G.R. No. L-18359 April 29, 1961
CALIXTO DUQUE, ET AL., petitioners, vs. THE COURT OF FIRST INSTANCE OF MANILA, ET AL., respondents.

FACTS

Petitioners Calixto Duque and others filed a petition for certiorari and mandamus against the Court of First Instance of Manila, Branch I, and others. The case originated from Civil Case No. 34998, where the court had appointed Ramon Saura as receiver for properties involved in a dispute over contracts related to World War II Veterans Enterprises. The defendants and intervenors in the lower court filed a motion for Saura’s removal, alleging serious misconduct. The charges included that the receiver demanded secret “under the table” payments, threatened to sabotage business contracts unless his demands were met, and proposed executing secret agreements alongside official ones.
During hearings on the removal motion, the movants presented evidence supporting these allegations. Before the receiver could present his counter-evidence, the movants filed an urgent joint motion for the appointment of the Clerk of Court, Macario Ofilada, as a second receiver. They argued that a prima facie case had been established and that immediate appointment was imperative to protect their rights during the protracted removal proceedings. The respondent court denied this motion on March 29, 1961, primarily on the ground that appointing a second receiver would create confusion in managing the receivership estate.

ISSUE

Whether the respondent court committed grave abuse of discretion in denying the motion for the appointment of a second receiver.

RULING

Yes, the Supreme Court ruled that the respondent court committed grave abuse of discretion. The legal logic centers on the court’s paramount duty to protect the property in custodia legis and the rights of the parties during pending litigation. While a court has broad discretion in receivership matters, this discretion must be exercised judiciously to prevent irreparable injury. The Supreme Court found the verified petition and attached documents sufficiently meritorious, indicating that the serious allegations of receiver misconduct—including demands for secret payments and threats—created a situation where the assets and rights of the parties required immediate safeguarding.
The lower court’s sole rationale of avoiding “confusion” was inadequate in the face of the grave charges, which, if true, posed a direct threat to the estate’s integrity. The Supreme Court emphasized that its ruling did not prejudge the pending removal motion. However, for the interim protection of the petitioners’ rights, the appointment of a provisional second receiver was deemed necessary. Consequently, the Supreme Court granted the petition, annulled the lower court’s order, and provisionally appointed Clerk of Court Macario Ofilada as second receiver upon filing a bond, subject to later replacement from a list to be submitted by the parties. A bond was also required from the petitioners for this ex parte appointment.