121. Case Title: Making Enterprises, Inc. vs. Marfori, G.R. No.

152239, 17 August
2011
Povadora, Devie Marie I.
Remedial Law; Provisional Remedies; Receivership; When rights of the parties are
still to be determined; Propriety
QUESTION:
X acquired a five-story building built on Z�s property. X had entered into a
contract of lease with Z for a period 25 years of which upon expiration of the
lease, all the improvements thereunder will be under the exclusive and sole
ownership of Z. X had also leased some portions of the building to Z. X executed a
dacion en pago and assignment of rights transferring the ownership of the subject
property to Y. X�s wife filed an action, among others, Receivership, alleging that
subject property is a conjugal property and she did not consent to the transfer of
its ownership. She sought, among others, to annul the dacion en pago and assignment
of rights and prayed for the appointment of a receiver to preserve the rentals of
the building. She also prayed for the issuance of a writ of preliminary injunction
to enjoin the Z from paying its rentals to Y and from approving the transfer of the
building. Should the application for the appointment of receiver for the rentals
of the building be granted?

SUGGESTED ANSWER:
No. An application for the appointment of a receiver under Section 1(a), Rule 59 of
the 1997 Rules of Civil Procedure, as amended, requires that the property or fund
subject of the action is in danger of being lost, removed, or materially injured,
necessitating its protection or preservation. Rentals are of a non-perishable
character. The application 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. Receivership is a harsh remedy that can be granted
only in extreme situations, respondents must prove a clear right to its issuance.
Furthermore, the issue on the validity of the dacion en pago and assignment of
rights executed by X in favor of Y still has to be resolved. Until the contract is
rescinded or nullified, the same remains to be valid and binding. The RTC was
correct 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.

122. Case Title: Bonaplata vs. Ambler, G.R. No. 1278, August 1, 1903
Povadora, Devie Marie I.
Remedial Law; Provisional Remedies; Receivership; Exhaustion of local remedies
QUESTION:
X filed an action against Y for collection of sum of money due to defaulted loan he
had obtained from the latter, in the complaint X alleged that Y was insolvent; that
several creditors had sued him, that the assets of his business consisted of real
estate, contracts for buildings (many partly completed), equities in real estate,
and other properties. That said property was in good condition and that it was in
the interest of creditors to retain the actual status of the business; that under
proper management the business could be conducted at a good and satisfactory
profit, and pay a greater portion of said Y's creditors, if not all; that the
management of the said business was in the hands of the Y, who was unable to give
it necessary care and attention; that for various causes the business had been
losing money. The assets of the business were then more than enough to pay the
indebtedness, but if said business were managed by the said Y it will be dissipated
and wasted, and therefore X in that action prayed for the appointment of a receiver
to take charge of the said business and conduct the same subject to the orders of
the court. A receiver was appointed by the court. Is the appointment of a receiver
proper?

SUGGESTED ANSWER:
No. The appointment of receiver is not proper. As a general rule, the appointment
of a receiver is an equitable remedy and before such remedy is resorted to, except
in certain prescribed cases, the legal remedy must be exhausted. X is not bound and
is entitled to a writ of mandamus to compel the issuance of execution of his
judgement.

123. Case Title: Harden vs. Director of Prisons G.R. No. L-2349, October 22, 1948
Povadora, Devie Marie I.
Remedial Law; Provisional Remedies; Receivership; Jurisdiction
QUESTION:
A receiver was appointed and a preliminary injunction was issued restraining X and
his codefendant, Y 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. X found out that X transferred over 1,000 pesos in drafts or cash to
various institutions and to an unknown person; Mrs. X moved the court to order X to
return all these amounts and to and to redeposit them with the Manila branch of the
identified institutions. The court ordered that X 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 X 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;
..X be ordered to deliver the certificate covering the 368,553 shares of stock
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 identified institutions. Does the court have
jurisdiction over properties in the foreign country and thereby effect an action
for receivership to the person of such properties?

SUGGESTED ANSWER:
No. The court ruled 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 court�s
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.

124. Case Title: Commodities Storage and Ice Plant vs. CA, G.R. 125008, June 19,
1997
Povadora, Devie Marie I.
Remedial Law; Provisional Remedies; Receivership; Appointment of Receiver
QUESTION:
X obtained a loan from Y to finance the purchase of the Ice Plant & Cold Storage.
The loan was secured by a mortgage over the ice plant and the land on which it
stands. X failed to pay the loan. Y extrajudicially foreclosed the mortgage and the
ice plant was sold by public bidding. Y was the highest bidder and it registered
the certificate of sale. X filed a case against Y for reformation of the loan
agreement, annulment of the foreclosure sale, and damages to which RTC dismissed
due to failure to pay the docket fees. X filed another civil case against Y, among
others, an Urgent Petition for Receivership praying for the appointment to save the
ice plant, conduct its affairs and safeguard its records during the pendency of the
case; on appeal the order was annulled and set aside. X claimed that appointment
of a receiver is justified under Sec. 1 (b) of Rule 59. They argued that the ice
plant in danger of being lost, removed and materially injured because of the
aforementioned imminent perils. Should the assignment of receiver be justified?

SUGGESTED ANSWER:
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 case at bar, there is no necessity for
the appointment of a receiver. X has not sufficiently shown that the 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 Y's motion to dismiss, Y,
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 X.

125. Case Title: Calo vs. Roldan, G.R. No. L-252, March 30, 1946
Povadora, Devie Marie I.
Remedial Law; Provisional Remedies; Receivership; Appointment of a Receiver is not
proper or does not lie in action of Injunction.
QUESTION:
X filed a complaint against Y alleging that the latter, through use of force,
threat, stealth, strategy and intimidation, intend 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 X. Y 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 and the X have never been in possession thereof.
The CFI of Laguna denied the petition for preliminary injunction on the ground that
Y were in actual possession of said lands. Motion for Reconsideration was filed,
pending resolution plaintiff filed an urgent petition ex parte praying that their
Motion for Reconsideration 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 X 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 Z who was the
judge appointed, replacing Judge A granted the petition for appointment of and
appointed a receiver in the case. Is the grant of the petition for the appointment
of receiver proper?

SUGGESTED ANSWER:
No, the X�s 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 Y be restrained, enjoined and
prohibited from entering in, interfering with or harvesting the lands. To wit, a
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 fruits 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.
126. Case Title: Ylarde vs. Enriquez, G.R. No. L-1401, June 25, 1947
Povadora, Devie Marie I.
Remedial Law; Provisional Remedies; Receivership;
QUESTION:
X is common law wife of Y, now deceased. Y was granted a free patent to a homestead
measuring 15 hectares of which is involved in the litigation. After Y died, she
executed an extrajudicial partition wherein she falsely declared under oath that
she was the sole heiress of the estate in question. Following the extrajudicial
partition, a transfer certificate of title was issued in X's name cancelling the
original document. Y�s collateral relatives, R brought the action against X. During
the pendency of the case, X died and was substituted by Z. The record does not
reveal the degree of relationship between Z and the deceased X. Z allege that they
are and have been in the possession of the part of the land which corresponded to
them or to X in the partition, while the R entered upon the possession of their
share upon the signing of the settlements. R denied that Z are in "physical"
possession of the property in dispute. Is the appointment of receiver proper?

SUGGESTED ANSWER:
No. The appointment of receiver is not proper. 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.
127. Case Title: ROCHA & CO., vs. A. S. CROSSFIELD, G.R. No. L-3430, August 7,
1906
Povadora, Devie Marie I.
Remedial Law; Provisional Remedies; Receivership;
QUESTION:
FACTS:
X filed an action against R Group in which he alleged, among other things, that he
had a limited partnership formed, 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. He further alleged that on the withdrawal 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 partnership was reorganized under the name of R
Group which latter company assumed all the debts and liabilities of the
partnership, and took possession of all its assets. There was no allegation in the
complaint that the partnership of the partnership was dissolved by the withdrawal
of X, 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 nor was there any allegation that he had any lien upon any of this
property. The real controversy between the parties is over the right of X to
receive his proportionate part of the reserve fund and of the sinking fund.
Notwithstanding the allegations, X, 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 R Group. A receiver was appointed who
afterwards took possession of the entire property of R Group. Whether or not the
appointment of a receiver is proper?

SUGGESTED ANSWER:
No, the appointment of a receiver is not proper. There is no allegation in the
complaint, as has been before stated, that the plaintiff is the owner of any of the
property of R Group, 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, 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. In one of the orders made by the court below relating
to the receiver, its authority for making it was based on paragraphs 2 and 4 of
section 174 of the Code of Civil Procedure above quoted. In a subsequent order this
ground was abandoned and the appointment was based on paragraph 1 of said section,
the court holding that a special partnership was corporation within the meaning of
said section 174. This claim can not be sustained and, in fact, it was not urged in
the argument of this case in this court. The case not being one in which a receiver
could be appointed, the order making such appointment was void and was beyond the
jurisdiction of the court, although that court had jurisdiction of the main action
has been settled adversely to the defendants in this suit by the case of Bonaplata
vs. Ambler. The order of the court below appointing a receiver in this case was
illegal and void, and it all proceedings taken therein are hereby annulled.