CIRILO D. DOLAR AND LUIS B. TUPAS, PETITIONERS, VS. CARLOS L. SUNDIAM, GREGORIO LIRA AND REMIGIO LUMAMPAO, RESPONDENTS.

This is an original action for certiorari and prohibition to set aside an order of the Court of
First Instance of Iloilo dated December 1, 1966, in Special Proceeding 472,
granting the petition of the herein respondent Remigio
Lumampao for the appointment of a receiver over two (2) parcels of land subject
of a motion, filed by the said respondent Lumampao,
to set aside the sale thereof made by the herein petitioner Luis Tupas, in his capacity as judicial administrator of the
testate estate of one Generoso Tupas, Sr., in favor of
his herein co-petitioner Cirilo Dolar.

On June 25, 1948,
one Generoso Tupas, Jr.
filed a petition with the Court of First Instance of Iloilo (docketed as
Special Proceeding 472) for the allowance of his father’s will and the
appointment of an administrator for the deceased’s estate.  The deceased was survived by his spouse, his
son Generoso Tupas, Jr., and his other children by a first
marriage.

After the probate of the will and the appointment of the
deceased’s widow (later replaced by Luis Tupas) as
judicial administrator of the testate estate, Generoso
Tupas, Jr., on December 5, 1953, sold to the herein
respondent Lumampao, for the price of P40,000, two
(2) parcels of land bequeathed to him by his father.  On August
9, 1955, Lumampao, by virtue of this
purchase, asked the surrogate court to be allowed to intervene in the
proceedings.  The court granted his
motion.

On July 9, 1956, a project of partition of the testate estate,
comprising at least two hundred twenty-three (223) hectares, was submitted to
the probate court for approval, by the herein petitioner Luis Tupas, as judicial administrator thereof.  The two parcels of land of the testate estate
previously sold to Lumampao, with an area of
ninety-two (92) hectares, more or less, were thereunder
expressly assigned to Generoso Tupas,
Jr.  This project of partition was
approved by the probate court on July
16, 1956.

On February 18, 1957, however, a complaint for the recovery of
the said two parcels of land was filed by Lumampao
against Generoso Tupas, Jr.
and Luis Tupas with the Court of First Instance of
Iloilo (docketed as civil case 4276), on the ground that the defendants
therein, by use of force, threats, stealth, strategy and intimidation, deprived
him of the possession of the said properties and gathered all the products therefrom.  The
validity of the sale to him of these properties, which was brought in issue in
the said case, was upheld by the court a quo on May 15, 1959.

This decision, in turn, was affirmed on appeal, by the Court of
Appeals in CA-G.R. 26507-R
on April 2, 1964.  The dispositive
portion of the appellate court’s decision reads as follows:

“WHEREFORE, the judgment appealed from [declaring Lumampao the owner of said parcels of real estate] is
AFFIRMED, with the modification that Generoso Tupas, Jr. pay plaintiff P437.20 and that defendants pay
plaintiff P4,000.00 for the bodega and sugar mill and P6,000.00 annually from
the crop year 1954-55 up to the delivery of the land to plaintiff.  Costs against defendants.”

The foregoing decision was appealed to this
Court in L-23134, but in a minute resolution dated December 15, 1964 we dismissed the appeal.

Prior to the final adjudication on the aforementioned complaint
of Lumampao, however, Luis Tupas
filed with the probate court, on February 9, 1960, a motion for authority to
sell four (4) parcels of land of the testate estate for the payment of taxes
due to the Government in the amount of P1,701.68, attorney’s fees and other
obligations.  The said motion included
the two parcels of land previously sold to Lumampao.  The motion was approved by the probate court
on February 13, 1960 with
Judge Wenceslao Fernan
presiding, subject to the condition that “before executing the sale, the
price must first be referred [to] and approved by this Court.”

For some unexplained reason, Luis Tupas
did not take any action relative to the foregoing authority, for, on May 14,
1963, or more than three (3) years later, another motion for authority to sell
the same parcels of land mentioned in his motion of February 9, 1960 was filed by
him with the probate court, again for the payment of municipal taxes in the
same amount of P1,701.68 and P10,000 for counsel’s services.  This motion, however, unlike the first
motion, bore the signed conformity of the heirs of the deceased, except Generoso Tupas, Jr.  The said motion was approved on May 31, 1963 by the probate court,
with Judge Jesus Rodriguez, presiding, subject to the condition that the real
properties mentioned therein shall be sold, as per prayer of Luis Tupas, for not less than P15,000.

On June 4, 1963, Luis Tupas sold to his
herein co-petitioner Cirilo Dolar
for the price of P15,000 the four (4) parcels of land specified in his motion,
comprising an aggregate area of 143 hectares, more or less, inclusive of the 92
hectares previously sold to Lumampao by Generoso Tupas, Jr. for
P40,000.  It will be noted that at this
time, the validity of the sale to Lumampao was still
pending adjudication in the Court of Appeals.

On January 24, 1964,
the probate court, through Judge Imperial Reyes, who temporarily took over the
functions of the court a quo in the absence of its presiding
judge who was then in Manila,
affixed his signature at the foot of the deed of sale executed by Luis Tupas to his co-petitioner Cirilo
Dolar, indicating his conformity therewith.

On November 6, 1965,
Lumampao, in his capacity as intervenor
in the settlement proceedings, filed with the surrogate court an amended motion
to set aside the order of the said court dated May 31, 1963 insofar as it authorized the sale of the
two (2) parcels of land conveyed to him by Generoso Tupas, Jr.  Among the
grounds adduced by Lumampao in his motion are (a)
that the said parcels of land belong to him by virtue of a final and executory decision of the Court of Appeals; (b) that contrary
to section 7(b), Rule 89 (formerly Rule
90) of the New Rules of Court no notice was given to him and to some of the
heirs of the deceased of both motions of Luis Tupas
for authority to sell said properties; (c) that the probate court’s approvals
of the said motions were all made without his knowledge; (d) that the approval
of the conveyance to Cirilo Dolar
of the said parcels was made without any corresponding motion therefor; and (e) that the testate estate has other
properties with which to pay its obligations.

On October 22, 1966,
pending decision on his motion to set aside, Lumampao
filed with the probate court a petition for the appointment of a receiver over
the two parcels of land conveyed and adjudicated to him.

On December 1, 1966,
the probate court, with Judge Carlos Sundiam
presiding, granted Lumampao’s petition, and, on February 8, 1967, appointed the herein
respondent Gregorio Lira receiver over the said parcels of land.

On June 7, 1967,
Tupas and Dolar filed with
this Court the instant petition to set aside the receivership order of the
court a quo.  On June 16, 1967, we issued a writ of
preliminary injunction against the herein respondents Judge Sundiam,
Lumampao and Lira.

The principal object of the ancillary relief a receivership is to secure and
preserve the property or thing in controversy pending litigation in order that,
as far as practicable, a judicial tribunal, in aid of its jurisdiction, may be
able to effectively bestow to the parties litigant the rights to which they are
entitled, or exact from them the obligations to which they are subject, under
the law.  Ordinarily, therefore, this
remedy will not lie where the property involved is already in custody of law,
such as that in the hands of an executor or administrator.  In these cases, the practical and equitable
purposes to be accomplished under a receivership are then virtually available.

The fact remains, however, that relief by way of receivership is
essentially equitable in nature, and consequently, must be controlled by, and administered
on, equitable principles, in the absence of statutory principles specifically
defining or laying out the dimension of its coverage, scope or application.  Thus, the Corpus Juris
Secundum,^[1]
in a brief resume of the decisions of several learned American tribunals, says:

“Ordinarily, a receiver cannot be put on property which is
already in custody of the law under process from another court of competent
jurisdiction; and there cannot be more than one receiver over the same
property.  … A court of equity has
power to appoint a receiver of property which is already in the hands of an
executor or administrator, but such power should be exercised with caution, and
a receiver should not be appointed to take assets out of the hands of legally
appointed representatives except in cases of manifest danger of loss or
destruction of, or material injury to, assets. 
…

“… Also, a receiver will be appointed when the executor or
administrator has been guilty of misconduct, waste, or misuse of assets, and there
is real danger of loss; and conversely, a receiver will not be appointed to
take assets from the custody of an executor or administrator unless there is
manifest danger of loss or destruction of, or material injury to, the assets
and a receivership is clearly necessary to protect and preserve the
property.”

In appreciating the foregoing principles, it must be borne in
mind that, thus far, we have proceeded upon the assumption that the estate upon
which receivership is prayed for is under the custody of law.  Apparently, the two parcels of land in
dispute cannot be said to be within this category, judged from the records of
this case.  The said two parcels of real
estate were, by virtue of a final and executory
judgment, adjudicated in favor of Lumampao.  Consequently, they can no longer be said to
form part of the testate estate of the late Generoso Tupas, Sr. over which the probate court can validly
exercise jurisdiction in connection with the distribution and liquidation of
the said estate.

The probate court’s order authorizing the sale of the said
parcels of land was issued and their subsequent sale to Cirilo
Dolar was consummated prior to the rendition of the
judgment of the Court of Appeals upholding the validity of the sale to Lumampao. 
Consequently, at the time of the sale of these two parcels to Cirilo Dolar, the status of such
parcels as belonging to the testate estate or to Lumampao
was then still fairly controversial.  But
the inevitable time-lag that goes with the disposal of court cases cannot, in
the present controversy, alter the fact that the Court of Appeals’ decision on
the merits of the controversy below was based upon the validity of the deed of
sale of the said parcels to Lumampao, and, thus, in
law, said properties belonged to him even before the authority to sell them was
issued by the probate court to Luis Tupas.  Hence, although the appellate court’s
decision on the ownership question came later, it nevertheless had merely the
effect of erasing once and for all any doubt or uncertainty about the real
ownership of the said parcels.  Appellate
courts, beset as they are by heaps of cases, cannot be expected naturally to
act on the hour on every litigation brought to them.  A court exercising original jurisdiction over
a suit ought, by constant exposure to this exacting job of unraveling what is
true and just, to comprehend the quantum of caution required for the avoidance
of simple problems that may in the future hamper the closure of a dispute
before it.  There appears, for instance, no
plausible reason why the sale of the two parcels in dispute was authorized by
the probate court considering that the testate estate was still quite enormous,
and considering further that the court a quo itself had, only a
short time before that, upheld the validity of their sale to Lumampao.

Moreover, it is essentially the duty of every person dealing at
arms’ length with the administrator of an estate subject to settlement and
liquidation to inquire about the existence of claims against, or of persons having
interests in, the estate subject of probate and settlement proceedings, for
such proceedings are, by their nature and purpose, open notice to all and
sundry once put into motion.  Every
diligent person ought to know that such proceedings require not just the
collection, identification, division and distribution of assets; they not
infrequently involve matters more complicated than these.

The foregoing opinion notwithstanding, we find it essential for
the purpose of disposing of the
specific issue raised in the instant petition — that the respondent court has
no jurisdiction to grant receivership over the said parcels of land in dispute
— to allow the respondent court the benefit of the doubt, that when it
authorized Luis Tupas to sell the real properties in
dispute and approved their sale in favor of Cirilo Dolar, it was acting under an honestly mistaken impression
that the questioned properties still formed part of the inventoriable
estate of the late Generoso Tupas,
Sr.

In our opinion, where, as in this case, a piece of property which
originally is a part of the estate of a deceased person is sold by an heir of
the deceased having a valid claim thereto, and said piece of property is, by
mistake, subsequently inventoried or considered part of the deceased’s estate
subject to settlement, and, thereafter, with the authority and approval of the
probate court, is sold once more to another person, a receiver of the property
so sold may, during the pendency of a motion to set
aside the second sale, be appointed by the court when in its sound judgment the
grant of such temporary relief is reasonably necessary to secure and protect
the rights of its real owner against any danger of loss or material injury to
him arising from the use and enjoyment
thereof by another who manifestly cannot acquire any right of dominion thereon
because the approving surrogate court had already lost jurisdiction to
authorize the further sale of such property to another person.

Under the particular
facts of the instant dispute, we find no compelling reason for disturbing the
respondent court’s order granting the petition of Lumampao
for the appointment of a receiver over the parcels of land in question.

ACCORDINGLY, the order of the court a quo
dated December 1, 1966 is hereby affirmed.  The said court is, however, enjoined to act
in consonance with the tenor and intendment of this decision.  No costs.

Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Fernando, Teehankee, Barredo, Villamor, and Makasiar, JJ., concur.

^[1]
See 75 C.J.S. Secs. 14 and 24.