Title
Ventosa vs. Fer
Case
G.R. No. L-14941
Decision Date
Jan 31, 1964
A lessee contested a receiver's takeover of an ice plant, claiming a valid lease. The court upheld the receiver's authority, ruling the lease's validity must first be determined in ongoing litigation.
ventosa
fernan
dispute

Case Summary (G.R. No. L-14941)

Creation of the Lease and Public Service Commission Approval

The record showed that, by virtue of a resolution (Exhibit A) dated January 6, 1958, the corporation’s stockholders authorized leasing the corporation’s franchise, factory, and equipment to Ventosa. The formal lease agreement (Exhibit B) was executed on January 31, 1958 and was ratified before Notary Public Pedrito A. Gianzon and approved by a board resolution (Exhibit C). The lease was further approved by the Public Service Commission on May 2, 1958 (Exhibit D).

Ventosa allegedly took possession of the leased premises, including the factory and equipment, on February 4, 1958, and operated the ice plant as lessee.

Civil Case No. 4994 and the Receiver’s Takeover

On September 24, 1958, respondents C. N. Hodges and Ricardo Gurrea filed an action in the CFI of Iloilo (Civil Case No. 4994) against the corporate officers, Manuel Lezama (President) and Paquita B. Lezama (Secretary), seeking, among others, the appointment of a receiver ex parte for the corporation’s properties. Jose Dineros was appointed receiver and took possession of the plant. At that time, Benjamin Borja was reportedly in charge of the factory as manager, allegedly appointed by Ventosa.

Ventosa then wrote to the receiver: a letter dated October 1, 1958 (Exhibit H) and another dated October 3, 1958 (Exhibit H-1), insisting that he could not deliver possession of the corporation’s properties because they were leased to him, and requesting the receiver not to interfere with management. Despite the letters, the receiver continued to possess and refused to return possession to the corporation.

Ventosa’s Intervention and Motions in the Receivership Case

Ventosa sought to participate actively in Civil Case No. 4994 by filing a motion to intervene (Exhibit I) and a complaint in intervention (Exhibit J). The complaint in intervention was admitted on October 13, 1958 (Exhibit J). The corporate defendants filed their answer with counterclaims on October 8, 1958, and later Hodges and Gurrea filed answers challenging the lease on October 29, 1958 (Exhibit M).

On October 8, 1958, Ventosa filed a motion (Exhibit L) before the respondent judge seeking an order restraining the receiver from interfering with management. He argued that the ice plant was leased to him and that the receiver had no right to deprive him of possession during the term of the lease without due process; he asserted that the receiver’s right, if any, was limited to collecting monthly rentals under the lease. The trial court deferred consideration until pleadings in the intervention were filed.

On November 22, 1958, the respondent judge denied the motion for a restraining order, reasoning that the plaintiffs were questioning the validity of the contract of lease in favor of Ventosa. On December 23, 1958, the respondent judge denied Ventosa’s motion for reconsideration, holding that the validity of the lease had to be decided first before Ventosa could regain or assume control of management and administration.

Petition for Certiorari and Preliminary Mandatory Injunction

Ventosa then filed the present action for certiorari with preliminary injunction on January 22, 1959, seeking the annulment of the orders dated November 22, 1958 and December 23, 1958, on the ground that they were issued by the respondent judge with grave abuse of discretion. A preliminary mandatory injunction was issued by the Court.

Respondents later filed an ex parte motion to dismiss on February 8, 1959, alleging that the lease had already expired due to an order of the Public Service Commission dated January 6, 1959, or alternatively that the writ of preliminary mandatory injunction should be lifted. Ventosa countered that, upon motion of Atty. Roman Cruz, the Commission reconsidered its January 6 order on February 18, 1959 and approved the renewal of the lease. The Court denied respondents’ motions.

The Court directed the respondent judge to cite Jose Dineros and Ernesto Gianzon for contempt in connection with the preliminary injunction, though the subsequent contempt proceedings were not reported.

Respondents’ Answers and Receiver’s Defenses

On February 18, 1959, respondents Judge Fernan, Gurrea, and Hodges filed their answer. They alleged that Hodges and Gurrea were majority stockholders and that Civil Case No. 4994 was filed as majority stockholders and on behalf of the corporation to recover damages for alleged corporate mismanagement, to effect an election of directors, and to secure the appointment of a receiver. They further claimed that the lease contract was simulated, fictitious, and contrary to law. They also contended that, if valid, the lease had already expired based on the Public Service Commission’s January 6, 1959 order.

Receiver Dineros filed his answer adopting admissions and denials and raised special and affirmative defenses. He argued that the petition lacked proper verification. He further contended that, assuming the lease was valid, it could not be considered a lien in the sense asserted by Ventosa. He also maintained that the present proceeding was not the proper remedy because Ventosa was not a stranger to the receivership proceedings.

Evidence Received and the Core Issue Framed by the Court

Pursuant to a resolution dated April 8, 1959, the parties presented evidence before Deputy Clerk Ejercito of this Court as Commissioner. After Ventosa presented his first witness, Jose Manuel Lezama, Ventosa asked that cross-examination be limited. The Court deferred action on that request until the case could be heard on the merits, while allowing the Commissioner to continue receiving evidence.

Evidence adduced by respondents through receiver Dineros was directed to possession. Dineros testified that he took possession of the ice plant in the afternoon of September 27, 1958 and found there Benjamin Borja, who did not identify himself as manager of Ventosa’s enterprise. About a week later, Atty. Treflas and Borja told the receiver that the ice plant was leased to Ventosa. Dineros also testified that in his investigation of corporate papers, Borja was not shown to be a manager of the corporation, and that City Hall records reflected that business licensing, taxes paid, and purchases were made in the corporation’s name, not Ventosa’s.

The Court treated the dominant issue as whether the respondent judge acted with grave abuse of discretion in denying Ventosa’s motion (Exhibit L) of October 8, 1958 and in denying reconsideration (Exhibit P) dated November 26, 1958, embodied in the order dated December 23, 1958 (Exhibit S). The factual fulcrum was that, at the time Ventosa intervened, the receiver was already in possession, operation, and control of the ice plant. The receiver took possession from the defendants in Civil Case No. 4994, and not from Ventosa. The record before the respondent court, as characterized by the Court, lacked evidence showing Ventosa’s prior actual possession and control at the time the receiver took over. The intervention itself presented an issue as to whether Ventosa had ever been in possession, and the record likewise did not establish that the receiver took over operation and control beyond what was already in dispute in Civil Case No. 4994.

Receivership Claims and the Need for Regular Determination of Right

The Court explained that by intervening, Ventosa submitted to the jurisdiction of the court in Civil Case No. 4994 and became a party to the receivership litigation. The Court stated the governing procedural principle: after appointment of a receiver, claimants of property or an interest therein may enforce their claims only by permission of the court appointing the receiver. A claimant may become a party to establish the claim, may petition for hearing before a master, or may sue for possession with express permission, but the receiver will not be ordered to deliver the property until the claimant’s right is established through one of these recognized modes.

The Court also cited that the procedure for presenting claims in receivership is by motion or petition in the same proceeding, or by intervention, and that all parties in interest must be notified and claims must be determined after regular hearing, not by summary resolution. The Court further characterized property under receivership as property in custodia legis, subject to administration and control of the receivership court and its receiver for purposes of preservation and for the benefit of the party adjudged entitled. It followed that, because entitlement to possession and control remained legally contested, the receivership court needed to hold so

...continue reading

Analyze Cases Smarter, Faster
Jur helps you analyze cases smarter to comprehend faster, building context before diving into full texts. AI-powered analysis, always verify critical details.

About Privacy Terms