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PROVISIONAL REMEDIES (Rule 59)

RULE 59 RECEIVERSHIP Sec. 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 ourt of Appeals or by the Supreme ourt, or a member thereof, in the following cases! a." #hen it appears from the verified application, and such other proof the court may re$uire, 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 by appointed to administer and preserve it% b." #hen it appears in an action by the mortgagee for the foreclosure of a mortgage that the property in is danger of being wasted or dissipated or materially injured, and that its value is probably insufficient to discharge the mortgage debt, or that the parties have so stipulated in the contract of mortgage% c." After judgment, to preserve the property during the pendency of an appeal, or to dispose of it according to the judgment, or to aid e&ecution when the writ of e&ecution has been returned unsatisfied or the judgment obligor refuses to apply his property in satisfaction of the judgment, or otherwise to carry the judgment into effect% d." #henever in other cases it appears that the appointment of the receiver is the most convenient and feasible means of preserving, administering, or disposing of the property in litigation. 'uring the pendency of an appeal, the appellate court may allow an application for the appointment of a receiver to be filed in and decided by court of origin and the receiver appointed to be subject to the control of said court.

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RECEIVER - an indifferent person, neutral between the parties, appointed by the court to receive and preserve the property in litigation pendente lite when it is not seem reasonable to the court that either party will hold it. Q: Who among the parties does the receiver represent? A: Neither the plaintiff nor the defendant. e is an A!"N# $% # " &$'(#. ")ample: #he ownership of a piece of land is in controversy. #o be fair for both parties claiming the land, especially when both of them are in possession of it, the court will manage it. #he court will appoint a receiver and the income will be deposited. *o it is the same as an administrator. Q: Who appoints the receiver? A: +. &ourt where the case is pending. ,. -y the &A, or a member thereof. .. -y the *&, or a member thereof. 'nder the new rules the application for receivership is now verified. Q: What are grounds for receivership ? A: We have a,b,c,d of section +.

PROVISIONAL REMEDIES (Rule 59)


a/ When it appears from the verified application, and such other proof the court may re0uire, that the party applying for the appointment of a receiver has an interest in the property or fund which is the sub1ect of the action or proceeding, and that such property or fund is in danger of being lost, removed, or materially in1ured unless a receiver by appointed to administer and preserve it2

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BAR Q : A filed a case against B to collect unpaid loan. B, the defendant has no other property left except a piece of land. Meaning of A wins, that land is the only property the he can levy. And to preserve the property A, the plaintiff filed an application to place the property under receivership. Is the petition proper? A !"#R: #he *& said N$, because receivership is only proper when the property to be placed under receivership is the sub1ect of the litigation. 3n this case, the sub1ect of litigation is not the property but money. 3 am collecting a loan which is different from recovery of possession or ownership of land. Q$#!%I& : *uppose the defendant is trying to destroy the property or run away with it or dispose it? A !"#R: 4ou better get an attachment and not a receivership. #hat is the tric5y part. b./ When it appears in an action by the mortgagee for the foreclosure of a mortgage that the property in is danger of being wasted or dissipated or materially in1ured, and that its value is probably insufficient to discharge the mortgage debt, or that the parties have so stipulated in the contract of mortgage2 #his applies or granted by law to a mortgagee. 'nder the law on mortgage, if the mortgagor cannot pay, mortgagee can foreclose. And if the property is in danger of being wasted or dissipated or materially in1ured, mortgagee can as5 for receivership. $r the parties have stipulated in their agreement that while foreclosure proceeding is going on, they can place the property under receivership. 3n -an5 6ortgage &ontracts, meron nito. c./ After 1udgment, to preserve the property during the pendency of an appeal, or to dispose of it according to the 1udgment, or to aid e)ecution when the writ of e)ecution has been returned unsatisfied or the 1udgment obligor refuses to apply his property in satisfaction of the 1udgment, or otherwise to carry the 1udgment into effect2 !enerally, you file a 7rovisional (emedy while the case is going on. ")cept under par. c. (eceivership is not only available while the case is pending. 3t is available even after 1udgment to: +. preserve the property during the pendency of an appeal. Q$#!%I& : "here will you file you petition for receivership? Before the 'A or the trial court? A !"#R: #he last par. of sec. +, appellate court may allow the filing of the receivership in the trial court that decided it although the trial court has already lost 1urisdiction because of the appeal. Q$#!%I& : Is this supported (y Rule )*? A !"#R: 4"*. (ule 8+, *ection 9, last paragraph. $nce the appeal is perfected, the trial court losses 1urisdiction over the case e)cept to issue orders for the preservation and protection of the rights of the parties while on appeal. #his is part of the (esidual 7owers of the (#&. ,. dispose of it according to the 1udgment. .. to aid e)ecution when the writ of e)ecution has been returned unsatisfied or the 1udgment obligor refuses to apply his property in satisfaction of the 1udgment. Q$#!%I& : Is this provision or ground supported (y the rules on execution? Is there a provision in the rules of court ? A !"#R: 4"*, in remedies in aid of e)ecution. (ule .9 sec. 8+. 3n the e)ecution stage, you can appoint

PROVISIONAL REMEDIES (Rule 59)


a receiver to preserve the property which is to be levied. 8. carry the 1udgment into effect. d./ Whenever in other cases it appears that the appointment of the receiver is the most convenient and feasible means of preserving, administering, or disposing of the property in litigation. 3t:s the broadest. Anything under the sun can fall on this ground. Sec. (. Bond on appointment on receiver.- Before issuing the order appointing a receiver, the court shall re$uire the applicant to file a bond e&ecuted to the party against whom the application is presented, in an amount to fi&ed by the court, to the effect that the applicant will pay such party all damages he may sustain by reason of the appointment of such receiver in case the applicant shall have procured such appointment without sufficient cause, and the court may, in its discretion, at any time after the appointment re$uire an additional bond as further security for such damages. ("Q'3*3#"* %$( ("&"3;"(* 37: +. ;erified application. <under *ection +/. ,. -ond <under this section = ,/. Sect. ). 'enial of application or discharge of receiver. * +he application may be denied, or the receiver discharged, when the adverse party files a bond e&ecuted to the applicant, in an amount to be fi&ed by the court, to the effect that such party will pay the applicant all damages he may suffer by reason of the acts, omissions, or other matters specified in the application as ground for such appointment. +he receiver may also be discharged if it is shown that his appointment was obtained without sufficient cause. Sect. ,. -ath and bond of receiver.- Before entering upon his duties, the receiver shall be sworn to perform them faithfully, and shall file a bond, e&ecuted to such person and in such sum as the court may direct, to the effect that he will faithfully discharge his duties in the action or proceeding and obey the orders of the court. >o not confuse the bond here with the bond in *ection ,. *ection , = -ond is posted by the party. *ection 8 = -ond is posted by the receiver. Sect. .. Service of copies of bonds% effect of disapproval of the same. * +he person filing a bond in accordance with the provisions of this /ule shall forthwith serve a copy thereof on each interested party, who may e&cept to its sufficiency or of the surety or sureties thereon. 0f either the applicant1s or the receiver1s bond is found to be insufficient in amount, or if the surety or sureties thereon fail to justify, and a bond sufficient in amount with sufficient sureties approved after justification is not filed forthwith, the application shall be denied or the receiver discharged, as the case may be. 0f the bond of the adverse party is found to be insufficient in amount or the surety or sureties thereon fail to justify, and a bond sufficient in amount with sufficient sureties approved after justification is not filed forthwith, the receiver shall be appointed or re-appointed, as the case may be. Sec. 2. 3eneral powers of receiver.- Subject to the control of the court in which the action or proceeding is pending, a receiver shall have the power to bring and defend in such capacity, actions in his own name! to ta4e and 4eep possession of the property in controversy% to receive rents% to collect debts due to himself as receiver

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PROVISIONAL REMEDIES (Rule 59)


or to the fund, property, estate, person, or corporation of which he is a receiver% to compound for and compromise the same% to ma4e transfers% to pay outstanding debts% to dived the money and other property that shall remain among the persons legally entitled to receive the same% and generally to do such acts respecting the property as the court may authori5e. 6owever, funds in the hands of a receiver may be invested only by order of the court upon which consent of all parties to the action. 7o action may be filed by or against a receiver without leave of the court which appointed him.

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What are the powers of the receiver? ?ust read the provision. 3t is li5e the power of the manager. #he last paragraph is new. #he one who files an action for receivership must secure the permission of the court. Sec. 8. 9iability for refusal or neglect to deliver property to receiver.- A person who refuses or neglects, upon reasonable demand, to deliver to the receiver all the property, money, boo4s, deeds, notes, bills, documents and papers within his power or control, subject of or involved in the action or proceeding , or in case of disagreement, as determined and ordered by the court, may be punished for contempt and shall be liable to the receiver for the money or the value of the property and other things so refused or neglected to be surrendered , together with all damages that may have been sustained by the party or parties entitled thereto as a conse$uence of such refusal or neglect. 3f you refuse or neglect to deliver the property to the receiver , you will be liable for contempt of court. Sec. :. +ermination of receivership% compensation of receiver.-#henever the court, motu propio or on motion of either party, shall determine that the necessity for a receiver no longer e&ists, it shall, after due notice to all interested parties and hearing, settle the accounts of the receiver, direct the delivery of the funds and other property in his possession to the person adjudged to be entitled to receive them, and order the discharge of the receiver from further duty as such. +he court shall allow the receiver such reasonable compensation as the circumstances of the case warrant, to be ta&ed as costs against the defeated party or apportioned as justice re$uires. Q$#!%I& : When do you terminate a receivership? A !"#R: When the grounds enumerated under section + no longer e)ists. Sect. ;. <udgment to include recovery against sureties.- +he amount, if any, to be awarded to any party upon any bond filed in accordance with the provisions of this /ule, shall be claimed, ascertained, and granted under the same procedure prescribed in Section (= of /ule .8. Q'"*#3$N: ow do you claim for damages? AN*W"(: %ollow (ule @A, *ect. ,B. #a5e note: No separate action to claim for damages