G.R. No.

135706             October 1, 2004 Whether or not the period within which the respondent bank was placed
SPS. CESAR A. LARROBIS, JR. and VIRGINIA S. LARROBIS vs under receivership and liquidation proceedings may be considered a
Philippine Veterans Bank fortuitous event which interrupted the running of the prescriptive period in
bringing actions
Facts: Held:
On March 3, 1980, petitioner spouses contracted a monetary loan with
respondent Philippine Veterans Bank in the amount of ₱135,000.00, This is consistent with the purpose of receivership proceedings, i.e., to
evidenced by a promissory note, due and demandable on February 27, receive collectibles and preserve the assets of the bank in substitution of
1981, and secured by a Real Estate Mortgage executed on their lot its former management, and prevent the dissipation of its assets to the
together with the improvements thereon. detriment of the creditors of the bank.26
When a bank is declared insolvent and placed under receivership, the
On March 23, 1985, the respondent bank went bankrupt and was placed Central Bank, through the Monetary Board, determines whether to proceed
under receivership/liquidation by the Central Bank from April 25, 1985 until with the liquidation or reorganization of the financially distressed bank. A
August 1992. receiver, who concurrently represents the bank, then takes control and
possession of its assets for the benefit of the bank’s creditors. A liquidator
The bank filed for a petition of extrajudicial foreclosure on August 23, 1995 meanwhile assumes the role of the receiver upon the determination by the
more than fourteen years from the time the loan became due and Monetary Board that the bank can no longer resume business. His task is
demandable. Such was granted and the property was sold in a public to dispose of all the assets of the bank and effect partial payments of the
auction with PVB as the sole bidder. bank’s obligations in accordance with legal priority. In both receivership
and liquidation proceedings, the bank retains its juridical personality
The spouses filed a case to nullify the extra judicial foreclosure and sale as notwithstanding the closure of its business and may even be sued as its
null and void. During the Pre-trail conference the parties agreed to limit the corporate existence is assumed by the receiver or liquidator. The receiver
issue to whether or not the period within which the bank was placed under or liquidator meanwhile acts not only for the benefit of the bank, but for its
receivership and liquidation was a fortuitous event which suspended the creditors as well.27
running of the ten-year prescriptive period in bringing actions. The RTC of However, the receiver of the bank is in fact obliged to collect debts
Cebu ruled in favor of the PVB stating that the fact that the bank went owing to the bank, which debts form part of the assets of the bank.
under receivership the 10 year prescriptive period was interrupted. MR The receiver must assemble the assets and pay the obligation of the
was denied and thus raised to SC for resolution. bank under receivership, and take steps to prevent dissipation of
such assets. Accordingly, the receiver of the bank is obliged to
The contention of the spouses is that the obligation has already prescribe collect pre-existing debts due to the bank, and in connection
and that such can no longer be demanded to them legally. As for the PVB therewith, to foreclose mortgages securing such debts.29
they have asserted that due to the receivership it was considered a Unlike Provident Savings Bank, there was no legal prohibition imposed
fortuitous event thus interrupting the 10 year prescriptive period from the upon herein respondent to deter its receiver and liquidator from performing
time the obligation became due and demandable. The bank used a their obligations under the law. Thus, the ruling laid down in
jurisprudence to justify their allegations. Thus, this issue was raised to the the Provident case cannot apply in the case at bar.
SC for resolution.

Issue:
G.R. No. 203585               July 29, 2013

1
MILA CABOVERDE TANTANO and ROSELLER CABOVERDE vs other kin. She alleged that she immediately needs her legal share in the
DOMINALDA ESPINA-CABOVERDE, EVE CABOVERDE-YU, FE income of these properties for her daily sustenance and medical
CABOVERDE-LABRADOR, and JOSEPHINE E. expenses. She alleged that she immediately needs her legal share in the
CABOVERDE, Respondents income of these properties for her daily sustenance and medical
expenses. The other kins responded and objected that the remaining
Facts: properties should not be placed under receivership and that the allegations
of Dominalda is not a ground to put the property into receivership. The
The present controversy started when on March 7, 2005, respondents Eve RTC eventually appointed a relative of her husband Anabelle Saldia and to
and Fe filed a complaint before the RTC of Sindangan, Zamboanga del the former brgy kagawad Jesus Tan. CA affirms the decision of the RTC
Norte where they prayed for the annulment of the Deed of Sale purportedly and even did not require the applicants to post bond. Thus, this was raised
transferring Lots 2, 3 and 4 from their parents Maximo and Dominalda in to SC for resolution.
favor of petitioners Mila and Roseller and their other siblings, Jeanny,
Laluna and Ferdinand. In their verified Answer, the defendants therein, Issue:
including Maximo and Dominalda, posited the validity and due execution of
the contested Deed of Sale. (1) Whether or not the CA committed grave abuse of discretion in
sustaining the appointment of a receiver despite clear showing that the
As encouraged by the RTC, the parties executed a Partial Settlement reasons advanced by the applicant are not any of those enumerated by
Agreement (PSA) where they fixed the sharing of the uncontroverted the rules; and
properties among themselves, in particular, the adverted additional eight (2) Whether or not the CA committed grave abuse of discretion in
(8) parcels of land including their respective products and improvements. upholding the Resolution of the RTC and ruling that the receivership bond
Under the PSA, Dominalda’s daughter, Josephine, shall be appointed as is not required prior to appointment despite clear dictates of the rules.
Administrator. The PSA provided that Dominalda shall be entitled to Held:
receive a share of one-half (1/2) of the net income derived from the
uncontroverted properties. The PSA also provided that Josephine shall We have repeatedly held that receivership is a harsh remedy to be granted
have special authority, among others, to provide for the medicine of her with utmost circumspection and only in extreme situations. The doctrinal
mother. However, Domilnalda filed a Motion for Leave to Admit Amended pronouncement in Velasco & Co. v. Gochico & Co is instructive:
Answer, attaching her Amended Answer where she contradicted the The power to appoint a receiver is a delicate one and should be exercised
contents of the aforesaid verified Answer by declaring that there never was with extreme caution and only under circumstances requiring summary
a sale of the three (3) contested parcels of land in favor of Ferdinand, Mila, relief or where the court is satisfied that there is imminent danger of loss,
Laluna, Jeanny and Roseller and that she and her husband never received lest the injury thereby caused be far greater than the injury sought to be
any consideration from them. She made it clear that they intended to averted. The court should consider the consequences to all of the parties
divide all their properties equally among all their children without favor. The and the power should not be exercised when it is likely to produce
amended answer was granted by the RTC. During the course of the irreparable injustice or injury to private rights or the facts demonstrate that
proceeding the RTC approved the PSA leaving leaving (3) contested the appointment will injure the interests of others whose rights are entitled
properties. Fearing that the contested properties would be squandered, to as much consideration from the court as those of the complainant. 15
Dominalda filed with the RTC on July 15, 2008 a Verified Urgent To recall, the RTC approved the application for receivership on the stated
Petition/Application to place the controverted Lots 2, 3 and 4 under rationale that receivership was the most convenient and feasible means to
receivership. In Her application she informed the RTC about her condition preserve and administer the disputed properties. As a corollary, the RTC,
and how will she be on a disadvantage if the properties will be left to her agreeing with the applicant Dominalda, held that placing the disputed

2
properties under receivership would ensure that she would receive her Furthermore, this Court has declared that the appointment of a receiver is
share in the income which she supposedly needed in order to pay for her not proper when the rights of the parties, one of whom is in possession of
vitamins, medicines, her regular check-ups and daily sustenance. the property, depend on the determination of their respective claims to the
Considering that, as the CA put it, the applicant was already an title of such property24 unless such property is in danger of being materially
octogenarian who may not live up to the day when the conflict will be injured or lost, as by the prospective foreclosure of a mortgage on it or its
finally settled, the RTC did not act with grave abuse of discretion portions are being occupied by third persons claiming adverse title. 25
amounting to lack or excess of jurisdiction when it granted the application
for receivership since it was justified under Sec. 1(d), Rule 59 of the Rules As to the bond requirement for the appointment of a receiver.
of Court, which states:
Section 1. Appointment of a receiver. – Upon a verified application, one or The foregoing arguments are misplaced. Sec. 2 of Rule 59 is very clear in
more receivers of the property subject of the action or proceeding may be that before issuing the order appointing a receiver the court shall require
appointed by the court where the action is pending, or by the Court of the applicant to file a bond executed to the party against whom the
Appeals or by the Supreme Court, or a member thereof, in the following application is presented. The use of the word "shall" denotes its mandatory
cases: nature; thus, the consent of the other party, or as in this case, the consent
xxxx of petitioners, is of no moment. Hence, the filing of an applicant’s bond is
(d) Whenever in other cases it appears that the appointment of a receiver required at all times. On the other hand, the requirement of a receiver’s
is the most convenient and feasible means of preserving, administering, or bond rests upon the discretion of the court. Sec. 2 of Rule 59 clearly states
disposing of the property in litigation. (Emphasis supplied.) that the court may, in its discretion, at any time after the appointment,
Indeed, Sec. 1(d) above is couched in general terms and broad in scope, require an additional bond as further security for such damages.
encompassing instances not covered by the other grounds enumerated
under the said section.16 However, in granting applications for receivership Koruga vs Arcenas
on the basis of this section, courts must remain mindful of the basic Facts:
principle that receivership may be granted only when the circumstances so Koruga, a minority stockholder of Banco Filipino, filed a complaint before
demand, either because the property sought to be placed in the hands of a the RTC against the defendants that pertained to the conduct of Banco
receiver is in danger of being lost or because they run the risk of being Filipino’s banking business and prayed for Receivership and Creation of A
impaired,17 and that being a drastic and harsh remedy, receivership must Management Committee, pursuant to Rule 59 of the ROC. She accused
be granted only when there is a clear showing of necessity for it in order to the directors and officers of Banco Filipino of engaing in unsafe, unsound,
save the plaintiff from grave and immediate loss or damage. 18 and fraudulent banking practices, more particularly, acts that violate the
Before appointing a receiver, courts should consider: (1) whether or not prohibition on self-dealing.
the injury resulting from such appointment would probably be greater than
the injury ensuing if the status quo is left undisturbed; and (2) whether or Arcenas, et al filed their Answer raising, among others, the trial court’s lack
not the appointment will imperil the interest of others whose rights deserve of jurisdiction to take cognizance of the case. They filed Motion to dimiss
as much a consideration from the court as those of the person requesting the case which the RTC denied. The MR was also denied. Thus filed
for receivership.19 before the CA a Petition for a pre.injunction and a TRO. CA granted this
Moreover, this Court has consistently ruled that where the effect of the and issued a 60-day TRO enjoining Judge Marella from conducting further
appointment of a receiver is to take real estate out of the possession of the proceedings in the case. Koruga filed a Preition for Certiorari to SC against
defendant before the final adjudication of the rights of the parties, the the TRO and pre. Injunction granted by the CA. Thus this issue
appointment should be made only in extreme cases. 20
Issue:

3
Which body has jurisdiction over the Receivership Application of Koruga?
Issue:
Held: Whether or not the CA erred in granting respondent Fidela’s application for
It is clear under Sec 29 and 30 of the New Central Bank Act provides that receivership.
it is the Monetary Board that exercises exclusive jurisdiction over
proceedings for receivership of banks. The court’s jurisdiction can only be Held:
invoked after the Monetary Board had taken action on the matter and only
on the grounds of excess of jurisdiction or grave abuse of discretion The above cases are similar only in that they involved the same parties
amounting to lack or excess of jurisdiction. and Fidela sought the placing of the properties under receivership in all of
them. But receivership is not an action. It is but an auxiliary remedy, a
G.R. No. 174356               January 20, 2010 mere incident of the suit to help achieve its purpose. Consequently, it
EVELINA G. CHAVEZ and AIDA CHAVEZ-DELES vs COURT OF cannot be said that the grant of receivership in one case will amount
APPEALS and ATTY. FIDELA Y. VARGAS to res judicata on the merits of the other cases. The grant or denial of this
provisional remedy will still depend on the need for it in the particular
Facts: action.
Fidela Y. Vargas owned a five-hectare mixed coconut land and rice fields
in Sorsogon. Petitioner Evelina G. Chavez had been staying in a remote Two. In any event, we hold that the CA erred in granting receivership over
portion of the land with her family, planting coconut seedlings on the land the property in dispute in this case. For one thing, a petition for
and supervising the harvest of coconut and palay. Fidela and Evelina receivership under Section 1(b), Rule 59 of the Rules of Civil Procedure
agreed to divide the gross sales of all products from the land between requires that the property or fund subject of the action is in danger of being
themselves. Since Fidela was busy with her law practice, Evelina lost, removed, or materially injured, necessitating its protection or
undertook to hold in trust for Fidela her half of the profits. preservation. Its object is the prevention of imminent danger to the
property. If the action does not require such protection or preservation, the
Fidela claimed that Evelina had failed to remit her share of the profits and, remedy is not receivership.6
despite demand to turn over the administration of the property to Fidela, Here Fidela’s main gripe is that Evelina and Aida deprived her of her share
had refused to do so, thus she filed a complaint for recovery of of the land’s produce. She does not claim that the land or its productive
possession, rent, and damages with prayer for the immediate appointment capacity would disappear or be wasted if not entrusted to a receiver. Nor
of a receiver before the Regional Trial Court (RTC) of Bulan, Sorsogon. 1 In does Fidela claim that the land has been materially injured, necessitating
their answer, Evelina and Aida claimed that the RTC did not have its protection and preservation. Because receivership is a harsh remedy
jurisdiction over the subject matter of the case since it actually involved an that can be granted only in extreme situations, 7 Fidela must prove a clear
agrarian dispute. right to its issuance. But she has not. Indeed, in none of the other cases
The RTC ruled in favor of the respondents thus dismissing the complaint she filed against Evelina and Aida has that remedy been granted her. 8
due to lack of jurisdiction. Thus Evelina appealed to the CA and the CA
granted the appointment of a receiver by the court based on noting that G.R. No. 203527
there appeared to be a need to preserve the property and its fruits in light SPS. AURELIO HITEROZA and CYNTHIA HITEROZA vs CHARITO S.
of Fidela’s allegation that Evelina and Aida failed to account for her share CRUZADA, President and Chairman, CHRIST'S ACHIEVERS
of such fruits. MONTESSORI, INC., and CHRIST'S ACHIEVERS MONTESSORI, INC.

Thus this appeal to the SC.

4
 The CA declared that the allegations on the school’s dissipation of assets
and funds have yet to be proven and that the RTC was still in the process
of ascertaining the veracity of the Sps. Hiteroza’s claims. 55 Further, there is
Facts: no showing that the school is in imminent danger of paralysation of its
Christ’s Achievers Montessori Inc. is a non-stock, non-profit corporation business operations.56
that operates a school in San Jose del Monte, Bulacan. The petitioner Sps.
Hiteroza and the respondent Charito Cruzada (Charito) are the Thus,the Sps Hiteroza appeal to the SC for resolution.
incorporators, members and trustees of the School.  The Sps. Hiteroza
filed a Complaint6 for a derivative suit with prayer for the creation of a Issue:
management committee, the appointment of a receiver, and a claim for whether the CA correctly nullified the assailed RTC Order which directed
damages against Charito, the President and Chairman of the school. The the appointment of a receiver?
Sps. Hiteroza alleged that Charito employed schemes and acts resulting in
dissipation, loss, or wastage of the school’s assets that, if left unchecked, Held:
would likely cause paralysis of the school operations, amounting to fraud
and misrepresentation detrimental and prejudicial to the school’s Section 2, Rule 9 of the Interim Rules, on the other hand, provides for the
interests.8 The particular alleged schemes and acts of Charito that brought appointment of a receiver, to quote:
about the Sps. Hiteroza’s prayer for the creation of a management SEC. 2. Receiver.  — In the event the court finds the application to be
committee and the appointment of a receiver. sufficient in form and substance, the court shall issue an order: (a)
appointing a receiver of known probity, integrity and competence and
Charito filed her belated Answer19 dated April 12, 2010, and argued that without any conflict of interest as hereunder defined to immediately take
the complaint  is a nuisance and harassment suit. 20 Charito averred that over the corporation, partnership or association, specifying such powers as
the Sps. Hiteroza’s real motive is to access and secure for themselves the it may deem appropriate under the circumstances, including any of the
school’s income; the Sps. Hiteroza professed their "concern" for the school powers specified in section 5 of this Rule; (b) fixing the bond of the
affairs only after almost ten (10) years. 21 Charito also averred that her receiver; (c) directing the receiver to make a report as to the affairs of the
family’s house is situated at a low-cost subdivision and their car was entity under receivership and on other relevant matters within sixty (60)
obtained through hard work and not through fraud. days from the time he assumes office; (d) prohibiting the incumbent
management of the company, partnership, or association from selling,
The RTC ruled in favor of the spouses and aproved to the appointment of encumbering, transferring, or disposing in any manner any of its properties
a management committee or a receiver. The RTC issued an Order except in the ordinary course of business; and (e) directing the payment in
(assailed RTC order)  appointing Atty. Rafael Chris F. Teston as the full of all administrative expenses incurred after the issuance of the order.
school’s receiver in view of the "inability of the parties to work out an The recent case of Villamor, Jr. v. Umale67 that touches on these points, is
amicable settlement of their dispute, and in order to enable the court to instructive:
ascertain the veracity of the claim of the [spouses Hiteroza] that Charito x x x Management committees and receivers are appointed when the
has unjustifiably failed and refused to comply with the final decision in this corporation is in imminent danger of "(1) [d]issipation, loss, wastage or
case dated May 14, 2010. Thus Charito appealed to the CA, the CA destruction of assets or other properties; and (2) [p]aralysation of its
favored Charito due to that the RTC gravely abused as here was business operations that may be prejudicial to the interest of the minority
noncompliance with the requisites for the appointment of a receiver under stockholders, parties-litigants, or the general public."
Section 1, Rule 9 of the Interim Rules.54  Applicants for the appointment of a receiver or management
committee need to establish the confluence of these two requisites.

5
This is because appointed receivers and management committees will
immediately take over the management of the corporation and will have
the management powers specified in law.1âwphi1 This may have a
negative effect on the operations and affairs of the corporation with third
parties,86 as persons who are more familiar with its operations are
necessarily dislodged from their positions in favor of appointees who are
strangers to the corporation’s operations and affairs. (emphasis supplied)
The rationale for the need to establish the confluence of the two (2)
requisites under Section 1, Rule 9 by an applicant for the appointment of a
management committee is primarily based upon the fact that such
committee and receiver appointed by the court will immediately take over
the management of the corporation, partnership or association, including
such power as it may deem appropriate, and any of the powers specified
in Section 5 of the Rule. x x x.
Thus, the creation and appointment of a management committee and a
receiver is an extraordinary and drastic remedy to be exercised with care
and caution; and only when the requirements under the Interim Rules are
shown. It is a drastic course for the benefit of the minority stockholders, the
parties-litigants, or the general public allowed only under pressing
circumstances and, when there is inadequacy, or ineffectual exhaustion of
legal or other remedies. The power to intervene before the legal remedy is
exhausted and misused when it is exercised in aid of such a purpose. The
power of the court to continue a business of a corporation, partnership, or
association must be exercised with the greatest care and caution. There
should be a full consideration of all the attendant facts, including the
interest of all the parties concerned.69
We find that the CA correctly attributed grave abuse of discretion on the
part of the RTC when the RTC prematurely appointed a receiver without
sufficient evidence to show that there is an imminent danger of: (1)
dissipation, loss, wastage, or destruction of assets or other
properties; and (2) paralysation of its business operations that may be
prejudicial to the interest of the minority stockholders, parties-litigants, or
the general public.