CASE DIGESTS ON RECEIVERSHIP
Alcantara v. Abbas
2
Abrigo v. Kayanan
2
Philippine Trust Company v. Santamaria
3
Arranza vs. B.F. Homes Inc.
3
Commodities Storage vs. Court of Appeals
4
Pacific Merchandising Corporation vs. Consolacion Insurance
5
Dolar v. Sundiam
6
Velasco vs. Gochuico
5
Bonoplata vs. Ambler
7
Martinez vs. Graño
7
Alcantara v. Abbas
Abrigo v. Kayanan
FACTS:
•
Alcantara was designated by the court as receiver of
the tractor owned by Bacaron.
•
With the court’s approval, Alcantara leased the tractor
to Sablada. Sablada failed to return the tractor. The
court ordered Alcantara to take steps to recover the
tractor.
•
Meanwhile Bacaron petitioned the court to relieve
Alcantara as receiver alleging that he neglected his
duties, and to appoint him as the receiver instead.
•
Respondent judge relieved Alcantara and appointed
Bacaron as receiver of the tractor, without bond and
with authority to receive the rentals in the hands of
Alcantara.
FACTS:
•
Respondents alleged that they are the co-owners of a
parcel of land. They instituted an action to partition the
land.
•
Thereafter, they filed an urgent motion to appoint a
receiver on the ground that numerous squatters had
invaded the property.
•
The court granted the motion appointing the clerk of
court as the receiver.
•
Abrigo challenged this action claiming that there was
no legal basis for the appointment of a receiver. So he
posted a bond to discharge the receiver but this was
denied.
ISSUES:
W/N the reliever of Alcantara as receiver and the
appointment of Bacaron is proper.
RULING: No.
“Neglect of duties”
•
Alcantara already asked permission to sue Sablada for
replevin. He even suggested that Sablada be held in
continuous contempt and be imprisoned until he
placed the tractor at the proper place.
•
Hence, Alcantara undertook the necessary steps to
take possession.
Defendant as receiver
•
A receiver ought to be an indifferent person between
the parties and should be impartial and disinterested.
•
Bacaron was the defendant. His personal interest
would conflict with his duties to the court and the
plaintiff.
•
Moreover, there was no bond submitted.
ISSUE:
W/N the appointment of the receiver is proper.
RULING: No.
•
A receiver who is also burdened with his duties as
clerk of court cannot be in a better position than the
actual possessors in dealing with the squatters.
•
A receiver is not endowed with extra-legal power to
take the law in his hands with a view to quell and
disband the squatters short of taking legal action, nor
is he conferred with a magic wand not possessed by
herein party litigants as property owners.
•
The receivership places the parties at a disadvantage.
The receiver stands between the owners and the
squatters so much so that any action of the ownerspossessors will have to pass through the receiver. A
receiver is not appointed for the benefit of the parties.
Philippine Trust Company v. Santamaria
Arranza vs. B.F. Homes Inc.,
Facts:
Petitioner: Philippine Trust Co.
Defendant: F.M. Yaptico & Co., Ltd.
Facts:
•
BF Homes suffered from mismanagement issues. It
was placed under rehabilitation receivership, which at
the time was governed by the rules under the SEC.
•
Petitioners were demanding the delivery of the basic
services that were promised to them when they
purchased their respective properties.
•
Plaintiffs filed a case with HLURB. BF Homes resisted
and claimed that jurisdiction should be lodged with the
SEC.
•
•
•
•
•
The Court of First Instance of Iloilo rendered
judgements in favor of Philippine Trust Co. in two civil
cases. The defendant in said cases owe Philippine
Trust about P110,000.
Philippine Trust asked the court to issue an execution
pending the defendant’s appeal, but such request was
denied. The CA affirmed CFI’s judgment.
Philippine Trust once again asked the lower court to
issue an execution on the judgments, which was
granted. The sheriff made return that no property of
defendant could satisfy the judgement.
Philippine Trust asked the lower court to appoint a
receiver of defendant’s property on the ground that
defendant was fraudulently putting its property
beyond the reach of creditors, but it was denied.
Defendant asked the court to suspend the execution of
the judgments for a period of 4 months. The request
was opposed by Philippine Trust and it again renewed
its motion for the court to appoint a receiver
Issue: Whether the appointment of a receiver is valid.
Ruling:
•
The lower court exceeded its jurisdiction in suspending
the execution for the period of four months.
•
It is also the duty of the court to appoint a receiver for
the defendant, to protect and preserve its property for
the use and benefit of its creditors and in particular
Philippine Trust.
Transcript Notes:
•
The lower court should have granted the motion for
appointment of the receiver because the case has
already reached the stage of execution of the
judgment. In fact, there was already inordinate delay in
the execute.
•
The court did not immediately implement the writ of
execution and even ordered for its lifting.
•
There was also an allegation that the defendant was
already disposing of its property. It’s clear that the
intention of which is to refuse the satisfaction of the
judgment debt.
•
One of the grounds for the appointment of a receiver is
to preserve the property after judgment and to aid its
execution.
Issue: W/N SEC, not the HLURB, has jurisdiction over the
complaint.
Ruling. No.
Jurisdiction is with the HLURB.
•
The fact that respondent is under receivership does not
divest HLURB of its jurisdiction.
•
A person placed under receivership will not lose its
personality. The appointment of a receiver does not
dissolve a corporation, not does it interfere with the
exercise of its corporate rights.
Nature of a receiver
•
A receiver is a person appointed by the court or a
quasi-judicial agency for the purpose of preserving and
conserving the property, to prevent it from loss or
destruction.
•
It is the duty of the receiver to administer the assets of
the receivership estate
•
He acts in a fiduciary capacity and with impartiality
towards all interested persons.
Commodities Storage vs. Court of Appeals
Summary:
Spouses Trinidad obtained a loan from respondent bank
to finance the purchase of the Sta. Maria Ice Plant & Cold
Storage and they failed to pay their loan. The bank
extrajudicially foreclosed the mortgage. An “Urgent
Petition for Receivership” was filed on by the spouses
claiming that the appointment of a receiver is justified
under Section 1 (b) of Rule 59. The SC said the
assignment of the receiver was not justified.
Doctrine:
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.
Facts:
In 1990, petitioner spouses Victor and Johannah Trinidad
obtained a loan of P31,000,000.00 from 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 petitioner’s nominee as receiver. On appeal,
the order was annulled and set aside.
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":
•
•
Danger to the lives, health and peace of mind of the
inhabitants living near the Sta. Maria Ice Plant;
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;
•
The rapid reduction of the Ice Plant into a scrap heap
because of evident incompetence, neglect and
vandalism.”
Issues Ratio:
Was the assignment of a receiver justified?
No. 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.
Transcript Notes:
•
The Supreme Court did not allow the appointment of
the receivership because there is no sufficient basis.
•
One of the formal requisites for receivership is notice
and hearing in order to determine if there is a factual
basis to support the ground in which the applicant
relied upon.
•
There is no factual basis because it is undisputed that
the alleged damage to the ice plant causing emission
of toxic fumes has already been repaired.
•
Even the plaintiff did not dispute that the bank already
took steps to repair the damage. So there is no basis
that the ice plant would be at the risk of being reduced
to scrap heap.
•
The court’s power of discretion should not be
disturbed even on appeal unless there is a showing
that the judge exercised with grave abuse of discretion.
Pacific Merchandising Corporation vs. Consolacion
Insurance, 73 SCRA 564
FACTS:
•
Pacific is already a judgment creditor in a previous case
filed against Leo Enterprises for the construction of a
theater.
•
The court ordered to levy the machineries in the
theater owned by Leo Enterprises.
•
Pajarillo was appointed as the receiver over the theater
itself. He promised to settle the judgment debt of Leo
Enterprises without the consent of the Court. The sale
of the machineries was cancelled because of this
representation.
•
In a case, the theater was awarded to Pajarillo.
•
When Pacific demanded payment from Pajarillo, the
latter denied liability contending that he was not
anymore the receiver of the property.
ISSUE:
W/N Pajarillo should be liable to pay.
RULING: Yes.
•
•
A receiver is an officer of the court exercising his
functions in the interest of neither plaintiff nor
defendant, but for the common benefit of all the
parties in interest.
A receiver has no right or power to make any contract
binding the property or fund in his custody or to pay
out funds in his hands without the authority or
approval of the court.
Pajarillo’s liability
•
Unauthorized contracts of a receiver do not bind the
court in charge of receivership.
•
The contract he entered into will constitute as his
personal undertaking and obligation, because it was
entered into without the authority of the court.
•
Pajarillo should pay his obligation otherwise he will
unjustly enrich himself.
Officer of the court
•
When a person refuses to obey a receiver, it is
considered as a contemptuous act.
•
Such person can be liable for contempt and shall be
liable to the receiver for the value of the property so
refused or neglected to be surrendered, together with
damages that may have been sustained by the party
entitled thereto as a consequence of refusal or neglect.
Velasco vs. Gochuico
GIST: A motion was made in court to appoint a receiver in a
foreclosure action.
ISSUE: Main is appealed or elevated to an appellate court.
RULING:
•
Although the case has been appealed and the appeal
perfected, the lower court still has the power to hear
and decide an application for the appointment of a
receiver.
•
IOW the approval of appointment of receiver may be
with the appellate court but the one who will execute,
appoint and see to it that the receiver discharges his
function is the lower court.
Notice and hearing must transpire
•
The power to appoint a receiver is a delicate one and
should be exercised with extreme caution and only
under circumstances requiring summary relief or where
the court is satisfied that there is imminent danger of
loss, lest the injury thereby caused be far greater than
the injury sought to be averted.
Dolar v. Sundiam
Facts:
•
•
•
•
•
•
•
•
Generoso Tupas, Jr. filed a petition with the CFI of Iloilo
for the allowance of his father’s will and the
appointment of an administrator for the estate.
After probate and appointment of the deceased’s
widow as administrator (later replaced by Luis Tupas),
Generoso sold to Lumampao the two parcels of land.
Luis, as administrator, asked the court for the partition
of the estate. The two parcels of land previously sold
was expressly assigned to Generoso. This was
approved by the probate court.
Lumampao filed a complaint for the recovery of the
two parcels of land against Generoso and Luis with the
CFI of Iloilo. The validity of the sale to him of these
properties was upheld by the court a quo.
Prior to the final adjudication, Luis filed with the
probate court a motion for authority to sell four parcels
of land which included the land previously sold to
Lumampao. The motion was approved. Luis sold to
herein petitioner Cirilo Dolar the four parcels of land.
While the validity of the sale to Lumampao was still
pending adjudication with the CA, the probate court
approved the deed of sale executed by Luis to Dolar.
The CA affirmed the lower court’s decision in declaring
Lumampao the owner of said parcels of land.
Lumampao filed with the probate court a petition for
the appointment of a receiver over the two parcels of
land conveyed and adjudicated to him.
Issue:
Whether or not the appointment of a receiver is proper
notwithstanding that the subject property is already in
custodia legis.
Ruling:
•
The general rule is that when a property is in custodia
legis, there is no need to appoint a receiver. The ruling
in this case provided an exception.
•
In probate proceedings, there is the appointment of an
administrator. If there is no will, then an executor will
be appointed.
•
The role of an administrator or executor is in the same
nature as that of a receiver which is to oversee the
property of another, in this case the estate of the
decedent.
•
If a receiver will be appointed when there is already an
administrator, it will result in a situation wherein
another person would be discharging the function of
the administrator.
•
However, in this case, the Supreme Court allowed the
appointment of a receiver notwithstanding the fact that
there was already an administrator.
•
The appointment of a receiver is based on equity. Since
Lumampao has already been considered as the legal
owner of the two parcels of land, it would be unfair or
inequitable if the court will not allow the appointment
of a receiver to protect his interests.
•
The Courts are not expected to know everything in the
discharge of its functions. That’s why it’s unfortunate
that the subject property was included in the inventory
of assets.
Bonoplata vs. Ambler, 2 Phil 392
Martinez vs. Graño
FACTS:
•
Reyes filed for a collection against Tan Tonco
amounting to 1,500 in Mexican currency.
•
Tan Tonco was allegedly insolvent but that he has real
properties to 2,000. It was also alleged that Tan
Tanco’s assets were more than enough to pay the
indebtedness.
•
Plaintiff prayed for the appointment of a receiver
because the assets, if left with Tan Tanco, will
dissipate or be wasted.
•
The CFI of Manila appointed a receiver to operate said
properties, to employ such persons and make such
payments and disbursements as needed.
GIST: The receiver already asserted ownership over the
property being the highest bidder during the sale.
ISSUE:
W/N the appointment of a receiver is proper.
RULING: No.
•
•
•
The appointment of a receiver is an equitable remedy.
Equitable remedy rests solely in the sound discretion
of the court. The objective of a receiver is to preserve
the property which is the subject matter of the case.
Before such remedy is resorted to, legal remedies must
first be exhausted.
Exhausting legal remedies
•
Plaintiff should have exhausted his legal remedy by
selling the real estate on the execution, and it not
appearing that there would be a deficiency on the sale,
the court had no jurisdiction to appoint a receiver.
Plaintiff’s claim
•
The claim amounted to only 1,500 Mexican dollars.
Whereas the property of Tan Tonco was valued at
2,000. It does not appear that there were any
judgments against him having priority to that of
plaintiff.
FACTS:
•
Reyes was appointed as a receiver of the subject
property. However, he was not able to pay the
mortgagee of the property.
•
Reyes asked the consent of the court to sell the
property. The court approved the request on the
condition that the proceeds thereof shall be deposited
with the clerk of court.
•
Reyes was not able to find a purchaser so he offered to
buy the property. The judge approved the sale but
Reyes did not turn over the proceeds of the sale to the
clerk of court.
ISSUE:
W/N Reyes should be removed as receiver.
RULING: Yes.
•
A receiver should be a disinterested person because he
is serving under the authority of the court and not for
the interest of either party.
•
If he is serving his personal interest, he is not expected
to faithfully discharge his functions as a receiver.
•
If he asserts ownership, that is a basis for the
termination of the receivership.
Termination of receivership may only be issued after due
notice and hearing of all interested parties.
Section 8
Before the termination of the receivership, the court shall
settle the accounts of the receiver, direct the delivery of
funds in his possession to the person adjudged to be
entitled to receiver them and order the discharge of the
receiver