ANSELMO CLAUDIO, MANUEL G. GOYENA, AND LUIS S. FLORES, AS DIRECTORS OF THE “COTABATO & CAGAYAN MINING ASSOCIATION”, PETITIONERS, VS. FRANCISCO ZANDUETA, JUDGE OF FIRST INSTANCE …

The questions raised by the petition for certiorari and the answer thereto, filed in this case, may be summarized as follows:

(a) When the facts alleged in support of a complaint
praying for the appointment of a receiver, are denied under oath in an
answer thereto, and it is affirmed in both pleadings that there are
many other interested parties not joined in the case either directly or
indirectly, may such appointment be made without committing an excess
or abuse of jurisdiction, no evidence of any kind having been taken to
determine in some way the truth of said facts and no order having been
issued for the joinder of the other interested parties?

(b) Did the respondent judge exceed his jurisdiction and
abuse his discretion in appointing as he did a receiver in civil case
No. 51510 of the Court of First Instance of Manila entitled C. P.
Neuffer et al., plaintiffs, vs. Anselmo Claudio et al., defendants, for
rendition of accounts, appointment of a receiver, issuance of a
preliminary injunction and dissolution of an association?

(c) Is the “Cotabato & Cagayan Mining Association” a
legally organized association in the sense that it is entitled to
acquire mining properties in the Provinces of Cagayan and Cotabato and
to be joined as party in civil case No. 51510?

It should be borne in mind that civil case No. 51510 of the Court
of First Instance of Manila was instituted by the respondents, except
the respondent judge and J. C. Cowper, to ask for: (1) the dissolution
of the association named “Cotabato & Cagayan Mining Association”;
(2) an accounting by the petitioners, the defendants in the
above-entitled case, of the money and property, personal or otherwise,
belonging to said association, that have passed through their hands,
and of those still in their possession; and (3) the appointment of a
receiver to take charge of the properties of the association until the
court directs otherwise. To this effect it was alleged: (a),
that( the articles of association of the “Cotabato & Cagayan Mining
Association” have not been registered in the Mercantile Registry of the
Bureau of Commerce and Industry, as required by law; (b) that
notwithstanding the fact that the heroin petitioners, defendants in the
above-entitled case, had not secured a permit to sell shares of said
association, as required by law, they had been selling and offering for
sale to the public, and they “themselves acquired, some of said shares;
(c) that notwithstanding the fact that the association has 279
members who have subscribed to the original shares thereof, no meeting
was ever held with the exception of that held in September, 1936, at
which M. W. Rice was elected president of the executive committee,
Anselmo Claudio as vice-president, Manuel G. Goyena as
secretary-treasurer, and Luis S. Flores arid C. P. Neuffer as members; (d)
that as M. W. Rice had resigned his position as president, Anselmo
Claudio was elected to succeed him by the members of the executive
committee; (e) that notwithstanding the fact that the
association had been formed for purposes of location, exploration and
exploitation of mining claims in Cagayan, Island of Luzon, and
Cotabato, Island of Mindanao, it never had and does not actually have
any mining claim of any kind; (f) that as said association has
no legal existence, the defendants, as members of the executive
committee thereof, are not authorized to discharge the offices to which
they were elected; (g) that the defendants have squandered the
funds of the association for salaries and in payment of other expenses,
and have abandoned the properties thereof located at Palimbang Kiver,
Cotabato; and (h) that to avoid the squandering of the funds
of the association and the loss of its other properties, a receiver
should be appointed in the meantime to take charge of keeping and
preserving the same.

The therein defendants, petitioners herein, answering the petition
of the therein plaintiffs and herein respondents for the issuance of a
writ of preliminary injunction and for the appointment of a receiver,
admitted it as a fact that they organized the “Cotabato & Cagayan
Mining Association” on August 28, 1936, claiming, however, to have done
so at the instance and solicitation of M. W. Rice. They specially
alleged under oath that said M. W. Rice is .the moving spirit of the
association, being the owner of one-fifth of its subscribed capital;
that in spite thereof, the plaintiffs did not include him in their
complaint either as a plaintiff or as a defendant, and did not even
mention him therein, although said fact is known to their attorney, who
is the one who filed the complaint, for the reason that said M. W. Rice
is also his client for whom he had been negotiating with the executive
committee of the association, up to the last hour, the payment to him
of certain salaries due him and of other sums allegedly owed him by the
executive committee; that the allegation of the plaintiffs that the
association has been offering its original shares for sale to the
public is false and malicious; that certificates of shares were issued
only to those who have completed payment of their subscriptions; that
the allegation that they abandoned the properties of the association
situated at Palimbang River is likewise false, and that it was
precisely M. W. Rice, in connivance with the plaintiff C. P. Neuffer,
who did so; that the true interested party in the case is M. W. Rice,
who is attempting to collect from the association his salaries and
other sums which he claims to have paid for the association; and that
if the plaintiffs did not include him in their complaint, it was to
prevent the court from acquiring jurisdiction over his person so as not
to compel him to transfer to the association the 45 mining claims
located and registered by him in the registry with money belonging to
the association.

It is well settled in this jurisdiction that the remedy of
certiorari lies to prevent acts in excess of authority or jurisdiction
as well as to correct manifest abuses of discretion committed by an
inferior tribunal, when an appeal does not prove to be a more speedy
and adequate remedy (Valdez vs. Querubin, 37 Phil., 774; Leung Ben vs.
O’Brien, 38 Phih, 182; Salvador Campos y Cia. vs. Del Rosario, 41
Phil., 45; Sabado vs. Cristina Gonzalez, Inc., 53 Phil., 770;
Westminster Bank vs. Torres and K. Nassoor, Inc., 57 Phil., 422). This
being known, it is now the duty of this court to determine, by taking
into consideration the facts inferred from the pleadings of the
parties, which are the ones briefly stated hereinbefore, whether or not
the respondent judge acted in excess of his jurisdiction and abused his
discretion, there feeing as there is no necessity of determining
whether or not he ha3 authority to appoint a receiver because he has
authority to do so under certain circumstances, by virtue of the
provisions of sections 173 et seq. of Act No. 190.

In order that, a receiver may be appointed in a case, an
application under oath to that effect must be filed, alleging all the
facts necessary to convince the court to grant the same, for the
purpose of preserving the property which is the subject of litigation
and protecting thereby the rights of all the parties interested
therein. This is due to the fact that, as stated by this court in the
case of Velasco & Co. vs. Gochuico & Co. (28 Phil., 39), the
power to appoint a receiver is a delicate one; that said power should
be exercised with extreme caution and only when the circumstances so
demand, either because there is imminent danger that the property
sought to be placed in the hands of a receiver be lost or because they
run the risk of being impaired, endeavoring to avoid that the injury
thereby caused be greater than the one sought to be averted. For this
reason, before the remedy is granted, the consequences or effects
thereof should be considered or, at least, estimated in order to avoid
causing irreparable injustice or injury, to others who are entitled to
as much consideration as those seeking it. (Velasco & Co, vs.
Gochuico & Co., supra.)

In the complaint itself, which is at the same time a petition for
the appointment of a receiver filed by the herein respondents in civil
case No. 51510, it has been emphatically alleged that the “Cotabato
& Cagayan Mining Association” is composed of 279 members; but in
spite thereof, the respondents failed to include them as parties in
said case, except only the petitioners, personally and as members of
the executive committee of the association, without pretending that
they brought the action not only for their own benefit but also for the
benefit of the other members. Neither did they include said
association, in spite of the fact that their principal purpose is to
obtain the dissolution of the same. The association, as a party
affected thereby, is undoubtedly as much entitled, if not more entitled
than the plaintiffs and defendants, to be heard in the case, in matters
affecting its existence as well as the appointment of a receiver
applied for. It is of no avail to allege that it has no legal
personality or existence because if it has none under the provisions of
the Code of Commerce (arts. 116, 117, 119, 123 and 17 of the Code of
Commerce), or under those of the Corporation Law, it undoubtedly has
legal personality or existence by virtue of the provisions of articles
38, 37, 36 and 35, paragraph 2, in connection with article 1667 of the
Civil Code. (Compania Agricola de Ultramar vs. Reyes, 4 Phil, 2).

The law certainly provides that when the controversy is one of
common or general interest to many persons, and the parties are so
numerous that it is impracticable to bring them all before the court,
one or more may sue or defend, but this is permissible only in cases
where those who do so act for the benefit of all (sec. 118, Act No.
190). There is nothing in the pleadings filed in civil case No. 51510
from which it may be inferred that the defendants acted for the benefit
of the “Cotabato & Cagayan Mining Association” or all the members
thereof, much less that the plaintiffs, in turn, sued not only for
their own benefit but also for the benefit of all the other members.

It necessarily follows from the foregoing that in order that the
respondent judge could exercise his jurisdiction or authority to
appoint a receiver in the case under consideration, he should
hayerequired the inclusion therein, as necessary parties, of the
“Cotabato-Cagayan Mining Association” or of the other members not
included as such parties; or at least, the plaintiffs should have
brought the action for themselves and in the name of the association in
question, or for the benefit of the other members. Not having done so,
and it appearing clearly from the pleadings that the persons who .might
be affected by the remedy applied for were not parties to the case, the
respondent judge undoubtedly acted in excess of his jurisdiction and
abused his discretion.

For all the foregoing, and holding as it is hereby held that the
questions raised should be answered favorably to the petitioners, that
is, the first, in the negative sense, and the last two, in the
affirmative sense, the remedy applied for is granted, and the order of
the respondent judge, of July 19, 1937, appointing J. C. Cowper
receiver in civil case No. 51510 of the Court of First Instance of
Manila, is hereby declared null and void, with the costs to the
respondents C. P. Neuffer, William Meyer, Arthur Skiles and Jose
Araneta. So ordered.

Avancena, C. J., Villa-Real, Abad Santos, Imperial, Laurel, and Concepcion, JJ., concur.