Receivership is a provisional remedy by which the court appoints a receiver to take charge of, preserve, and administer property that is the subject of litigation or otherwise at risk, for the benefit of whoever is ultimately entitled to it. A court may appoint a receiver in situations such as: when the property is in danger of being lost, removed, or materially injured; when a party has an interest in property and it is shown to be in danger of loss or waste; to preserve property during an appeal; or after judgment, to aid in its execution or preserve the property pending an appeal. The receiver is an officer of the court, not the agent of any party, and must act impartially to preserve the property, file a bond, and account to the court. Because receivership takes control of property away from its possessor, it is granted with caution and only when necessary, and the applicant is generally required to post a bond to answer for damages if the appointment turns out to be wrongful. A receiver may be discharged when no longer necessary.
When property in a lawsuit is at risk of being lost, wasted, or dissipated, the court can put it in neutral hands — by appointing a receiver.
What Receivership Is
Receivership is a provisional remedy by which the court appoints a receiver to take charge of, preserve, and administer property that is the subject of litigation or otherwise at risk — for the benefit of whoever is ultimately entitled to it.
When a Receiver May Be Appointed
A court may appoint a receiver, for example:
- When the property is in danger of being lost, removed, or materially injured;
- When a party with an interest in property shows it is in danger of loss or waste;
- To preserve the property during an appeal; or
- After judgment, to aid in execution or to preserve the property pending appeal.
The Receiver Is an Officer of the Court
A crucial point: the receiver is an officer of the court, not the agent of any party. The receiver must act impartially to preserve the property for the benefit of all parties, subject to the court's control. The receiver:
- Files a bond;
- Takes and keeps possession of the property;
- Manages it under the court's direction; and
- Accounts to the court.
Granted With Caution
Because receivership takes control of property away from its possessor — a drastic step — courts grant it with caution and only when necessary to preserve the property and there is no other adequate remedy. The applicant is generally required to post a bond to answer for damages if the appointment turns out to be wrongful or unjustified.
Discharge of the Receiver
A receiver may be discharged when the receivership is no longer necessary — for example, when the danger to the property has passed, the case is resolved, or the adverse party posts a counter-bond — and the receiver renders a final accounting.
Practical Takeaways
- Receivership puts disputed or at-risk property under a court-appointed receiver to preserve it;
- It is available when property is in danger of loss, waste, or injury, or to aid execution or an appeal;
- The receiver is a neutral officer of the court, and receivership is granted cautiously, usually with a bond from the applicant.
Frequently Asked Questions
What is receivership? A provisional remedy by which the court appoints a receiver to take charge of, preserve, and administer property that is the subject of litigation or at risk, for the benefit of whoever is ultimately entitled to it.
When can a court appoint a receiver? When property is in danger of being lost, removed, or materially injured, when property a party has an interest in is in danger of loss or waste, to preserve property during an appeal, or after judgment to aid execution or preserve the property.
Is the receiver on one party's side? No. The receiver is an officer of the court, not the agent of any party. They must act impartially to preserve the property for the benefit of all parties, subject to the court's control, and account to the court.
Why is receivership granted with caution? Because it takes control of property away from its possessor, a drastic step. Courts grant it only when necessary and there is no other adequate remedy, and the applicant is generally required to post a bond for damages if the appointment proves wrongful.
This commentary is for general informational purposes only and does not constitute legal advice. For guidance specific to your situation, please consult a licensed attorney.
If you have questions about your rights or options under Philippine law, our firm is available to assist. You may reach us via Viber or WhatsApp, call us at 0995 433 5550, or send an email to vivasnobles@gmail.com. We look forward to hearing from you.