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Advent Capital and Finance Corporation vs. Nicasio I. Alcantara and Editha I.
Alcantara
G.R. No. 1803050, January 25, 2012
FACTS:
The corporation petitioner, Advent Capital, was subject to rehabilitation. Its court
appointed rehabilitation receiver, Atty. Danilo L. Concepcion, subsequently found
out that the respondent Alcantara couple had owned the Advent Capital
P27,398,026.59, representing trust fees that it supposedly earned for managing
their several trust accounts. Prompted by this finding, Atty. Concepcion requested
Belson Securities, Inc. (Belson) to deliver to him, as Advent Capitals rehabilitation
receiver, the P7,635,597.50 in cash dividends that Belson held under the
Alcantaras Trust Account 95-013. Atty. Concepcion claimed that the dividends, as
trust fees, formed part of Advent Capitals 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. The Alcantaras made a special
appearance before the rehabilitation court to oppose Atty. Concepcions motion.
They claimed that the money in the trust account belonged to them under their
Trust Agreement with Advent Capital. The rehabilitation court granted the motion
despite the Alcantara couples opposition. Complying with the rehabilitation courts
order and Atty. Concepcions demand letter, Belson turned over the subject
dividends to him. Meanwhile, the Alcantaras filed a special civil action of certiorari
before the Court of Appeals (CA), seeking to annul the rehabilitation courts order.
The CA rendered a decision, granting the petition and directing Atty. Concepcion to
account for the dividends and deliver them to the Alcantaras. The CA ruled that the
Alcantaras owned those dividends. They did not form part of Advent Capitals
assets as contemplated under the Interim Rules of Procedure on Corporate
Rehabilitation (Interim Rules). Hence, the present petition.
ISSUE:
Whether or not the cash dividends held by Belson and claimed by both the
Alcantaras and Advent Capital constitute corporate assets of the latter that the
rehabilitation court may, upon motion, require to be conveyed to the rehabilitation
receiver for his disposition?
HELD:
No. The Court of Appeals decision is affirmed.
RATIO:
Cash dividends held by Belson and claimed by both the Alcantaras and Advent
Capital does not constitute corporate assets of the latter that the rehabilitation
court may, upon motion, require to be conveyed to the rehabilitation receiver for his
disposition.
Advent Capital asserts that the cash dividends in Belsons possession formed part of
its assets based on paragraph 9 of its Trust Agreement with the Alcantaras,
According to Advent Capital, it could automatically deduct its management fees

from the Alcantaras portfolio that they entrusted to it. Paragraph 9 of the Trust
Agreement provides that Advent Capital could automatically deduct its trust fees
from the Alcantaras portfolio, at the end of each calendar quarter, with the
corresponding duty to submit to the Alcantaras a quarterly accounting report within
20 days after.
But the problem is that the trust fees that Advent Capitals receiver was claiming
were for past quarters. Based on the stipulation, these should have been deducted
as they became due. As it happened, at the time Advent Capital made its move to
collect its supposed management fees, it neither had possession nor control of the
money it wanted to apply to its claim. Belson, a third party, held the money in the
Alcantaras names. Whether it should deliver the same to Advent Capital or to the
Alcantaras is not clear. What is clear is that the issue as to who should get the
same has been seriously contested.
The real owner of the trust property is the trustor-beneficiary. In this case, the
trustors-beneficiaries are the Alcantaras. Thus, Advent Capital could not dispose of
the Alcantaras portfolio on its own. The income and principal of the portfolio could
only be withdrawn upon the Alcantaras written instruction or order to Advent
Capital. The latter could not also assign or encumber the portfolio or its income
without the written consent of the Alcantara. All these are stipulated in the Trust
Agreement. Advent Capital and Finance Corporation vs. Nicasio I. Alcantara and
Editha I. Alcantara,
Ultimately, the issue is what court has jurisdiction to hear and adjudicate the
conflicting claims of the parties over the dividends that Belson held in trust for their
owners. Certainly, not the rehabilitation court which has not been given the power
to resolve ownership disputes between Advent Capital and third parties. Neither
Belson nor the Alcantaras are its debtors or creditors with interest in the
rehabilitation.
Advent Capital must file a separate action for collection to recover the trust fees
that it allegedly earned and, with the trial courts authorization if warranted, put the
money in escrow for payment to whoever it rightly belongs. Having failed to collect
the trust fees at the end of each calendar quarter as stated in the contract, all it had
against the Alcantaras was a claim for payment which is a proper subject for an
ordinary action for collection. It cannot enforce its money claim by simply filing a
motion in the rehabilitation case for delivery of money belonging to the Alcantaras
but in the possession of a third party.
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.

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Advent Capital and Finance Corporation vs. Nicasio I. Alcantara and Editha I.

According to Advent Capital, it could automatically deduct its management fees

Rehabilitation proceedings are summary and non-adversarial in nature, and do not

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