applying for the appointment of

Receivership (Rule 59) receiver has an interest on the

property or fund which is the
subject of the proceeding or
Receivership – It is a provisional or action.
ancillary remedy wherein the court
appoints a receiver to receive and 2. There is an action for
preserve the property or fund in litigation foreclosure and that the property
pendente lite, when it does not seem is in danger of being wasted,
reasonable that either party should hold dissipated or materially injured,
it. and that the value of the property
What is the nature of receivership? is insuFicient to discharge the
- It is a mere provisional remedy, the mortgage debt, or if the parties so
the receivership in Rule 59 stipulated in the contract of
presupposes that there is a mortgage.
principal action or proceeding and
that the property or fund subject of 3. In cases where the property or
such action or proceeding requires fund where it should be disposed
its preservation. so the disposal is done according
to the judgment.
What is the purpose of receivership?

- It is aimed for to make sure that 4. After judgement, to preserve the

existing rights are preserved and property or fund during the
become more secure. pendency of the appeal.

Examples of cases that justify the

5. After judgement, to aid in
appointment of a receiver
execution when the execution has
1. That there is an action or
returned unsatisfied or when the
proceeding and the subject of the
judgment obligor refuses to apply
same is the property fund, and that
his property for the satisfaction of
such property or fund is in danger
a judgment.
of being lost, dissipated or
materially injured, unless a
6. In other cases where the
receiver be appointed to
appointment of a receiver is the
administer and preserve it.
most convenient and feasible way
-In this case, a receiver can be
of preserving, administering, and
assigned when it appears in the
disposing the property in litigation.
verified application that the party
Meaning of a receiver that their interests may be equally
- A person appointed by the court in protected with the least possible
behalf of all the parties to the inconvenience and expense.
action for the purpose of Court that can grant receivership
preserving and conserving the
1. The court where the action is
property in litigation and prevent
pending
its possible destruction or
2. The Court of Appeals or any
dissipation, if it were left in the
member thereof.
possession of any of the parties.
3. The Supreme Court or any member
- The appointment of one is not a
thereof.
matter of absolute right as it
depends upon the sound -Receivership may be availed of, not only
discretion of the court and is during the pendency of the action. It may
based on facts and circumstances also be availed of even after judgment to
of each particular case. preserve the property during the
- A receiver is not an agent or pendency of an appeal, to dispose of it
representative of any party to the according to judgment, to aid in execution
action. He is an oFicer of the court or to carry the judgement into e<ect.
exercising his functions in the Requisites for the appointment of a receiver
interest of neither plaintiF nor
1. A verified application must be
defendant, but for the common
filed by the party applying for the
benefit of all parties in interest.
appointment of a receiver.
- A receiver performs his duties
2. The applicant must have an
“subject to the control of the
interest in the property or funds
Court”, and every question in
subject of the action; he must
volved in the receivership may be
show that the property or fund is in
determined by the court taking
danger of being lost, removed,
cognizance of the receivership
materially altered, wasted or
proceedings.
dissipated or there is a need to
GENERAL RULE: Neither party to a preserve or administer the
litigation should be appointed as a property, or that all the grounds
receiver without the consent of the justifying the appointment of a
other because a receiver should be a receiver exist.
person indiFerent to the parties and
should be impartial and disinterested. 3. The application must be with
He is not a representative of any of the notice and set for hearing. A
parties but of all of them to the end hearing is necessary because the
 grounds for a receivership require appointed. (To make a successful
the resolution of factual issues. opposition, such as party should
file a bond executed to the
4. Before issuing the appointment applicant, in an amount to be fixed
of a receiver, the court shall by the court, to the e<ect that such
require the applicant to post a party will pay the applicant all
bond executed to the party damages he. May su<er by reason
against whom the application is of the acts, omissions, or other
presented. Amount of the bond is matters specified in the
fixed by the court. It is posted to application as ground for such
the e<ect that the applicant will appointment)
pay such party all damages he may - OBTAINED WITHOUT SUFFICIENT
sustain by reason of the CAUSE - The receiver may also be
appointment of the receiver. The discharged if it is shown that his
amount of the bond initially fixed appointment was obtained without
by the court is not the final suFicient cause.
amount. At any time after the
Required Bonds:
appointment of a receiver, the
court may require additional bond 1. The bond required before the
as security for the payment of appointment of a receiver.
damages. (required at all times, the amount
specified by the court, and is not
5. Before entering upon his duties, final as the court may require
the receiver must be sworn to additional bond as further security
perform his duties faithfully and for such damages)
shall also file a bond. This bond is 2. The bond required of a receiver
to the e<ect that he will faithfully before entering upon his duties.
discharge his duties in the action (depends on the discretion of the
or proceeding and obey the orders court)
of the court.
General powers of a receiver:
Opposing the application for the
1. To bring and defend actions in his
appointment of receiver
own name in his capacity as
- COUNTERBOND - The party receiver
against whom the application for 2. To take and keep possession of the
an appointment of a receiver may property subject to the controversy
oppose the application or ask for 3. To receive rents
the discharge of a receiver already
 4. To collect debts due to himself as - A person who refuses or neglects,
receiver or to the fund, property, upon reasonable demand, to
estate, person or corporation of deliver the receiver all the
which he is the receiver property, money, books, deeds,
5. To compound for and compromise notes, bills, documents and
the same papers within his power or control,
6. To make transfers subject of or involved in the action
7. To pay outstanding debts or proceeding or in case of
8. To divide the money and property disagreement, as determined by
that shall remain among the the court:
persons legally entitled to receive a. May be punished for contempt
the same b. Shall be liable to the receiver
9. To do such acts respecting the for the money of the value of
property as the court may the property and other things
authorize so refused or neglected to be
surrendered, together with all
Investment of funds by receiver
damages that may have been
1. A receiver may not invest funds in sustained by the parties
his custody without an order from entitled thereto as a
the court and without the written consequence of such refusal or
consent of all parties to the action. neglect.
2. A receiver, strictly speaking, has no
Termination of receivership;
right or power to make any
compensation of receiver
contract binding the property or
fund in his custody or to pay out 1. Whenever the court, motu propio
funds in his hands without the or on motion of either party, shall
authority or approval of the court. determine that the necessity for a
receiver no longer exists, it shall,
Suits against a receiver – no action may
after due notice to all interested
be filed against a receiver without leave of
parties and hearing, settle the
the court which appointed him. Any
accounts of the receiver, direct the
action filed against a receiver without the
delivery of the funds and other
requisite judicial authority may be
property in his possession to the
dismissed.
person adjudged to be entitled to
Liability for refusal or neglect to deliver receive them, and order the
property to receiver discharge of the receiver from
further duty as such.
2. The court shall allow the receiver
such reasonable compensation as
the circumstances of the case
warrant, to be taxed as costs
against the defeated party, or
apportioned as justice requires.