Receivership

It is a provisional or ancillary remedy wherein the court appoints a receiver to receive and
preserve the property or fund in litigation pendente lite, when it does not seem reasonable to the
court that either party should hold it.

Is the receiver an agent of either party?

No. he is regarded as an officer of the court.

“A receiver is a person appointed by the court in behalf of all the parties to the action for the
purpose of preserving and conserving the property in litigation and prevent its possible
destruction or dissipation, if it were left in the possession of any of the parties. (Normandy v.
Duque, 29 SCRA 385, 391 [1969]; Cia. General de Tabacos v. Gauzon, 20 Phil. 261, 267-268
[1911]) The appointment of a receiver is not a matter of absolute right. It depends upon the
sound discretion of the court (Calo and San Jose v. Roldan, 76 Phil. 445, 453 [1946]; Mendoza v.
Arellano, 36 Phil. 59, 63-64 [1917]) and is based on facts and circumstances of each particular
case.” (Duque v. CFI of Manila, 13 SCRA 420, 423 [1965]; Ralla v. Alcasid, supra, at 625; Lama
v. Apacible, 79 Phil. 68, 73-74
[1947])

Receivership may be applied for only in respect of the property or fund subject of the action or
proceeding or in respect of the property in litigation. In a sum of money case, the defendant’s
property or fund is not the subject of the action or litigation.

May an application for the appointment of a receiver be availed of in extrajudicial foreclosure?

No. Extrajudicial foreclosure is not an action but a stipulation allowing the mortgagee to take
possession of the property mortgaged upon foreclosure is valid. ( DBP v SPS Doyon March 2009)

Purpose of receivership

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. (Commodities Storage & Ice
Plant Corp. v. Court of Appeals, G.R. No. 125008, June 19, 1997, 274 SCRA 439, 446-447)

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 Court of
Appeals or by the Supreme Court, or a member thereof, in the following cases:

When it appears from the verified application, and such other proof as the court may require,
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 be appointed to administer and
preserve it;
When it appears in an action by the mortgagee for the foreclosure of a mortgage that the
property is in 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;
After judgment, to preserve the property during the pendency of an appeal, or to dispose of it
according to the judgment, or to aid execution when the execution 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;
Whenever in other cases it appears that the appointment of a receiver is the most convenient
and feasible means of preserving, administering, or disposing of the property in litigation.

During 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 the court of origin and the receiver
appointed to be subject to the control of said court. (Section 1, Rule 59)

Note:

The receiver should be a neutral or impartial person and hence a party to the litigation should
not be appointed a receiver unless the other party consents.

Who may be appointed as a receiver?

1. The Court where the action is pending;

2. The Court of Appeals or a member thereof;
3. The Supreme Court or a member thereof.

A receiver may be appointed only over property which is the subject of the action or proceeding.
Where the action is merely to obtain a money judgment on unpaid credits and not to enforce a
lien upon specific property or funds in the defendant’s possession, the appointment of a receiver
is improper.

Even if appeal has been perfected but the trial court has been deprived of its jurisdiction it may
still appoint a receiver if the order is necessary for the protection and preservation of the rights
of the parties and provided the original record or record on appeal has not yet been transmitted
to the appellate court.

Bonds required under Rule 59

1. Applicant’s bond ( S2, R59)

2. Counterbond( S3, R59)
3. Receiver’s bond ( S4, R59)

Grounds for the denial of the application or discharge of the receiver?

Filing of counterbond by the adverse party

No sufficient cause

General powers of a receiver

1. The power to bring and defend actions in his own name in his capacity as receiver;
2. To take and keep possession of the property in controversy;
3. To receive rents;
4. To collect debts due to himself as receiver or to the fund, property, estate, person, or
corporation of which he is the receiver;
5. To compound for and compromise such debts;
6. To pay outstanding debts;
 7. To make transfers;
8. To divide the money and other property that shall remain among the persons legally
entitled to receive the same;
9. Generally, to do such acts respecting the property as the curt may authorize.

What are the acts that need court approval?

1. Funds in the hands of a receiver may be invested only by order of the court upon written
consent of all the parties to the action.
2. No action may be filed by or against the receiver without leave of the court which
appointed him;
3. A receiver cannot enter into a contract without the approval of the court.

Replevin

Tillson v. Court of Appeals, G.R. No. 89870, May 28, 1991, 197 SCRA 587, 597-598, discusses
the term replevin as follows:

The term replevin is popularly understood as “the return to or recovery by a person of goods or
chattels claimed to be wrongfully taken or detained upon the person‟s giving security to try the
matter in court and return the goods if defeated in the action;” “the writ by or the common-law
action in which goods and chattels are replevied,” i.e., taken or gotten back by a writ for
replevin;” and to replevy, means to recover possession by an action of replevin; to take
possession of goods or chattels under a replevin order. Bouvier‟s Law Dictionary defines replevin
as “a form of action which lies to regain the possession of personal chattels which have been
taken from the plaintiff unlawfully x x x, (or as) the writ by virtue of which the sheriff proceeds at
once to take possession of the property therein described and transfer it to the plaintiff upon his
giving pledges which are satisfactory to the sheriff to prove his title, or return the chattels taken
if he fail so to do; the same authority states that the term, “to replevy” means “to re-deliver
goods which have been distrained to the original possessor of them, on his giving pledges in an
action of replevin.” The term therefore may refer either to the action itself, for the recovery of
personality, or the provisional remedy traditionally associated with it, by which possession of the
property may be obtain[ed] by the plaintiff and retained during the pendency of the action.
(Emphasis and underscoring supplied; citations omitted)

Replevin can be a principal remedy and provisional relief

Broadly understood in this jurisdiction, replevin is both a form of principal remedy and of
provisional relief. It may refer either to the action itself, i.e., to regain the possession of personal
chattels being wrongfully detained from the plaintiff by another, or to the provisional remedy
that would allow the plaintiff to retain the thing during the pendency of the action and to hold it
pendente lite. (BA Finance Corporation v. CA, 327 Phil. 716, 724-725 (1996). See also Tillson v.
Court of Appeals, id.; Bouvier’s Dictionary, Third (Rawle’s) Revision, Vol. 2; Black’s Law
Dictionary, Sixth Edition, p. 1299) The action is primarily possessory in nature and generally
determines nothing more than the right of possession. (BA Finance Corporation v. CA, 327 Phil.
716, 725 [1996])

Who can avail replevin

A party praying for the recovery of possession of personal property. (Section 1, Rule 60)

Stage to avail replevin

Recovery of possession of personal property can be availed:

at the commencement of the action; or

at any time before answer. (Section 1, Rule 60)

Mechanics to file replevin

The mechanics could refer either to the action itself, i.e., to regain the possession of personal
chattels being wrongfully detained from the plaintiff by another, or to the provisional remedy
that would allow the plaintiff to retain the thing during the pendency of the action and to hold it
pendente lite

If it refers to the action itself, i.e., to regain the possession of personal chattels being wrongfully
detained from the plaintiff by another, the procedures are as follows:

That the applicant is the owner of the property claimed, particularly describing it, or is
entitled to the possession thereof;
That the property is wrongfully detained by the adverse party, alleging the cause of detention
thereof according to the best of his knowledge, information, and belief;
That the property has not been distrained or taken for a tax assessment or a fine pursuant to
law, or seized under a writ of execution or preliminary attachment, or otherwise placed under
custodia legis, or if so seized, that it is exempt from such seizure or custody; and (d) The actual
market value of the property.

The applicant must also give a bond, executed to the adverse party in double the value of the
property as stated in the affidavit attached to the complaint. (Section 2, Rule 60). In practice the
allegations regarding jurisdictional facts of the complaint and the affidavit are the same. The
affidavit should be attached to the complaint.

If it refers to the provisional remedy that would allow the plaintiff to retain the thing during the
pendency of the action and to hold it pendente lite, the procedures are as follows:

At the commencement of the action or at any time before answer a party praying for the
recovery of possession of personal property can apply for an order for the delivery of such
property and must show by his own affidavit or some other person who personally knows the
facts the following jurisdictional facts:

That the applicant is the owner of the property claimed, particularly describing it, or is
entitled to the possession thereof;
That the property is wrongfully detained by the adverse party, alleging the cause of detention
thereof according to the best of his knowledge, information, and belief;
That the property has not been distrained or taken for a tax assessment or a fine pursuant to
law, or seized under a writ of execution or preliminary attachment, or otherwise placed under
custodia legis, or if so seized, that it is exempt from such seizure or custody; and (d) The actual
market value of the property.

The applicant must also give a bond, executed to the adverse party in double the value of the
property as stated in the affidavit aforementioned, for the return of the property to the adverse
party if such return be adjudged, and for the payment to the adverse party of such sum as he
may recover from the applicant in the action. (Section 2, Rule 60)

Amount and purpose of applicant’s bond Amount of bond

The amount of applicant‟s bond is double the value of the property as stated in the affidavit of
merit. (last paragraph, Section 2, Rule 60)

Purpose of bond

For the payment to the adverse party of such sum as he may recover from the applicant in the
action. (last paragraph, Section 2, Rule 60)

Rule on return of property

Effect if adverse party object to the sufficiency of applicant’s bond

The adverse party cannot immediately require the return of the property if he objects to the
sufficiency of the applicant‟s bond, or of the surety or sureties thereon. (Section 5, Rule 60)
Effect if he does not object to the sufficiency of applicant’s bond
But if he does not so object, he may, at any time before the delivery of the property to the
applicant, require the return thereof, by filing with the court where the action is pending a bond
executed to the applicant and by serving a copy of such bond on the applicant. (Section 5, Rule
60)

Amount of adverse party’s bond

The amount is in double the value of the property as stated in the applicant‟s affidavit. (Section
5, Rule
60)

Purpose of adverse party’s bond

For the delivery of the property to the applicant, if such delivery be adjudged;
And for the payment of such sum to him as may be recovered against the adverse party.
(Section 5, Rule 60)

Effect of filing a redelivery bond under Sections 5 and 6 of Rule 60

It is clear from Sections 5 and 6 of Rule 60 that a defendant in a replevin suit may demand
return of possession of the property replevied by filing a redelivery bond within the periods
specified in Sections 5 and 6 of Rule 60. Under Section 5, petitioner may “at any time before the
delivery of the property to the applicant “ require the return of the property; in Section 6, he
may do so, “within five (5) days after the taking of the property by the officer.” Both these
periods are mandatory in character. (Bachrach Motor Co., Inc. v. Albert, 60 Phil. 308 [1934])

Disposition of property by sheriff

When property to be delivered to applicant

In the following instances, the property shall be delivered to the applicant:

if within five (5) days after the taking of the property by the sheriff the adverse party does not
object to the sufficiency of the bond, or of the surety or sureties thereon;
or if within five (5) days after the taking of the property by the sheriff the adverse party so
objects
and the court affirms its approval of the applicant’s bond or approves a new bond;
or if within five (5) days after the taking of the property by the sheriff the adverse party requires
the return of the property but his bond is objected to and found insufficient and he does not
forthwith file an approved bond;
If for any reason the property is not delivered to the applicant, the sheriff must return it to the
adverse party. (Section 6, Rule 60)

The five day period is mandatory

In Spouses Bautista v. Sulla, A.M. No. P-04-1920, August 17, 2007, the Supreme Court held the
mandatory character of the five day period for the defendant to post a counter-bond and serving
the same to the plaintiff as follows:

“Under Section 5, complainants may require the return of the vehicle by (1) posting a counter-
bond in double the value of the vehicle and (2) serving Glor with a copy of the counter-bond.
Both requirements must be complied with before the vehicle is delivered to Glor. Put differently:

If a defendant in a replevin action wishes to have the property taken by the sheriff restored to
him, he should within five days from such taking, (1) post a counter-bond in double the value of
said property, and
serve plaintiff with a copy thereof, both requirements — as well as compliance therewith within
the five- day period mentioned — being mandatory. x x x

Conformably, a defendant in a replevin suit may demand the return of possession of the property
replevined by filing a redelivery bond executed to the plaintiff in double the value of the property
as stated in the plaintiff‟s affidavit within the period specified in Sections 5 and 6. (Citibank, N.A.
v. Court of Appeals, 364 Phil. 328, 348 [1999])

Under Section 6, the vehicle shall be delivered to Glor only under the following instances:
If within five days after the taking of the vehicle, complainants do not object to the sufficiency of
the bond or of the surety or sureties thereon;
If within five days after the taking of the vehicle, complainants object to the sufficiency of the
bond and the trial court affirms its approval of Glor‟s bond or approves a new bond; or
If within five days after the taking of the vehicle, complainants require the return of the vehicle
and their bond is objected to and found insufficient and they do not forthwith file an approved
bond.”

Purpose of five-day period under Section 6, Rule 60

The purpose of the five day period was likewise discussed in Spouses Bautista v. Sulla, A.M. No.
P-04- 1920, August 17, 2007: “Under the Rules of Court, the sheriff should not immediately
deliver the property seized under a writ of replevin to the plaintiff. This is because defendants
have every right to be respected in their possession and may not be deprived of it without due
process. The purpose of the five-day period in Section 6 is to give defendants in a replevin case
a chance to require the return of the property by filing a counter-bond. In Pardo v. Velasco, A.M.
No. P-90-408, 7 August 1992, 212 SCRA 323, 328-329, this Court held that:

Respondent as an officer of the Court is charged with certain ministerial duties which must be
performed faithfully to the letter. Every provision in the Revised Rules of Court has a specific
reason or objective. In this case, the purpose of the five (5) days is to give a chance to the
defendant to object to the
sufficiency of the bond or the surety or sureties thereon or require the return of the
property by filing a counter[-]bond.

In Sebastian v. Valino, A.M. No. P-91-549, 5 July 1993, 224 SCRA 256, 259 this Court
held that:

Under the Revised Rules of Court, the property seized under a writ of replevin is not to
be delivered immediately to the plaintiff. The sheriff must retain it in his custody for five
days and he shall return it to the defendant, if the latter, as in the instant case, requires
its return and files a counter[-
]bond (Sec. 4, Rule 60, Revised Rules of Court). (Emphasis ours)

Replevin vs Attachment ( R57)

1. Replevin is available only where the principal relief sought in the action is the
recovery of possession of personal property
2. Attachment is available even if the recovery of personal property is only an
incidental relief sought in the action.
3. Replevin extends only to personal property
4. Attachment covers both real and personal property
5. Replevin may be availed of to recover personal property even if it is not being
concealed, removed or disposed of;
6. Attachment presupposes that the property has been concealed, removed or
disposed of to prevent its being found or taken by the applicant;
7. Replevin, the application may be made at the commencement of the action or at
any time before answer
8. S1 ( C ) R57, may be applied for at the commencement of the action or at
anytime before enrty of judgment.

Note

Replevin will not lie for the seller to re-possess the goods in case of non-payment by
the buyer because the filing of the action for rescission will not ipso facto revest title in
the seller; it is the court judgment which will do so.

After the filing of an answer, the plaintiff could no longer apply for a writ of replevin.
The remedy is to move for a preliminary attachment under Section 1(c ), Rule 57.

Prior demand is not a condition precedent to the filing of an action for a writ of replevin
since there is nothing in Section 2, Rule 60 requires the applicant to make demand on
the possessor of the property before an action for a writ of replevin could be filed.

In sum of money cases, jurisdiction is determine by the amount of the claim not by the
value of the vehicle seized under the writ of replevin.
Support pendent lite

It is support provided a party during the pendency of the litigation.

In what actions may Support pendent lite be applied for?

1. In an action for support;
2. In criminal actions where the civil liability includes support for the offspring as a
consequence of the crime and the civil aspect thereof has not been waived,
reserved or instituted prior to its filing.

Note

Court of Appeals may also grant SPL where proper in an appealed case.

If the adverse party failed to comply, the Court shall, MOTU PROPIO or upon MOTION,
issue an order of execution against him without prejudice to his liability for contempt.

Order granting SPL is an interlocutory order hence appeal is not available.

- End-