MENA LAMA, PETITIONER, VS. CONSOLACION N. VDA. DE APACIBLE, AND EUGENIO ANGELES, JUDGE OF THE COURT OF FIRST INSTANCE OF BATANGAS, RESPONDENTS.

Petitioner seeks the writs of certiorari, prohibition, and mandamus in his
petition dated March 24, 1947, praying judgment: (a) revoking the
appointment of the receiver in civil case No. 3932 of the Court of First
Instance of Batangas, with declaration of nullity of the orders issued by
respondent Judge Angeles on January 14, 17, and 21, 1947, as having been issued
without or in excess of his jurisdiction or with abuse of discretion; (b)
declaring null and void the proceedings had before the same judge on March 13,
1947, and issuing a writ of prohibition commanding him to desist from further
proceeding with the case until further orders of this Court; (c)
declaring null and void the order of the same respondent judge made in open
court denying petitioner’s motion to declare respondent Apacible in default in
that case, and issuing a writ of mandamus directing, said judge to enter another
order declaring respondent Apacible in default for failure to answer
petitioner’s counterclaim and allowing petitioner to present his evidence in
support of said counterclaim; and (d) for general relief.

By his order of January 14, 1947 (Annex J), Judge Eugenio Angeles,
respondent, for the reasons therein set forth, found that the appointment of a
receiver in said case, as requested by the therein plaintiff, was appropriate
and proper and accordingly appointed Marcelina Y. de Pagara as such receiver,
requiring the appointee before entering upon the discharge of her duties to give
a bond with sufficient sureties to be approved by the court in the sum of P2,000
and to take the necessary oath of office. The order of January 17, 1947 (Annex
K), entered by the same judge in the same case changed the amount of the bond
required of the receiver to P1,500. And in his order of January 21, 1947 (Annex
L), the same judge clarified this order of January 14, 1947, by declaring that
what he intended in fixing the bond therein at P2,000 was that said bond was to
be given by the plaintiff (respondent Apacible) in favor of the defendant
(petitioner herein) in that case to answer for whatever damages may be suffered
by said defendant by reason of the appointment of the receiver, whereupon it was
decreed that the sum of P2,000 which had been deposited by Marcelina Y. de
Pagara (the receiver in question), on January 17, 1947, with the clerk of the
lower court, was thereby considered and declared “to be the cash bond given by
the plaintiff in favor of the defendant for whatever damages may be suffered by
said defendant by reason of the appointment of a receiver in this case.”

The question of the propriety of the appointment of the receiver in said
civil case No. 3932 constitutes by far the most important one in the instant
proceedings. We will defer its consideration until after disposing of the minor
questions raised by the petition in paragraphs (b) and (c) of the
prayer thereof.

Paragraph (b) of said prayer has to do with the proceedings had before
Judge Angeles on March 13, 1947. In subdivision III of his answer to the
petition herein the respondent judge, through his counsel, in referring to the
hearing had on March 13, 1947, after the denial of the petition for postponement
of said hearing, alleges: (a) that the hearing of the case on the merits
had been postponed to March 13, 1947, pursuant to the joint petition or
stipulation of the parties themselves (Annex 1 of said answer); (b) that
the petition for postponement was made verbally in court and was vigorously
opposed by the plaintiff; (c) that the petition for default and the
petition for reconsideration of the order granting the appointment of receiver
could not hinder the hearing of the case on the merits on March 13, 1947; and
(d) that the reservation made by the court as respects the resolution of
the petition for reconsideration was due to the manifestation of the defendant’s
counsel made in open court that he wanted to present evidence in support of said
petition for reconsideration, which evidence, he said, he was going to present
at the hearing of the case on the merits, so that the court felt justified in
ordering that the hearing of the case on the merits proceed, the petition for
reconsideration to be passed upon after the presentation of evidence, which
would serve for the decision on the merits and also for the resolution of the
said petition for reconsideration. It is further averred that in fact the
hearing was commenced forthwith on March 13, 1947, with the plaintiff presenting
her evidence, but due to lack of time it was ordered to be continued on April
22, 1947, but was again postponed until further assignment on motion of
defendant Lama, now petitioner, in view of the pendency of the present
proceedings. This last allegation is substantiated by the petition to transfer
the hearing filed by said Lama as defendant in the court below (Annex 2 of the
answer) and the order of the respondent judge granting the same (Annex 3 of the
answer).

In view of the foregoing circumstances, we are clearly of opinion that the
respondent judge committed no abuse of discretion in proceeding, as he did,
commencing the hearing on the merits and postponing its continuation until
further assignment as prayed by the therein defendant himself. In the same way,
we find absolutely no showing of abuse of discretion on the part of the judge in
reserving until after the presentation of evidence on the merits the resolution
of the therein defendant’s petition for reconsideration of the appointment of
receiver.

As to the refusal of the respondent judge (par. [c], prayer of
petition) to declare the therein plaintiff Apacible, herein respondent, in
default for failure to answer petitioner’s (defendant’s) counterclaim, and to
allow said defendant to present his evidence in support of said counterclaim
under Rule 35, section 5, it appears that the reply to said counterclaim (Annex
I of petition) was filed under date of December 16, 1946, but appears to have
been actually filed on December 20, 1946, according to the respondent judge’s
answer (page 5), and the petition to declare the therein plaintiff in default as
to said counterclaim was not filed until almost two months thereafter, that is,
on February 13, 1947 (Annex O of petition). Rule 15, section 16, provides that
upon motion and on such terms as may be just the court may extend the time to
plead provided in the Rules, and section 17 of the same Rule provides that all
pleadings shall be liberally construed so as to do substantial justice.

We need not say that the pleading containing such reply (Annex I of petition)
may be liberally construed so as to be understood as praying the court for leave
to file said reply beyond the reglementary period. We say this because at any
rate the counterclaim contained in the answer (Annex E of petition) merely
alleges that the defendant “reproduces by reference all allegations set forth in
paragraphs 1 to 13 inclusive, of this answer,” and then, it contains an
allegation which is nothing more nor less than a repetition of previous
allegations already made, by way of special defenses, in the same answer, with
the averment of the legal conclusion that “the defendant is entitled to the full
and complete legal ownership of the land in question, free from all liens and
incumbrances, and the plaintiff is legally bound to execute the necessary
document of sale and transfer of the title to said land to the defendant.” Some
of the allegations of that answer referred to in the counterclaim were made in
answer to the averments of the first and second causes of action in the
complaint, some admitting, others denying, and still others qualifying said
allegations, and the others were made by way of special defenses, but all of
such allegations, so far as they were of facts, needed no reply from the
plaintiff, as respects those which did not contain new matter, and as respects
those which contained new matter, the plaintiff could either reply to them at
the beginning of the trial or abstain from so doing, in which last case such new
matters would be deemed controverted any way (Rule 11, section 1); and the
averments of conclusions or points of law naturally needed no reply. And as to
all of said classes of allegations, there was, of course, no occasion for
default. As a consequence of what has been stated above, there was really no
practical need of a reply to the aforesaid counterclaim. In other words, for his
own defense against the plaintiff’s action, the defendant at any rate would have
to prove those allegations of facts in his answer whether or not they were
expressly denied by the plaintiff, and the latter would have the right to offer
rebutting evidence. Thereafter the facts to be found by the court will not be
any different for the purposes of the counterclaim than for the purposes of the
complaint and answer.

Turning our attention now to the question of the appointment of the receiver
by the respondent judge, our determination thereof must primarily start from the
fundamental and well-settled principle that the matter of the appointment of a
receiver is largely within the discretion of the court to which the petition is
addressed, provided that court is one of those to which the law or the rules
grant the requisite power. High on Receivers (4th ed., p. 12, par. 7), states
the principle as follows:

“Discretionary character of the jurisdiction; discretion defined.—The
appointment of a receiver pendente lite, like the granting of an
interlocutory injunction, is to a considerable extent a matter resting in the
discretion of the court to which the application is made, to be governed by a
consideration of the entire circumstances of the case. And since the appointment
of a receiver is thus a discretionary measure, the action of the lower court in
appointing or denying a receiver pendente lite will not be disturbed upon
appeal unless there has been a clear abuse. But the discretion thus vested in
the chancellor in the matter of appointing receivers pendente lite is not
an absolute or arbitrary one but it is a sound judicial discretion in view of
all the circumstances of the case, to be exercised for the promotion of justice
where no other adequate remedy exists.” (See also Teal Motor Company
vs. Court of First Instance of Manila, 51 Phil., 549.)

It will be noted that in paragraph 8 of the complaint (Annex A) filed by
respondent Apacible, as plaintiff in civil case No. 3932 of the Court of First
Instance of Batangas, she makes a positive claim of ownership over all of the
products of the lands in question consisting of palay in the agricultural year
1944-1945, as well as the products in the subsequent agricultural years. So that
said products were and are a part of the “property in litigation” within the
meaning of Rule 61, section 1 (e). And even as to the parcels of land in
controversy, the receivership appeared to the respondent judge as the most
convenient and feasible means of administering said realty, in which we concur
with His Honor, because from the same parcels of land the past palay crops,
unquestionably fungible in character, were harvested and future ones will have
to be planted, cared for and harvested. It behooved both parties to keep the
lands productive in the meantime, and under the facts then before the court the
most convenient course was to appoint a receiver to administer the lands and
their products—the receiver will act as the court’s, not either party’s, agent.
(Teal Motor Company vs. Court of First Instance of Manila, supra.)
We are of opinion that no showing has been made of any abuse of the trial
court’s discretion in the premises. And the remedy resting largely in the lower
court’s discretion, it would only be fair to set forth herein the respondent
judge’s own exposition of the reasons which impelled him to appoint the
receiver. Those reasons are stated under the appropriate heading in the
respondent judge’s answer herein as follows:

“I. AS TO THE APPOINTMENT OF A RECEIVER:

“A. The appointment of a receiver in the case referred to (Consolacion N.
Vda. de Apacible vs. Mena Lama, No. 3932) falls squarely under pars.
(b) and (e) of section 1 of Rule 61, inasmuch as:

“(a) There is prima facie showing in the pleadings sufficient,
at least, to be a basis for the appointment of a receiver that plaintiff
Apacible has interest in the property and the products thereof, in litigation,
inasmuch as:

“(1) It is averred in the complaint that the plaintiff is the owner of the
property with a Torrens title thereon issued in her favor (see par. 2,
Annex A of the petition), and the defendant admits that such Torrens title has
been really issued in favor of the plaintiff (paragraph 2, defendant’s answer,
Annex E of the petition); and it is further averred in the complaint, supported
by the notarial document, Exhibit A, attached thereto, dated September 10, 1941,
that the said property was leased by the plaintiff to the defendant for 5 years,
at a yearly rental of 70 cavanes of palay, with an option to purchase for
P2,625, within the same period, and that the failure of the defendant to comply
with the terms of the said contract, particularly in the payment of the rents,
would extinguish the lease and the option to purchase (Exhibit A attached to the
complaint, Annex A of the petition), and that Lama failed to deliver 40 cavanes
of palay to complete the rent for 1941-1942, and 70 cavanes of palay for the
rent for 1943-1944. (See complaint, Annex A of the petition.) The lease
contract is not controverted by the defendant Lama, although he alleges that he
had complied with the terms and conditions of the same, and that he has already
become entitled to a deed of sale of the said property after having deposed in
the Court of First Instance of Manila in the case entitled ‘Mena Lama vs.
Consolacion N. Vda. de Apacible’ No. 2539, in June, 1944, the price of the
property and the rents then due; these averments are controverted by the
plaintiff Apacible (see Reply, Annex I of the petition);

“(2) From defendant’s (Lama) answer to the complaint (Annex E of the
petition, par. 9), it appears that what he alleges to have offered to the
plaintiff and deposited in the Court of First Instance of Manila in the case
2539 hereinabove referred to, on or about June 27, 1944, was P2,950.60 for the
price of the land and price of the palay as rentals due (P2,625 for the price of
the land and P325.60 for the price of the palay rentals); the plaintiff,
although she does not admit the allegation with regards to such deposit, she
avers that in any event the amount alleged to have been offered and deposited by
the defendant Lama was in Japanese military notes and, at any rate, such offer
was not in accordance with the contract which called for palay as rents and
genuine Philippine money as price (see, Reply, Annex I of the petition,
pars. 4-12). Defendant Lama’s allegation, therefore, of such offer does not
serve to destroy per se the interest of the plaintiff in the property and
plaintiff’s contention that defendant has failed to comply with his obligations
as stipulated in the contract. While this is, of course, the issue to be decided
in the decision of the case on the merits, plaintiff’s interest in the property
and in the products thereof by virtue of her certificate of title and the terms
of the contract of lease, cannot be disregarded in the meantime and it serves,
at least, for the appointment of a receiver.

“(b) From the pleadings, it also appears that defendant Lama is
retaining the possession of the land in question, taking the share for the owner
of the crops thereof, and disposing of such share without delivering any portion
thereof to the plaintiff up to the present time;

“(c) From the foregoing, it is obvious that in the meantime that the
conflict between the parties is not finally decided, the property should be
placed in the hands of a receiver who takes charge of the property and its
products, under the control of the Court, to be delivered to the party that may
be finally adjudged as entitled thereto;

“(d) The defendant has not been denied opportunity to be heard in.
connection with the motion for receivership; in fact the hearing of the petition
was set for January 8, 1947 (Annex F-1 of the petition) and defendant Lama filed
his written opposition (Annex H of the petition), which was taken into
consideration in the resolution (Annex J of the petition). There was no need to
postpone such hearing as requested by Lama’s counsel in his motion (Annex G of
the petition), for the purpose as he stated ‘that he desires to appear and argue
personally at the hearing in opposition to said petition,’ inasmuch as the
matter was already sufficiently discussed in the petition for receivership
(Annex F of the petition) and in the written opposition (Annex H of the
petition), and the ground for receivership appeared already in the
pleadings;

“(e) The relationship between plaintiff Apacible and the person
appointed receiver (it has been admitted in court on March 13, 1947, that they
are distant relatives), does not disqualify such receiver, there being no legal
prohibition that a relative of one of the parties, and a distant one at that,
cannot be appointed receiver, who after all, is responsible to and is always
under the control and orders of the court, and whenever a misconduct on her part
is shown she can be removed and held accountable.”

We think that, in proceeding as he did, the respondent judge properly
exercised the discretion which the rules conferred upon him in the matter.
However, the receiver should be made to file a bond pursuant to Rule 61, section
5.

Wherefore, the petition is denied, with costs against the petitioner. So
ordered.

Moran, C.J., Feria, Pablo, Bengzon, Hontiveros, Padilla, and
Tuason, JJ., concur.

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PERFECTO, J.:

Respondent Apacible filed against petitioner a complaint, dated June 14,
1945, praying that the lease contract upon three lots of land located in Lian,
Batangas be declared terminated; that petitioner be ordered to deliver them to
plaintiff, including 110 cavanes of palay as rents up to the agricultural year
1943-44, and, thereafter, 124 cavanes of palay as the net harvest for each
succeeding agricultural year; that petitioner’s right to purchase said three
lots be declared extinguished, and that petitioner be ordered to pay the
costs.

In his answer, dated November 27, 1946, petitioner alleged that for many
years before and. during the year 1941, there was existing an agrarian
controversy between the tenants of the Hacienda de Lian and the owner thereof,
Colegio de San Jose; that the tenants, petitioner being one of them, brought the
controversy before the Court of Industrial Relations, against the owner and the
manager N. B. Sinclair; that the case involved other persons from the
municipalities of Balayan and Tuy who purchased parcels of land occupied by the
tenants; that to settle amicably the controversy, the court gave the tenants a
period of time within which to purchase the respective lands occupied and leased
by them, by depositing with said, court or with Sinclair the value agreed
upon.

Petitioner, the answer continues, borrowed money from his brother-in-law, Dr.
Gregorio Limjoco, to make the initial deposit on the price of the lot in
question. At Dr. Limjoco’s suggestion, who needed to be refunded of the loan
granted to petitioner, the latter approached respondent Apacible for a loan with
which Limjoco may be reimbursed and the balance of the purchase price of the
lands be paid. Respondent Apacible agreed to grant the loan with an interest
consisting in 70 cavanes of palay annually for a period of five years, but
imposed the condition that, instead of executing a deed of loan, that the deed
of sale of the land in question be executed by Sinclair in the name of Apacible,
who will grant petitioner a five-year lease from September, 1941, with the
option to purchase the lands for the sum of P2,625.

Petitioner had to agree to the arrangement as it was the only alternative
open to him. In 1944, he offered Apacible P2,625 as purchase price for the
lands, but Apacible refused the tender, and petitioner instituted an action in
the Court of First Instance of Manila to compel Apacible to execute a deed of
sale of the lands, depositing the corresponding amount with the court. The
record of the case was destroyed, and all efforts of petitioner to reconstitute
it was blocked by Apacible. Petitioner prayed in his answer for the dismissal of
the complaint and, among other things, that he be declared as the true and
lawful owner of the lands in question for having exercised his option to
purchase them. On December 16, 1946, six months after the complaint was filed,
Apacible filed a petition for the appointment of a receiver to take charge and
possession of the three lots of land described in the complaint as well as of
the crops that may be harvested therefrom.

Petitioner filed an opposition to the petition alleging several reasons,
among them, that he is the absolute owner of the lands in question and that all
the expenses and costs of cultivation and production of the palay crops has been
and will always be defrayed by petitioner, without Apacible contributing a cent
therefor, and that, as a consequence, said respondent has no interest or right
to said crops and that petitioner is financially able to respond to any judgment
for the payment of all the rents that the court may adjudicate.

From the pleadings of both parties, there is no question that the effect of
the appointment of a receiver will be to take the lands in question from
petitioner’s possession before a final adjudication as to the ownership of the
lands in question. From the pleadings it appears that petitioner is among the
Lian tenants who were able to find a solution to their agrarian controversy with
the owners of the Lian estate, by being allowed to purchase the lands he had
possessed for many years. But then he had fallen into another controversy with a
money lender who pretended to assume the ownership of the lands for which
petitioner had fought for many years. Evidently, the controversy between the
parties raises a clear question of social justice.

The appointment of a receiver in this case is tantamount to prejudicing the
controversy against petitioner, by a summary ejectment from the lands he had
been occupying for many years, and to depriving him of the palay crops for which
he defrayed all the expenses of cultivation and production, without respondent
Apacible contributing a single iota of energy nor a single cent, a procedure
that cannot find support in any principle of justice.

We are of opinion that the petition is well-founded, and that the orders of
respondent judge dated January 14, 1947 and January 21, 1947, concerning the
appointment of the receiver in question in civil case No. 3932 of the Court of
First Instance of Batangas, should be set aside.

PARAS, J.:

I concur.