G.R. No. 152239 . August 17, 2011.
MAKING ENTERPRISES, INC. AND SPOUSES JOAQUIN TAMANO AND ANGELITA TAMANO, Petitioners, vs. JOSE MARFORI AND EMERENCIANA MARFORI, Respondents.

FACTS

On June 4, 1984, respondent Jose Marfori acquired the Marsman Building from the Development Bank of the Philippines. The building stood on land leased from the Philippine Ports Authority (PPA). On April 10, 1987, Marfori executed a dacion en pago and assignment of rights transferring the building to petitioner Making Enterprises, Inc., represented by its officers, on the condition that Making would assume all of Marfori’s obligations. Respondent Emerenciana Marfori, Jose’s wife, claimed the building was conjugal property and she did not consent to the transfer. On April 12, 1994, she filed a civil case (Civil Case No. 94-70092) before the RTC of Manila against Making, the Tamanos, and others, seeking annulment of the dacion en pago, recovery of ownership, appointment of a receiver, and injunction. The RTC denied her application for a writ of preliminary injunction and receivership in an Order dated October 18, 1995. Her petition to the CA (CA-G.R. SP No. 39161) challenging this denial was dismissed on March 29, 1996.
Separately, in 1987, Jose Marfori issued 22 checks in favor of Cristina Lee, which were dishonored. Lee filed complaints for estafa and violation of B.P. 22. After reinvestigation, the prosecutor initially recommended dismissal, but later reversed this and filed 17 informations for violation of B.P. 22 against Marfori before the MeTC of Caloocan City. Warrants for his arrest were issued. Marfori filed a petition for certiorari and injunction with the RTC of Caloocan City to enjoin the criminal proceedings, but it was dismissed on April 18, 1997.
On November 27, 1996, the Marforis filed a Consolidated Petition (G.R. No. 126841) with the Supreme Court, seeking appointment of a receiver for the Marsman Building and injunction against the criminal cases. The Supreme Court referred the petition to the CA. On February 16, 1998, respondents filed an Amended Consolidated Petition with the CA, reiterating their prayers for receivership and to enjoin the criminal prosecution. Petitioners opposed, alleging forum shopping and that respondents had ceded all rights to the building.

ISSUE

1. Whether the Court of Appeals erred in granting the petition for certiorari and prohibition to permanently enjoin the prosecution of Jose Marfori in Criminal Case Nos. 170660 to 170676 for violation of B.P. 22.
2. Whether the Court of Appeals erred in ordering the appointment of a receiver in Civil Case No. 94-70092.

RULING

1. On the criminal cases: The Supreme Court noted that Jose Marfori had died during the pendency of the appeal. Citing Article 89(1) of the Revised Penal Code, the Court held that the death of the accused pending appeal extinguishes his criminal liability, both as to personal and pecuniary penalties, because it occurred before final judgment. Consequently, the criminal cases against him are deemed dismissed. The Court of Appeals’ order enjoining the prosecution of the criminal cases was effectively mooted by his death.
2. On the appointment of a receiver: The Supreme Court reversed the Court of Appeals’ order for the appointment of a receiver. The Court emphasized that a receiver should be appointed only when there is a clear necessity to preserve property or rights during litigation, and such appointment is a discretionary equitable remedy. In this case, the RTC had previously denied the application for receivership, finding no grave injustice or irreparable damage to Emerenciana Marfori, especially since she refiled her complaint more than six years after her first complaint was dismissed. The Court upheld the RTC’s discretion, noting that a receiver is not ordinarily appointed when title to real property is in dispute and one party is in possession. The Court of Appeals overstepped its authority in ordering receivership, as no grave abuse of discretion by the RTC was shown.
DISPOSITIVE: The Supreme Court GRANTED the petition in part. The criminal cases against Jose Marfori were dismissed due to his death. The Court of Appeals’ decision ordering the appointment of a receiver was REVERSED and SET ASIDE. The RTC’s orders denying receivership and preliminary injunction in Civil Case No. 94-70092 were reinstated.