1|SANTIAGO, Sara Andrea Nina P.

| 2017-0064 | Civil Procedure

Rule 59, Section 6. General powers of receiver. — Subject to the control of the court in
which the action or proceeding is pending a receiver shall
a. have the power to bring and defend, in such capacity, actions in his own name;
b. to take and keep possession of the property in controversy;
c. to receive rents;
d. to collect debts due to himself as receiver or to the fund, property, estate, person, or
corporation of which he is the receiver;
e. to compound for and compromise the same;
f. to make transfers;
g. to pay outstanding debts;
h. to divide the money and other property that shall remain among the persons legally
entitled to receive the same;
i. and generally to do such acts respecting the property as the court may authorize.
However, funds in the hands of a receiver may be invested only by order of the court
upon the written consent of all the parties to the action.
Rule 39, Section 41. Appointment of receiver. — The court may appoint a receiver of the
property of the judgment obligor; and it may also forbid a transfer or other disposition
of, or any interference with, the property of the judgment obligor not exempt from
execution.
Section 41, Rule 39 of the Rules of Civil Procedure provides for the exemption as to the
general powers of the receiver, which was enunciated under Section 6, Rule 59 of the
same Rules. Generally, a receiver has the power to make transfers, with the exception that
such transfer of the property is within the ambit of the judgment obligor for its execution.
In such a case, the receiver is not clothed with authority to transfer any property belong to
the judgment obligor for the purpose of aiding the execution of the judgment.
2|SANTIAGO, Sara Andrea Nina P. | 2017-0064 | Civil Procedure

G.R. No. L-24508 April 25, 1969

CENTRAL SAWMILLS, INC. vs. ALTO SURETY & INSURANCE CO., ET AL.; ALTO SURETY &
INSURANCE CO.
FACT This appeal from the order of the Court of First Instance of Manila dated October 4, 1960 in its civil case
S ordering the appointment of a receiver of the properties of defendant-appellant Alto Surety & Insurance
Company as well as from the order denying the motion for reconsideration thereof was certified to this
Court by the Court of Appeals in a resolution. Firstly, plaintiff has offered the provisions of Section 1,
Rule 61 of the Rules of Court, more particularly paragraph (d) thereof. In support of its claim, plaintiff
has cited the case of Philippine Trust Co. vs. Francisco Santamaria 53 Phil. 463, wherein the Supreme
Court ordered the appointment of a receiver of all the properties and assets of a judgment debtor in aid of
execution of judgment rendered against it. The action against the judgement debtor in the said case was
for the recovery of a sum of money. Secondly plaintiff has cited the provisions of Section 2, Rule 61 of
the Rule of court, quoted as follows:

SEC. 2. Creditor or stockholder may apply for receiver for corporation. — When a corporation has been
dissolved, or is insolvent or is in imminent danger or insolvency, or has forfeited its corporate rights, a
receiver may be appointed on the complaint of a creditor, stockholder, or member of the corporation.
In relation to this provision of law, Exhibits E-Receivership and G-Receivership tend to show that
defendant Alto Surety & Insurance Co., Inc., is in imminent danger of insolvency. As a matter of fact, no
less than the Insurance Commissioner of the Philippines has manifested in his letter dated May 16, 1960
and marked as Exhibit G-Receivership that the defendant corporation and is in a precarious financial
condition.
ISSUE Whether or not, in an action for the collection of a debt, where there is already a final and executory
judgment, the Court has the authority to appoint a receiver of the properties of the judgment debtor
which are not involved in the action, in aid of the execution of said judgement.
HELD The Court is of the opinion that the lower court exceeded its jurisdiction in suspending the execution for
the period of four months from June 30, 1929. We are also of the opinion that upon the facts shown in
this record, it was the duty of the court to appoint a receiver for the F. M Yaptico & Co., Ltd., to protect
and preserve its property and assets for the use and benefit of its creditors and, in particular, this
petitioner, under the provisions of section 483 of the Code of Civil Procedure. The very fact that the
judgments in question were rendered on October 19, 1927, and that no part of them has yet been paid,
and that F. M. Yaptico & Co., Ltd., has so far been able to defeat the petitioner in the collection of its
judgments, in a very strong and cogent reason why a receiver should be appointed.

This specific citation naturally gave defendant-appellant cause to oppose the petition on the ground that
underline provision thus cited, the receivership contemplated is only that "of the property, real or
personal, which is the subject of the action." It was only in its memorandum, which is not included in the
record on appeal but mentioned only in the opposition to the motion for reconsideration of the order
granting the receivership, that plaintiff-appellant must have referred the court a quo to other provisions
of the Rules, particularly, Section 2 of Rule 61 and Section 39 of Rule 39. Thus, as may be seen from the
above-quoted portions of its order of receivership, the said court, made reference to all the three
provisions which it said were "offered" or cited by the plaintiff-appellee, namely: Section 1 (d), Rule 61,
Section 2, Rule 61 and Section 39, Rule 39. Seemingly, the court a quo was uncertain as to which
particular one of these provisions was the proper basis of authority because it simply ruled that "after
considering the evidence and the argument adduced by the parties in relation to plaintiff's petition for
receivership and further considering the outstanding obligations of defendant corporation, the Court is of
the opinion that plaintiff's motion for receivership is well-taken and made no commitment as to which
rule or provision it was relying upon for its action.

G.R. No. 125008 June 19, 1997

3|SANTIAGO, Sara Andrea Nina P. | 2017-0064 | Civil Procedure

COMMODITIES STORAGE & ICE PLANT CORPORATION, SPOUSES VICTOR & JOHANNAH
TRINIDAD
v.
COURT OF APPEALS, JUSTICE PEDRO A. RAMIREZ, CHAIRMAN and FAR EAST BANK & TRUST
COMPANY
FACT Petitioner spouses Victor and Johannah Trinidad obtained a loan from respondent Far East Bank & Trust
S 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 the ice plant stands. Petitioner spouses failed to pay
their loan. The bank extrajudicially foreclosed the mortgage and the ice plant was sold by public bidding.
Respondent bank was the highest bidder. As a provisional remedy, petitioners filed an "Urgent Petition
for Receivership." Respondent bank filed a "Motion to Dismiss and Opposition to Plaintiff’s Petition for
Receivership." It alleged that the complaint states no cause of action and that venue had been improperly
laid.
ISSUE Whether the appointment of a receiver is the proper provisional remedy in this case.
HELD A receiver of real or personal property, which is the subject of the action, may be appointed by the court
when it appears from the pleadings or such other proof as the judge may require, that the party applying
for such appointment has (1) an actual interest in it; and (2) that (a) such property is in danger of being
lost, removed or materially injured; or (b) whenever it appears to be the most convenient and feasible
means of preserving or administering the property in litigation. A petition for receivership under Section
1 (b) of Rule 59 requires that the property or fund which is the subject of the action must be in danger of
loss, removal or material injury which necessitates protection or preservation. The guiding principle is
the prevention of imminent danger to the property. If an action by its nature, does not require such
protection or preservation, said remedy cannot be applied for and granted.

In the instant case, we do not find the necessity for the appointment of a receiver. Petitioners have not
sufficiently shown that the Sta. Maria Ice Plant is in danger of disappearing or being wasted and reduced
to a "scrap heap." Neither have they proven that the property has been materially injured which
necessitates its protection and preservation. 15 In fact, at the hearing on respondent bank’s motion to
dismiss, respondent bank, through counsel, manifested in open court that the leak in the ice plant had
already been remedied and that no other leakages had been reported since. 16 This statement has not
been disputed by petitioners.

At the time the trial court issued the order for receivership of the property, the problem had been
remedied and there was no imminent danger of another leakage. Whatever danger there was to the
community and the environment had already been contained.

The "drastic sanctions" that may be brought against petitioners due to their inability to pay their
employees and creditors as a result of "the numbing manner by which [respondent bank] took the ice
plant" does not concern the ice plant itself. These claims are the personal liabilities of petitioners
themselves. They do not constitute "material injury" to the ice plant.

G.R. No. 31951 September 4, 1929

4|SANTIAGO, Sara Andrea Nina P. | 2017-0064 | Civil Procedure

PHILIPPINE TRUST CO.

vs.
FRANCISCO SANTAMARIA and F. M. YAPTICO & CO., LTD.
FACT It appears that the judgments in favor if the petitioner against F. M. Yaptico & Co., Ltd., were rendered
S in the Court of First Instance of Iloilo on October 19, 1927, from which F. M. Yaptico & Co., Ltd.,
appeared to this court which affirmed the judgments. 1 It also appears that the petitioner asked for an
execution of the judgment pending the appeal to this court, which was denied, and that after the cases
were affirmed by this court, it again asked for an execution of judgments. The petitioner then applied to
the court for the appointment of a receiver upon the ground that F. M. Yaptico & Co., Ltd., was
fraudulently putting its property beyond the reach of its creditor and the petitioner in particular. After a
hearing, that motion was denied, and the lower court on July 30, 1929, suspended the execution of the
judgment of the judgments for four months from June 30, 1929.
ISSUE Whether the appointment of a receiver is valid.
HELD The Court is clearly of the opinion that the lower court exceeded its jurisdiction in suspending the
execution for the period of four months from June 30, 1929. We are also of the opinion that upon the
facts shown in this record, it was the duty of the court to appoint a receiver for F. M. Yaptico & Co.,
Ltd., to protect and preserve its property and assets for the use and benefit of its creditors and in
particular this petitioner, under the provision of section 483 of the Code of Civil Procedure. The very fact
that the judgments in question were rendered on October 19,1927, and that no part of them has yet been
paid and that F. M. Yaptico & Co., Ltd., has so far been able to defeat the petitioner in the collection of
its judgments, is a very strong and cogent reason why a receiver should be appointed.

On the facts stated, its seems obvious that the respondent judge exceeded his jurisdiction in calling the
writ of execution in question. It is true that the court retains a certain amount of control over a writ of
execution even after it leaves its hands, but such control is limited and regulated by such fairly definite
rules of law and is not unrestricted. A writ of execution may thus be quashed when it appears that it has
been improvidently issued, or that it is defective in substance, or is issued against the wrong party, or that
the judgment debt has been paid, or when the writ has been issued without authority, etc. But the writ
had not been recalled by reason of any defense which could not been made at the time of the trial of the
case, nor can the recall be made so as to practically change the terms of a judgment which has become
final.

It is the order of the court that a writ of mandamus be forthwith as prayed for in the petition, and that the
lower court at once appoint a receiver of all the property and assets of F. M. Yaptico & Co., Ltd., and
that petitioner have judgments for costs.
5|SANTIAGO, Sara Andrea Nina P. | 2017-0064 | Civil Procedure

G.R. No. L-29119 February 18, 1928

TEAL MOTOR CO., INC. and E. H. TEAL. vs. COURT OF FIRST INSTANCE OF MANILA, E. M.
BACHRACH and THEODORE G. DAVIS, receiver of the TEAL MOTOR CO., INC.
FACT The original complaint in which the receiver was appointed alleges that the Teal Motor Company, Inc., is
S a domestic corporation, with a capital stock of P1,000,000 divided into 10,000 shares of the par value of
P100 each, of which 8,000 shares have been issued 3,999 of which are in the name of Bachrach and one
in his nominee, and 3,998 in the name of Teal and two in the name of his nominees. Plaintiff respectfully
alleges that in order to obtain an application of the property and interests in property of the defendant,
Teal Motor Co., Inc., to and upon the claims of this plaintiff and other creditors of said defendant
corporation, and in order to prevent the depreciation of said property and the loss and destruction of the
value thereof as a going concern, it is necessary that this court shall appoint a receiver for the purpose of
taking possession of and conducting the business of the defendant, Teal Motor Co., Inc., and to sell said
property and business, or so much thereof as may be necessary to satisfy the debts and claims against the
same, and that under the said circumstances the appointment of such a receiver by this court, for the
protection of the value of said property and of the interests of all concern, is an imperative necessity. The
lower court then made an order appointing a receiver, and the instant case is another and a different
petition for a writ of certiorari, to which a copy of the original complaint, in which a receiver was
appointed, is attached to, and made a part of, the petition, in which it is alleged that "in issuing the said
order of December 19, 1927, appointing a receiver, the said defendant, the Court of First Instance of the
City of Manila, exceeded its jurisdiction and attempted to confer powers upon the said receiver, which
are improper, illegal, and in excess of the jurisdiction of the said Court of First Instance of Manila and
which were not under consideration by this Honorable Supreme Court in the said action for certiorari G.
R. No. 28816," following which is a complete copy of the order of the lower court appointing Theodore
G. Davis as receiver, with a full and detailed statement of all of his powers and duties.
ISSUE Whether the appointment of a receiver is valid.
HELD The sole purpose and intent of having a receiver appointed was to protect and preserve the property
pending the litigation arising of the original suit, and to prevent its alleged fraudulent disposal, so that in
the end the assets of the corporation would be kept intact and applied to the payment of the amount of
any judgment which the plaintiff might recover and to the claims of any other creditors of the
corporation. It was never the purpose or intent that the receiver should be vested with all of the powers
and duties of a permanent receiver, or that he should have any other powers and duties that those
specified and defined in section 175 of the Code of Civil Procedure. The appointment of a receiver did
not dissolve the corporation, and it does not in the least interfere with the exercise of its corporate rights.
There is no legal principle by which the receiver in the original suit, in which he was appointed, could
claim or assert the right to appear and legally represent either litigant. Suffice it to say that the lower
court eventually denied that the right to the receiver.

It should be borne in mind that a receiver in a pending suit should be neutral, fair and impartial between
the litigant parties, and that should be knowingly or wilfully become a partisan or favor either party at
the expense of the other, upon a proper showing, it would be ground for his removal. Legally speaking,
the court assumes that the plaintiff has made out a prima facie case at the time the receiver was
appointed; otherwise, the receiver ought not to be appointed. Be that as it may, no final decision is made
on the actual merits of the case until both parties have been heard on their respective contentions, at
which time a final decision is then made, and during that period, through the receiver, the property is in
custodia legis pending the final decision for either the plaintiff or the defendant in the original suit, and it
is for such reason that the law makes it the imperative duty of a receiver to be neutral, fair and impartial
between the litigants. In the absence of something exceptional and of some special reason, the powers
and duties of the receiver in the instant case should be confined and limited to those specified and
defined in section 175 of the Code of Civil Procedure, together with those which are germane to such
powers and duties.
6|SANTIAGO, Sara Andrea Nina P. | 2017-0064 | Civil Procedure

G.R. No. 45606 September 4, 1937

PHILIPPINE MOTOR ALCOHOL CORPORATION and CARLOS PALANCA
v.
EMILIO MAPA, Judge of First Instance of Manila, C. M. HUDSON and J. E. BERKENKOTTER
FACT Petitioners pray (1) for the issuance of an order requiring the clerk of the Court of First Instance of
S Manila to certify to this court a copy of the petition, order appointing the receiver, motion to suspend and
dissolve said order and the decree denying said motion in said civil case No. 51448 of the said Court of
First Instance; (2) for a preliminary injunction ordering the respondents to refrain from the further
proceeding in the matter of the receivership here sought to be reviewed until the further order of this
court; and (3) that after hearing the parties, judgment be rendered: (a) annulling said order appointing the
respondent Berkenkotter receiver of the property of the petitioner Philippine Motor Alcohol Corporation;
(b) prohibiting the said Berkenkotter, his employees, agents and/or representatives, from taking
possession of the property of said petitioner corporation or taking any other action as a result of said
appointment as receiver; (c) ordering the said Berkenkotter to return to the petitioner corporation all
books of account, papers, documents or other effects or assets of said corporation received by him under
his appointment as such receiver; (d) for costs of suit and for such other and further relief as this court
may deem just and equitable.
ISSUE Whether the trial court erred in appointing a receiver in the present case.
HELD The Court agrees with the suggestions of counsel for the petitioners that the appointment of a receiver,
because of its drastic nature and of its character as a special remedy under our Code of Civil Procedure,
is a power which should be exercised with great caution. But this does not argue against the existence of
the power of the court to appoint a receiver where the necessity therefor has arisen. In such a case, the
appointment of a receiver is a matter resting largely in the discretion of the trial court. Upon the other
hand, it is not disputed that after the appointment ex parte of the receiver in the present case arguments
both written and oral were presented and the defendants in civil case No. 51448 who are petitioners
herein made a credible effort to set aside the order issued by the trial court appointing a receiver. These
arguments appear to have been carefully weighed by the respondent judge who thereafter, in an order of
June 28, 1937, virtually reaffirmed his order of receivership. Under these circumstances, it can not be
said that the trial judge acted without or in excess of jurisdiction or that the order of June 13, 1937 issued
by him is otherwise illegal for lack of notice to or hearing of the parties.

For the issuance of said order seems clear from the provisions of section 177 of the Code of Civil
Procedure, to wit: "If a receiver be appointed upon an ex parte application, the court, before making the
order, may require from the plaintiff or person filing the application for such appointment, an obligation
with sufficient sureties, to be approved by the court, in an amount to be fixed by the court, to the effect
that the applicant will pay to the defendant in the application all damages he may sustain by reason of the
appointment of such receiver and the entry by him upon his duties, in case the applicant shall have
procured such appointment without sufficient cause; and the court may, in its discretion, at any time after
the appointment, require an additional obligation as further security fir such damages, if any, shall be
ascertained by the court and, in its final judgment in the action, shall be decreed against the plaintiff and
the sureties on the obligation." It is necessary and legitimate inference from the opening statement of this
section that an order of receivership may be issued by the court ex parte upon proper showing in
appropriate cases.