FACTS:

Petitioner Advent Capital filed a petition for rehabilitation. The RTC named Atty. Concepcion as rehabilitation receiver. Upon audit of Advent Capital’s books, Atty. Concepcion found that respondents Nicasio and Editha Alcantara owed Advent Capital ₱27,398,026.59, representing trust fees that it supposedly earned for managing their several trust accounts.

Atty. Concepcion requested Belson Securities, Inc. to deliver to him in cash dividends that Belson held under the Alcantaras’ Trust Account, claiming that the dividends formed part of Advent Capital’s assets. Belson refused, however, citing the Alcantaras’ objections as well as the absence of an appropriate order from the rehabilitation court.

Thus, Atty. Concepcion filed a motion before the rehabilitation court to direct Belson to release the money to him, as rehabilitation receiver.

The Alcantaras opposed Atty. Concepcion’s motion. They claimed that under the circumstances, the rehabilitation court had no jurisdiction over the subject dividends.

The rehabilitation court granted Atty. Concepcion’s motion.

The Alcantaras filed a special civil action of certiorari before the CA, seeking to annul the rehabilitation court’s order. The CA granted  the petition.

The CA denied Atty. Concepcion and Advent Capital’s motion for reconsideration, prompting the filing of the present petition.

ISSUE:

Whether or not the rehabilitation court has jurisdiction to hear and adjudicate the conflicting claims of the parties over the dividends that Belson held in trust for their owners.

RULING:

Certainly, the rehabilitation court has not been given the power to resolve ownership disputes between Advent Capital and third parties. 

Advent Capital must file a separate action for collection to recover the trust fees that it allegedly earned and, with the trial court’s authorization if warranted, put the money in escrow for payment to whoever it rightly belongs. 

Rehabilitation proceedings are summary and non-adversarial in nature, and do not contemplate adjudication of claims that must be threshed out in ordinary court proceedings. Adversarial proceedings similar to that in ordinary courts are inconsistent with the commercial nature of a rehabilitation case. The latter must be resolved quickly and expeditiously for the sake of the corporate debtor, its creditors and other interested parties. Thus, the Interim Rules “incorporate the concept of prohibited pleadings, affidavit evidence in lieu of oral testimony, clarificatory hearings instead of the traditional approach of receiving evidence, and the grant of authority to the court to decide the case, or any incident, on the basis of affidavits and documentary evidence.”

Here, Advent Capital’s claim is disputed and requires a full trial on the merits. It must be resolved in a separate action where the Alcantaras’ claim and defenses may also be presented and heard. Advent Capital cannot say that the filing of a separate action would defeat the purpose of corporate rehabilitation. In the first place, the Interim Rules do not exempt a company under rehabilitation from availing of proper legal procedure for collecting debt that may be due it. Secondly, Court records show that Advent Capital had in fact sought to recover one of its assets by filing a separate action for replevin involving a car that was registered in its name.