FLORENCIO T. MALLARI (AS RECEIVER IN CIVIL CASE NO. 58734, COURT OF FIRST INSTANCE OF MANILA), GO TIN AND JULIAN LEE, PETITIONERS, VS. COURT OF APPEALS, JOHN C. LEE, JESUS C. LE…

At the outset, it should
be stated that among the
petitioners was originally included “Judge Agustin P. Montesa in his capacity as Judge
of Branch XIX, Court of First Instance of Manila”.  Since he need not be impleaded
as a petitioner, even as a formal
party, his name has been dropped.^[1]

This case originated from
the civil action instituted by Go Tin and Julian Lee, mother and son, on August
28, 1964, against
Lee Tek Hong and the latter’s sons, docketed as Civil Case No. 58734 in
the Court of First Instance of
Manila, Branch XIX, presided by the Hon. Agustin P. Montesa,
for Reconveyance and Accounting with
Receivership.  They sought to recover
their share, as widow and child, in the estate of the deceased Lee Tay, who had died in Manila in 1935, leaving property conservatively
valued at P100,000.00, consisting of an interest in a partnership of Lee Tay and Lee Chay.  The partnership had been liquidated and Lee Tay’s share was taken over, managed and administered, allegedly in trust for the benefit of
the widow and children of the deceased, by Lee Tek
Hong, second eldest son of Lee Tay, the eldest being
sickly.  Lee Tek
Hong then invested the assets of the estate in the corporation known as Lee Tay and Lee Chay, Inc. (the
Corporation, for brevity).

The Complaint expressly
alleged “that in breach of his
trust and in grave abuse of the
confidence reposed on him by the plaintiffs (widow and son), defendant Lee Tek Hong clandestinely maneuvered and manipulated the
affairs of Lee Tay and Lee Chay,
Inc., by forming a partnership known as Alaska Lumber Co. making it appear in
the records of the partnership that he and his deceased wife (Mina S.
Capistrano) alone were parties in said partnership x x x ;” that Alaska Lumber Co. and the other
firms organized by Lee Tek Hong were
mere “fronts” to enable him to siphon the assets of Lee Tay and Lee Chay, Inc. to his
exclusive personal benefit to the exclusion and prejudice of plaintiffs mother
and son and other heirs of the deceased Lee Tay; that
“all the assets of Lee Tay and Lee Chay, the Alaska Lumber Co., the Uno
Lumber Co., the New Venus Lumber, the Era Incorporated operating the Paris
Motel, and Parkway Trading should be impressed with a constructive trust as
being part of the conjugal estate of the deceased Lee Tay
and plaintiff Go Tin, since 11/20 thereof rightfully and legally belongs to
plaintiff Go Tin and a proportionate 1/20 share thereof belongs to plaintiff
Julian Lee.”

The Complaint then
prayed, considering plaintiffs’ actual and existing legal and beneficial
interest, for the appointment of a receiver of the assets, properties and funds
of all the firms serving as “fronts” for the fraudulent acts and
manipulations of defendant Lee Tek
Hong and his children, namely, defendants Jesus C. Lee, Joseph. C. Lee and John
C. Lee, as the most convenient and feasible means of preserving and protecting
these properties and funds.

The case is still pending
trial in the Court below, now unfortunately delayed because of the controversy
over the appointment of a Receiver during the pendency
of the action.

Defendants-respondents,
Lee Tek Hong and sons (the LEES, for short), deny
widow and son’s interest in the properties and funds involved alleging that Go
Tin is not the legitimate wife of Lee Tay and,
therefore, is not entitled to share in the latter’s estate; and that the
properties left by Lee Tay are all under the control and administration of the Corporation with its own
duly constituted officers charged with safeguarding and protecting the assets
thereof.  It is emphasized further that
of the nine children of Lee Tay, only plaintiff
Julian Lee filed the Complaint against their elder brother, Lee Tek Hong.

When Lee Tek Hong’s wife,
Mina S. Capistrano, died in 1963, their son, John C. Lee, was appointed
administrator of her estate consisting of about 80% of the assets and
properties of Alaska Lumber Co.,
in Special Proceeding No. 54999
of the Court of First Instance of Manila, Branch IV.

As prayed for in the
Complaint, and after due hearing, the trial Court, on November
13, 1964, issued an
order (hereinafter referred to as the Receivership Order)^[2] authorizing the appointment of Atty. Florencio T. Mallari as Receiver,
upon the filing of a bond of P50,000.00,

“to take custody of the assets, properties and funds claimed
by the parties in this case, as well as the management of the business involved herein (1) Lee Tay and Lee Chay, Inc. x x x ; (2)
Alaska Lumber Co. (3) Uno Lumber Co. (4) New Venus
Lumber (5) Era Incorporated operating the Paris Motel, and (6) Parkway Trading
x x x .”

The LEES then filed a
Petition for Certiorari and Prohibition with the Court of Appeals,
docketed as CA-G.R. No. 35009-R (First Certiorari Petition), seeking to
annul and set aside the said Receivership Order; to command the Receiver to
desist from carrying out the Order complained of, and respondent
from enforcing in any way the said Order. 
After proper proceeding, the Court of Appeals, on March
19, 1965, rendered a
Decision^[3] denying the Petition and affirming the
Receivership Order.

In the meantime, on
December 4, 1964, while the First Certiorari Petition was pending before
the Court of Appeals, the trial Court issued another Order^[4] directing the Sheriff of Manila or any of his
deputies to take over the custody of the assets, properties and funds as well
as the management of the business of (1) Lee Tay and
Lee Chay, Inc., (2) Alaska Lumber Co., (3) Uno Lumber Co., (4) New Venus Lumber, (5) Era Incorporated
which operates Paris Motel, and (6) Parkway Trading, and to turn them over to
the Receiver.

On December
14, 1964, the trial
Court denied the LEES’ offer for a counterbond in
order to discharge the Receiver.

Also, on June 30, 1965,
this time after the Decision in CA-G.R. No. 35009-R had been rendered, the
trial Court denied the Urgent Motion of John C. Lee, in his capacity as administrator of the intestate estate of Mina S.
Capistrano, (Sp. Proceeding No. 54999, Court of First Instance of Manila,
Branch IV)^[5] to order the Receiver to surrender to him
all the properties of Alaska Lumber Co. contending that they were in custodia legis in
the intestate case.

Instead of moving for
reconsideration, the LEES filed on July 26, 1965, a second Petition for Certiorari
and Prohibition with Preliminary Injunction with the Court of Appeals, docketed
as CA-G.R. No. 36093-R (Second Certiorari Petition), seeking to nullify
the aforementioned Orders including the Receivership Order, which had already
been passed upon in the First Certiorari Petition.  A temporary Restraining Order was issued on August 3,
1965 in favor of the
LEES.

In the meantime, upon
examination under oath of Lee Tek Hong by the trial
Court, it was discovered that Alaska Lumber Co. was indebted to the Corporation
in the amount of P402,000.00 consisting of monthly rentals, first of P1,000.00,
which was later raised to P4,000.00 for the use of its 2-1/2 hectares of land in Juan Luna Street, Manila, together with its sawmill, machineries and
equipment.  In view thereof, the trial
Court in its Order of August 2, 1965 authorized the Receiver to pay the
Corporation the amount of P402,000.00 out of Alaska Lumber Co.’s deposit in the
Philippine Bank of Commerce and China Banking Corporation and from the proceeds
of the sale of its properties.

On November 29, 1965, a
Decision by a Special Division of Five^[6] was rendered in the Second Certiorari
Petition (CA-G.R. No. 36093-R) denying Certiorari once more on the
ground that the validity of the Receivership Order was assailed and fully
litigated in the First Certiorari Petition (CA-G.R. No. 35009-R), and
since no appeal therefrom was duly perfected, it has
become final and no longer open to further liti­gation pursuant to the
“law of the case” doctrine. 
“Right or wrong, it is binding on both the trial Court and the
appellate Court, and is not subject to re-examination by either.”
“Apart from these,” the Court continued, “the principle of res judicata has also spread its mantle over the present
litigation, the parties, the subject-matter and the cause of action in the
previous case and in this one, being exactly the same x x x.” Said Decision also lifted the Restraining
Order of August 3, 1965.

However, upon a Motion
for Reconsideration, an Amendatory Decision, dated April 11, 1966, was rendered by a three to two vote,
setting aside the original Decision.  The
dispositive portion of the Amendatory Decision reads:

“In the light of the foregoing considerations, the judgment of
this Court of November 29, 1965 is set aside and a new one entered under which the Alaska Lumber Co. and/or
the estate of Mina S. Capistrano is hereby allowed to file a counterbond of P50,000.00 to dissolve the receivership over
the assets, funds, properties and management of the said company.  The order of August 2, 1966 ordering the
receiver to pay to Lee Tay and Lee Chay, Inc. the sum of P402,000.00 and to sell and dispose of
the assets of the Alaska Lumber Company as may be necessary to settle the said
obligation is revoked and the withdrawn deposits be returned to the Alaska
Lumber Company within 15 days from the time this decision becomes final.  In order to terminate all the issues involved
in Civil Case 58724, it is suggested that Lee Tay and
Lee Chay, Inc. and Alaska Lumber Company be impleaded as party-defendants therein.  No pronouncement is made as to costs.”^[7]

A Motion for
Reconsideration of the Amendatory Decision was denied,^[8] hence, the instant Petition for Review by Certiorari filed by
mother and son.

The following are the
assigned errors:

“I.   The Court of Appeals erred in reviewing by writ of certiorari alleged errors of the trial court
which, if true, were, at most, mere errors of judgment and not errors of
jurisdiction.

II.    The Court of Appeals, in the Amendatory Decision, committed an
error of law in ignoring and not
applying the well-settled doctrine that the petitioners’ failure to file with
the Court below a motion for reconsideration of the order subject of the certiorari
proceeding is a fatal and insurmountable barrier’ (Collector of Internal
Revenue vs. Reyes, G.R. No. L-8685, January
11, 1957; Plaza vs. Mencias, G.R. No.
L-18253, October 31, 1962;
Sy It vs. Tiangco, G.R. No.
L-18375, February 27, 1962); and that under the said doctrine the peti­tion for
review by certiorari of the Orders of December 4, 1964, December 14,
1964, June 30, 1965 and August 2, 1965, without first presenting the proper
motions for reconsideration before the trial court was fatally defective.

III.   The Court of Appeals, in the
same Amendatory Decision, committed a similar serious error of law in taking
cognizance in CA-G.R. No. 36093-R, and, as a matter of fact, resolving in a diametrically opposite manner in
said proceeding the question of receivership, which was the principal question
raised and adjudicated in the previous certiorari proceeding, CA-G.R.
No. 35009-R, after the decision therein had become final and executory for failure of the petitioners to appeal therefrom.

IV.  The Court of Appeals, in the same Amendatory Decision, committed an
error of law in failing to consider the clear nature and scope of the Order of
November 13, 1964, and in not holding that the Orders of December 4, 1964 and
June 30, 1965, were mere implementing orders issued to carry out the basic Order
of November 13, 1964, which Order was upheld in the decision in CA-G.R. No.
35009-R, the last mentioned decision having already become final and executory; and that, as
a matter of fact, the receiver, under the Order of November 13, 1964,
could take custody and management of the assets of Alaska Lumber Co.
independently of the Orders of December 4, 1964 and June 30, 1965; and that the
appointment of the receiver could not
be divorced from his duty and right to take over custody of the management of
the assets of the firm placed under receivership.

V.   The Court of Appeals, in
the Amendatory Decision, clearly committed a serious error of law in disturbing
and, as a matter of fact, reversing a final and executory
finding in the decision in CA-G.R. No. 35009-R, in utter disregard of the
principle of res judicata or that of bar by former judgment,
when it held that ‘at this stage of the said case (Civil Case No. 58734) the
legal interest of plain­tiffs (herein petitioners) Go Tin and Julian Lee in the
properties held by Lee Tay and Lee Chay, Inc. and/or Alaska Lumber Company is non-existent.’

VI.  The Court of Appeals has similarly committed a grave error of law
in taking cognizance, in CA-G.R. No. 36093, of the following other questions,
which were squarely raised and definitely adjudicated in the previous
proceeding, CA-G.R. No. 35009-R:

a.   Whether or not the assets of Alaska Lumber
Company were in custodia legis,

b.   Whether or not Alaska Lumber Company, not
being a party in Civil Case No. 58734, could be placed under receivership.

VII. The Court of Appeals, in its Amendatory Decision, erred in assuming
jurisdiction over the Order of August 2, 1965, which involved the sum of
P402,000.00; in not holding that the said order was final and not interlocutory and, therefore, could not be
reviewed by certiorari; and in not holding that the issuance of said
order was strictly in accordance with law and equity.”^[9]

Upon the facts and
recorded evidence, we are constrained to set aside the Amendatory Decision and to reinstate the original Decision in the
Second Certiorari Petition (CA-G.R. No. 36093-R).

1.  Section 49(b), Rule 39 of
the Rules of Court provides:

“Sec. 49. Effect of
judgments.  The effect of a
judgment or final order rendered by a court or judge of the Philippines,
having jurisdiction to pronounce the judgment or order, may be as follows:

x          x                   x          x                      x          x

b)   In other cases the judgment or order is, with respect to the matter
directly adjudged or as to any other matter that could have been raised in
relation thereto, conclusive between the parties and their successors in
interest by title subsequent to the commencement of the action or special
proceeding, litigating for the same thing and under the same title and in the same
capacity;

x          x                   x          x                      x          x “

The dispositive
portion of the Decision of the Court of Appeals in the First Certiorari
Petition reads:

“WHEREFORE, finding no abuse of discretion by the respondent
Judge in authorizing the appointment of a receiver under his order of November 13, 1964, as affirmed in
his order of November 25, 1964,
the petition is hereby denied.”

It is plain from the
foregoing that the Appellate Court had sustained the validity of the
Receivership Order issued on November 13, 1964.  That
issue was fully litigated and resolved in the First Certiorari Petition
(CA-G.R. No. 35009-R).  And yet, in the
Second Certiorari Petition (CA-G.R. No. 36093-R), one of the ultimate
goals of the action was again “to nullify the order of the respondent
Judge of November 13, 1964.”

Assailing the
Receivership Order on jurisdictional grounds can no longer be successfully
done.  The principle of bar by prior
judgment, one of the aspects of the doctrine of res judicata or estoppel by
judgment as known to Anglo-American jurisprudence, comes into play and
precludes the re-litigation in another Certiorari proceeding of the
specific question actually litigated and resolved in the First Certiorari
Petition, which is, the validity of the Receivership Order which included
“taking custody” of the properties and funds and “managing”
the businesses involved.  The Second Certiorari
Petition must be held to be barred by the prior judgment in the First Certiorari
Petition, there being identity of parties, subject matter and cause of action
between the First Certiorari Petition where the original Decision was
rendered, and the Second Certiorari Petition which sought to assail
again the Receivership Order.  Further,
the judgment in the First Certiorari
Petition is a final one rendered by a Court of competent jurisdiction upon the
merits, there having been no appeal perfected.

And even under the
“law of the case” doctrine, as aptly held in the original Decision in
the Second Certiorari Petition (CA-G.R. No. 36093-R), the Receivership
Order is no longer open to
further litigation.  It constitutes the
controlling legal rule between the parties and can not be modified or amended.^[10]

“By ‘law of the case’ is meant that whatever is once
irrevocably established as the controlling legal rule or decision between the
same parties in the same case continues to be the law of the case so long as
the facts on which such decision was predicated continue to be the facts of the
case before the court.”^[11]

“And once the decision becomes final, it is binding on all
inferior courts and hence, beyond their power and authority to alter or
modify.”^[12]

Thus, it was erroneous
for the Amendatory Decision to hold that the trial Court “abused its
discretion in authorizing the receiver to take possession and custody of all
the funds, assets and properties of the Alaska Lumber Co., as well as its
management, particularly before the final adjudication of the rights of the
parties”.

To contend that the
Receivership Order merely “authorized” the appointment of the
Receiver as shown in the dispositive portion
of the Decision in the First Certiorari Petition, and did not include
“custody” nor “management” is to conveniently close one’s
eyes to the basic text of the Receivership Order, to wit,

“x x x to
take custody of the assets, properties and funds claimed by the parties in this
case, as well as the management of the businesses involved herein, such as (1)
Lee Tay and Lee Chay, Inc. x x x ; (2) Alaska Lumber Co., x x x ; (3) Uno Lumber Co., x x x ; (4) New Venus Lumber, x x x ; (5) Era Incorporated and Paris Motel, x x x ; and (6) Parkway Trading, x x x ,”

and
to dismember the Receivership Order beyond recognition and effectiveness.  For even the general powers of a receiver
include:

“x x x to
take and keep possession of the property in controversy; to receive rents; to
collect debts, due to himself as receiver or to the fund, property, estate,
person or corporation of which he is receiver; x x x to pay outstanding debts; to divide the money and other
property that shall remain wrong the persons legally entitled to receive the
same; and generally to do such acts respecting the property as the court may
authorize.  x x
x .”^[13]

It is contended, however,
that a strict interpretation of the res judicata doctrine cannot and should not apply
to the present proceeding.  First,
because the parties are not all the same considering the entry into the picture of the intestate estate of Mina S. Capistrano upon the
approval by the lower court of Administrator John C. Lee’s motion to intervene
as defendant.  Second, because the only
issue in the First Certiorari Petition was the validity of the appointment of the Receiver, while the
present case involves the validity of several acts of the Receiver occurring
after the First Certiorari Petition. 
And third, because the Decision in the First Certiorari Petition
was not intended to be the final word as to subsequent acts of the Receiver
because of the Appellate Court’s statement that “if at the hearing, it
will be shown that such appointment was uncalled for, the error may be
corrected by promptly asking the court to revoke the same.”^[14]

We cannot subscribe to
the foregoing views.  It is fundamental
that the application of the rule of res
judicata may not be evaded by simply including additional parties in a subsequent
litigation.^[15] There is still identity of parties although
in the second action there is one party who was not joined in the former
action, if it appears that such party is not a necessary party either in the
first or in the second action.^[16] The intestate estate of Mina S. Capistrano
is not such a necessary party.

While the non-finality of
the appointment of the Receiver may be conceded in the sense that it may be
revoked during the pendency of the action, yet it
cannot be gainsaid that the Decision of the Appellate Court in the First Certiorari
Petition upholding the validity of the appointment was, in legal contemplation,
final, no appeal having been perfected therefrom.

The argument that the only
issue in the First Certiorari Petition was the validity of the appointment
of the Receiver, while in the second, it is the validity of the several acts of
the Receiver after the First Certiorari Petition, is tenuous.  It ignores the full scope of the Receivership
Order, which included not only the custody of the assets, properties and funds
claimed, but also the management of the businesses involved.  The Order of December 4, 1964 authorizing the
Sheriff to take over custody of properties and turn them over to the Receiver,
and that of June 30, 1965 denying the Motion for the surrender of the
properties of Alaska Lumber Co. to the intestate estate of Mina S. Capistrano,
are part and parcel of the custody and management specifically entrusted to the
Receiver.  They did not alter the effects
of the basic Receivership Order.  They were allied Orders issued in
implementation and furtherance thereof. 
The Order of December 14, 1964 denying the counterbond
for the discharge of the Receiver, upholds the custody granted the Receiver,
and was within the discretion of the trial Court to grant or deny.

In so far as the Order of
August 2, 1965 is concerned, which required the payment of rentals by Alaska
Lumber Co. in the sum of P402,000.00 in favor of the
Corporation, suffice it to say that this Order was issued only after
examination under oath of Lee Tek Hong as to the
rentals due from the Alaska Lumber Co. to the Corporation.  The trial Court, therefore, cannot be faulted
with grave abuse of discretion in issuing said Order.

But even if the cause of
action in the Second Certiorari Petition were different, the issue
determined in the First Certiorari Petition, to reiterate, the validity
of the Receivership Order, must, as between the same parties, be taken as
conclusively established so long as the judgment in the First Certiorari
Petition remains unmodified.  This is the
rule on conclusiveness of judgment, another aspect of the res
judicata doctrine, as enunciated
in section 49(c), Rule 39 of the Rules of Court:

“Sec. 49. Effect of judgments – The effect of a judgment or final order rendered by a court or judge of
the Philippines,
having jurisdiction to pronounce
the judgment or order, may be as follows:

(c)    In any other litigation between the same parties or their successors in
interest, that only is deemed to have been adjudged in a former judgment which
appears upon its face to have been so adjudged, or which was
actually and necessarily included therein or necessary thereto.”^[17]

2.  The Amendatory Decision likewise holds that the “legal
interest” of mother and son in the properties held either by the
Corporation or by Alaska Lumber Co., an indispensable requisite or receivership
(Sec. 1(b), Rule 59), is non-existent. 
Again, this is a matter that was passed upon and litigated in CA-G.R.
No. 35009-R.  In fact the appellate Court
in that case squarely held:

“It appears that the respondent Judge conducted a hearing of
the respondents’ motion of November 3,
1964, reiterating the prayer of the complaint for appointment of a
receiver.  Although during the hearing no
evidence was presented in support of the allegations of the complaint showing
the existence of the plaintiffs’ interest in the properties and funds of the corporations, partnerships
and business enterprises
abovementioned, and the defendants had vigorously insisted that the plaintiffs
have no legal interest in the estate of Lee Tay, as
shown by the fact that in Annex A, which is the deed of partition of the estate
of Lee Tay, plaintiff Go Tin is not included among
those who have a share in the estate, the respondent Judge was satisfied, and in this we agree with him, that the
plaintiffs have an interest in the properties of the corporations, partnerships
and business enterprises which are alleged as ‘fronts’ for the diversion of the
assets of the estate of the deceased, Lee Tay.  In other words, to the respondent Judge there
was a prima facie showing of the existence
of the plaintiffs’ interest in said entities on the basis of the allegations of
the complaint, and he did not consider it necessary for the plaintiffs to
present evidence in support thereof.  In
this stand of the respondent Judge, we see no abuse of discretion.

x          x       
x         x          x

“The respondents’ allegation that Lee Tek
Hong diverted the share of the deceased Lee Tay in
the partnership, Lee Tay and Lee Chay,
to the corporation, Lee Tay and Lee Chay, Inc., where it is made to appear that the principal
stockholders are Lee Tek Hong, his wife, M.S.
Capistrano, defendant Lee Chi Chiao and other persons
designated by Lee Tek Hong, sufficiently shows the
danger of dissipation, loss or misappropriation thereof.  Their further allegation that the share of Go
Tin in the conjugal partnership or community property, as the case may be, and
her hereditary portion, which constitute 11/20 thereof, were not to be included
as property of Lee Tay and Lee Chay,
Inc., but to be administered by Lee Tek Hong together
with the 1/20 share of her son, Julian
Lee, and notwithstanding this arrangement their shares were so included, sufficiently indicates the existence
of an actual and existing legal
interest in the properties under the control of Lee Tek
Hong.  If through subterfuge and
clandestine manipulations their shares are actually utilized for the exclusive personal benefit of the defendants,
such a state of affairs portrays the danger of their being lost or materially injured.  The claim that plaintiffs are the owners of a total share of 12/20 in the
properties and funds of said corporation, partnerships and business enterprises
which are actually managed, operated and controlled by Lee Tek
Hong, not for the benefit of all heirs but for him, his Children and other
relatives is not flimsy or unfounded. 
Consequently, their shares may be extended the protection that the law
on receivership affords.  The relief
sought that the defendants be ordered to reconvey to
them the said 12/20 share in the
properties and funds of the above-mentioned corporations, partnerships and
business enterprise, and to account for the fruits and income thereof from the
year 1937 up to the present when defendant Lee Tek
Hong has been the sole administrators, manager and possessor thereof,
reinforces the need for safeguarding their shares, interest and participation
in the estate of Lee Tay in order that a judgment to
that effect may not be rendered ineffectual and illusory.”

For the Amendatory
Decision, therefore, to rule anew on the presence or absence of legal interest
would be to amend a final and executory pronouncement
in CA-G.R. No. 35009-R, and to violate the
doctrine of estoppel by judgment.^[18]

3.  The Amendatory Decision
further states:  “considering that
the Alaska Lumber Co. and/or Lee Chay and Lee Tay, Inc., are not even parties in Civil Case 58734, it is
outright illegal to remove said assets from their custody and possession and
transfer them to the hands of a receiver specially one not appointed as such in
a direct action involving their dissolution and liquidation.” Again, the
matter of inclusion of parties was resolved in the Decision in the First Certiorari
Petition (CA-G.R. No. 53009-R), thus:

“The petitioners contend that as the said corporations, partnerships and business enterprises
are not parties in Civil Case No. 58734, respondent Judge abused his discretion
and acted in disregard of due process of law by placing them under
receivership.  This contention overlooks
the claim that said corporations, partnerships and business enterprises serve
merely as ‘fronts’ or devices for the illegal diversion and enjoyment of the
assets of the deceased Lee Tay which should be
properly distributed among his surviving spouse and heirs.”^[19]

In other words, the
appointment of the Receiver must be viewed from the preservative
standpoint.  He has been appointed not to
take sides nor to mismanage the properties. 
At the end of the receivership, he will be required to report and make
an accounting of his management.  The
Receiver is an officer of the Court, a delegate who acts for and in behalf of
nobody else but the Court.^[20]

In fine, we hold that the
Court of Appeals erred in promulgating the Amendatory Decision.

WHEREFORE, the Amendatory Decision dated April 11, 1966, as well as the Resolution of August
17, 1966, is hereby
reversed and set aside, and the original Decision in CA-G.R. No. 36093-R,
promulgated on November 29, 1965, hereby revived.

Costs against private
respondents.

SO ORDERED.

Makasiar, Fernandez, and Guerrero, JJ., concur.

Teehankee, J., (Chairman), in the result.

^[1]
Sec. 11, Rule 3, Rules of Court.

^[2]
Order, dated November
13, 1964, Rollo pp. 142-143.

^[3]
Decision, Rollo
pp. 144–159, penned by Esguerra,
J. and concurred in by
Enriquez, J., and Sanchez, PJ.

^[4]
Order, dated December
4, 1964, Rollo p. 160.

^[5]
Order, dated June 30,
1965, Rollo pp.
161-163.

^[6] Decision, Rollo
pp. 60-73.  This original Decision was
penned by Rodriguez, J., with Narvasa and Yatco, JJ., concurring; Villamor,
J., concurring and dissenting and Concepcion,
Jr., J., dissenting.

^[7]
Amendatory Decision, Rollo pp. 97-119, penned by Lucero, J.,
concurred in by Villamor and Concepcion,
Jr., JJ. with Rodriguez and Yatco, JJ.,
dissenting.

^[8]
Resolution, Rollo
pp. 127-133.

^[9]
Brief for the Petitioners, pp. 32-35.

^[10]
Lanuza vs. Gonzales, 17 Phil. 413 (1910); Palad vs. Governor of Quezon Province, 46 SCRA 354 (1972).

^[11]
PHHC vs. Mencias,
20 SCRA 1031 (1967).

^[12]
Kabigting vs. Acting Director of Prisons, 6
SCRA 281 (1962).

^[13]
Sec. 7, Rule 59, Rules of Court.

^[14]
Decision, p. 15, CA-G.R. No. 53009-R.

^[15]
Carpena vs. Manalo,
111 Phil. 685 (1961); Republic vs. Planas, 18
SCRA 132 (1966); Anticamara vs. Ong, 82 SCRA 337 (1978).

^[16]
Juan vs. Go Cotay,
26 Phil. 328 (1913).

^[17]
Rule 39, Rules of Court.

^[18]
PCI Bank vs. Pfleider, 65 SCRA 13 (1975); Dela Cruz vs.
Hon. Paras, 69 SCRA 556 (1976).

^[19]
Decision, CA-G.R. No. 53009-R, p. 14;
p. 157, Rollo.

^[20]
Teal Motor Co. vs. CFI of Manila, 51 Phil. 549 (1928); Pacific Merchandising
Corp. vs. Consolacion Insurance & Surety
Co., Inc., 73 SCRA 564 (1976).