DOMINADOR S. PONGOS v. HIDALGO ENTERPRISES, INC., BIENVENIDO A.

TAN, Judge of the

Court of First Instance of Rizal (Rizal City Branch) and THE SHERIFF OF RIZAL
G.R. No. L-3226. August 30, 1949
FERIA, J.:

DOCTRINE:

RECEIVER; APPOINTMENT OF RECEIVER DOES NOT DISPLACE VESTED CONTRACT LIENS.

— The appointment of a receiver vests in the court no absolute control over the property and no general
authority to displace vested contract liens, and while a receiver will be appointed only on the application
of one who appears to have an interest in the subject matter, yet when the appointment is made the
receiver is a mere officer of the court, and the appointment creates no lien in favor of any of the parties
applying for it and gives no advantage or preference to such parties over other claimants to the property;
it does not determine the rights of the parties.

FACTS:

Dominador Pongos instituted a civil action against Hidalgo Enterprises before the CFI to cancel or
rescind the contract between them by which Pongos turned over and delivered to the Hidalgo Enterprise
the full management, operation, possession and control of the Pasay Ice Plant and Storage, and conveyed
to it, by way of chattel mortgage, all the machineries, equipment, accessories and the certificate of public
convenience of said plant, as security for the payment of the advances of money made by the Hidalgo
Enterprise to pay the outstanding debts and obligation due from the Pongos to other persons on account
of said Ice Plant and Cold Storage.

Hidalgo Enterprises Inc., during the pendency of the suit, secured first a writ of mandatory injunction
directing the Pongos to surrender the possession of the said Pasay Ice Plant and Cold Storage. Judge Tan
appointed a receiver who took possession of such properties.

Hidalgo Enterprises Inc. amended its answer and set up a counterclaim for the recovery of money due
from Pongos and the foreclosure of the chattel mortgage, and as a necessary step for the foreclosure asked
the court to order Pongos who was in possession of the machineries, equipment, and appurtenances of
the Pasay Ice Plant and Cold Storage, to deliver them to the defendant. Judge Tan granted the
counterclaim.

Hence, Pongos filed a special civil action of certiorari against Judge Bienvenido A. Tan to set aside his
order for the delivery of the machineries, equipments, and appurtenances of the Pasay Ice Plant and Cold
Storage to Hidalgo Enterprises, Inc.
Pongos contends that Judge Tan exceeded in the exercise of his jurisdiction in ordering the delivery of the
personal property mortgaged to Hidalgo because said properties were in custodia legis and Judge Tan
had no authority to order their delivery to the Hidalgo Enterprise.

ISSUE:

Whether

RULING:

As to the first ground, "The appointment of a receiver vests in the court no absolute control over the property and
no general authority to displace vested contract liens, and while a receiver will be appointed only on the application
of one who appears to have an interest in the subject-matter, yet when the appointment is made the receiver is a
mere officer of the court, and the appointment creates no lien in favor of any of the parties applying for it
and gives no advantage or preference to such parties over other claimants to the property; it does not
determine the rights of the parties,." . . (Cyclopedia of Law and Procedure, Vol. 34, p. 180).
PS. Wala ng other discussion si SC sa topic na yan ☹
EVELINA G. CHAVEZ and AIDA CHAVEZ-DELES,  vs. COURT OF APPEALS and ATTY. FIDELA Y.
VARGAS
ABAD, J.:

FACTS:

Fidela Y. Vargas owned a coconut land and rice fields in Sorsogon. While 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, for recovery of possession, rent, and
damages with prayer for the immediate appointment of a receiver before the RTC.

RTC DISMISSED the complaint for lack of jurisdiction based on Fidela’s admission that Evelina and Aida
were tenants who helped plant coconut seedlings on the land and supervised the harvest of coconut and
palay.

Dissatisfied, Fidela appealed to the CA. She also filed with that court a motion for the appointment of a
receiver. 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 Fidela’s allegation that Evelina and Aida failed
to account for her share of such fruits.3

ISSUE:

Whether the CA erred in granting respondent Fidela’s application for receivership. (YES)

RULING:

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.6

Here Fidela’s main gripe is that Evelina and Aida deprived her of her share of the land’s 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,7 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.8

Besides, the RTC dismissed Fidela’s 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.