RECEIVERSHIP CASES 2014

Compana General de Tabacos vs GauzonKlenzene CachoBelgian Catholic missionaries vs Magallanes PressKristian Lastimosa CaumeranPo Pauco vs SiguenzaCristina Quiron CASE DIGESTED BY ARIEF MAMAO (big thanks rief!!!!!)Berg vs TeusDon NovalVivares vs ReyesCedric Tiu Gutierrez IIChavez vs CAAilee TejanoDescallar vs CARebecca L. JordanMaking Enterprises inc vs MarforiRhea YrayBonaplata vs AmberJohn Andrew CamelloCommodities Storage and Ice plant vs CAOwen LerinHarden vs Director of PrisonsMel Jason AugustoCalo vs RoldanMario CalvoYlarde vs EnriquezDave ParillaRocha and co vs CrossfieldJobey BernaldezParanete vs TanRomeo Cisco Amparado TenedoraTantano vs CaboverdeIsha Berezo CorbetaCitibank NA vs CAKimberly Marie EsmeaMartinez vs GranoKaren Abegail MonteronPlaton vs SandovalAirene EdaoOrendain vs BF homesAnne Vernadice AreaTraders Royal bank vs IACJecar G. Sual

G.R. No. 6305 September 26, 1911COMPAIA GENERAL DE TABACOS DE FILIPINAS,plaintiff-appellee,vs.ROMANA GAUZON and JUAN D. POMAR,defendants.JUAN D. POMAR,receiver-appellant.

DOCTRINE: 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, to receive the rents, issues or profits of the land or thing in question, 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. He is said to be the arm and hand of the court, a 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.

FACTS:Defendant, Romana Gauzon executed and delivered to the plaintiff (Compaia General de Tabacos de Filipinas) a mortgage upon an hacienda known as "San Jose".

The said defendant (Romana Gauzon) having failed to pay the said mortgage, the plaintiff (Compaia General de Tabacos de Filipinas) commenced an action for the foreclosure of said mortgage, and asked that a receiver be appointed to take change of the property in question, pending the said action.

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.

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).

After a careful consideration of the various items of the account of the receiver, Judge McCabe ordered the receiver, Juan Pomar, to pay into court the sum of P7,883.76, a balance which he ought to have had in his possession.

Defendant appealed to this court.

ISSUES: 1. WON 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.2. WON 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.3. WON the court erred in not approving the disbursement made by the receiver of the P3,001.94 delivered to theaparcerosas their share of the crop.4. WON the court erred in reducing to P1,000 the P4,860.87 which the receiver claimed as compensation for his services5. WON 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.

HELD:First issue: 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.

Second issue: 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. There was absence of express authority and absence of proof of the absolute necessity for incurring this item of expense

Third issue: It appears that the receiver delivered one-half of the sugar to the aparceroswithout deducting the amount of money and effects advanced to them. If he, in fact, advanced to the aparcerosthe said sum (P3,001.94) he should have deducted it from the amount due saidaparceros, 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, 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.

Fourth issue: 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. Considering the negligent manner in which the receiver administered the hacienda, 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.

Fifth issue: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 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 (Boothvs. Clark, 17 How. (U. S.),322, 331), to receive the rents, issues or profits of the land or thing in question (Bothvs. 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. (Wiswallvs. Kunz, 173 Ill., 110.)" 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.

We find no reason for changing or modifying the decision of the lower court, and the same is hereby affirmed, with costs.

G.R. No. L-25729 November 24, 1926THE BELGIAN CATHOLIC MISSIONARIES, INC. vs MAGALLANES PRESS, INC., ET AL.,defendants.JOSE MARIA MEMIJE,appellant.DOCTRINE: In a mortgage loan, the proceeds of the property is deemed under conservatorship and not replevin upon payment of bond. Replvin is the delivery of ownership to its owner. Pending the dispute of ownership (who should get the insurance proceed), the proper remedy is conservatorship and not replevin. FACTS: Magallanes Press obtained a loan from JP Heilberg with interest rate per annum SECURED by a CHATTEL MORTGAGE on the printing machineries. Later the successor company Magallanes Press Corporation (take note that the original company and the successor company is different) contracted another LOAN from Belgian Catholic Missionaries and SECURED THE SAME CHATTEL MORTGAGE. (This means that the printing machine was a security to 2 different loans at the same time).JP Heilberg transferred the credit to Jose Marie Memije. Now there is a subrogation of rights. Memije will collect on behalf of JP Heilberg. Also Memije is entitled to additional credit because the HEADS of Magallanes Press Co formerly contracted loans to Memije to pay JP Heilberg. The printing machines, subject to the chattel mortgage was destroyed by a fire. Gladly, the machines was covered by an insurance and such insurance proceeds was supposed to be paid to Mimeji. 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 respective insurance policies, which amounted to P7,686.45, but due to the issuance of the above-mentioned writ of preliminary injunction, payment could not be made.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 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.ISSUE: What is the proper remedy of the insurance proceeds? Replevin or Conservatorship?HELD: 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 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.

Topic: Distinguised a Receiver from a Sheriff

G.R. No. L-29295 October 22, 1928J.M. PO PAUCO vs. DOLORES SIGUENZA, et al. WISE & CO.

FACTS

J.M. Po Pauco obtained final judgment in his favor against the spouses 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. In another civil case, 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.

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.

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

ISSUETo determine which has the better right to the net proceeds of the sale of said sugar

RULING

The proceeds of the sale or sum mentioned is in the custody of the receiver & not of a sheriff. Thus, not within the the reach of judicial processes.

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 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.

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.

Topic: Receivership (Rule 59)EFFECT OF DISMISSAL OF THE CASE

ERNEST BERG, (plaintiff-appellant)vs.VALENTIN TEUS, (defendant-appellee)G.R.No.L-2987February20,1951FACTS:Ernest Berg brought the action against Valentin Teus to foreclose a real estate and chattelmortgage executed in November, 1944, to secure six promissory notes of the aggregate value ofP80,000 and payable on demandtwo years after declaration of armistice between the UnitedStates and Japan.

Mortgagor had undertaken, among other things, to insure and pay the taxes on the mortgagedproperties; not to alienate, sell, lease, encumber or in any manner dispose thereof; and to keepand maintain the said properties in good order and repair.Teus had failed to keep taxes fully paid; had made material alterations on the premises, and hadsold and conveyed them to Central Azucarera del Norte. The mortgage shall be deemed to beautomatically foreclosed and the mortgagee may forthwith proceed to foreclose this mortgageeither extrajudicially, even after the death of the mortgagor,in pursuance of the provisions ofAct No. 3135, as amended

On basis of this agreement it was prayed that the mortgage be declared automaticallyforeclosed and the plaintiff entitled to immediate possession of the properties in question.Berg's attorney also asked for the appointment of a receiver.

Defendant having moved for the dismissal of the complaint on the grounds thatplaintiff's causeof action had not accrued by reason of the executive ordersand having opposed the motionfor receivership,Judge ZoiloHilario entered an order holding that as to the collection of the sixnotes the suit had been prematurely brought, setting the cause for trial on the merits because, thereasons alleged in the motion to dismiss were not "indubitable" with reference to theappointment of a receiver sought by the plaintiff.The moratorium ought not to interfere withthe plaintiff's motion for appointment of receiver.

Defendant filed a new motion to dismiss; Judge Luis Ortega, replaced Judge Hilario, ignoring thelatter's order entered the order now on appeal by which the entire action was quashed on thetheory advanced in the motion to dismiss.

The new order was silent on both the application for receivership and the prayer that theplaintiff be adjudged authorized by the terms of the mortgage to foreclose it extrajudiciallyand seize the properties.Judge Ortega opined that Executive Orders Nos. 25 and 32 were still in force unaffected byRepublic Act No. 342 as to debts contracted during the Japanese occupation.Plaintiff contended that those executive orders had passed out of existence by thedisappearance of the emergency contemplated thereby.The constitutionality of Executive Orders Nos. 25 and 32 and Republic Act No. 342 and alliedissues 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.

ISSUE:Whether on basis of this agreement the mo9rtgage be declared automatically foreclosed and the plaintiff entitled to immediate possession of the properties in question; and,whether there is a need for appointment of a receiver.

HELD:The alleged violation of the conditions of the mortgaged 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, Receivership is an auxiliary remedy and the dismissal of the main action would eliminate the only basis for the appointment of receiver and thus completely bar the door to any relief from mischiefs.

Judge Hilario 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 the 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. A 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.

GR No. 155408

Julio A. Vivares and Mila G. Ignaling v Engr Jose J. Reyes

The kernel dispute in this petition under Rule 45 is the legality of the May 22, 2001 Resolution of the Camiguin Regional Trial Court (RTC), Branch 28 in Civil Case No. 517, which placed the estate of Severino Reyes under receivership.The Court of Appeals (CA) saw it differently in CA-G.R. SP No. 67492its June 18, 2002 Decision 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.The FactsSeverino 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.Petitioner Vivares was the designated executor of Torcuatos last will and testament, while petitioner Ignaling was declared a lawful heir of Torcuato.Petitioners instituted an action forPartition and Recovery of Real Estatebefore the Camiguin RTC. What was being contested were the properties that were still in the name of Severino.On March 15, 2000, petitioners filed a Motion to Place Properties in Litigation under Receivershipbefore 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 name several common properties. The petitioners prayed to place the entire disputed estate of Severino under receivership.They nominated Lope Salantin to be appointed as receiver.

Respondent opposed the appointment of receivership and asserted that the transfer in his name of the said properties was a result of oral partition.On September 19, 2000, respondent filed for cancellation of the receivership and offered to pay a bond in an amount fixed by court.Respondent also filed a motion to cancel the notice of lis pendens on certain properties owned by Elena Unchuan.RTC ruled in favor of the petitioner and dismissed the motion to cancel the receivership and lift the notice of lis pendens on the properties allegedly owned by Elena.

CA reversed the ruling, cancelled the receivership and lifted the notice of lis pendens on the properties owned by Elena. The case was then remanded to the RTC for further proceedings.

Issue:

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. WHETHER OR NOT THE RECEIVERSHIP SHOULD BE CANCELLED WITH THE WILLINGNESS TO PAY BOND BY THE RESPONDENT.

Ruling:

The Court sustained the ruling of the CA with some modifications. On the first issue: Petitioners 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. There was no sufficient cause or reason to justify placing the disputed properties under receivership.On the second issue: petitioner is willing to post a counterbond in the amount to be fixed by the court based on Sec. 3, Rule 59. 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.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.

6. Chavez vs. CA, GR. No. 174356, January 20, 2010ABAD, J.:

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 cases. The grant or denial of this provisional remedy will still depend on the need for it in the particular action.

Facts 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 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.

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 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.

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.

ISSUES: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.

RULING:

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. The elements of forum shopping are the same as in litispendentia where the final judgment in one case will amount to res judicatain 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.

Here, however, the various suits Fidela initiated against Evelina and Aida involved different causes of action and sought different reliefs. The present civil actionthat 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 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.

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, 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.

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 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.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, areREVERSED and SET ASIDE.The receivership is LIFTED and the Court of Appeals is directed to resolve CA-G.R. CV 85552 with utmost dispatch.ANTONIETTA O. DESCALLAR, petitioner, v.THE HON. COURT OF APPEALS and CAMILO F. BORROMEO, respondents.G.R. No. 106473July 12, 1993

TOPIC: Where rights of a party are still to be determined; ProprietyDOCTRINE OF THE CASE: 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.

"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."

Only when the property is in danger of being materially injured or lost... or if portions thereof are being occupied by third persons claiming adverse title thereto, may the appointment of a receiver be justified

FACTS:

Camilo Borromeo, a realtor, filed against petitioner Antonietta Descallar 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

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

Descallar alleged that the property belongs to her as the registered owner. 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 which Judge Mercedes Golo-Dadole granted the application for receivership and appointed her clerk of court as receiver with a bond of P250,000.00.

Descallar appealed the decision before the CA but appellate court dismissed the petition.

ISSUE 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

RULING: 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. Her title and possession cannot be defeated by mere verbalallegations 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. Her Torrens certificates of title are indefeasible or incontrovertible

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.

"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... 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 CourtThat 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 thatinactionsinvolvingtitletorealproperty,theappointmentofareceivercannotbeentertainedbecauseitseffectwouldbetotakethepropertyoutofthepossessionofthedefendant,exceptinextremecaseswhenthereisclearproofofitsnecessitytosavetheplaintifffromgraveandirremediablelossordamage,it is evident that the action of the respondent judge is unwarranted and unfair to the defendants. (Mendoza vs. Arellano, 36 Phil. 59;

During the pendency of this appeal, Judge Dadole rendered a decisionupholding Borromeo's claim to Descallar's property,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 receivership which the respondent Court of Appeals affirmed in its decision of July 29, 1992 in CA-G.R. SP No. 27977, the petition forcertiorariis 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. MAN1148, are hereby ANNULLED and SET ASIDE. Costs against the private respondent.

MAKING ENTERPRISES, INC. AND SPOUSES JOAQUIN TAMANO AND ANGELITA TAMANO, PETITIONERS, VS. JOSE MARFORI AND EMERENCIANA MARFORI, RESPONDENTS.

[ G.R. No. 152239, August 17, 2011 ]

Where rights of a party are still to be determined; Propriety

FACTS:

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 improvements found on the leased premises shall become the PPA's sole property. Marfori then incurred huge expenses for the rehabilitation of the building and leased some portions of the building to the PPA.

On April 10, 1987, Marfori executed adacion en pagoand assignment of rights transferring the ownership of the Marsman Building to Making Enterprises, Inc. (Making), on the condition that Making would assume all of Marfori's obligations.

Marfori's 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. 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. She sought, among others, to annul thedacion en pagoand 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.

RTC denied the prayer for the issuance of a writ of preliminary injunction and the application for receivership.

Emerenciana filed before the CA a petition for certiorari and receivership with prayer for preliminary injunction. However, the CA dismissed the petition for being insufficient in form and substance.

Marfori, on the other hand, was the accused in an action for estafa and violation of Batas Pambansa Blg.22 with the Prosecutor's Office of Caloocan City.

On November 27, 1996, Marfori and his wife had filed with this Court a Consolidated Petition 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. SC referred the petition to CA.

CA granted the petition and appointed a receiver. 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.

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.

RULING:

Yes

1st issue: 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 the1997 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;

Respondents 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, respondents must prove a clear right to its issuance. This they failed to do.

It must be stressed that the issue of the validity of thedacion en pagoand 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 parties depend on the determination of adverse claims of legal title to real property and one party is in possession.Case: Commodities Storage & Ice Plant Corporation vs. CADoctrine: Appointment, Section 1Facts: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. The loan was secured by a mortgage over the ice plant and the land on which it stands. Petitioners failed to pay their loan. The bank extrajudicially foreclosed the mortgage and the ice plant was sold by public bidding on March 22, 1993. Respondent bank was the highest bidder and it registered the certificate of sale on September 22, 1993. Petitioner spouses filed a case against respondent bank for reformation of the loan agreement, annulment of the foreclosure sale, and damages. The RTC dismissed the complaint for failure to pay the docket fees.

On October 28, 1994, another civil case was filed by petitioners for damages, accounting and fixing of redemption period. An Urgent Petition for Receivership was also filed on November 16, 1994. They prayed for the appointment to save the ice plant, conduct its affairs and safeguard its records during the pendency of the case. The RTC assigned petitioners nominee as receiver. On appeal, the order was annulled and set aside.

*Important part of the case* 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":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.

Issue: WON the assignment of a receiver is justified.

Held: NO.[Requisite of petition for receivership under section 1 (b)]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 reservation, said remedy cannot be applied for and granted.

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.In fact, at the hearing on respondent bank's 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. This statement has not been disputed by petitioners.

Augusto, Mel Jason T. RULE 59-RECEIVERSHIPHarden vs Director of Prisons, G.R. No. L-2349, October 22, 1948TOPIC: JURISDICTIONDOCTRINE: While a court cannot give its receiver authority to act in another state without the assistance of the courts thereof, it may act directly upon the parties before it with respect to the property beyond the territorial limits of its jurisdiction and hold them in contempt if they resist the courts orders with reference to its custody or disposition. Whether the property was removed before or after the appointment of the receiver is likewise immaterial.

ANTECEDENT FACTS: A receiver was appointed and a preliminary injunction was issued restraining Fred M. Harden and his codefendant, Jose Salumbides from transferring and alienating, except for a valuable consideration and with the consent of the court, moneys, share of stock and other properties and assets, real and personal, belonging to the conjugal partnership. When Mrs. Harden found out that Fred M. Harden transferred to the Hongkong and Shanghai Banking Corporation and the Chartered Bank of Asia, Australia and China, both in Hongkong, over 1,000 pesos in drafts or cash and to Virginia Recreation Center, Long Beach, California, P20,196.80, and to an unknown person, P50,000; she(Mrs. Harden) moved the court to order Fred Harden to return all these amounts and to and to redeposit them with the Manila branch of the Chartered Bank of India, Australia & China. The court order, through Judge Pena stated that Fred Harden should do so within the period of 15 days from the receipt of a copy of said order. But when she filed a petition of certiorari to the Supreme Court and all other various motions, said order was modified, stating that Fred Harden should do so within the period of 5 days from the receipt of a copy of said order with the inclusion of a decree which states, among others: ..Fred M. Harden be ordered to deliver the certificate covering the 368,553 Balatoc Mining Company shares either to the Clerk of this Court or to the receiver in this case for safekeeping after his compliance with the order of January 17, 1948 and 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.NOTE: the last part of the order was the culmination of another series of motions with their corresponding hearings. So, it is important to know the facts of such motions. The facts culled from the pleadings are the following: the receiver appointed in the main case prayed that the certificates of stock of the conjugal partnership, 368,553 shares of Balontoc Mining Co., alleged to be in the possession of the defendant, be ordered turned over to him (receiver) so that he may registered them. The court authorized Harden to register not later that June 30. Mrs. Harden complained when her husband failed to comply with said order and prayed he be ordered to show cause why he should not be declared in contempt. Harden filed a perfunctory compliance. In his "compliance", 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. After some time, the receiver informed the court that despite the expiration of December 31, 1947, Fred Harden had not been registered said certificate. Upon his request, he is given an extension until March 31, 1948 to comply with said order. Mrs. Harden prayed that defendant Harden "be ordered to deliver the certificate covering the 368,553 Balatoc Mining Co. shares either to the clerk of the court or to the receiver herein for safekeeping, immediately after registering them pursuant to Republic Act No. 62. It was in stage of the case that the present petitioner was committed to jail for failing to comply with the said orders of the court. Fred Hardens imprisonment in New Bilibid, Muntinlupa Rizal is to be continued until he complies with the said orders of the court.

ISSUE: Whether or not the court has no jurisdiction of the property in a foreign country, and that it has no power to effect an action for receivership to the persons of such property.

RULING: The High Tribunal ruled in the negative.

The Supreme Court said that while a court cannot give its receiver authority to act in another state without the assistance of the courts thereof, it may act directly upon the parties before it with respect to the property beyond the territorial limits of its jurisdiction and hold them in contempt if they resist the courts orders with reference to its custody or disposition. Whether the property was removed before or after the appointment of the receiver is likewise immaterial.

Further, the Court citing the case of Sercomb vs. Catlin, where that Supreme Court of Illinois ruled: 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.

Anent to the issue of whether or not the penalty complained of is cruel, unjust or excessive, the Supreme Court ruled otherwise.

The Court said that the penalty 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. To order 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.

But take note of the dissenting opinion of Justice Perfecto (although this is not binding): Section 7, Rule 64 Rules of Court which states:

SEC. 7.Imprisonment until ordered obeyed. 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.

(Note that this provision pertains to the old Rule, as this case was decided on year 1948.)

Justice Perfecto if of the opinion that the reglementary provision is null and void per se and, therefore, should be denied compliance. Perhaps, there is no other provision in our statute books more revolting to conscience, more shocking to the most elemental sense of justice, and most unreasonably Draconian. The provision is characterized by such an extreme of arbitrariness that is comprehensible only under a dictatorial system of government. (Something interesting to ponder, isnt it?)

CALO VS. ROLDANG.R. No.L-252. March 30, 1946

DOCTRINE OF THE CASE:Appointment of a receiver is not proper or does not lie in action of Injunction.

FACTS:Plaintiffs Calo and San Jose, as owners and possessors of certain parcels of rice land in Laguna filed a complaint against the defendantsRegingRelova and certain TeodulaBartolome alleging that the latter, through the use of force, stealth, strategy and intimidation, intend or are intending to enter and work or harvest whatever existing fruits found on the land. Included in the complaint is a prayer for an issuance of a writ of preliminary injunction to be issued ex parte to restrain, enjoin and prohibit defendants from entering, interfering with or harvesting the lands belonging to plaintiffs spouses with an accompanying bond of 200. Defendants opposed the issuance of the writ of preliminary injunction on the ground that they are the owners of the lands and have been in actual possession since 1925 and the plaintiffs have never been in possession thereof.The CFI of Laguna denied the petition for preliminary injunction on the ground that the defendants were in actual possession of said lands. Motion for Reconsideration was filed, pending resolution plaintiff filed an urgent petition ex parte praying that their MR of the order denying petition for preliminary injunction be granted and/or for the appointment of a RECEIVER of the properties involved, on the ground that the plaintiffs have an interest in the properties and fruits and that the appointment of a receiver was the most convenient and feasible means of preserving, administering and disposing of the properties in litigation. Judge Roldan, who was the judge appointed, replacing Judge Rilloroza granted the petition for appointment of and appointed a receiver in the case.

ISSUE: Whether or not the granting of the petition for the appointment of a receiver was proper.

RULING:No, the plaintiffs action is one of ordinary injunction for which they alleged that they are the owners of the lands involved and were in actual possession thereof and that the defendants without any legal right, though the use of force, intimidation, stealth, threat and strategy and prayed that the defendants be restrained, enjoined and prohibited from entering in, interfering with or harvesting the lands.The provisional remedies (attachment, preliminary injunction, receivership, delivery of personal property are remedies to which party litigant may resort for the preservation or protection of their rights or 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 cannot applied for and granted. To each kind of action/sa proper remedy is provided for law,-Preliminary prohibitory injunction, lies when the relief demanded in the complaint consists in restraining the commission/continuance of the act complained of, either perpetually or for a limited period, and the other conditions required by Sec. of Rule 60. The purpose is to preserve the status quo of the things subject of the action or the relation between parties, in order to protect the rights of plaintiff respecting the subject of the action during the pendency of the suit.-Receiver, may be appointed to take charge of personal/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. The property or fund must 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.According to the complaint of the plaintiff, the action is one of ordinary injunction based on the allegation in the complaint.Therefore it is evident that the respondent judge acted in excess of his jurisdiction in appointing a receiver. 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 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 cannot ask for the appointment of a receiver of a 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 other persons in preserving and administering it.

Ylarde vs. Enriquez

FACTS: This is a petition for certiorari to vacate an appointment of a receiver by order of the Court of First Instance of Nueva Ecija.Eugenia Ylarde was the legal or common law wife of one Simplicio Rosario, now deceased. 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. After Eugenia Ylarde's legal or common-law husband died, she executed an extrajudicial partition 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's name cancelling the original document.In September, 1945, Bienvenido, Magdalena and Apolinario all surnamed Sabado, Simplicio Rosario's collateral relatives, brought the action against Eugenia. During the pendency of the case, Eugenia died and was substituted by Rodolfo, Flor (through a guardian ad litem) and Julia all surnamed Ylarde.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 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) denied that the petitioners are in "physical" possession of the property in dispute.ISSUE: Whether or not the lower court abused its discretion in appointing a receiver.HELD: YES. Appointment of receiver is hereby revoked.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 be adequate to protect the plaintiffs from any possible injury consequent upon being deprived of the possession of the property.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. 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.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.

G.R. No. L-3430 August 7, 1906ROCHA & CO., Sociedad en Comandita,plaintiff,vs.A. S. CROSSFIELD, Judge of the Court of First Instance of Manila, and FRANCISCO T. FIGUERAS,defendants.DOCTRINE OF THE CASE: APPOINTMENT OF A RECEIVERFACTS: 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 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.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 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.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 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.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 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.ISSUE: WHETHER OR NOT THERE IS A VALID GROUND FOR APPOINTMENT OF A RECEIVER?RULING: 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:(1) When a corporation has been dissolved, or is insolvent, or is in imminent danger of insolvency, or has forfeited its corporate rights.(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. 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. AmblerThe 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.

MILA CABOVERDE TANTANO and ROSELLER CABOVERDE, petitioners VsDOMINALDA ESPINA-CABOVERDE, EVE CABOVERDE-YU, FE CABOVERDE-LABRADOR, and JOSEPHINE E. CABOVERDE, respondents

VELASCO, JR.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 DominaldaEspina-Caboverde's application for receivership and appointing the receivers over the disputed properties.The Facts Petitioners Mila CaboverdeTantano (Mila) and RosellerCaboverde (Roseller) are children of respondent DominaldaEspina-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 Zamboangadel Norte, having purchased them from their parents, Maximo and DominaldaCaboverde.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 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.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. The RTC would later issue a Resolution granting the Motion to Admit Amended Answer. 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.

The IssuesPetitioners raise the following issues in their petition:(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(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.The RulingThe petition is impressed with merit. 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. 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 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.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.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. 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. 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 court may, in its discretion, at any time after the appointment, require an additional bond as further security for such damages.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, Zamboangadel Norte, in Civil Case No. S-760, approving respondent DominaldaEspina-Caboverde's application for receivership and appointing the receivers over the disputed properties are likewiseSET ASIDE.

Case: Citibank, N.A. (Formerly First National City Bank), petitioner, vs. The Honorable Court of Appeals and Douglas F. Anama, respondents. G.R. No. 61508March 17, 1999

Case doctrine:The Court of Appeals found that the requirements of Section 5, Rule 59 on receivership were not complied with by the petitioner, particularly the filing or posting of a bond and the taking of an oath. It should be noted that under the old Rules of Court which was in effect at the time this case was still at trial stage, a bond for the appointment of a receiver was not generally required of the applicant, except when the application was made ex parte.

FACTS:

In considering for a loan obtained from Citibank, N.A., the defendant Douglas Anama executed a promissory note, dated November 10, 1972, to pay the plaintiff bank the sum of P418,000.00 in sixty (60) equal successive monthly installments of P8,722.25, starting on the 10th day of December 1972 and on the 10th of every month thereafter.

To secure payment of the loan, private respondent Anama also constituted a Chattel Mortgage of even date in favor of petitioner, on various machineries and equipment located at No. 1302 Epifaniodelos Santos Avenue, Quezon City.

For failure and refusal of the private respondent to pay the monthly installment due under the said promissory note since January despite repeated demands, petitioner filed a verified complaint against private respondent Anama for the collection of his unpaid balance on the said promissory note, for the delivery and possession of the chattels covered by the Chattel Mortgage preparatory to the foreclosure thereof

Anama submitted his Answer with Counterclaim, denying the material averments of the complaint, and averring, inter alia that the remedy of replevin was improper and the writ of seizure should be vacated.

The trial court, upon proof of default of the private respondent in the payment of the said loan, issued an Order of Replevin. Despite the issuance of the said order however, actual delivery of possession did not take place because of negotiations for an amicable settlement. A pre-trial conference was held and the petitioner then took over private respondents business as receiver. But when settlement failed, the lower court tried the case on the merits.

Petitioner then presented a Motion for the Issuance of an Alias Writ of Seizure, ordering the sheriff to seize and dispose of the properties involved. Private respondent opposed the motion claiming, among others, (1) that Citibanks P400,000 replevin bond to answer for damages was grossly inadequate; (2) that he was never in default to justify the seizure; xxx (4) that his supposed obligations with Citibank were fully secured and his mortgaged properties are more than sufficient to secure payment thereof; xxx

The trial court issued an Order granting the Motion for Alias Writ of Seizure. Private respondent moved for reconsideration of the aforesaid order but the same was denied. As a consequence, the sheriff seized subject properties, dismantled and removed them from the premises where they were installed, delivered them to petitioners possession and advertised them for sale at public auction.

Private respondent filed with the CA a Petition for Certiorari and Prohibition with Injunction. Finding that the trial court acted with grave abuse of discretion amounting to excess or lack of jurisdiction in issuing the assailed resolutions, the CA granted the petition, holding that the provisions of the Rules of Court on Replevin and Receivership have not been complied with, in that (1) there was no Affidavit of Merit accompanying the Complaint for Replevin; (2) the bond posted by Citibank was insufficient; and (3) there was non-compliance with the requirement of a receivers bond and oath of office. Hence the present petition for certiorari with TRO by Citibank.

ISSUE: 1. WON respondent court erred in practically and in effect rendering judgment on the merits against the petitioner by ordering the return of the machineries and equipment and its accessories to their original and respective places and positions.2. WON respondent erred in finding that the issuance of replivin was improper3. WON respondent erred in finding that the bond posted by the petitioner is questionable and/or insufficient.4. WON the respondent erred in finding that the petitioner did not comply with the provisions of sec. 5, rule 59 by failing to post a receiver's bond.5. WON respondent erred in finding that the hon. jorge r. coquia acted with grave abuse of discretion amounting to excess or lack of jurisdiction in dealing with the situation.

RULING:

No. CA found that the requirements of Section 5, Rule 59 on receivership were not complied with by the petitioner, particularly the filing or posting of a bond and the taking of an oath. However, the old Rules of Court which was in effect at the time this case was still at trial stage, a bond for the appointment of a receiver was not generally required of the applicant, except when the application was made ex parte. CA was right in finding a defect in such assumption of receivership in that the requirement of taking an oath has not been complied with.

For erroneously issuing the alias writ of seizure without inquiring into the sufficiency of the replevin bond and for allowing petitioner to assume receivership without the requisite oath, the Court of Appeals aptly held that the trial court acted with grave abuse of discretion in dealing with the situation. Under the Revised Rules of Court, the property seized under a writ of replevin is not to be delivered immediately to the plaintiff. This is because a possessor has every right to be respected in its possession and may not be deprived of it without due process. Petition DISMISSED.

RULE 59. RECEIVERSHIP

Instruction: DischargeCase: Martinez vs. Grano (49 Phil. 214)Doctrine of the Case:A receiver who asserts ownership over the property in his hands as receiver and refuses to submit any account of the financial status of said property should be removed by the court having charge of the receivership.Facts:Estanislao Reyes was appointed as receiver and entered into possession the property in controversy in January 1921. During this period, the property did not produce enough income to meet the expenses and pay the sum due to the first mortgage, El Hogar Filipino. Thus, he recommended to the court that the property be sold. The court made an order authorizing the receiver to sell the land with the condition that the proceeds of the sale must be deposited to the clerks office. Meanwhile, receiver reported that there is no purchaser of the property and he himself came forward making an offer to take the property with an understanding that he would assume all obligations encumbering it. Defendant, ClemenciaGrano, opposed the sale because it included the three parcels of property belonged to her. Thus, the court rendered decision excluding the three parcels of land which belongs to Grano.When the decision was returned to the lower court, Reyes submitted a motion asking the court to declare him as owner of the property. In response, Judge Paredes instead declared that the approved sale was a nullity on the ground that Reyes violated the condition imposed upon by the court. Thus, Reyes was treated not as a purchaser but as a receiver of the property. In view of this, Reyes still pretended to be the owner of the property by virtue of the purchase and still refused to submit any account of his receivership in the subsequent years. Thus, the judge revoked his appointment as receiver and ordered him to rendered an account and deliver the property immediately to the parties in interest all the properties on its present condition.Issues:Whether or not appellant should be removed as receiver over the property in controversy.

Held:Yes.There cannot be the slightest doubt of the power of the lower court to remove a receiver and terminate a receivership under Section 180 of the Code of Civil Procedure; and in view of the attitude of the appellant, the impropriety of his longer remaining in office is apparent. The court, however, is of opinion that if upon the prompt submission and examination of the receivers accounts, it should be found that he has actually paid out for the conservation and protection of the property which is the subject of the receivership more than he has received by way of income, or should have received in the exercise of reasonable diligence, such balance in his favor should be recognized as lawful claim constituting a lien on the property.

Actions against Receivers; Leave of CourtRule 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. The rule talks of the current receiver of the company and not the previous receiver. 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 receivers performance of duties through improvident suits. 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.

Topic: DischargeCASE: G.R. No. 49031 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. August 28, 1944

DOCTRINE OF THE CASE:The receiver, being an officer of the court 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.

FACTS:Jose Platon was appointed receiver of the property of the late Servanda Mailom while the civil case regarding the annulment of the sale of certain parcels of land made by the spouses Roman Castillo and Ser