G.R. No. L-45403; April 26, 1939
THE NATIONAL CITY BANK OF NEW YORK, plaintiff-appellant, vs. THE YEK TONG LIN & MARINE INSURANCE COMPANY, defendant-appellee.

FACTS

The National City Bank of New York filed an action against The Yek Tong Lin & Marine Insurance Company on a bond the latter issued to secure the faithful performance of duties by Rafael Fernandez, a receiver appointed by the Court of First Instance of Pampanga. The defendant filed a demurrer, arguing the court lacked jurisdiction because no leave was obtained from the court that appointed the receiver. The trial court sustained the demurrer and dismissed the case when the plaintiff failed to amend its complaint.

ISSUE

Whether the trial court correctly sustained the demurrer and dismissed the action for lack of jurisdiction due to the plaintiff’s failure to secure leave from the receivership court before suing the receiver’s bondsman.

RULING

No. The Supreme Court reversed the trial court’s order. The rule requiring leave from the appointing court before an action may be maintained against a receiver applies only when the receivership is still pending. The complaint in this case indicated the action was filed five years after the receiver had been declared insolvent, strongly suggesting the receivership had already terminated. Without deciding whether the rule extends to a receiver’s bondsmen, the Court held the demurrer was erroneously sustained. The case was remanded to the trial court for further proceedings.

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