An application for the appointment of a receiver under Section 1(a), Rule 59 of the 1997 Rules of Civil Procedure, as amended, requires that the property or fund subject of the action is in danger of being lost, removed, or materially injured, necessitating its protection or preservation. Section 1 provides,
SECTION 1. Appointment of receiver.—Upon a verified application, one or more receivers of the property subject of the action or proceeding may be appointed by the court where the action is pending, or by the Court of Appeals or by the Supreme Court, or a member thereof, in the following cases:
(a) When it appears from the verified application, and such other proof as the court may require, that the party applying for the appointment of a receiver has an interest in the property or fund which is the subject of the action or proceeding, and that such property or fund is in danger of being lost, removed, or materially injured unless a receiver be appointed to administer and preserve it;
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Here, respondents submit that they have satisfactorily established their legal right over the Marsman Building. They alleged that the building and the income and rentals thereof are in danger of being lost, removed or materially injured by the apathy, neglect and fraudulent design of petitioners thereby rendering the appointment of a receiver both urgent and imperative.[32] However, they failed to show how the building as well as the income thereof would disappear or be wasted if not entrusted to a receiver. They were not able to prove that the property has been materially injured, necessitating its protection and preservation. Because receivership is a harsh remedy that can be granted only in extreme situations,[33] respondents must prove a clear right to its issuance. This they failed to do.
We furthermore observe that in granting the appointment of a receiver, the CA merely concluded that respondents have sufficiently proven that they have an interest in the Marsman Building. It further held that unless a receiver is appointed, there is a danger of loss or material injury, considering that petitioners presently possess absolute control of the building and the rentals accruing thereof. However, there was no justification on how the CA arrived at its conclusion.
It must be stressed that the issue of the validity of the dacion en pago and assignment of rights executed by Marfori in favor of Making still has to be resolved in Civil Case No. 94-70092. Until the contract is rescinded or nullified, the same remains to be valid and binding. Thus, we agree with the RTC when it held that courts of equity will not ordinarily appoint a receiver where the rights of the parties depend on the determination of adverse claims of legal title to real property and one party is in possession.
As regards the second issue, the Court finds no longer necessary to pass upon the correctness of the order of the CA permanently enjoining the prosecution of Jose Marfori in Criminal Case Nos. 170660 to 170676 before the MeTC of Caloocan City. The Court notes that during the pendency of this petition, Jose Marfori passed away on October 2, 2004.[34] Pursuant to Article 89, paragraph 1[35] of the Revised Penal Code, as amended, the death of Marfori totally extinguished his criminal liability. Because Marfori died even before arraignment and trial, there is no relevance in declaring the extinction as well of civil liability that was based exclusively on the crime for which an accused is convicted (i.e., ex delicto). Only civil liability predicated on a source of obligation other than the delict, if any, survived the death of the accused, which the offended party can recover by means of a separate civil action.[36]
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