy
the proceeds or income as these are all appropriated solely by Mila Tantano in connivance with some
of her selected kins;
7.That unless a receiver is appointed by the court, the income or produce from these lands, are in
grave danger of being totally dissipated, lost and entirely spent solely by Mila Tantano in connivance
with some of her selected kins, to the great damage and prejudice of defendant Dominalda
Espina Caboverde, hence, there is no other most feasible, convenient, practicable and easy way to
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get, collect, preserve, administer and dispose of the legal share or interest of defendant Dominalda
EspinaCaboverde except the appointment of a receiver . . .;
xxx xxx xxx
9.That insofar as the defendant Dominalda Espina Caboverde is concerned, time is of the utmost
essence. She immediately needs her legal share and legal interest over the income and produce of
these lands so that she can provide and pay for her vitamins, medicines, constant regular medical
check-up and daily sustenance in life. To grant her share and interest after she may have passed
away would render everything that she had worked for to naught and waste, akin to the
saying "aanhin pa ang damo kung patay na ang kabayo." HDaACI
On August 27, 2009, the court heard the Application for Receivership and persuaded the parties to
discuss among themselves and agree on how to address the immediate needs of their mother. 6
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On October 9, 2009, petitioners and their siblings filed a Manifestation formally expressing their
concurrence to the proposal for receivership on the condition, inter alia, that Mila be appointed the
receiver, and that, after getting the 2/10 share of Dominalda from the income of the three (3) parcels
of land, the remainder shall be divided only by and among Mila, Roseller, Ferdinand, Laluna and
Jeanny. The court, however, expressed its aversion to a party to the action acting as receiver and
accordingly asked the parties to nominate neutral persons. 7
On February 8, 2010, the trial court issued a Resolution granting Dominalda's application for
receivership over Lot Nos. 2, 3 and 4. The Resolution reads:
As regards the second motion, the Court notes the urgency of placing Lot 2 situated at Bantayan,
covered by TCT No. 46307; Lot 3 situated at Poblacion, covered by TCT No. T-8140 and Lot 4 also
situated at Poblacion covered by TCT No. T-8140, all of Sindangan, Zamboanga del Norte under
receivership as defendant Dominalda EspinaCaboverde (the old and sickly mother of the rest of the
parties) who claims to be the owner of the one-half portion of the properties under litigation as her
conjugal share and a portion of the estate of her deceased husband Maximo, is in dire need for her
medication and daily sustenance. As agreed by the parties, Dominalda Espina Caboverde shall be
given 2/10 shares of the net monthly income and products of the said properties. 8 cDHAaT
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In the same Resolution, the trial court again noted that Mila, the nominee of petitioners, could not
discharge the duties of a receiver, she being a party in the case. 9Thus, Dominalda nominated her
husband's relative, Annabelle Saldia, while Eve nominated a former barangay kagawad, Jesus Tan. 10
Petitioners thereafter moved for reconsideration raising the arguments that the concerns raised by
Dominalda in her Application for Receivership are not grounds for placing the properties in the hands
of a receiver and that she failed to prove her claim that the income she has been receiving is
insufficient to support her medication and medical needs. By Resolution 11 of July 19, 2010, the trial
court denied the motion for reconsideration and at the same time appointed Annabelle Saldia as the
receiver for Dominalda and Jesus Tan as the receiver for Eve. The trial court stated:
As to the issue of receivership, the Court stands by its ruling in granting the same, there being no
cogent reason to overturn it. As intimated by the movant-defendant Dominalda Caboverde, Lots 2, 3
and 4 sought to be under receivership are not among those lots covered by the adverted Partial
Amicable Settlement. To the mind of the Court, the fulfilment or non-fulfilment of the terms and
conditions laid therein nonetheless have no bearing on these three lots. Further, as correctly pointed
out by her, there is possibility that these Lots 2, 3, and 4, of which the applicant has interest, but are
in possession of other defendants who are the ones enjoying the natural and civil fruits thereof which
might be in the danger of being lost, removed or materially injured. Under this precarious condition,
they must be under receivership, pursuant to Sec. 1 (a) of Rule 59. Also, the purpose of the
receivership is to procure money from the proceeds of these properties to spend for medicines and
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other needs of the movant defendant Dominalda Caboverde who is old and sickly. This circumstance
falls within the purview of Sec. 1(d), that is, "Whenever in other cases it appears that the
appointment of a receiver is the most convenient and feasible means of preserving, administering, or
disposing of the property in litigation."
Both Annabelle Saldia and Jesus Tan then took their respective oaths of office and filed a motion to fix
and approve bond which was approved by the trial court over petitioners' opposition. EaCSTc
Undaunted, petitioners filed an Urgent Precautionary Motion to Stay Assumption of Receivers dated
August 9, 2010 reiterating what they stated in their motion for reconsideration and expressing the
view that the grant of receivership is not warranted under the circumstances and is not consistent
with applicable rules and jurisprudence. The RTC, on the postulate that the motion partakes of the
nature of a second motion for reconsideration, thus, a prohibited pleading, denied it via a Resolution
dated October 7, 2011 where it likewise fixed the receiver's bond at PhP100,000 each. The RTC
stated:
[1]The appointed receivers, JESUS A. TAN and ANNABELLE DIAMANTE-SALDIA, are considered duly
appointed by this Court, not only because their appointments were made upon their proper
nomination from the parties in this case, but because their appointments have been duly upheld by
the Court of Appeals in itsResolution dated 24 May 2011 denying the herein defendants' (petitioners
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therein) application for a writ of preliminary injunction against the 8 February 2010Resolution of this
Court placing the properties (Lots 2, 3 and 4) under receivership by the said JESUS A. TAN and
ANNABELLE DIAMANTE-SALDIA, and Resolution dated 29 July 2011 denying the herein defendants'
(petitioners therein) motion for reconsideration of the 24 May 2011 Resolution, both, for lack of merit.
In its latterResolution, the Court of Appeals states:
A writ of preliminary injunction, as an ancillary or preventive remedy, may only be resorted to by a

litigant to protect or preserve his rights or interests and for no other purpose during the pendency of
the principal action. But before a writ of preliminary injunction may be issued, there must be a clear
showing that there exists a right to be protected and that the acts against which the writ is to be
directed are violative of the said right and will cause irreparable injury. CaSHAc
Unfortunately, petitioners failed to show that the acts of the receivers in this case are inimical to their
rights as owners of the property. They also failed to show that the non-issuance of the writ of
injunction will cause them irreparable injury. The court-appointed receivers merely performed their
duties as administrators of the disputed lots. It must be stressed that the trial court specifically
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appointed these receivers to preserve the properties and its proceeds to avoid any prejudice to the
parties until the main case is resolved, Hence, there is no urgent need to issue the injunction.
1.The defendants' "Urgent Precautionary Motion to Stay Assumption of Receivers" be DENIED for lack
of merit. Accordingly, it being patently a second motion for reconsideration, a prohibited pleading, the
same is hereby ordered EXPUNGED from the records;
ACCORDINGLY, the motion for reconsideration is DENIED for lack of merit.

SO ORDERED.
xxx xxx xxx
WHEREFORE, premises considered, this Court RESOLVES, as it is hereby RESOLVED, that:
2.The "Motion to Fix the Bond, Acceptance and Approval of the Oath of Office, and Bond of the
Receiver" of defendant Dominalda Espina Caboverde, be GRANTED with the receivers' bond set and
fixed at ONE HUNDRED THOUSAND PESOS (PhP100,000.00) each. 12 HDIaET
It should be stated at this juncture that after filing their Urgent Precautionary Motion to Stay
Assumption of Receivers but before the RTC could rule on it, petitioners filed a petition
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for certiorari with the CA dated September 29, 2010 seeking to declare null and void the February 8,
2010 Resolution of the RTC granting the Application for Receivership and its July 19, 2010 Resolution
denying the motion for reconsideration filed by petitioners and appointing the receivers nominated by
respondents. The petition was anchored on two grounds, namely: (1) non-compliance with the
substantial requirements under Section 2, Rule 59 of the 1997 Rules of Civil Procedurebecause the
trial court appointed a receiver without requiring the applicant to file a bond; and (2) lack of factual or
legal basis to place the properties under receivership because the applicant presented support and
medication as grounds in her application which are not valid grounds for receivership under the rules.
On June 25, 2012, the CA rendered the assailed Decision denying the petition on the strength of the
following premises and ratiocination:
Petitioners harp on the fact that the court a quo failed to require Dominalda to post a bond prior to
the issuance of the order appointing a receiver, in violation of Section 2, Rule 59 of the Rules of
court which provides that:
SEC. 2.Bond on appointment of receiver. Before issuing the order appointing a receiver the
court shall require the applicant to file a bond executed to the party against whom the application is
presented, in an amount to be fixed by the court, to the effect that the applicant will pay such party
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all damages he may sustain by reason of the appointment of such receiver in case the applicant shall
have procured such appointment without sufficient cause; and the court may, in its discretion, at any
time after the appointment, require an additional bond as further security for such damages. aHTEIA
The Manifestation dated September 30, 2009 filed by petitioners wherein "they formally manifest[ed]
their concurrence" to the settlement on the application for receivership estops them from questioning
the sufficiency of the cause for the appointment of the receiver since they themselves agreed to have
the properties placed under receivership albeit on the condition that the same be placed under the
administration of Mila. Thus, the filing of the bond by Dominalda for this purpose becomes
unnecessary.
It must be emphasized that the bond filed by the applicant for receivership answers only for all
damages that the adverse party may sustain by reason of the appointment of such receiver in case
the applicant shall have procured such appointment without sufficient cause; it does not answer for
damages suffered by reason of the failure of the receiver to discharge his duties faithfully or to obey
the orders of the court, inasmuch as such damages are covered by the bond of the receiver.
As to the second ground, petitioners insist that there is no justification for placing the properties
under receivership since there was neither allegation nor proof that the said properties, not the fruits
thereof, were in danger of being lost or materially injured. They believe that the public respondent
went out of line when he granted the application for receivership for the purpose of procuring money
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for the medications and basic needs of Dominalda despite the income she's supposed to receive
under the Partial Settlement Agreement.
The court a quo has the discretion to decide whether or not the appointment of a receiver is
necessary. In this case, the public respondent took into consideration that the applicant is already an
octogenarian who may not live up to the day when this conflict will be finally settled. Thus, We find
that he did not act with grave abuse of discretion amounting to lack or excess of jurisdiction when he
granted the application for receivership based on Section 1(d) of Rule 59 of the Rules of Court. DAESTI
A final note, a petition for certiorari may be availed of only when there is no appeal, nor any plain,
speedy and adequate remedy in the ordinary course of law. In this case, petitioners may still avail of
the remedy provided in Section 3, Rule 59 of the said Rule where they can seek for the discharge of
the receiver.
FOR REASONS STATED, the petition for certiorari is DENIED.
SO ORDERED. 13
Petitioners' Motion for Reconsideration was also denied by the CA on September 21, 2012. 14
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Hence, the instant petition, petitioners effectively praying that the approval of respondent
Dominalda's application for receivership and necessarily the concomitant appointment of receivers be
revoked.
(1)Whether or not the CA committed grave abuse of discretion in sustaining the appointment of a
receiver despite clear showing that the reasons advanced by the applicant are not any of those
enumerated by the rules; and
The Issues
(2)Whether or not the CA committed grave abuse of discretion in upholding the Resolution of the RTC
and ruling that the receivership bond is not required prior to appointment despite clear dictates of the
rules.
Petitioners raise the following issues in their petition:
The Court's Ruling
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The petition is impressed with merit. CcSTHI
much consideration from the court as those of the complainant. 15
We have repeatedly held that receivership is a harsh remedy to be granted with utmost
circumspection and only in extreme situations. The doctrinal pronouncement inVelasco & Co. v.
Gochico & Co is instructive:
To recall, the RTC approved the application for receivership on the stated rationale that receivership
was the most convenient and feasible means to preserve and administer the disputed properties. As a
corollary, the RTC, agreeing with the applicant Dominalda, held that placing the disputed properties
under receivership would ensure that she would receive her share in the income which she
supposedly needed in order to pay for her vitamins, medicines, her regular check-ups and daily
sustenance. Considering that, as the CA put it, the applicant was already an octogenarian who
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may not live up to the day when the conflict will be finally settled, the RTC did not act with
grave abuse of discretion amounting to lack or excess of jurisdiction when it granted the application
for receivership since it was justified under Sec. 1 (d), Rule 59 of the Rules of Court, which states:
(d)Whenever in other cases it appears that the appointment of a receiver is the most
convenient and feasible means of preserving, administering, or disposing of the property
in litigation. (Emphasis supplied.)
Section 1.Appointment of a receiver. Upon a verified application, one or more receivers of the
property subject of the action or proceeding may be appointed by the court where the action is
pending, or by the Court of Appeals or by the Supreme Court, or a member thereof, in the following
cases:
Indeed, Sec. 1 (d) above is couched in general terms and broad in scope, encompassing instances not
covered by the other grounds enumerated under the said section.16 However, in granting
applications for receivership on the basis of this section, courts must remain mindful of the basic
principle that receivership may be granted only when the circumstances so demand, either because
the property sought to be placed in the hands of a receiver is in danger of being lost or because they
run the risk of being impaired, 17 and that being a drastic and harsh remedy, receivership must be
xxx xxx xxx
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granted only when there is a clear showing of necessity for it in order to save the plaintiff from grave
and immediate loss or damage. 18 aTCAcI
Before appointing a receiver, courts should consider: (1) whether or not the injury resulting from such
appointment would probably be greater than the injury ensuing if the status quo is left undisturbed;
and (2) whether or not the appointment will imperil the interest of others whose rights deserve as
much a consideration from the court as those of the person requesting for receivership. 19
Moreover, this Court has consistently ruled that where the effect of the appointment of a receiver is to
take real estate out of the possession of the defendant before the final adjudication of the rights of
the parties, the appointment should be made only in extreme cases. 20
After carefully considering the foregoing principles and the facts and circumstances of this case, We
find that the grant of Dominalda's Application for Receivership has no leg to stand on for reasons
discussed below.
First, Dominalda's alleged need for income to defray her medical expenses and support is not a valid
justification for the appointment of a receiver. The approval of an application for receivership merely
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on this ground is not only unwarranted but also an arbitrary exercise of discretion because financial
need and like reasons are not found in Sec. 1 of Rule 59 which prescribes specific grounds or reasons
for granting receivership. The RTC's insistence that the approval of the receivership is justified under
Sec. 1 (d) of Rule 59, which seems to be a catch-all provision, is far from convincing. To be clear, even
in cases falling under such provision, it is essential that there is a clear showing that there is
imminent danger that the properties sought to be placed under receivership will be lost, wasted or
injured.
Second, there is no clear showing that the disputed properties are in danger of being lost or
materially impaired and that placing them under receivership is most convenient and feasible means
to preserve, administer or dispose of them.
Based on the allegations in her application, it appears that Dominalda sought receivership mainly
because she considers this the best remedy to ensure that she would receive her share in the income
of the disputed properties. Much emphasis has been placed on the fact that she needed this income
for her medical expenses and daily sustenance. But it can be gleaned from her application that, aside
from her bare assertion that petitioner Mila solely appropriated the fruits and rentals earned from the
disputed properties in connivance with some of her siblings, Dominalda has not presented or alleged
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anything else to prove that the disputed properties were in danger of being wasted or materially
injured and that the appointment of a receiver was the most convenient and feasible means to
preserve their integrity. cCaATD
Further, there is nothing in the RTC's February 8 and July 19, 2010 Resolutions that says why the
disputed properties might be in danger of being lost, removed or materially injured while in the hands
of the defendants a quo. Neither did the RTC explain the reasons which compelled it to have them
placed under receivership. The RTC simply declared that placing the disputed properties under
receivership was urgent and merely anchored its approval on the fact that Dominalda was an elderly
in need of funds for her medication and sustenance. The RTC plainly concluded that since the
purpose of the receivership is to procure money from the proceeds of these properties to
spend for medicines and other needs of the Dominalda, who is old and sickly, this
circumstance falls within the purview of Sec. 1 (d), that is, "Whenever in other cases it
appears that the appointment of a receiver is the most convenient and feasible means of
preserving, administering, or disposing of the property in litigation."
Verily, the RTC's purported determination that the appointment of a receiver is the most convenient
and feasible means of preserving, administering or disposing of the properties is nothing but a hollow
conclusion drawn from inexistent factual considerations. cDIHES
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Third, placing the disputed properties under receivership is not necessary to save Dominalda from
grave and immediate loss or irremediable damage. Contrary to her assertions, Dominalda is assured
of receiving income under the PSA approved by the RTC providing that she was entitled to receive a
share of one-half (1/2) of the net income derived from the uncontroverted properties. Pursuant to the
PSA, Josephine, the daughter of Dominalda, was appointed by the court as administrator of the eight
(8) uncontested lots with special authority to provide for the medicine of her mother. Thus, it was
patently erroneous for the RTC to grant the Application for Receivership in order to ensure Dominalda
of income to support herself because precisely, the PSA already provided for that. It cannot be overemphasized that the parties in Civil Case No. S-760 were willing to make arrangements to ensure that
Dominalda was provided with sufficient income. In fact, the RTC, in its February 8, 2010 Resolution
granting the Application for Receivership, noted the agreement of the parties that "Dominalda
Espina Caboverde shall be given 2/10 shares of the net monthly income and products of
said properties." 21
Finally, it must be noted that the defendants in Civil Case No. S-760 are the registered owners of the
disputed properties that were in their possession. In cases such as this, it is settled jurisprudence that
the appointment should be made only in extreme cases and on a clear showing of necessity in order
to save the plaintiff from grave and irremediable loss or damage. 22 TcSCEa
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This Court has held that a receiver should not be appointed to deprive a party who is in possession of
the property in litigation, just as a writ of preliminary injunction should not be issued to transfer
property in litigation from the possession of one party to another where the legal title is in dispute
and the party having possession asserts ownership in himself, except in a very clear case of evident
usurpation. 23
Furthermore, this Court has declared that the appointment of a receiver is not proper when the rights
of the parties, one of whom is in possession of the property, depend on the determination of their
respective claims to the title of such property 24 unless such property is in danger of being materially
injured or lost, as by the prospective foreclosure of a mortgage on it or its portions are being occupied
by third persons claiming adverse title. 25
It must be underscored that in this case, Dominalda's claim to the disputed properties and her share
in the properties' income and produce is at best speculative precisely because the ownership of the
disputed properties is yet to be determined in Civil Case No. S-760. Also, except for Dominalda's claim
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that she has an interest in the disputed properties, Dominalda has no relation to their produce or
income.
By placing the disputed properties and their income under receivership, it is as if the applicant has
obtained indirectly what she could not obtain directly, which is to deprive the other parties of the
possession of the property until the controversy between them in the main case is finally
settled. 26 This Court cannot countenance this arrangement.
To reiterate, the RTC's approval of the application for receivership and the deprivation of petitioners of
possession over the disputed properties would be justified only if compelling reasons exist.
Unfortunately, no such reasons were alleged, much less proved in this case.
In any event, Dominalda's rights may be amply protected during the pendency of Civil Case No. S-760
by causing her adverse claim to be annotated on the certificates of title covering the disputed
properties. 27
As regards the issue of whether or not the CA was correct in ruling that a bond was not required prior
to the appointment of the receivers in this case, We rule in the negative. aAcHCT
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Respondents Eve and Fe claim that there are sufficient grounds for the appointment of receivers in
this case and that in fact, petitioners agreed with them on the existence of these grounds when they
acquiesced to Dominalda's Application for Receivership. Thus, respondents insist that where there is
sufficient cause to appoint a receiver, there is no need for an applicant's bond because under Sec. 2
of Rule 59, the very purpose of the bond is to answer for all damages that may be sustained by a
party by reason of the appointment of a receiver in case the applicant shall have procured such
appointment without sufficient cause. Thus, they further argue that what is needed is the
receiver's bond which was already fixed and approved by the RTC. 28 Also, the CA found that there
was no need for Dominalda to file a bond considering that petitioners filed a Manifestation where they
formally consented to the receivership. Hence, it was as if petitioners agreed that there was sufficient
cause to place the disputed properties under receivership; thus, the CA declared that petitioners were
estopped from challenging the sufficiency of such cause.
The foregoing arguments are misplaced. Sec. 2 of Rule 59 is very clear in that before issuing the order
appointing a receiver the court shall require the applicant to file a bond executed to the party against
whom the application is presented. The use of the word "shall" denotes its mandatory nature; thus,
the consent of the other party, or as in this case, the consent of petitioners, is of no moment. Hence,
the filing of an applicant's bond is required at all times. On the other hand, the requirement of a
receiver's bond rests upon the discretion of the court. Sec. 2 of Rule 59 clearly states that the
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court may, in its discretion, at any time after the appointment, require an additional bond as further
security for such damages. ETaSDc
SO ORDERED.
Peralta, Abad, Mendoza and Leonen, JJ., concur.
WHEREFORE, upon the foregoing considerations, this petition is GRANTED. The assailed CA June 25,
2012 Decision and September 21, 2012 Resolution in CA-G.R. SP No. 03834 are
hereby REVERSED and SET ASIDE. The Resolutions dated February 8, 2010 and July 19, 2010 of the
RTC, Branch 11 in Sindangan, Zamboanga del Norte, in Civil Case No. S-760, approving respondent
Dominalda Espina-Caboverde's application for receivership and appointing the receivers over the
disputed properties are likewise SET ASIDE.
____________________________________________________________________________________________________
FIRST DIVISION
[G.R. No. 49031. August 28, 1944.]
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JOSE PLATON and ROMAN CASTILLO, petitioners, vs. HON. CLAUDIO SANDOVAL, in his
capacity as Judge, Court of First Instance of Laguna, and INES MAILOM, respondents.
Avelino & Yatco for petitioners.
Galo Al. Acua and T. G. de Castro for respondents.
SYLLABUS
1. CERTIORARI AND MANDAMUS; RECEIVERS, DISCHARGE OF. The property in litigation and under
receivership belongs to the intestate estate of the deceased S.M., deceased wife of the petitioner R.C.
The defendant A.C., who is not an heir of said deceased, does not claim ownership of said property
and has signed his conformity to the discharge of the receiver. And the heirs of said deceased have
agreed upon the partition of said property with the approval of the probate court. It seems clear,
therefore, that the declaration of the respondent judge that there was no longer any necessity for the
continuation of the receivership was well founded. In any event, it cannot be said that the respondent
judge exceeded his jurisdiction or abused his discretion in making such a finding.
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2. ID.; RECEIVERS AS OFFICERS OF THE COURT. Furthermore, the receiver, being an officer of the
court and not the agent or representative of either party, has no legal interest or standing to question
the court's determination that the necessity for the continuation of the receivership has ceased to
exist.
3. ID.; ID.; JUDGMENTS. An order discharging a receiver and terminating the receivership is
interlocutory and not appealable.
DECISION
OZAETA, J p:
This is an original petition for certiorari and mandamus to annul an order issued by the respondent
judge whereby the receiver appointed in civil case No. 7385 of the Court of First Instance of Laguna,
entitled "Ines Mailom vs. Antonino Castillo and Roman Castillo," was discharged, and to compel the
respondent judge to approve the appeal of said receiver from said order.
It appears that said civil case was instituted by Ines Mailom, one of the heirs of the deceased
Servanda Mailom, to annul the sale of certain parcels of land made by the spouses Roman Castillo
and Servanda Mailom (previous to the death of the latter) in favor of Antonino Castillo, a brother of
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Roman. After the death of Servanda Mailom, her husband Roman Castillo was appointed administrator
of the estate left by her. The herein petitioner Jose Platon was appointed receiver of the property in
litigation in said civil case No. 7385 at the instance of the plaintiff (now respondent) Ines Mailom.
It was also Ines Mailom who, through her attorney, moved the court on November 11, 1942, to
discharge the receiver on the ground that there was no more necessity for the continuation of the
receivership inasmuch as the defendant Antonino Castillo had renounced his claim to said property in
a stipulation of facts submitted to the court on November 25, 1940, and the heirs of the deceased
Servanda Mailom, including the administrator Roman Castillo, had submitted a project of partition in
the intestate proceedings of the deceased Servanda Mailom, case No. 3148 of said court, which
project of partition had been approved by the court. Upon such allegations, which the court found to
be true, the respondent judge granted the motion, discharging the receiver and ordering him to
deliver the properties under receivership to the persons entitled to receive the same in accordance
with the project of partition aforementioned.
The receiver Jose Platon filed a motion to set aside said order on the grounds (1) that he had not been
notified of the motion upon which the same was issued; (2) that the case in which he was appointed
receiver was still pending decision by Judge Proceso Sebastian; (3) that in the event Antonino Castillo
wins the case, the receiver has to deliver to him the properties, thereby rendering the project of
partition useless and of no value; and (4) that irregularities were committed by Attorney Acua for the
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plaintiff and the heirs of Servanda Mailom regarding the disposition of the properties in question after
the approval of the project of partition. In a memorandum submitted by the attorney for the receiver
Jose Platon in support of said motion, said attorney, who also represents the defendant-administrator
Roman Castillo, said that the latter joins the receiver in said motion and makes it his own.
After hearing both parties upon said motion to set aside the order discharging the receiver, the
respondent judge reaffirmed his finding that there was no necessity for the continuation of the
receivership and denied said motion. Thereupon the receiver filed a notice of appeal from said order
and tendered a record on appeal which the respondent judge disapproved on the ground that the
order was interlocutory and not appealable.
With regard to the order discharging the receiver and terminating the receivership, we find no excess
of jurisdiction nor grave abuse of discretion on the part of the respondent judge. The property in
litigation and under receivership belongs to the intestate estate of the deceased Servanda Mailom,
deceased wife of the petitioner Roman Castillo. The defendant Antonino Castillo, who is not an heir of
said deceased, does not claim ownership of said property and has signed his conformity to the
discharge of the receiver. And the heirs of said deceased have agreed upon the partition of said
property with the approval of the probate court. It seems clear, therefore, that the declaration of the
respondent judge that there was no longer any necessity for the continuation of the receivership was
well founded. In any event, it cannot be said that the respondent judge exceeded his jurisdiction or
abused his discretion in making such a finding. Furthermore, the receiver, being an officer of the court
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and not the agent or representative of either party to the action, has no legal interest or standing to
question the court's determination that the necessity for the continuation of the receivership has
ceased to exist.
It is immaterial to decide now whether the receiver was entitled to be heard on the original motion to
discharge him, for the reason that he was actually heard in the premises when thru his attorney he
filed a motion for reconsideration.
With regard to the approval of the record on appeal, we agree with the respondent judge that the
order sought to be appealed from is interlocutory, and hence mandamus does not lie to compel him
to approve and certify the record on appeal. As a matter of fact, certiorari to annul an order and
mandamus to approve an appeal from said order are inconsistent remedies. The first is predicated on
the theory that the second is unavailable. Having decided to pass upon the petition for certiorari on
the merits, we cannot consistently compel the approval of an appeal from the same order which was
the object of the certiorari proceeding.
The petition is denied and the orders assailed are affirmed, with costs against the petitioners.
Yulo, C.J., Moran, Horrilleno, and Paras, JJ., concur.
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THIRD DIVISION
[G.R. No. 146313. October 31, 2006.]
FLORENCIO ORENDAIN, petitioner, vs. BF HOMES, INC., respondent.
DECISION
VELASCO, JR., J p:
Before us is a Petition for Review on Certiorari praying for the reversal of the August 18, 2000
Decision and December 6, 2000 Resolution of the Court of Appeals (CA) in CA-G.R. SP No. 48263
entitledFlorencio B. Orendain v. Hon. Alfredo R. Enriquez, Presiding Judge of RTC-Br. 275, Las Pias,
and BF Homes, Inc., which affirmed the December 4, 1996 and April 22, 1998 Orders of the Las Pias
RTC finding that said court, not SEC, has jurisdiction over Civil Case No. LP-96-0022 for reconveyance
of the lot covered by TCT No. T-36482 to respondent BF Homes, Inc. ('BF Homes' for brevity).
BF Homes, Inc. is a domestic corporation operating under Philippine laws and organized primarily to
develop and sell residential lots and houses and other related realty business. 1
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Records show that respondent BF Homes had to avail itself of financial assistance from various
sources to enable it to buy properties and convert them into residential subdivisions. This resulted in
its incurring liabilities amounting to PhP 1,542,805,068.23 2 as of July 31, 1984. On the other hand,
during its business operations, it was able to acquire properties and assets worth PhP
2,482,843,358.81 as of July 31, 1984, which, if liquidated, were more than enough to pay all its
creditors. 3
Despite its solvent status, respondent filed a Petition for Rehabilitation and for Declaration in a State
of Suspension of Payments under Section 4 of PD No. 1758 before the Securities and Exchange
Commission (SEC) because of the following:
(a) the predatory acts of the Central Bank of trying to take over Banco Filipino and hand it cheap to its
unidentified principal and its buyer financing facility with Banco Filipino has been suspended such that
it cannot now consummate its sales transactions necessary for it to generate cash to service and/or
liquidate its various maturing obligations;
(b) the libelous [circulars] made by the Central Bank to banks under its supervision that its deposit
accounts and other transactions with them were being examined such that the creditors of
[BF Homes] have [begun] insisting on full liquidation under pain of foreclosure of their notes . . .;
and ACcaET
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(c) the [liquidation] of [BF Homes'] assets cannot be made in such a short time as demanded by its
creditors. 4
In the said petition, respondent prayed that in the meantime it was continuing its business
operations it be afforded time to pay its aforesaid obligations, freed from various proceedings
either judicially or extra-judicially against its assets and properties. Also, respondent highlighted the
importance of and prayed for a Rehabilitation Receiver in the petition. Such receiver, according to
respondent, was "imperative to oversee the management and operations of [BF Homes] so that its
business may not be paralyzed and the interest of the creditors may not be prejudiced." It further
argued that "rehabilitation [was] feasible and imperative because otherwise, in view of the extent of
its involvement in the shelter program of the government and in the nation's home mortgage
insurance system, which has a secured coverage for at least P900 M of [BF Homes'] P1.5 B liabilities,
not only [the] creditors, [buyers, and stockholders] of the petitioner corporation may suffer but the
public as well." 5
In SEC Case No. 2693, the SEC subsequently issued its March 18, 1985 Order which stated:
WHEREFORE, in the interest of the parties-litigants, as well as the general public, and in order to
prevent [paralyzation] of business operation[s] of the B.F. Homes, Inc., a Management Committee is
hereby created composed of:
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1. Atty. Florencio Orendain as Chairman
Accordingly, with the creation of the Management Committee, all actions for claims against
B.F. Homes, Inc. pending before the court, tribunal, board or body are hereby deemed suspended. 6
2. Representative of B. F. Homes, Inc. member

3. Representative of Home Financing Commission member
4. Two (2) representatives from the major creditors members
xxx xxx xxx
Thereafter, on February 2, 1988, the SEC ordered the appointment of a rehabilitation receiver, FBO
Management Networks, Inc., with petitioner Orendain as Chairman to prevent paralyzation
of BF Homes' business operations. 7
On October 8, 1993, a Deed of Absolute Sale 8 was executed by and between BF Homes
represented by petitioner Orendain as absolute and registered owner, and the Local Superior of the
Franciscan Sisters of the Immaculate Phils., Inc. (LSFSIPI) over a parcel of land situated at Barangay
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Pasong Papaya, BF International, Municipality of Las Pias, Metro Manila, covered by Transfer
Certificate of Title No. T-36482.
Directors of BF Homes with Albert C. Aguirre as the Chairman of the Committee. Consequently,
receiver Orendain was relieved of his duties and responsibilities. DEICHc
The portion of land sold to LSFSIPI was 7,800 square meters, more or less, for Nineteen Million Five
Hundred Thousand Pesos (PhP 19,500,000.00). 9
In its August 22, 1995 Order, 11 the SEC denied BF Homes' and the intervenor-derivative suitor
Eduardo S. Rodriguez's motions for reconsideration of its November 7, 1994 Omnibus Order.
Meanwhile, on November 7, 1994, the SEC hearing panel released an Omnibus Order 10 which
admitted and confirmed the Closing Report submitted by the receiver, petitioner Orendain. It further
appointed a new Committee of Receivers composed of the eleven (11) members of the Board of
On January 23, 1996, BF Homes filed a Complaint before the Las Pias RTC against LSFSIPI and
petitioner Orendain, in Civil Case No. LP-96-0022, for reconveyance of the property covered by TCT
No. T-36482 alleging, inter alia, that the LSFSIPI transacted with Orendain in his individual capacity
and therefore, neither FBO Management, Inc. nor Orendain had title to the property transferred.
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Moreover, BF Homes averred that the selling price was grossly inadequate or insufficient amounting
to fraud and conspiracy with the LSFSIPI. BF Homes also stated that the total assessed value of the
property was approximately PhP 802,330.00. Hence, it prayed in the Complaint that LSFSIPI reconvey
the disputed property or, if reconveyance was no longer feasible, pay the present value of the
property. 12
On March 21, 1996, the LSFSIPI filed its Answer with Compulsory Counterclaim, 13 stating, among
others, that (1) the Complaint stated no cause of action since there was a valid sale with sufficient
consideration, and there was no fraud; (2) it was barred by a prior judgment of a tribunal with
sufficient jurisdiction over the matter, and BFHomes was liable for forum shopping; and
(3) BF Homes could not question its own acts by way of estoppel.
On June 14, 1996, Florencio B. Orendain filed a Motion to Dismiss stating that (1) the RTC had no
jurisdiction over the reconveyance suit; (2) the Complaint was barred by the finality of the November
7, 1994 Omnibus Order of the SEC hearing panel; and (3) BF Homes, acting through its Committee of
Receivers, had neither the interest nor the personality to prosecute the said action, in the absence of
SEC's clear and actual authorization for the institution of the said suit. 14
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On July 15, 1996, BF Homes filed its Opposition 15 to petitioner's Motion to Dismiss, alleging that the
case was within the exclusive jurisdiction of the RTC, not the SEC, considering that the case was an
ordinary reconveyance suit. Likewise, BF Homes alleged that the cause of action was not barred by
the perceived finality of the SEC November 7, 1994 Omnibus Order, and that the general powers of a
receiver authorized BF Homes to institute actions to recover the property.
On December 4, 1996, RTC Las Pias, Branch 275 issued an Order denying the June 14, 1996 Motion
to Dismiss for lack of merit. 16
However, on May 8, 1997, the SEC rendered its Order, as follows:
WHEREFORE, premises considered, the decision of the hearing panel denying the motion for
intervention of Mr. Eduardo Rodriguez is hereby AFFIRMED. The Commission hereby receives and
notes the Closing Report of the Management Network and the Joaquin Cunanan Audit Report for
inclusion in the records of the case without going into the merits and veracity of the contents thereof;
the order to pay the attorney's fees of Balgos and Perez is hereby SET ASIDE; the resolution of the
issue on the alleged payment of receiver's fees of FBO Management Network is hereby deferred, and
the order to pay the additional fees of the receiver is hereby set aside until after the Commission en
banc finally clears and releases FBO Management Networks from its accountabilities in accordance
with the policies and orders of the Commission on the receivership. 17
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On December 27, 1997, petitioner Orendain filed his Motion for Reconsideration 18 of the RTC
December 4, 1996 Order. Consequently, BF Homes filed its January 17, 1997
Opposition 19 to Orendain's Motion for Reconsideration; and on April 22, 1998, the RTC issued an
Order denying the Motion for Reconsideration for lack of merit and petitioner Orendain was directed
to file his answer to the Complaint within ten (10) days from receipt of the Order. 20
On July 13, 1998, petitioner filed before the CA a Petition for Certiorari and Prohibition with Prayer for
the Issuance of a Temporary Restraining Order and/or Bonded Writ of Preliminary Injunction 22 which
sought to annul the RTC December 4, 1996 and April 22, 1998 Orders, denying petitioner's Motion to
Dismiss and Motion for Reconsideration. Petitioner alleged that these motions were issued without
jurisdiction or with grave abuse of discretion amounting to lack or in excess of jurisdiction.aSTAcH
Petitioner then filed his Answer Ex Abudante Ad Cautelam with Compulsory Counterclaims 21 on May
29, 1998.
The Ruling of the Court of Appeals
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In its August 18, 2000 Decision, the CA held that the action for reconveyance filed by BF Homes was
within the exclusive jurisdiction of the RTC. In the rehabilitation case, the LSFSIPI was not a party to
the said case and did not have any intra-corporate relation with petitioner at the time of the sale. The
SEC could not acquire jurisdiction over the Franciscan Sisters; while petitioner Orendain was sued in
his individual capacity and not in his official capacity as receiver. 23
Moreover, the CA stated that at the time the assailed orders were issued, the subject SEC Order had
not yet attained finality; that there was no identity between the first and the second action with
respect to the parties; and that the SEC November 7, 1994 Omnibus Order relied on by Orendain was
not a decision on the merits of BFHomes' Petition for Rehabilitation and for a Declaration in a State of
Suspension of Payments under Sec. 4 of P.D. No. 1758.
According to the CA:
Although this Court is not oblivious to the fact that the SEC en banc in a Decision dated May 8, 1997,
affirmed the denial of the intervention filed by Rodriguez, still the said order did not go into the merits
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of the intervention but merely refused to give due recognition to the intervention as it was allegedly
"untimely." Therefore, the contention of petitioner that the principle of res judicata is applicable in the
case at bar does not hold water. 24
Hence, this petition is before us.
The CA ultimately rendered its judgment in this wise:
Petitioner avers that the CA erred in holding that (1) the complaint a quo is a simple reconveyance
suit and hence, can be heard and tried by the court a quo; (2) res judicata is inapplicable to the
complaint a quo; and (3) the Committee of Receivers may institute an action against a former
receiver without prior SEC approval. 26
WHEREFORE, premises considered, the instant petition is DISMISSED for failure to clearly show grave
abuse of discretion and the assailed orders dated December 4, 1996 and April 22, 1998, are hereby
AFFIRMED in toto without costs to petitioner. 25
The Court's Ruling
The petition is not meritorious.
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Action for Reconvenyance in the RTC Does Not Involve Intra-Corporate Dispute
according to petitioner, the SEC, which appointed the rehabilitation receiver, has the sole power to
decide the issue as to whether petitioner acted within the scope of the vested authority.
The issue central to this petition is: which has jurisdiction over the action for reconveyance the RTC
or SEC.
Petitioner Orendain argues that it is the SEC that has jurisdiction by virtue of Presidential Decree No.
902-A since BF Homes' suit was instituted against him as its former receiver. He also avers
that BF Homes' allegations were nothing more than protestations against the former receiver who
entered into a transaction during BF Homes' regime of rehabilitation; and that the assailed transaction
was consummated at the time the SEC had placed BF Homes under rehabilitation. Therefore,
Petitioner also claims that the resolution of the instant controversy depends on the ratification by the
SEC of the acts of its agent, the receiver. Also, he asserts that for the RTC to insist on hearing and
deciding the case below is to dislodge the appointing body from reviewing, ratifying, confirming, or
overruling the acts of its appointee; and such would constitute undue interference on the jurisdiction
of the SEC by a court of equal jurisdiction. Further, petitioner claims that the questions of whether the
receiver of a company undergoing rehabilitation acted within the scope of his authority, and whether
a transaction consummated during the rehabilitation proceedings is impermissible, are matters not
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within the province of a regular court acting on an ordinary reconveyance suit. Petitioner avers that
the undisputed fact is that at the time of the said transaction, respondent was operating under
rehabilitation whereby receivership places all matters arising from, incidental, or connected with the
implementation of said rehabilitation proceedings beyond the jurisdiction of regular courts. In
addition, petitioner avers that the property in question is one of the many properties which formed
part of a pool of assets placed under receivership and that he was the Chairman of the FBO
Management, Inc. the SEC-appointed Rehabilitation Receiver at the time of the transaction. TaDCEc
In Speed Distributing Corp. v. CA, we held that:
WE hold OTHERWISE.
In the case at bench, the BF Homes' Complaint for reconveyance was filed on January 23, 1996
against LSFSIPI and Florencio B. Orendain, in Civil Case No. LP-96-002.
Jurisdiction over the subject matter is conferred by law. The nature of an action, as well as which court
or body has jurisdiction over it, is determined based on the allegations contained in the complaint of
the plaintiff, irrespective of whether or not plaintiff is entitled to recover upon all or some of the
claims asserted therein. It cannot depend on the defenses set forth in the answer, in a motion to
dismiss, or in a motion for reconsideration by the defendant (citations omitted). 27
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In 1996, Section 5 of PD No. 902-A, 28 which was approved on March 11, 1976, was still the law in
force whereby the SEC still had original and exclusive jurisdiction to hear and decide cases
involving:
Clearly, the controversy involves matters purely civil in character and is beyond the ambit of the
limited jurisdiction of the SEC. As held in Viray v. Court of Appeals, "[t]he better policy in determining
which body has jurisdiction over a case would be to consider not only [1] the status or relationship of
the parties but also [2] the nature of the question that is the subject of their controversy." 29
b) controversies arising out of intra-corporate or partnership relations, between and among

stockholders, members, or associates; between any and/or all of them and the corporation,
partnership, or association of which they are stockholders, members or associates, respectively; and
between such corporation, partnership or association and the state insofar as it concerns their
individual franchise or right to exist as such entity.
More so, in Speed Distributing Corp., we held that:

The first element requires that the controversy must arise out of intra-corporate or partnership
relations between any or all of the parties and the corporation, partnership or association of which
they are stockholders, members or associates; between any or all of them and the corporation,
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partnership or association of which they are stockholders, members or associates, respectively; and
between such corporation, partnership or association and the State insofar as it concerns their
individual franchises. The second element requires that the dispute among the parties be intrinsically
connected with the regulation of the corporation. If the nature of the controversy involves matters
that are purely civil in character, necessarily, the case does not involve an intra-corporate
controversy. The determination of whether a contract is simulated or not is an issue that could be
resolved by applying pertinent provisions of the Civil Code (citations omitted). 30
addition, the seller, petitioner Orendain, is being sued in his individual capacity for the unauthorized
sale of the property in controversy. Hence, we find no cogent reason to sustain petitioner's
manifestation that the resolution of the instant controversy depends on the ratification by the SEC of
the acts of its agent or the receiver because the act of Orendain was allegedly not within the scope of
his authority as receiver. Furthermore, the determination of the validity of the sale to LSFSIPI will
necessitate the application of the provisions of the Civil Code on obligations and contracts, agency,
and other pertinent provisions.
However, Section 5 of PD No. 902-A does not apply in the instant case. The LSFSIPI is neither an
officer nor a stockholder of BF Homes, and this case does not involve intra-corporate proceedings. In
In addition, jurisdiction over the case for reconveyance is clearly vested in the RTC as provided in
paragraph (2), Section 19, B.P. Blg. 129, to wit:
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Jurisdiction in civil cases. Regional Trial Courts shall exercise exclusive [and] original jurisdiction
(1) In all civil actions in which the subject of the litigation is incapable of pecuniary estimation; and
(2) In all civil actions which involve the title to, or possession of, real property or any interest therein,
where the assessed value of the property involved exceeds Twenty Thousand pesos (P20,000.00) or
for civil actions in Metro Manila, where such value exceeds Fifty Thousand pesos (P50,000.00) . . .
Likewise, in DMRC Enterprises v. Este del Sol Mountain Reserve, Inc., the Court said:
Nowhere in said decree [PD 902-A] do we find even so much as an intimidation [sic] that absolute
jurisdiction and control is vested in the Securities and Exchange Commission in all matters affecting
corporations. To uphold the respondents' arguments would remove without the legal imprimatur from
the regular courts all conflicts over matters involving or affecting corporations, regardless of the
nature of the transactions which give rise to such dispute. The courts would then be divested of
jurisdiction not by reason of the nature of the dispute submitted to them for adjudication, but solely
for the reason that the dispute involves a corporation. This cannot be done. To do so would not only
be to encroach on the legislative prerogative to grant and revoke jurisdiction of the courts but such a
sweeping interpretation may suffer constitutional infirmity. Neither can we reduce jurisdiction of the
court by judicial fiat ([citing] Article X, Section 1, The [1973] Constitution). 31
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Res Judicata Does Not Apply in the Action for Reconveyance
We are not persuaded.
According to petitioner, dismissal of the complaint is proper based on res judicata. He alleged that on
September 28, 1994, he filed a Petition for Rehabilitation and for Declaration in a State of Suspension
of Payments docketed as SEC Case No. 2693; and that sometime in 1994, FBO Management Network,
Inc. submitted its Closing Report to the SEC. In said report, the receiver disclosed the conveyance of
the property to the LSFSIPI. It is the same transaction which BF Homes seeks to nullify in the
complaint a quo.
There are two (2) aspects to the doctrine of res judicata:
The first, known as "bar by prior judgment," is the effect of a judgment as a bar to the prosecution of
a second action upon the same claim, demand or cause of action. The second, known as
"conclusiveness of judgment," issues actually and directly resolved in a former suit cannot again be
raised in any future case between the same parties involving a different cause of action. 32
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A case is barred by prior judgment when the following requisites are present: "(1) the former
judgment is final; (2) it is rendered by a court having jurisdiction over the subject matter and the
parties; (3) it is a judgment or an order on the merits; and (4) there is between the first and second
actions identity of parties, of subject matter, and causes of action." 33
Petitioner asserts that bar by prior judgment exists since the May 8, 1997 Order of the SEC en
banc had become final which would effectively preclude the adjudication of Civil Case No. LP-96-0022.
We DISAGREE.
While the said SEC order denied the motion for intervention filed by intervenor Eduardo S. Rodriguez,
it did not, however, resolve the issues raised in the motion on the merits. A judgment is "on the
merits when it amounts to a legal declaration of the respective rights and duties of the parties based
upon the disclosed facts (emphasis supplied and citation omitted)." 34 It is apparent that the SEC
order in question merely acknowledged the Closing Report for inclusion in the records of the case. It
did not, however, pass upon the merits and veracity of the report's contents. As such, it cannot, in
any wise, be considered as an adjudication of the rights and obligations of the parties relating to the
subject matter of the action. ASIDTa
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Likewise, it appears that between the first and second actions, there was no identity of parties, of
subject matter, and of cause of action. Hence, res judicata does not apply in the instant case.
litigated between the parties and their privies whether or not the claim, demand, purpose, or subject
matter of the two actions is the same.
The second type of res judicata is "conclusiveness of judgment." In Francisco v. Co, this Court
elucidated the nature of this principle, thus:
Evidently, "conclusiveness of judgment" may operate to bar the second case even if there is no
identity of causes of action. The judgment is conclusive in the second case, only as to those matters
actually and directly controverted and determined, and not as to matters merely involved therein. 35
"Conclusiveness of judgment" operates as a bar even if there is no identity as between the first and
second causes of judgment. Under the doctrine, any right, fact, or matter in issue directly adjudicated
or necessarily involved in the determination of an action before a competent court in which judgment
is rendered on the merits is conclusively settled by the judgment therein and cannot again be
A perusal of the SEC case would show that reconveyance of the property in controversy was neither
an issue nor a relief sought by any party in the SEC proceedings. Evidently, the SEC November 7,
1994 Omnibus Order did not mention any reconveyance of property. 36
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Eduardo S. Rodriguez, the intervenor in the SEC case, did not demand the reversion of the disputed
property precisely because the SEC has no jurisdiction over the action for reconveyance.
Assuming, arguendo, that intervenor Rodriguez raised the issue on the validity of petitioner's acts in
his capacity as receiver, still, the SEC November 7, 1994 Omnibus Order did not delve into the merits
of the intervention nor did the order give due course to the intervention as it was untimely.
Thus, there is no "conclusiveness of judgment" as the reconveyance of the lot sold to LSFSIPI was not
directly decided or necessarily involved and adjudicated in the said SEC order.
Furthermore, petitioner argues that the Committee of Receivers should have sought prior clearance
from the SEC before instituting the action for reconveyance before the RTC, because it does not have
the legal capacity to sue. This is incorrect. One of the general powers of a receiver under Rule 59,
Section 6 of the Rules of Court is the power to bring and defend suits in such capacity.
Petitioner also contends that an action filed by a successor-receiver against him as predecessorreceiver is not allowed under Rule 59, Section 6 without leave of court which appointed him; as
Section 6 provides that "no action may be filed by or against a receiver without leave of the court
which appointed him." This is bereft of merit.
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The rule talks of the current receiver of the company and not the previous receiver like
petitioner Orendain. The reason behind Rule 59, Section 6, which requires leave of court for all suits
by or against the present receiver, is to forestall any undue interference with the receiver's
performance of duties through improvident suits. Apparently, such situation cannot apply
to Orendain who is no longer BF Homes' receiver.
Moreover, the instant petition has been rendered moot and academic by the passage of RA
8799 or The Securities Regulation Code which took effect on August 8, 2000.37
Section 5.2 of RA 8799 transferred exclusive and original jurisdiction of the SEC over actions involving
intra-corporate controversies to the courts of general jurisdiction or the appropriate RTC. In the
transition, all intra-corporate cases pending in the SEC, which were not ripe for adjudication as of
August 8, 2000, were turned over to the RTC. Congress thereby recognized the expertise and
competence of the RTC to take cognizance of and resolve cases involving intra-corporate
controversies. Thus, "whether or not the issue is intra-corporate, it is now the [RTC] and no longer the
SEC that takes cognizance of [and resolves cases involving intra-corporate controversies]." 38
Section 5.2 of RA 8799 explicitly provides:
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The Commission's jurisdiction over all cases enumerated under Section 5 of Presidential Decree No.
902-A is hereby transferred to the Courts of general jurisdiction or the appropriate Regional Trial
Court: Provided, That the Supreme Court in the exercise of its authority may designate the Regional
Trial Court branches that shall exercise jurisdiction over the cases. The Commission shall retain
jurisdiction over pending cases involving intra-corporate disputes submitted for final resolution which
should be resolved within one (1) year from the enactment of this Code. The Commission shall
retain jurisdiction over pending suspension of payment/rehabilitation cases filed as of 30
June 2000 until finally disposed (emphasis supplied). AEIHCS
Subsequently, on January 23, 2001, the Supreme Court issued Supplemental Administrative Circular
No. 8-01 which ordered that effective March 1, 2000, "all SEC cases originally assigned or transmitted
to the regular RTC shall be transferred to the branches of the regular RTC specially designated to hear
such cases in accordance with AM No. 00-11-03-SC."
During the Bicameral Conference Committee's discussions on the conflicting provisions of Senate Bill
No. 1220 and House Bill No. 8015 on the "Amendments to the Securities, Regulations and
Enforcement Act," former Senator Raul S. Roco rendered his report, 39 as follows:
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The first major departure is as regards the Security Exchange Commission. The Securities and
Exchange Commission has been authorized under this proposal to reorganize itself. As an
administrative agency, we strengthened it and at the same time we take away the quasijudicial functions. The quasi-judicial functions are now given back to the courts of general
jurisdiction the Regional Trial Court, except for two categories of cases (emphasis
supplied).
In case of corporate disputes, only those that are now submitted for final determination of the SEC
will remain with the SEC. So, all those cases, both memos of the plaintiff and defendant, that have
been submitted for resolution will continue. At the same time, cases involving rehabilitation,
bankruptcy, suspension of payments and receiverships that were filed before June 30, 2000 will
continue with the SEC. In other words, we are avoiding the possibility, upon approval of this bill, of
people filing cases with the SEC, in a manner of speaking, to select their court.
. . . It is only right now with this bill that we clarify the independent functions, not only in terms of
monetary polity, by giving it to the Monetary Board, but in matters of commerce and securities and
capital formation, by giving them to the [SEC], with sufficient powers to monitor and regulate capital
formation in the Philippines.
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That is the first major departure . . . in terms of the powers and responsibilities of the [SEC]. In
registration of securities, exempt transactions [and exempt securities], these are very technical and
there are modifications . . . The registration and monitoring of securities are basically the same as the
old law.
Pre-need plans . . . remain with the SEC. Originally we wanted the SEC to concentrate on commerce,
corporations and the securities regulation, but pre-need plan[s] under the Senate report was really
with the SEC and under the House report, it was recommended to remain with the SEC without
prejudice to a subsequent law if we should decide to do so to have the pre-need plans transferred to
the Office of the Insurance Commissioner. . . .
Thus, it is unequivocal that the jurisdiction to try and decide cases originally assigned to the SEC
under Section 5 of PD 902-A has been transferred to the RTC. For clarity, we quote those cases under
Section 5, PD 902-A, which now fall within the RTC's jurisdiction, as follows:
(a) Devices or schemes employed by or any acts of the board of directors, business associates, its
officers or partners, amounting to fraud and misrepresentation which may be detrimental to the
interest of the public and/or stockholders, partners, members of associations registered with the
Commission;
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(b) Controversies arising out of intra-corporate or partnership relations, between and among
stockholders, members, or associates; between any or all of them and the corporation, partnership or
association and the State insofar as it concerns their individual franchise or right as such entity;
the corporation, partnership or association has no sufficient assets to cover its liabilities but is under
the management of a rehabilitation receiver or management committee created pursuant to this
Decree.
(c) Controversies in the election or appointment of directors, trustees, officers or managers of such
corporations, partnerships, or associations; ACEIac
The remaining powers and functions of the SEC are enumerated in Section 5 of RA 8799, to wit:
(d) Petitioners of corporations, partnerships or associations to be declared in the state of suspension

of payment in cases where the corporation, partnership or association possesses sufficient property to
cover all its debts but foresees the impossibility of meeting them when they fall due or in cases where
Powers and Functions of the Commission. [5.1] The Commission shall act with transparency and
shall have the powers and functions provided by this Code,Presidential Decree No. 902-A, the
Corporation Code, the Investment Houses Law, the Financing Company Act and other existing law[s].
Pursuant thereto the Commission shall have, among others, the following powers and functions:
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(a) Have jurisdiction and supervision over all corporations, partnerships or associations who are the
grantees of primary franchises and/or a license or permit issued by the Government;
(b) Formulate policies and recommendations on issues concerning the securities market, advise
Congress and other government agencies on all aspects of the securities marker and propose
legislation and amendments thereto;
(c) Approve, reject, suspend, revoke or require amendments to registration statements, and
registration and licensing applications;
(d) Regulate, investigate and supervise the activities of persons to ensure compliance;
(e) Supervise, monitor, suspend or take over the activities of exchanges, clearing agencies and other
SROs;
(f) Impose sanctions for the violation of laws and the rules, regulations and orders issued pursuant
thereto;
(g) Prepare, approve, amend or repeal rules, regulations, and orders, and issue opinions and provide
guidance on and supervise compliance with such rules, regulations and orders;
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(h) Enlist the aid and support of and/or deputize any and all enforcement agencies of the
Government, civil or military as well as any private institution, corporation, firm, associations or
person in the implementation of its powers and functions under this Code;
(k) Compel the officers of any registered corporation or association to call meetings of stockholders or
members thereof under its supervision;
(i) Issue cease and desist orders to prevent fraud or injury to the investing public;
(j) Punish for contempt of the Commission, both direct and indirect, in accordance with the pertinent
provisions of and penalties prescribed by the Rules of Court;
(l) Issue subpoena duces tecum and summon witnesses to appear in any proceedings of the
Commission and in appropriate cases, order the examination, search and seizure of all documents,
papers, files and records, tax returns, and books of accounts of any entity or person under
investigation as may be necessary for the proper disposition of the cases before it, subject to the
provision of existing laws; SCHATc
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(m) Suspend, or revoke, after notice and hearing the franchise or certificate of registration of
corporations, partnerships or associations, upon any of the grounds provided by law; and
(n) Exercise such other powers as my be provided by law as well as those which may be implied from,
or which are necessary or incidental to the carrying out of, the express powers granted the
Commission to achieve the objectives and purposes of these laws.
Juxtaposing the jurisdiction of the RTC under RA 8799 and the powers that were retained by the SEC,
it is clear that the SEC retained its administrative, regulatory, and oversight powers over all
corporations, partnerships, and associations who are grantees of primary franchises, and/or a license
or permit issued by the Government. However, the Securities Regulations Code (SRC) is clear that
when there is a controversy arising out of intra-corporate relations, between and among stockholders,
members or associates, and between, any, or all of them and the corporation, it is the RTC, not SEC,
which has jurisdiction over the case.
Thus, when the complaint involves "an active antagonistic assertion of a legal right on one side and a
denial thereof on the other concerning a real, and not a mere theoretical question or issue," 40 a
cause of action involving a delict or wrongful act or omission committed by a party in violation of the
primary right of another, 41 or an actual controversy involving rights which are legally demandable or
enforceable, 42 the jurisdiction over this complaint is lodged with the RTC but not the SEC.
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The passage of RA 8799 has put to rest petitioner Orendain's claim that it is the SEC and not the RTC
that has jurisdiction over Civil Case No. LP-96-0022. At present, the instant petition has nothing to
stand on and perforce must fail.
SECOND DIVISION
WHEREFORE, the August 18, 2000 Decision and December 6, 2000 Resolution of the Court of Appeals
in CA-G.R. SP No. 48263 is hereby AFFIRMED IN TOTO.
TRADERS ROYAL BANK, petitioner, vs. INTERMEDIATE APPELLATE COURT, and HEIRS OF THE
LATE JOSE C. TAYENGCO, respondents.
SO ORDERED.
Antonio C. Singson for petitioner.
Quisumbing, Carpio, Carpio Morales and Tinga, JJ., concur.
Tirol & Tirol for private respondents.
[G.R. No. 111357. June 17, 1997.]
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SYLLABUS
1. REMEDIAL LAW; CIVIL PROCEDURE; JUDGMENT; RES JUDICATA; ELEMENTS. The elements of res
judicata are: (1) The previous judgment has become final; (2) the prior judgment was rendered by a
court having jurisdiction over the matter and parties; (3) the first judgment was made on the merits;
and (4) there was substantial identity of parties, subject matter, and cause of action, as between the
prior and subsequent actions. SETAcC
2. ID.; PROVISIONAL REMEDIES; RECEIVERSHIP; TERMINATION THEREOF; COMPENSATION; WHEN
PROPER. Section 8, Rule 59 of the Rules of Court, however, explicitly provides for the manner in
which it shall be paid for its services, to wit: "SEC. 8. Termination of receivership; compensation of
receiver. Whenever the court, of its own motion or on that of either party, shall determine that the
necessity for a receiver no longer exists, it shall, after due notice to all interested parties and hearing,
settle the accounts of the receiver, direct the delivery of the funds and other property in his hands to
the persons adjudged entitled to receive them, and order the discharge of the receiver from further
duty as such. The court shall allow the receiver such reasonable compensation as the circumstances
of the case warrant, to be taxed as costs against the defeated party, or apportioned, as justice
requires." It is, therefore, clear that when the services of a receiver who has been properly appointed
terminates, his compensation is to be charged against the defeated party, or the prevailing litigant
may be made to share the expense, as justice requires. IDCScA
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RESOLUTION
ROMERO, J p:
The factual aspects of this case have already been resolved by this Court in G.R. No.
63855, 1 wherein we ruled the deceased spouses Jose and Salvacion Tayengco to be the lawful
owners of the properties under receivership, and G.R. No. 60076, 2 where we affirmed the validity of
the appointment of petitioner Traders Royal Bank (TRB) as receiver pendente lite.
In view of these rulings, the receivership proceeding was duly terminated. Thus, TRB rendered its final
accounting of the funds under receivership wherein it retained the amount of P219,016.24 as its
receiver's fee, instead of turning over the entire fund to the Tayengcos. The Regional Trial Court of
Iloilo, Branch 5, in an order dated July 5, 1988, approved the final accounting submitted by TRB,
including the deduction of its fee from the fund under receivership.
The Tayengcos assailed said order before the Court of Appeals, 3 contending that TRB's compensation
should have been charged against the losing party and not from the funds under receivership.
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In resolving this issue the Court of Appeals, 4 in its decision dated February 12, 1993, ruled that TRB
cannot deduct its fee from the funds under its receivership since this must be shouldered by the
losing party or equally apportioned among the parties-litigants. Consequently, TRB was ordered to
return the P219,016.24 to the Tayengcos, and the losing parties, Cu Bie, et al., were held solely liable
for TRB's compensation. 5 TRB filed a motion for reconsideration, but this was denied by the appellate
court in its resolution dated August 17, 1993. 6
In this appeal, TRB raises the following errors allegedly committed by the Court of Appeals:
1. The Hon. IAC (should be CA) erred when it rendered the judgment and Resolution ordering the
return by TRB of Receiver's Fee of P219,016.24 to the heirs of Jose Tayengco, as it reversed the
Decision of the Supreme Court in the case of Jose Tayengco vs. Hon. Ilarde, TRB, et al., GR. No. 60076,
which ordered the Trial Court to "settle the account of the receiver, TRB" to thereafter discharge the
receiver and charged as cost against the losing party;
2. The Hon. IAC had no jurisdiction in CA-GR. 21423 and erred in knowingly taking cognizance and
rendering the judgment and resolution on the issue of the payment of receiver's fee to TRB since the
same subject matter was already within the jurisdiction of the Supreme Court in GR. No. 60076;
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3. The Hon. IAC erred when it rendered the judgment and Resolution which reversed the final
Supreme Court Decision in GR. No. 60076 on the payment of the receiver's fee to TRB as it violated
the Rule on "Bar by Final Judgment". 7 (Emphasis supplied)
The elements of res judicata are: (1) The previous judgment has become final; (2) the prior judgment
was rendered by a court having jurisdiction over the matter and parties; (3) the first judgment was
made on the merits; and (4) there was substantial identity of parties, subject matter, and cause of
action, as between the prior and subsequent actions. 8
TRB's assignment of errors submits for resolution two vital issues: (1) Is the Court of Appeals decision
dated February 12, 1993 barred by res judicata by virtue of our ruling in G.R. No. 60076 recognizing
the propriety of TRB's appointment as receiver? (2) Who is responsible for TRB's receiver's fee?
With respect to the first assigned error, we are not persuaded.
The difference between the two causes of action is unmistakable. In G.R. No. 60076, the petition was
for the annulment of the trial court's order requiring Tayengco to render and submit an accounting of
the rental of the buildings and apartments, while C.A. G.R. CV No. 21423 was an appeal questioning
the order of the trial court authorizing the deduction by TRB of its compensation from the receivership
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funds. There is clearly no identity of causes of action here. Clearly, the last element of res judicata is
absent in the case at bar.
Procedural obstacles aside, we now answer the principal query posed in the instant petition.
Nobody questions the right of TRB to receive compensation. Section 8, Rule 59 of the Rules of Court,
however, explicitly provides for the manner in which it shall be paid for its services, to wit:
shall, after due notice to all interested parties and hearing, settle the accounts of the receiver, direct
the delivery of the funds and other property in his hands to the persons adjudged entitled to receive
them, and order the discharge of the receiver from further duty as such. The court shall allow the
receiver such reasonable compensation as the circumstances of the case warrant, to be taxed as
costs against the defeated party, or apportioned, as justice requires." (Emphasis supplied)
"SEC. 8. Termination of receivership; compensation of receiver. Whenever the court, of its own
motion or on that of either party, shall determine that the necessity for a receiver no longer exists, it
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It is, therefore, clear that when the services of a receiver who has been properly appointed
terminates, his compensation is to be charged against the defeated party, or the prevailing litigant
may be made to share the expense, as justice requires. Consequently, the trial court's order
approving TRB's compensation to be charged solely against the funds under its receivership is without
legal justification; hence, it was correctly reversed by the Court of Appeals. cdasia
[G.R. No. 151925. February 6, 2003.]
IN VIEW OF THE FOREGOING, the decision appealed from is AFFIRMED. Costs against petitioner. SO
ORDERED.
Abello Concepcion Regala and Cruz for petitioner.
CHAS REALTY AND DEVELOPMENT CORPORATION, petitioner, vs. HON. TOMAS B. TALAVERA,
in his capacity as Presiding Judge of the Regional Trial Court of Cabanatuan City, Branch
28, and ANGEL D. CONCEPCION, SR., respondents.
R. A. S. Dizon Law Office for private respondent.
FIRST DIVISION
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SYNOPSIS
Petitioner Chas Realty and Development Corporation (CRDC) is the owner and developer of a threehectare shopping complex, also known as the Megacenter Mall (Megacenter), in Cabanatuan City.
Purportedly on account of factors beyond the control of CRDC, such as high interest rates on its loans,
unpaid rentals of tenants, low occupancy rate, sluggishness of the economy and the freezing of its
bank account by its main creditor, the Land Bank of the Philippines, CRDC encountered difficulty in
paying its obligations as and when they fell due and had to contend with collection suits and related
cases. CRDC filed a petition with the Regional Trial Court, Branch 28, of Cabanatuan City, for
rehabilitation attaching thereto a proposed rehabilitation plan. Prior to the filing of the petition for
rehabilitation, a special meeting of its stockholders was held, during which the majority of the
outstanding capital stock of CRDC approved the resolution authorizing the filing of a petition for
rehabilitation. Private respondent Angel D. Concepcion, Sr., moved to dismiss and/or to deny the
petition for rehabilitation on the ground that there was no approval by the stockholders representing
at least two-thirds (2/3) of the outstanding capital stock which, according to him, would be essential
under paragraph 2(k), Section 2, Rule 4, of the Interim Rules on Corporate Rehabilitation. Concepcion
further asserted that the supposed approval by the directors of the filing of the petition for
rehabilitation was inaccurate considering that the membership of petitioner CRDC's board of directors
was still then being contested and pending final resolution. The trial court issued an order directing
petitioner within a period of 15 days from receipt of a copy of this order to secure from its directors
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and stockholders the desired certification and submit the same in accordance with the provision of
the Interim Rules of Procedure on Corporate Rehabilitation. On petition for certiorari, the Court of
Appeals denied the petition for lack of merit. Hence, the present petition for review
on certiorari. CDAcIT
The Supreme Court reversed and set aside the decision of the Court of Appeals and that of the
Regional Trial Court of Cabanatuan City. Nowhere in Section 2, Rule 4(k) of the Interim Rules of
Procedure on Corporate Rehabilitation can it be inferred that an affirmative vote of stockholders
representing at least two-thirds (2/3) of the outstanding stock is invariably necessary for the filing of a
petition for rehabilitation regardless of the corporate action that the plan envisions. Just to the
contrary, it only requires in the filing of the petition that the corporate actions therein proposed have
been duly approved or consented to by the directors and stockholders "in consonance with existing
laws." The Court stressed that the said requirement is designed to avoid a situation where a
rehabilitation plan, after being developed and judicially sanctioned, cannot ultimately be seen through
because of the refusal of directors or stockholders to cooperate in the full implementation of the plan.
The rehabilitation plan submitted by petitioner merely consists of a repayment or re-structuring
scheme of CRDC's bank loans to Land Bank of the Philippines and Equitable-PCI Bank and of leasing
out most of the available spaces in the Megacenter, including the completion of the construction of
the fourth floor, to increase rental revenues. None of the proposed corporate actions would require a
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vote of approval by the stockholders representing at least two-thirds (2/3) of the outstanding capital
stock.
SYLLABUS
1. MERCANTILE LAW; PRIVATE CORPORATIONS; INTERIM RULES ON CORPORATE REHABILITATION;
CONTENTS OF PETITION FOR REHABILITATION; EXPLAINED. Rule 4, Section 2(k), distinctly provides
that, first, under letter (a), the filing of the petition has been duly authorized; and, second, under
letter (b), the directors and stockholders have irrevocably approved and/or consented to, in
accordance with existing laws, all actions or matters necessary and desirable to rehabilitate the
debtor including, but not limited to, amendments to the articles of incorporation and by-laws or
articles of partnership; increase or decrease in the authorized capital stock; issuance of bonded
indebtedness, alienation, transfer, or encumbrance of assets of the debtor; and modification of
shareholder's rights. Observe that Rule 4, Section 2(k), prescribes the need for a certification; one, to
state that the filing of the petition has been duly authorized, and two, to confirm that the directors
and stockholders have irrevocably approved and/or consented to, in accordance with existing laws, all
actions or matters necessary and desirable to rehabilitate the corporate debtor, including, as and
when called for, such extraordinary corporate actions as may be marked out. The phrase, "in
accordance with existing laws," obviously would refer to that which is, or to those that are, intended
to be done by the corporation in the pursuit of its plan for rehabilitation. Thus, if any extraordinary
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corporate action (mentioned in Rule 4, Section 2(k), of the Interim Rules on Corporate Rehabilitation)
are to be done under the proposed rehabilitation plan, the petitioner would be bound to make it
known that it has received the approval of a majority of the directors and the affirmative votes of
stockholders representing at least two-thirds (2/3) of the outstanding capital stock of the corporation.
Where no such extraordinary corporate acts (or one that under the law would call for a two-thirds
(2/3) vote) are contemplated to be done in carrying out the proposed rehabilitation plan, then the
approval of stockholders would only be by a majority, not necessarily a two-thirds (2/3), vote, as long
as, of course, there is a quorum a fact which is not here being disputed.
2. ID.; ID.; ID.; ID.; PROPOSED CORPORATE ACTIONS IN CASE AT BAR DOES NOT REQUIRE A VOTE OF
APPROVAL BY THE STOCKHOLDERS REPRESENTING AT LEAST TWO THIRDS (2/3) OF THE
OUTSTANDING CAPITAL STOCKS. The trial court and appellate court, unfortunately, have taken an
inaccurate understanding of the memorandum to the Supreme Court of Justice Reynato S. Puno, the
committee chair on the draft of the rules on corporate rehabilitation, still then being proposed; the
memorandum reads, in part, thusly: "3. Rule 4. Rehabilitation "The following are the principal
deviation from the SEC Rules: "a) The proposed Rules now require, as an attachment to the petition, a
Certificate attesting, among others, that the governing body and owners of the petitioning debtor
have approved and consented to whatever is necessary or desirable (including but not limited to
increasing or decreasing the authorized capital stock of the company and modification of
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stockholders' right) to rehabilitate the debtor (Sec. 2, par. (k), Rule 4). This is to avoid a situation
where a rehabilitation plan, after being developed for years, cannot be implemented because of the
refusal of shareholders to approve the arrangements necessary for its implementation." Nowhere in
the aforequoted paragraph can it be inferred that an affirmative vote of stockholders representing at
least two-thirds (2/3) of the outstanding stock is invariably necessary for the filing of a petition for
rehabilitation regardless of the corporate action that the plan envisions. Just to the contrary, it only
requires in the filing of the petition that the corporate actions therein proposed have been duly
approved or consented to by the directors and stockholders "in consonance with existing laws." The
requirement is designed to avoid a situation where a rehabilitation plan, after being developed and
judicially sanctioned, cannot ultimately be seen through because of the refusal of directors or
stockholders to cooperate in the full implementation of the plan. In fine, a certification on the
approval of stockholders is required but the question, whether such approval should be by a majority
or by a two-thirds (2/3) vote of the outstanding capital stock, would depend on the existing law vis-avis the corporate act or acts proposed to be done in the rehabilitation of the distressed corporation.
The rehabilitation plan submitted by petitioner merely consists of a repayment or re-structuring
stock. cACDaH
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DECISION
VITUG, J p:
Petitioner Chas Realty and Development Corporation (CRDC) is a domestic corporation engaged in
property development and management. It is the owner and developer of a three-hectare shopping
complex, also known as the Megacenter Mall (Megacenter), in Cabanatuan City.
The construction of Megacenter commenced in January 1996, but by the time of its so-called "soft
opening" in July 1998, it was only partly completed due to lack of funds, said to have been brought
about by construction overages due to the massive devaluation of the peso during the economic crisis
in 1997, low occupancy, and rental arrearages of tenants. The opening of the upper ground floor and
the second floor of the building followed, respectively, in August 1998 and towards the end of 1998.
Eventually, Megacenter opened its third floor in 1999.
Purportedly on account of factors beyond the control of CRDC, such as high interest rates on its loans,
unpaid rentals of tenants, low occupancy rate, sluggishness of the economy and the freezing of its
bank account by its main creditor, the Land Bank of the Philippines, CRDC encountered difficulty in
paying its obligations as and when they fell due and had to contend with collection suits and related
cases.
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On 04 June 2001, CRDC filed a petition for rehabilitation attaching thereto a proposed rehabilitation
plan, accompanied by a secretary's certificate, consonantly with paragraph 2(k), Section 2, Rule 4, of
the Interim Rules of Procedure on Corporate Rehabilitation. CRDC claimed that it had sufficient assets
and a workable rehabilitation plan both of which showed that the continuance of its business was still
feasible. It alleged that, prior to the filing of the petition for rehabilitation, a special meeting of its
stockholders was held on 18 April 2001 during which the majority of the outstanding capital stock of
CRDC approved the resolution authorizing the filing of a petition for rehabilitation.
On 08 June 2001, the Regional Trial Court, Branch 28, of Cabanatuan City, to which the petition was
assigned, issued an order staying all claims against CRDC and prohibited it from making any payment
on its outstanding obligations and selling, or otherwise disposing or encumbering, its property.
Forthwith, the court appointed a rehabilitation receiver.
On 20 July 2001, Angel D. Concepcion, Sr., herein private respondent, filed a complaint in intervention
opposing the appointment of CRDC's nominee for the post of rehabilitation receiver. He belied CRDC's
factual allegations and claimed that the predicament of the corporation was due to serious
"mismanagement, fraud, embezzlement, misappropriation and gross/evident violation of the fiduciary
duties of CHAS officers." Concepcion moved to dismiss and/or to deny the petition for rehabilitation on
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the ground that there was no approval by the stockholders representing at least two-thirds (2/3) of
the outstanding capital stock which, according to him, would be essential under paragraph 2(k),
Section 2, Rule 4, of the Interim Rules on Corporate Rehabilitation. Concepcion further asserted that
the supposed approval of the directors of the filing of the petition for rehabilitation was inaccurate
considering that the membership of petitioner CRDC's board of directors was still then being
contested and pending final resolution.
On 10 August 2001, CRDC submitted its opposition ex abundante cautelam contending that the
complaint in intervention was a prohibited pleading and that there was no need for it to secure the
irrevocable consent and approval of its stockholders representing at least two-thirds (2/3) of its
outstanding capital stock because the petition did not include in its plan for rehabilitation acts that
would need any amendment of its articles of incorporation and/or by-laws, increase or decrease in the
authorized capital stock, issuance of bonded indebtedness, or the like, where such two-thirds (2/3)
vote would be required.
The trial court issued an order, dated 15 October 2001, the decretal portion of which was to the
following effect; viz:
"WHEREFORE, premises considered, in the absence of any showing that the petitioner has complied
with the certification required under Section 2, Rule 4(K) of theInterim Rules of Procedure on
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Corporate Rehabilitation, the petitioner is hereby given a period of 15 days from receipt of a copy of
this order to secure from its directors and stockholders the desired certification and submit the same
to this Court in accordance with the above-mentioned provision of the Interim Rules of Procedure on
Corporate Rehabilitation.
On 29 October 2001, CRDC filed before the Court of Appeals a petition for certiorari, with prayer for
temporary restraining order and/or preliminary injunction, which sought to have the 15th October
2001 order of the trial court set aside.
The Court of Appeals rendered a decision on 18 January 2002 and held:
"With respect to the other oppositions to the petition for rehabilitation including the opposition to the
appointment of the rehabilitation receiver, opposition filed by the land bank and the EEI, Inc., the
resolution of the same is hereby held in abeyance till after the period given to the petitioner to
comply with this order as it may become moot and academic after the expiration of the period given
to the petitioner." 1
"WHEREFORE, the foregoing premises considered, the petition for certiorari, with prayer for
temporary restraining order and/or writ of preliminary injunction, is DENIED for lack of merit." 2
Hence, the instant petition on the following grounds:
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"I
"Public respondent acted with grave abuse of discretion amounting to lack and/or excess of
jurisdiction in issuing the assailed order considering that:
"A. The petition for rehabilitation and the proposed rehabilitation plan do not require extraordinary
corporate actions.
"B. Since no extraordinary corporate actions are required or even contemplated as necessary and
desirable for the rehabilitation of CRDC, the requirements of the corporation code for the approval of
such actions cannot be complied with.
"C. The rehab rules and the corporation code do not allow or intend blind blanket approvals of
extraordinary corporate actions.
"D. To require 2/3 stockholders' approval for corporate actions requiring only a majority violates the
right of the majority stockholders.
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"II
"Public respondent acted with grave abuse of discretion amounting to lack and/or excess of
jurisdiction in requiring CRDC's compliance with paragraph 2(k), Section 2, Rule 4 of the Rehab rules
when CRDC already complied therewith." 3
debtor; (b) the nature of the business of the debtor; (c) the history of the debtor; (d) the cause of its
inability to pay its debts; (e) all the pending actions or proceedings known to the debtor and the
courts or tribunals where they are pending; (f) threats or demands to enforce claims or liens against
the debtor; and (g) the manner by which the debtor may be rehabilitated and how such rehabilitation
may benefit the general body of creditors, employees, and stockholders.
Rule 4, Section 2(k), of the Interim Rules on Corporate Rehabilitation provides:
"The petitioner shall be accompanied by the following documents:
"Sec. 2. Contents of the Petition. The petition filed by the debtor must be verified and must set
forth with sufficient particularity all the following material facts: (a) the name and business of the
"xxx xxx xxx.
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"k. A Certificate attesting, under oath, that (a) the filing of the petition has been duly authorized; and
(b) the directors and stockholders have irrevocably approved and/or consented to, in accordance with
existing laws, all actions or matters necessary and desirable to rehabilitate the debtor including, but
not limited to, amendments to the articles of incorporation and by-laws or articles of partnership;
increase or decrease in the authorized capital stock; issuance of bonded indebtedness; alienation,
transfer, or encumbrance of assets of the debtor; and modification of shareholders' rights." 4
Rule 4, Section 2(k), distinctly provides that, first, under letter (a), the filing of the petition has been
duly authorized; and, second, under letter (b), the directors and stockholders have irrevocably
approved and/or consented to, in accordance with existing laws, all actions or matters necessary and
desirable to rehabilitate the debtor including, but not limited to, amendments to the articles of
incorporation and by-laws or articles of partnership; increase or decrease in the authorized capital
stock; issuance of bonded indebtedness, alienation, transfer, or encumbrance of assets of the debtor;
and modification of shareholder's rights.
Observe that Rule 4, Section 2(k), prescribes the need for a certification; one, to state that the filing
of the petition has been duly authorized, and two, to confirm that the directors and stockholders have
irrevocably approved and/or consented to, in accordance with existing laws, all actions or matters
necessary and desirable to rehabilitate the corporate debtor, including, as and when called for, such
extraordinary corporate actions as may be marked out. The phrase, "in accordance with existing
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laws," obviously would refer to that which is, or to those that are, intended to be done by the
corporation in the pursuit of its plan for rehabilitation. Thus, if any extraordinary corporate action
(mentioned in Rule 4, Section 2(k), of the Interim Rules on Corporate Rehabilitation) are to be done
under the proposed rehabilitation plan, the petitioner would be bound to make it known that it has
received the approval of a majority of the directors and the affirmative votes of stockholders
representing at least two-thirds (2/3) of the outstanding capital stock of the corporation. Where no
such extraordinary corporate acts (or one that under the law would call for a two-thirds (2/3) vote) are
contemplated to be done in carrying out the proposed rehabilitation plan, then the approval of
stockholders would only be by a majority, not necessarily a two-thirds (2/3), vote, as long as, of
course, there is a quorum 5 a fact which is not here being disputed.
The trial court and appellate court, unfortunately, have taken an inaccurate understanding of the
memorandum to the Supreme Court of Justice Reynato S. Puno, the committee chair on the draft of
the rules on corporate rehabilitation, still then being proposed; the memorandum reads, in part,
thusly:
"3. Rule 4. Rehabilitation
"The following are the principal deviation from the SEC Rules:
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"a) The proposed Rules now require, as an attachment to the petition, a Certificate attesting, among
others, that the governing body and owners of the petitioning debtor have approved and consented
to whatever is necessary or desirable (including but not limited to increasing or decreasing the
authorized capital stock of the company and modification of stockholders' right) to rehabilitate the
debtor (Sec. 2, par. (k), Rule 4). This is to avoid a situation where a rehabilitation plan, after being
developed for years, cannot be implemented because of the refusal of shareholders to approve the
arrangements necessary for its implementation." 6
Nowhere in the aforequoted paragraph can it be inferred that an affirmative vote of stockholders
representing at least two-thirds (2/3) of the outstanding stock is invariably necessary for the filing of a
petition for rehabilitation regardless of the corporate action that the plan envisions. Just to the
contrary, it only requires in the filing of the petition that the corporate actions therein proposed have
been duly approved or consented to by the directors and stockholders "in consonance with existing
laws." The requirement is designed to avoid a situation where a rehabilitation plan, after being
developed and judicially sanctioned, cannot ultimately be seen through because of the refusal of
directors or stockholders to cooperate in the full implementation of the plan. In fine, a certification on
the approval of stockholders is required but the question, whether such approval should be by a
majority or by a two-thirds (2/3) vote of the outstanding capital stock, would depend on the existing
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law vis-a-vis the corporate act or acts proposed to be done in the rehabilitation of the distressed
corporation.
The rehabilitation plan 7 submitted by petitioner merely consists of a repayment or re-structuring
stock.
Relative to the contention that a motion for reconsideration is required prior to bringing up the
petition for certiorari (with the Court of Appeals), it should suffice to say that the filing of a motion for
reconsideration before availing of the remedy of certiorari is not always sine qua non such as when
the issue raised is one purely of law, or where the error is patent or the questions raised
on certiorari are exactly the same as those already squarely presented to and passed upon by the
court a quo. 8
WHEREFORE, the instant petition is GRANTED and the questioned decision of the Court of Appeals,
dated 18 January 2002, and the order of the Regional Trial Court, Branch 28, Cabanatuan City, dated
15 October 2001, in Civil Case No. 4036-AF, are REVERSED and SET ASIDE. The Regional Trial Court is
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directed to give due course to the Petition for Rehabilitation and conduct with dispatch the necessary
proceedings still required thereon. No costs. SHCaDA
SO ORDERED.
Davide, Jr., C.J., Ynares-Santiago, Carpio and Azcuna, JJ., concur.
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RECEIVERSHIP

G.R. No. 6305

September 26, 1911

COMPAIA GENERAL DE TABACOS DE FILIPINAS, plaintiff-appellee,

Militis Lex Fraterniy and Honor Society (Receivership Rule 59)

Militis Lex Fraterniy and Honor Society (Receivership Rule 59)

1. Care of cane before cutting

Militis Lex Fraterniy and Honor Society (Receivership Rule 59)

Militis Lex Fraterniy and Honor Society (Receivership Rule 59)

Militis Lex Fraterniy and Honor Society (Receivership Rule 59)

Militis Lex Fraterniy and Honor Society (Receivership Rule 59)

Militis Lex Fraterniy and Honor Society (Receivership Rule 59)

Militis Lex Fraterniy and Honor Society (Receivership Rule 59)

Militis Lex Fraterniy and Honor Society (Receivership Rule 59)

Militis Lex Fraterniy and Honor Society (Receivership Rule 59)

THE BELGIAN CATHOLIC MISSIONARIES, INC., plaintiff-appellee,

Torres, Mapa and Moreland, JJ., concur.

November 24, 1926

Militis Lex Fraterniy and Honor Society (Receivership Rule 59)

Antonio M. Opisso, Romualdez Hermanos and Luciano de la Rosa for appellant.

Militis Lex Fraterniy and Honor Society (Receivership Rule 59)

Militis Lex Fraterniy and Honor Society (Receivership Rule 59)

Militis Lex Fraterniy and Honor Society (Receivership Rule 59)

Militis Lex Fraterniy and Honor Society (Receivership Rule 59)

Militis Lex Fraterniy and Honor Society (Receivership Rule 59)

Militis Lex Fraterniy and Honor Society (Receivership Rule 59)

Militis Lex Fraterniy and Honor Society (Receivership Rule 59)

Militis Lex Fraterniy and Honor Society (Receivership Rule 59)

Militis Lex Fraterniy and Honor Society (Receivership Rule 59)

Militis Lex Fraterniy and Honor Society (Receivership Rule 59)

Militis Lex Fraterniy and Honor Society (Receivership Rule 59)

Militis Lex Fraterniy and Honor Society (Receivership Rule 59)

Militis Lex Fraterniy and Honor Society (Receivership Rule 59)

Avancea, C. J., Johnson, Street, Ostrand and Johns, JJ., concur.

October 22, 1928

Militis Lex Fraterniy and Honor Society (Receivership Rule 59)

Militis Lex Fraterniy and Honor Society (Receivership Rule 59)

Militis Lex Fraterniy and Honor Society (Receivership Rule 59)

G.R. No. L-2987

February 20, 1951

ERNEST BERG, plaintiff-appellant,

Without any special pronouncement as to costs. So ordered.

Militis Lex Fraterniy and Honor Society (Receivership Rule 59)

Alva J. Hill for appellant.

Militis Lex Fraterniy and Honor Society (Receivership Rule 59)

Militis Lex Fraterniy and Honor Society (Receivership Rule 59)

Militis Lex Fraterniy and Honor Society (Receivership Rule 59)

Militis Lex Fraterniy and Honor Society (Receivership Rule 59)

Militis Lex Fraterniy and Honor Society (Receivership Rule 59)

Militis Lex Fraterniy and Honor Society (Receivership Rule 59)

Militis Lex Fraterniy and Honor Society (Receivership Rule 59)

Militis Lex Fraterniy and Honor Society (Receivership Rule 59)

Militis Lex Fraterniy and Honor Society (Receivership Rule 59)

Militis Lex Fraterniy and Honor Society (Receivership Rule 59)

Militis Lex Fraterniy and Honor Society (Receivership Rule 59)

Militis Lex Fraterniy and Honor Society (Receivership Rule 59)

Militis Lex Fraterniy and Honor Society (Receivership Rule 59)

Militis Lex Fraterniy and Honor Society (Receivership Rule 59)

Receivership not justified

Petitioners position is bereft of any factual mooring.

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Militis Lex Fraterniy and Honor Society (Receivership Rule 59)

Militis Lex Fraterniy and Honor Society (Receivership Rule 59)

Militis Lex Fraterniy and Honor Society (Receivership Rule 59)