GORGONIO PANDES, PETITIONER, VS. HON. JOSE TEODORO, SR., JUDGE OF THE COURT OF FIRST INSTANCE OF NEGROS OCCIDENTAL, JOSE AZCONA, EX-OFFICIO PROVINCIAL SHERIFF OF NEGROS OCCIDENT…

On December 9, 1952, Uy Tiong Oh instituted in the Court of First
Instance of Negros Occidental Civil Case No. 2562, against Gorgonio
Pandes, for the recovery of a sum of money (Annex A). Upon the posting
of the corresponding bond, a writ of preliminary attachment was issued,
on motion of Uy Tiong Oh, “against the properties of the defendant not
exempt from execution” (Annex B). Then, the provincial sheriff issued a
“Notice of Garnishment” (Annex C) upon “whatever right, interest and
participation the defendant Gorgonio Pandes has or might have in” a
certain “partnership between Uy Tiong Oh and Ester Pandes, the wife of
the defendant, in connection with the Eden Theater of San Carlos,
Negros Occidental.” Thereafter, Gorgonio Pandes filed an “Answer to
Notice of Garnishment of the Provincial Sheriff” (Annex D), praying
that said garnishment “be stayed” upon the ground, among others, that
said right, interest and participation “is involved in Civil Case No.
2371” of the same court, entitled “Uy King Poe vs. Ester Pandes and
Gorgonio Pandes.” Admittedly, Uy King Poe, the plaintiff in said Case
No. 2371, is the same Uy Tiong Oh, the plaintiff in case No. 2562. It
would seem, also, that Gorgonio Pandes had never sought any court
action on his aforesaid “answer”. In due course, a decision was,
subsequently, rendered in favor of Uy Tiong Oh in case No. 2562. Said
decision having become final, the court ordered, on April 11, 1953, on
motion of Uy Tiong Oh, the issuance of the corresponding writ of
execution and directed the provincial sheriff to sell, at public
auction, “whatever rights, interest and participation the defendant may
have on the property levied upon * * * the proceeds thereof to be
applied in satisfaction of the judgment rendered” as above stated
(Annex E). After is- suing the corresponding notice of auction sale
(Annex F), on April 30, 1953, the provincial sheriff sold to Uy Tiong
Oh for P500.00, such right, interest and participation as Gorgonio
Pandes has or might have in the partnership aforementioned (Annex 6).
Prior thereto or on April 22, 1953, Gorgonio Pandes had moved for the
reconsideration of the order of April 11, 1953, upon the ground that
the partnership in question was under receivership and, being as such
under custodia legis, said partnership and its assets are not
subject to garnishment (Annex G). The motion for reconsideration having
been denied by the court, presided over by Hon. Jose Teodoro, Sr.,
Judge, (Annex H), Gorgonio Pandes instituted the present certiorari
proceedings. In his petition to this effect, he prays:

“1. For the issuance of an order requiring the Clerk
of Court of First Instance of Negros Occidental to certify to this
Court, a copy of the order of December 10, 1953, a copy of the order of
April 11, 1953, all in Civil Case No. 2371 of the said court, that the
same may be reviewed by this Court.

“2. That the Hon. Jose
Teodoro, Sr., Judge of the Court of First Instance of Negros
Occidental, and Jose Azcona, Ex-Officio Provincial Sheriff of
Occidental Negros be ordered to refrain from further proceeding in the
matter here sought to be reviewed until further order of this Court.

“3.
That after hearing the parties, a judgment be rendered declaring the
order of April 11, 1953 as improper, null and void as in excess of the
jurisdiction of the respondent judge, or as being a grave abuse of his
judicial discretion; and that the petitioner be conceded such further
and other relief as in the opinion of the Court he is justly and
equitably entitled, with costs. (P. 4, petition.)

It appears that on October 17, 1950, Uy Tiong Oh and Ester Pandes,
assisted by her husband, petitioner Gorgonio Pandes executed a contract
of partnership, copy of which is appended to respondents’ answer, as
Annex 1. It is stated therein that Uy King Poe (alias Uy Tiong Oh) owns
two (2) cinema projectors described therein, with all their
accessories; that Mrs. Pandes owns one (1) generator and one (1) motor,
with their corresponding accessories, all installed at the Eden
Theater, situated at San Carlos, Negros Occidental; and that both
parties have agreed to form a partnership for the operation of a cinema
house at said Theater, subject to the condition that Uy would
contribute said projectors and Mrs. Pandes, the generator and the motor
above referred to; that the rentals of the building would be charged
against the partnership ; that the net profits, after deducting all
expenses, would De divided equally between the partners; that Mrs.
Pandes would be the managing partner and Uy Tiong Oh, the treasurer;
that the employment and dismissal of employees would be determined by
both; and that the partnership would exist for five (5) years, subject
to renewal.

It further appears that on or about July 2, 1952, Uy King Poe (alias
Uy Tiong Oh) commenced the aforementioned civil case No. 2371 of the
Court of First Instance of Negros Occidental, for the dissolution and
liquidation of said partnership and the recovery of the sum of P18,000,
upon the ground that Mrs. Pandes had misappropriated said sum allegedly
belonging to the partnership, and that she had prevented the plaintiff
and his representatives from inspecting and supervising “the premises
of the cinema house, causing bodily harm to said representatives.”
(Annex 4.) Upon the same grounds and the additional ground that Mrs.
Pandes would continue defrauding the partnership and had threatened to
damage and destroy his projectors, Uy King Poe moved for the
appointment of a receiver, “to take care of the properties contributed”
by the partners and, also, of the “administration of the Cinema House”
during the pendency of the case (Annex 5). Acting upon this motion,
said court, presided over by the same Judge, respondent Jose Teodoro,
Sr., appointed one Felisberto A. Broce, “as receiver * * * with
authority to take possession and take charge of the Cinema House
denominated and popularly known as Eden Theater, situated at San
Carlos, Negros Occidental, Philippines.” (Annex 3.)

The only question for determination in the case at bar is whether or
not respondent Judge had, in the words of petitioner herein (par. 10 of
the petition), “exceeded his authority when he issued the»order of
April 11, 1953” (Annex E), directing the provincial sheriff “to sell at
public auction whatever rights, interest and participation the
defendants may have on the property levied upon * * * the proceeds
thereof to be applied in satisfaction of the judgment rendered in this
case.” Petitioner maintains the affirmative, upon the ground that “said
partnership being in the hands of a receiver, the same or the
properties thereof cannot be reached by execution.” (Par. 10 of the
petition.)

This pretense is untenable for the exemption from attachment,
garnishment or sale under execution of properties under receivership is
not absolute. Such properties may not be levied upon “except by leave of the Court appointing
the receiver” (4 Am. Jur. 808; 45 Am. Jur. 132). This is a mere
consequence of the theory that “a receivership operates to protect the
receiver against interference, without the consent of the court
appointing him, with his custody and possession of the
property subject to the receivership” (45 Am. Jur. 132; Italics
supplied). Hence, “it has been held * * * that real estate in the
custody of a receiver can be levied upon and sold under execution,
provided only that the actual possession of the receiver is not
interfered with” (45 Am. Jur. 133-134, citing Albany City Bank vs.
Schermerhorn, 9 Paige [NY] 372, 38 Am. Dec. 551). The reason is that
“only a receiver’s possession of property subject to
receivership * * * is entitled to protection * * * against
interference” (45 Am. Jur. 134; see, also, 75 C. J. S. 759).

Then, again, the interference enjoined is that resulting from orders or processes of a court “other”
than that which appointed the receiver (45 Am. Jur. 136), the rule
being predicated upon the need of preventing “unseemly conflicts
between courts whose jurisdiction embraces the same subjects and
persons” (45 Am. Jur. 137). Thus, in Cu Unjieng e Hijos vs. Mabalacat
Sugar Co. (58 Phil., 439, 441), this Court said:

“The fact that the mortgaged properties are in the
hands of a receiver appointed by the court which tried the foreclosure
suit does not prevent the same court from ordering the sale of the
aforesaid mortgaged properties, inasmuch as although the said
properties are in custodia legis by virtue of the judicial
receivership, there cannot be any conflict of jurisdiction therein
because the court that ordered the sale thereof is the same which
ordered that they be placed under receivership.”

This view was reiterated and applied in Orlanes & Banaag Trans.
Co. vs. Asiatic Petroleum Co. (P. I,), Ltd. and Laguna-Tayabas Bus Co.
(59 Phil., 433, 439), in the following language:

“The appellants contend that inasmuch as the
certificates of public convenience in question were in the hands and
under the control of a judicial receiver and, therefore, in custodia legis,
the Court of First Instance of Tayabas had no jurisdiction to order the
sale thereof and, consequently, the sale made by the sheriff of the
City of Manila to the Asiatic Petroleum Company (P. I.), Ltd., and the
assignment for the latter of its rights in favor of the Laguna-Tayabas
Bus Company are null and void.

“In the case of Cu Unjieng e
Hijos vs. Mabalacat Sugar Co. (58 Phil., 439), which was decided on
September 22, 1933, this court held that the court, which ordered the
placing of the mortgaged property in the hands of a receiver in a
foreclosure proceeding, has jurisdiction to order the sale of said
property at public auction even before the termination of the
receivership.

“In the case under consideration, it was the
same court of First Instance of Tayabas, which ordered the certificates
of public convenience in question placed in the hands of a receiver,
appointed the receiver who was to take charge thereof, and ordered the
receiver thus appointed to sell said certificates. In accordance with
the aforecited doctrine, said Court of First Instance of Tayabas had
jurisdiction to order said sale.”

For this reason, respondents maintain that petitioner is not
entitled to the relief sought, the garnishment and the sale under
execution complained of, having been ordered, not only by the same
court of First Instance of Negros Occidental which had jurisdiction
over the receivership, but, also, by the same judge, respondent Jose
Teodoro, Sr., who appointed the receiver.

At any rate, the receivership in case No. 2371 is limited to the
“possession” and administration “of the Cinema House denominated and
popularly known as Eden Theater” (Annex 3). This is not necessarily a
receivership of the partnership in question. But, even if it were,
neither said possession by the receiver, nor the administration of the
Eden Theater are affected by the order complained of (Annex E), the
same being directed, not against the partnership or its properties, but
against those of Gorgonio Pandes, particularly, “whatever rights,
interest and participation” he “has or might have” in said partnership.
This right, interest or participation, if any, is a property of
Gorgonio Pandes, separate and distinct from the properties of the
partnership, which has a personality of its own, distinct from that of
its partners, and, certainly, of said Gorgonio Pandes (Arts. 44 and
1768, Civil Code of the Philippines). Such property, if any, of the
latter, is not under receivership. The receiver had no authority to
take it under his custody and, in fact, never had it in his possession
or under his administration. Consequently, it is not in custodia legis and is subject to levy, even without the permission of the court appointing the receiver.

In view of the foregoing, the petition is hereby dismissed, with costs against the petition.

It is so ordered.

Paras, C. J., Pablo, Bengzon, Montemayor, Reyes, Jugo, Bautista Angelo, and Labrador, JJ., concur.