Orendain vs BF Homes

The reason behind Rule 59, Section 6, which requires leave of court for all suits by or against the
present receiver, is to forestall any undue interference with the receivers performance of duties
through improvident suits. Apparently, such situation cannot apply to Orendain who is no longer BF
Homes receiver.
FACTS
BF Homes (respondent) is a domestic corporation developing and selling lots and houses. It had to
avail itself of financial assistance from various sources to enable it to buy properties and convert them
into residential subdivisions.
Despite its solvent status, respondent filed a Petition for Rehabilitation and for Declaration in a State of
Suspension of Payments under Section 4 of PD No. 1758 before the Securities and Exchange
Commission (SEC). and that a receiver was imperative so that its business may not be paralyzed and
the interest of the creditors and the public may not be prejudiced.
SEC then ordered the appointment of a rehabilitation receiver, FBO Management Networks, Inc., with
petitioner Orendain as Chairman to prevent paralyzation of BF Homes business operations.
Later, a Deed of Absolute Sale was executed between BF Homes represented by petitioner Orendain as
absolute and registered owner, and the Local Superior of the Franciscan Sisters of the Immaculate
Phils., Inc. (LSFSIPI) over a parcel of land worth more or less 19Million .
Meanwhile, SEC hearing panel appointed a new Committee of Receivers composed of the 11 members
of the Board of Directors of BF Homes. Consequently, receiver Orendain was relieved of his duties and
responsibilities.
Later, BF Homes filed a Complaint before the RTC against LSFSIPI and petitioner Orendain, for
reconveyance of the property alleging:
(1) that the LSFSIPI transacted with Orendain in his individual capacity and therefore, Orendain had no
title to the property transferred; (2) That the selling price is grossly inadequate. Hence, it prayed in the
Complaint that LSFSIPI reconvey the disputed property or, if reconveyance was no longer feasible, pay
the present value of the property.
Petitioner Orendain filed a Motion to Dismiss stating that BF Homes, acting through its Committee of
Receivers, had neither the interest nor the personality to prosecute the said action, in the absence of
SECs clear and actual authorization for the institution of the said suit.
RTC denied petitioners motion to dismiss for lack of merit.
CA affirmed RTCs ruling.
ISSUE: Whether or not the Committee of Receivers may institute an action against a former receiver
without prior SEC approval.
RULING
YES. The relevant law here is R59 Sec 6 on the General powers of receiver.
Petitioner argues that the Committee of Receivers should have sought prior clearance from the SEC
before instituting the action for reconveyance before the RTC, because it does not have the legal
capacity to sue. This is incorrect. One of the general powers of a receiver under Rule 59, Section 6 of
the Rules of Court is the power to bring and defend suits in such capacity.
Petitioner also contends that an action filed by a successor-receiver against him as predecessorreceiver is not allowed under Rule 59, Section 6 without leave of court which appointed him; as Section
6 provides that "no action may be filed by or against a receiver without leave of the court which
appointed him." This is bereft of merit.
The rule talks of the current receiver of the company and not the previous receiver like petitioner
Orendain. The reason behind Rule 59, Section 6, which requires leave of court for all suits by or against
the present receiver, is to forestall any undue interference with the receivers performance of duties

through improvident suits. Apparently, such situation cannot apply to Orendain who is no longer BF
Homes receiver.
Traders Royal Bank vs IAC
When the services of a receiver who has been properly appointed terminates, his compensation is to
be charged against the defeated party, or the prevailing litigant may be made to share the expense,
as justice requires.
Note: this is already the courts resolution; the factual aspects have already been ruled in G.R. No.
63855, where:
Facts:
Spouses Jose and Salvacion Tayengco (Private respondents) were ruled to be the lawful owners of the
properties under receivership, and G.R. No. 60076, the SC affirmed the validity of the appointment of
petitioner Traders Royal Bank (TRB) as receiver pendente lite.
In view of these rulings, the receivership proceeding was duly terminated. Thus, TRB rendered its final
accounting of the funds under receivership wherein it retained the amount of P219,016.24 as its
receiver's fee, instead of turning over the entire fund to the Tayengcos.
RTC approved the final accounting submitted by TRB, including the deduction of its fee from the fund
under receivership.
Private Respondents Tayengcos assailed said order before the CA, that TRB's compensation should
have been charged against the losing party and not from the funds under receivership.
CA ruled in favor of the Tayencos: that TRB cannot deduct its fee from the funds under its receivership
since this must be shouldered by the losing party or equally apportioned among the parties-litigants.
The losing parties, Cu Bie, et al., were held solely liable for TRB's compensation.
Issue: Who is responsible for TRB's receiver's fee?
Ruling:
The defeated party Cu Bie et al, OR both Sps Tayenco (party litigant) and Cu bie, et al., as justice
requires.
"SEC. 8. Termination of receivership; compensation of receiver.-XxxThe court shall allow the receiver such reasonable compensation as the circumstances of the case
warrant, to be taxed as costs against the defeated party, or apportioned, as justice requires."
(Underscoring supplied)
It is, therefore, clear that when the services of a receiver who has been properly appointed terminates,
his compensation is to be charged against the defeated party, or the prevailing litigant may be made
to share the expense, as justice requires. The RTCs order approving TRB's compensation to be charged
solely against the funds under its receivership is without legal justification.
Hence, it was correctly reversed by the Court of Appeals. Holding Cu Bie solely liable for TRBs
compensation is correct.

Chas Realty & Devt Corp vs Talavera

Ang ruling ang naka taas ani. Just get the gist of it based on your own understanding. I put a lengthy
ruling para mas maka sabot mu sa reasoning sa court. Hahaha :D
Facts: Petitioner Chas Realty and Development Corporation (CRDC) is the owner and developer of a
shopping complex, the Megacenter Mall (Megacenter).
Due to low occupancy rate, sluggishness of the economy and the freezing of its bank account by its
main creditor, the Land Bank of the Philippines, CRDC encountered difficulty in paying its obligations as
and when they fell due and had to contend with collection suits and related cases.
CRDC filed a petition for rehabilitation attaching thereto a proposed rehabilitation plan, accompanied
by a secretarys certificate, consonantly with paragraph 2(k), Section 2, Rule 4, of the Interim Rules of
Procedure on Corporate Rehabilitation. CRDC claimed that it had sufficient assets and a workable
rehabilitation plan both of which showed that the continuance of its business was still feasible.
RTC issued an order staying all claims against CRDC and prohibited it from making any payment on its
outstanding obligations and selling, or otherwise disposing or encumbering, its property. Later, such
court appointed a rehabilitation receiver.
Angel D. Concepcion, Sr., herein private respondent, filed a complaint in intervention opposing the
appointment of CRDCs nominee for the post of rehabilitation receiver. He claimed that the
predicament of the corporation was due to serious "mismanagement and fraud, gross/evident violation
of the fiduciary duties of CHAS officers."
Concepcion moved to dismiss the petition for rehabilitation on the ground that there was no approval
by the stockholders representing at least two-thirds (2/3) of the outstanding capital stock as required
by the Interim Rules on Corporate Rehabilitation.
RTC then ordered Chas Realty to secure from its directors and stockholders the desired certification
and submit the same to this Court in accordance with the above-mentioned provision of the Interim
Rules of Procedure on Corporate Rehabilitation.
CRDC filed before the Court of Appeals a petition for certiorari, with prayer for temporary restraining
order and/or preliminary injunction, which sought to have the order of the trial court set aside. CA
denied such for lack of merit.
Issue: WON Public respondent acted with grave abuse of discretion amounting to lack and/or excess of
jurisdiction in requiring CRDCs compliance with paragraph 2(k), Section 2, Rule 4 of the Rehab rules
when CRDC already complied therewith.
Ruling:
YES.
Rule 4, Section 2(k), prescribes the need for a certification; one, to state that the filing of the petition
has been duly authorized, and two, to confirm that the directors and stockholders have irrevocably
approved and/or consented to, in accordance with existing laws, all actions or matters necessary and
desirable to rehabilitate the corporate debtor, including, as and when called for, such extraordinary
corporate actions as may be marked out.
The phrase, "in accordance with existing laws," refers to that which is, or to those that are, intended to
be done by the corporation in the pursuit of its plan for rehabilitation. Thus, if any extraordinary
corporate action (mentioned in Rule 4, Section 2(k), of the Interim Rules on Corporate Rehabilitation)
are to be done under the proposed rehabilitation plan, the petitioner would be bound to make it known
that it has received the approval of a majority of the directors and the affirmative votes of stockholders
representing at least two-thirds (2/3) of the outstanding capital stock of the corporation. Where no
such extraordinary corporate acts (or one that under the law would call for a two-thirds (2/3) vote) are
contemplated to be done in carrying out the proposed rehabilitation plan, then the approval of

stockholders would only be by a majority, not necessarily a two-thirds (2/3), vote, as long as, of course,
there is a quorum a fact which is not here being disputed.
Nowhere in the aforequoted paragraph can it be inferred that an affirmative vote of stockholders
representing at least two-thirds (2/3) of the outstanding stock is invariably necessary for the filing of a
petition for rehabilitation regardless of the corporate action that the plan envisions. It only requires in
the filing of the petition that the corporate actions therein proposed have been duly approved or
consented to by the directors and stockholders "in consonance with existing laws." The requirement is
designed to avoid a situation where a rehabilitation plan, after being developed and judicially
sanctioned, cannot ultimately be seen through because of the refusal of directors or stockholders to
cooperate in the full implementation of the plan. In fine, a certification on the approval of stockholders
is required but the question, whether such approval should be by a majority or by a two-thirds (2/3)
vote of the outstanding capital stock, would depend on the existing law vis--vis the corporate act or
acts proposed to be done in the rehabilitation of the distressed corporation.
The rehabilitation plan submitted by petitioner merely consists of a repayment or re-structuring
scheme of CRDCs bank loans to Land Bank of the Philippines and Equitable-PCI Bank and of leasing
out most of the available spaces in the Megacenter, including the completion of the construction of the
fourth floor, to increase rental revenues. None of the proposed corporate actions would require a vote
of approval by the stockholders representing at least two-thirds (2/3) of the outstanding capital stock.