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SYLLABUS
BARREDO, J : p
This appeal from the order of the Court of First Instance of Manila dated October
4, 1960 in its Civil Case No. 27374, entitled Central Sawmills, Inc., vs. Alto
Surety & Insurance Co., et al., ordering the appointment of a receiver of the
properties of defendant- appellant Alto Surety & Insurance Company as well as
from the order of October 25, 1960 denying the motion for reconsideration
thereof was certied to this Court by the Court of Appeals in a resolution, the
pertinent portions of which read thus:
"The undisputed evidence presented during the hearing on the petition for
receivership is summarized by the court a quo, as follows:
"Receipt of your advice within the fteen-day period given you for
complying with the requirements stated above, will be appreciated."
"In granting the petition for receivership, the court a quo said:
'Firstly, plainti has oered the provisions of Section 1, Rule 61 of
the Rules of Court, more particularly paragraph (d) thereof. In
support of its claim, plainti has cited the case of Philippine Trust
Co . vs. Francisco Santamaria, 53 Phil. 463, wherein the Supreme
Court ordered the appointment of a receiver of all the properties
and assets of a judgment debtor in aid of execution of judgment
rendered against it. The action against the judgment debtor in the
said case was for the recovery of a sum of money.
'Secondly, plainti has cited the provisions of Section 2, Rule 61 of
the Rules of Court, quoted as follows:
"In view of all the above, the issue raised in this appeal is
purely a question of law; this appeal is therefore beyond the
competence of this Court.
Accordingly, the only issue for resolution by this Court in this appeal is whether
or not, in an action for the collection of a debt, where there is already a nal and
executory judgment, the Court has the authority to appoint a receiver of the
properties of the judgment debtor which are not involved in the action, in aid of
the execution of said judgment.
This issue is not new. Almost on all fours with the present case is that of
Philippine Trust Co. vs. Santamaria, 1 decided way back on September 4, 1929.
There it was held:
"This is a petition for mandamus in which the petitioner alleges that it is
plainti in civil cases Nos. 6720 and 6721 pending in the Court of First
Instance of Iloilo. That on October 19, 1927, that court in those actions
rendered the following judgments:
"We are clearly of the opinion that the lower court exceeded its
jurisdiction in suspending the execution for the period of four months
from June 30, 1929. We are also of the opinion that upon the facts
shown in this record, it was the duty of the court to appoint a receiver
for the F. M. Yaptico & Co., Ltd., to protect and preserve its property and
assets for the use and benet of its creditors and, in particular, this
petitioner, under the provisions of Section 483 of the Code of Civil
Procedure. The very fact that the judgments in question were rendered
on October 19, 1927, and that no part of them has yet been paid, and
that F. M. Yaptico & Co., Ltd., has so far been able to defeat the petitioner
in the collection of its judgments, is a very strong and cogent reason why
a receiver should be appointed.
"It is the order of the court that a writ of mandamus be forthwith issued
as prayed for in the petition, and that the lower court at once appoint a
receiver of all the property and assets of F.M. Yaptico & Co., Ltd., and that
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petitioner have judgments for costs. So ordered."
With this precedent, it is obvious that the order of receivership appealed from
should be armed.
Only one point of procedure need be claried now. In its petition for the
appointment of a receiver, plainti-appellee relied expressly only on the
provisions of Section 1(d) of Rule 61 (Rules of 1940) which provided as follows:
"SECTION 1.When and by whom receiver appointed. One or more
receiver 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:
xxx xxx xxx
Indeed, this is the provision applicable to the circumstances of the case at bar.
Clearly, Section 1(d) of Rule 61 3 is not applicable here because, as contended by
defendant-appellant, all the cases of receivership contemplated in said Section
are only cases wherein the property or properties being placed under receivership
are those involved in the very litigation in which such receivership is ordered.
This is evident from the opening paragraph of said section which says that "one
or more receivers of the property, real or personal, which is the subject of the
action, may be appointed . . . in the following cases," and paragraph (d) is one of
those cases. [Italics supplied]. In other words, this qualifying clause, "the
property, real or personal, which is the subject of the action" applies to all the
cases specied in the ve paragraphs in said Section 1, which are:
"SECTION 1. . . .
"(a)When a corporation has been dissolved, or is insolvent, or is in
imminent danger of insolvency, or has forfeited its corporate rights;
"(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;
"(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 insucient to discharge the
mortgage debt, or that the parties have so stipulated in the contract of
mortgage;
And it is undisputed that in the case at bar, the properties being placed under
receivership are not the subject of the action.
Likewise, it is quite plain that Section 2 of Rule 61 4 is not also applicable to this
case. This Section refers to a receivership, not as an aid to execution of a nal
judgment in an ordinary action, but as a consequence of the dissolution of a
corporation or of its forfeiture of its corporate rights; and with respect to cases of
insolvency or imminent danger of insolvency of corporations, the receivership
contemplated in this Section must be in relation exclusively to such insolvency or
imminent danger thereof placed before the court in an appropriate principal
action, and again, not merely as an auxiliary remedy to the execution of a nal
judgment in an ordinary action.
In any event, it is unnecessary or superuous to bring in Sections 1 and 2 of Rule
61, which, to say the least, are of doubtful applicability, when Section 39 of Rule
39 appears to be clearly and ttingly applicable. If at all, the other provisions of
Rule 61 may be resorted to only insofar as they prescribe the procedure and the
bond requirements in a receivership as well as other matters related to the
carrying out of such receivership. There being no detailed rules under Rule 39
governing these matters, under the authority of Section 6, Rule 124 (now Rule
135), the pertinent provisions of Rule 61 may be adopted. Said Section provides:
"SECTION 6.Means to carry jurisdiction into eect . When by law
jurisdiction is conferred on a court or judicial ocer, all auxiliary writs,
processes and other means necessary to carry it into eect may be
employed by such court or ocer; and if the procedure to be followed in
the exercise of such jurisdiction is not specically pointed out by these
rules, any suitable process or mode of proceeding may be adopted which
appears most conformable to the spirit of said rules." 5
WHEREFORE, with the above clarication that Section 39 of Rule 39 of the Rules
of 1940, now Section 43 of Rule 39 of the current Rules, is the provision
applicable to the receivership herein in question, the same being in aid of the
execution of a nal judgment in an ordinary action for money, the disputed
orders of the court a quo dated October 4, 1960 and October 15, 1960 are hereby
armed, with costs against defendant-appellant, Alto Surety & Insurance
Company, Inc.
Dizon, Makalintal, Zaldivar, Sanchez Castro, Fernando, Capistrano and
Teehankee, JJ ., concur.
Reyes, J.B.L., C .J ., concurs and certies that the Chief Justice voted in favor of
this opinion before going on ocial leave.
Footnotes