The present  appeal is made  by the defendant Juan D. Pomar, as receiver,  against  the order of the Hon.  Albert E.  McCabe, judge of the Province of Occidental Negros, disallowing certain items in the final  account of the said receiver.

It appears from the record that the defendant, Romana Gauzon, on the 10th day of September, 1904, executed and delivered  to the plaintiff (Compañia General de Tabacos de Filipinas) a mortgage upon  an hacienda known as "San Jose," in the municipality of  San Carlos, in the Province of Occidental Negros.  The said defendant (Romana Gauzon) having failed to pay the said mortgage, the plaintiff (Compañia General de  Tabacos de Filipinas),  on the 22d day of September, 1905,  commenced an action for  the foreclosure of said mortgage, and asked, in addition to  the foreclosure of the mortgage, that a receiver be appointed to take charge of the property in question, pending the said action.  On the same day  (22d of September, 1905) the Hon. Vicente Jocson, after hearing the petition  filed  in  said cause, appointed the said defendant,  Juan B. Pomar, an employee of the plaintiff, receiver of the property involved in said foreclosure proceedings.  Said foreclosure proceedings continued to  a termination.  The result of said  proceedings may be found in two decisions  of this court, the cases of La Compania General de Tabacos de Filipinas vs. Ganson (13 Phil. Rep., 472)  and La Compania General de Tabacos de Filipinas vs. Ganson (13 Phil.  Rep., 481).  The facts relating to the foreclosure proceedings and the judgment therein are not important  in the  present cause,  further than to show the history of the transactions of the receiver, the defendant, Juan D. Pomar.

After the termination of  the  receivership, the court required of the receiver (Juan D. Pomar) a report and an accounting of his operations as receiver.  It appears from the record that the lower court had a good deal of trouble in securing a final.report.   The receiver apparently acted as though his only responsibility was to the  plaintiff (Compania General de Tabacos de Filipinas) ; however, finally the lower court secured what appears to be  a final accounting by the receiver,  upon the 9th or 10th  day of August, 1909.  The report of the receiver contained many items. After a careful consideration of the various items of the account of the receiver, Judge McCabe allowed the following items of said account -

1. Care of cane before cutting......................................................................		P1,522.30
2. Cutting and grinding, according to report of commissioners  .................		8,565.97
3. Fuel .....................................................................................................		150.00
4. Expenses in Iloilo, according to receiver's Exhibit B...............................		2,591.20
5. Storage................................................................................................		428.28
6. Insurance  ............................................................................................		428.28
7. Selling commission ...............................................................................		648.12
8. Judgment for plaintiff in  cause No. 249.................................................		9,187.80
9. Receiver's pay.....................................................................................		1,000.00
	Total .........................................................................	24,522.04

and ordered the receiver, Juan D. Pomar, to pay into court on  or about the first Tuesday of November, 1909, the sum of P7,883.76, a balance which he ought to have had in his possession.  From the order allowing said items  only  the defendant appealed to this court and made  the following assignments of error: 

"I.  The court erred in reducing to P8,565.97 the  P22,944.73 spent  by the  receiver for  cutting,  hauling, and manufacture of 8,005.58 piculs of sugar, for packing, transportation  and storage thereof, and insurance and selling commission thereon. 

"II.  The court erred in not allowing the item of P147.86 paid out by the receiver as interest on money borrowed to cover the first expenses of  his receivership. 

"III. The court erred in  not approving the disbursement made by the receiver of the P3.001.94 delivered to the aparceros as their share of the crop. 

"IV. The court erred in reducing to Pl,000 the P4,860.87 which the receiver claimed as compensation for his  services. 

"V. The court erred in holding that the order appointing the receiver does not extend his powers beyond those prescribed in section 175 of Act No. 190."

With reference to the first assignment of error, it will be noted that the receiver presented an account for cutting, grinding, etc., of the sugar cane upon the hacienda, over which he had control as receiver, amounting to P22,944.73. Judge McCabe refused to allow that amount for the cutting and grinding, etc., of said sugar cane, upon the ground that it was an unreasonable charge.  The parties  in the lower court agreed to the appointment of three commissioners for the purpose of ascertaining the reasonable cost of cutting, grinding, etc., of the sugar cane upon the said hacienda. The commissioners were duly appointed, the plaintiff selecting one, the defendant another and the court  selecting the third.  In due time and after due deliberation, the  commissioners reported that the reasonable cost for cutting, grinding, etc., of the said sugar cane per pico was P1.07.  There were 8,005.58  picos of sugar cane, which calculated at the rate of P1.07 per  pico for cutting, grinding, etc., would amount to P8,565.97, which amount the lower court allowed the receiver.  The  commissioners appointed by the lower court were men who  had had  experience  in  the cutting and grinding of sugar cane. It was the duty of the receiver to harvest the sugar cane at the least possible cost to the owners of the crop.  There is much proof in the record to indicate that the receiver did not harvest the crop of sugar cane as expeditiously  as  he  should have done.  There is no proof in the  record which  shows that the amount estimated by the said commissioners for the cutting, grinding, etc.  of the sugar cane in question, was  not a reasonable amount for that expense.  We find nothing in the record which justifies us in  modifying the decision of the lower court with reference to this first assignment of error.

With reference to the second assignment of error, it appears that the receiver attempted to charge F147.86, as interest on money borrowed by him during his administration  as receiver.  There is no proof in the record that the receiver was authorized to borrow money for the purpose of carrying  on  his work as receiver  of said hacienda; neither is there  any proof in the record which shows that it was  necessary for  him to borrow money to properly conserve the interests of the owners and creditors interested in the administration  of  the  hacienda.   The lower court correctly said, "a receiver has no authority to borrow money unless the same is expressly given by the court."  We would be inclined, however, to allow this amount  (P147.86) had the necessity been  fully demonstrated  for  borrowing the money.  In the  absence of authority expressly given and especially in the absence of proof of the absolute necessity for incurring this item of expense, we refuse to modify the conclusions of the lower court  with respect to this item.

With reference to the third assignment of error above noted,  the receiver included in  his account the item  of P3,001.94,  being the amount,  according to this statement, of money and effects delivered to "los aparceros de la hacienda" during  his administration.  It  is  a well known custom among sugar  growers in the Philippine Islands, that the aparceros  plant and cultivate sugar cane at their own expense, receiving one-half of the sugar produced and delivering the other half to the owner of the land.  It is also a  well  known custom that the owners of the  land from time to time  advance money and effects to the aparceros,  deducting the value of the same from the value of the sugar after the same is harvested.  In the present case it appears that the receiver delivered one-half of the sugar to the aparceros  without deducting  the amount of money and effects advanced to them.  If he, in fact, advanced to the aparceros the  said sum  (P3,001.94) he should have deducted it from the amount due said aparceros, and not have attempted to  collect the same  from the amount due the owner of the hacienda, prejudicing the  owner of the hacienda  thereby.  Here  again the  receiver exceeded  his authority.  Nevertheless we would be inclined to allow this amount (P3,001.94) if it were a just charge against the administration  of the  hacienda.  But, as was said above, it is not a just charge against the owner of the hacienda. This amount should have been collected from the aparceros. Judge McCabe committed no error in disallowing this item in the account of the receiver.

With reference to the fourth assignment of error above noted,  it  will be seen that the receiver included in his account the sum of P4,860.87 as compensation for his administration as receiver.   The lower court disallowed that amount but did allow  him. the sum  of P1,000 as his just compensation as receiver.  The lower court, in the appointment of the receiver,  did not fix any sum  for his compensation ; neither is it customary for courts in appointing receivers to fix their compensation in advance. Their compensation  is  a matter  which is always left to the sound discretion of the court, to be allowed from time to time. The receiver attempted to recover as his compensation 15 per cent of the value of the sugar.  The lower court found that the amount of P4,860.87  was an unreasonable amount to be allowed as compensation for the services of the receiver in the present case.  The court found that the receiver might have done all the work which he did do in the course of his administration as receiver in one hundred days.  The Code of Procedure in Civil Actions allows administrators of estates of deceased persons the sum of P4 a day for the time actually employed in the administration of the estate. The lower court, following: this provision of the law, believing the present case to be somewhat analogous, allowed the receiver P4 a day for his services.   The lower court also allowed an additional amount, the basis of which does not clearly appear in the record, making the total compensation of the receiver the sum of P1,000.   Against that order the owner of the hacienda did not  appeal.  Considering the negligent manner in  which the receiver administered the hacienda, as appears  from the record,  as well as his negligence in complying  with the various orders of the court with  reference to rendering accounts,  etc., we are of the opinion that the sum of P1,000 is, in fact, more than a just compensation  for  his services.  In  view, however, of the fact that the owner of the hacienda did not appeal from the order of the court allowing said sum (P1,000) we approve the finding of the lower court.

With reference to  the  fifth assignment of  error above noted, the appellant seems to believe that section 175 of the Code of Procedure in Civil Actions gave him full power to administer the property placed under his control as receiver as he might deem wise and necessary, without any intervention on the part of the court or of the interested parties. The appellant evidently overlooked the phrase of said article which says: "The receiver shall have, under the control of the court in which the action is pending, power, etc."  The judge of the lower court in  his decision  goes into detail at length and cites authorities extensively, for the purpose of showing the  general duties, powers  and responsibilities of  receivers,  evidently  for  the  purpose  of instructing receivers in his  district.  The receiver  is generally defined to be "an  indifferent person  between the parties litigant, appointed  by the court and  on behalf  of all the parties, and not of the plaintiff or defendant only, to  receive and hold the thing or property  in litigation,  pending the suit (Booth vs. Clark, 17 How. (U. S.), 822, 331), to receive the rents,  issues or profits of the land or thing  in  question (Booth vs. Clark, supra), to receive the rents  or other income, to hold possession and control of the property which is the  subject matter  of the litigation, and to dispose of the same or deliver it to such person or persons as may be directed by the court.  (Wiswall vs. Kunz, 173 Ill., 110.)" The  reports of the decisions  of the courts are filled with decisions supporting the above doctrine.   The  receiver  is said to be the arm and hand of the court  a  part of the machinery of the court, by which the rights of parties are protected.  He is required not only to preserve the property, but to  protect the rights of all of the parties interested. If he is not versed in the law,  he should secure  legal advice, with the permission of the court and in case of doubt should advise with the court and  receive direction.

After  a full consideration of the above assignments of error,  in connection with the facts contained in the record, we find no reason for changing or modifying the decision of the lower court, and the same is hereby affirmed, with costs.

Torres, Mapa, and Moreland, JJ., concur.

 

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CONCURRING

CARSON, J.,

I concur. I think it proper, however, to add  that the observation of the lower court, quoted with approval in the opinion of this court, that "a receiver has no authority to borrow money unless  the same is  expressly given by the court," while  undoubtedly true, as  a general  proposition, must not be understood as absolutely prohibiting the borrowing of money by a receiver and its repayment with interest as a lawful and necessary expense incurred by  the receiver in the performance of his duty, where it is impracticable or impossible to secure the prior approbation of the transaction by the court.

As a rule, consent of court should first be obtained; but as  clearly  indicated  in  the majority  opinion,  where  the necessity for incurring the expense actually exists, and is fully and clearly established, the transaction will be ratified and approved when all the  facts are shown to the court. The receiver and the lender take the risk that the transaction may not be ratified by the court, on the ground that in the opinion of the court there was no necessity therefor; and without the approval of the court previously obtained or the ratification and approval obtained  when the matter is finally reported, the property in the hands of the receiver is not and can not be bound  for  the  repayment of  the indebtedness.

If it were shown in the case at bar that to save a growing crop from destruction, or to harvest it at the proper time, it became necessary to borrow money to pay  laborers or the like,  and that under all the circumstances it was  impracticable to secure the  previous consent of the court to the transaction, it  will not  be doubted that on a proper showing the court would ratify and affirm the transaction, and that  this subsequent ratification would bind  the property in the hands of the receiver for the repayment of the money borrowed, together with interest  and the expenses necessarily incurred in and about the making of the loan.