G.R. No. 29295, October 22, 1928
J.M. PO PAUCO, plaintiff, vs. DOLORES SIGUENZA, ET AL., defendants. WISE & CO., intervenor-appellant.

FACTS

J.M. Po Pauco obtained a final judgment against Dolores Siguenza and Mariano Aguilar. The parties agreed that from the judgment amount, the sum of P13,007.46representing the net value of the defendants’ sugar cane attached by Po Pauco and later manufactured by the Philippine National Bank (PNB) as receiverwould be deducted. A writ of execution was issued for the balance. In a separate case, Wise & Co. obtained a judgment against Po Pauco. Wise & Co. then intervened in this case, seeking to have PNB, as receiver of the P13,007.46, satisfy its judgment against Po Pauco from that sum, alleging it had previously attached Po Pauco’s interest in this judgment. PNB opposed, claiming a preferential right to the surplus from the sugar sale and noting that the Hibila Trading Corporation had obtained a judgment establishing its preferential rights over the sugar harvest, superior to Po Pauco’s. The trial court denied Wise & Co.’s motion, directing it to file a separate action against PNB and Hibila Trading to determine rights to the proceeds. Wise & Co. appealed.

ISSUE

Whether a claimant to funds in the custody of a court-appointed receiver must intervene in the same proceeding where the receiver was appointed, or must institute a separate ordinary action to assert its claim.

RULING

The Supreme Court REVERSED the trial court’s order. Funds in the custody of a receiver, unlike those held by a sheriff, are not generally reachable by processes from other proceedings. A receiver is a special officer appointed for a specific case, with duties limited to that proceeding. Therefore, any person claiming a right to property or funds in a receiver’s possession must appear and assert that claim in the same proceeding where the receiver acts, by motion or petition, without the need to file a separate action. The case was remanded to the trial court to allow all interested parties to present and prove their claims to the contested sum within the existing proceeding.