Facts:

The case revolves around the Bisaya Land Transportation Company, Inc. (hereafter referred to as "the corporation") and the key parties involved, including petitioners Manuel Cuenco, Lourdes Cuenco, Jose P. Velez, Federico A. Reyes, and Jesus P. Velez, against private respondent Miguel Cuenco and Hon. Francisco Geronimo, as Presiding Judge of the Court of First Instance of Manila. The events began on March 21, 1959, when the Republic of the Philippines, represented by Solicitor General Edilberto Barot, filed a petition for quo warranto in the Court of First Instance of Manila, seeking to dissolve the corporation, which had been legally established in 1935 with its headquarters in Cebu City and engaged in land and water transportation.

In the petition, the Republic sought both the dissolution of the corporation and the appointment of a receiver. Miguel Cuenco, a co-respondent, submitted an answer including a cross-claim against the petitioners, requesting the appointment

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Facts:

Background of the Case

• The action arose from a quo warranto petition filed on March 21, 1959, by the Republic of the Philippines, represented then by Solicitor General Edilberto Barot, for the dissolution of Bisaya Land Transportation Co., Inc.—a corporation organized around June 10, 1935 under Act No. 1459.
• The principal purpose of the petition was to challenge the corporate existence of the respondent corporation, which was engaged in land and water transportation and had its principal place of business in Cebu City.
• Along with the petition seeking dissolution, the petition also called for the appointment of a receiver to protect the assets of the corporation.

Pleadings and Procedural Developments

• Private respondent Miguel Cuenco, co-respondent in the quo warranto case, filed an answer with a cross-claim against the petitioners, simultaneously praying for receivership without bond.
• Petitioners initially filed a motion to dismiss Cuenco’s cross-claim, with its resolution held in abeyance pending trial on the merits.
• Despite an earlier motion to dismiss the quo warranto having been denied, petitioners later submitted their answers on September 25, 1959 to the quo warranto petition and on October 19, 1959 to Cuenco’s cross-claim.

Further Proceedings and Orders

• On February 28, 1962, the respondent corporation filed a motion for judgment on consent ordering its own dissolution and liquidation.
• Respondent Miguel Cuenco, while agreeing with the judgment on consent, insisted on the appointment of a receiver for the preservation of the corporation’s assets.
• On May 27, 1963, petitioners filed a motion to withdraw the earlier motion for judgment on consent, which was opposed by Cuenco and objected to by the corporation.
• The trial court, on December 3, 1963, denied the motion to withdraw judgment on consent; however, it granted the appointment of a receiver.
• Petitioners escalated relief by filing a petition for certiorari with the Court of Appeals (CA-G.R. No. 33266-R), which issued an ex-parte writ of preliminary injunction against enforcement of the receivership order.

Resolution and Appeal to the Supreme Court

• On October 20, 1966, then Solicitor General Barredo filed a motion for dismissal of the quo warranto proceedings; despite opposition from Cuenco, the lower court issued its Resolution on April 3, 1968.
• The April 3, 1968 Resolution granted the dismissal of the quo warranto action, dismissed Cuenco’s cross-claim, and ordered that upon finality, the receiver render a complete accounting within thirty days, effectively terminating the receivership after that period.
• Cuenco appealed this Resolution (G.R. No. L-31490) and petitioners subsequently filed a motion to discharge the receiver under Section 4, Rule 39 of the Revised Rules of Court.
• On August 17, 1968, the trial judge denied the motion to discharge the receiver, prompting petitioners to seek certiorari with the Supreme Court to annul that denial and discharge the receiver.

Separate Dissent and Further Developments

• Justice Teehankee filed a separate dissenting opinion in connection with Case L-31490, arguing that dismissing long-contested proceedings—which had spanned 19 years—without a definitive determination on the merits was improper.
• The dissent emphasized that the intra-corporate dispute should be settled on its merits and that the lower court’s abrupt termination of proceedings disadvantaged the parties, notably in relation to Miguel Cuenco’s cross-claim and the underlying public interest considerations.

Issue:

Procedural and Jurisdictional Concerns

• Whether the appointment and continued existence of the receiver—given that it is intrinsic to the ancillary or provisional relief—should be automatically terminated with the dismissal of the quo warranto action.
• Whether petitioners’ petition for certiorari to annul the trial court’s denial of their motion to discharge the receiver is proper and warranted.
• Whether the filing of the motion to discharge the receiver after the perfection of the appeal improperly stripped the lower court of its jurisdiction to entertain the motion.

Substantive Matters on the Receivership

• Whether the receivership, intended to protect corporate assets during ongoing litigation, has now become moot due to the lower court’s effective termination order of the receivership to take effect thirty days after promulgation.
• The propriety of dismissing Cuenco’s cross-claim concurrently with the dismissal of the quo warranto action, and if such dismissal prejudices his rights.

Policy and Judicial Administration

• Whether allowing the termination of the receivership at this advanced stage in the litigation would result in irreparable injury or injustice to petitioners and other stockholders.
• Whether the lower court’s Resolution, in light of the longstanding and convoluted proceedings, appropriately balanced judicial efficiency with the need to adjudicate substantive intra-corporate disputes.

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

• (Subscriber-Only)