Atty. Redentor G. Liboro

November 19, 1986 Atty. Redentor G. Liboro 2nd Flr., PAUW Building 124 Matatag St., Central District Diliman, Quezon City Sir : This relates to your letter, dated September 30, 1986, requesting the opinion of this Commission on the queries posed therein. The facts presented in your letter are as follows: Admiral Ventures Co., Inc., (AVCI) is a corporation duly organized and existing under Philippine laws. In the course of its business operation, it contracted loan/credit obligation from several investors, and in payment thereof, issued checks through its authorized officers. However, the onset of the economic slump in the country adversely affected AVCI, as a result thereof, the corporation was short of meeting its financial obligations. Thus, its checks were dishonored. Due to said financial reverses, AVCI was placed under receivership by the Commission under PD 902-A, and suspension of all actions for claims against AVCI was ordered, prohibiting it further from disbursing funds except as may be expedient for the operations of the corporation. A claimant-investor is now demanding the payment of his loan from AVCI which was previously covered by a returned check. AVCI refuses to pay. Hence, the following queries are posed: 1. Can AVCI lawfully and validly refuse to pay claimant's just and valid demand by virtue of the prohibition order of the SEC? 2. If the refusal is valid, is the claimant justified in bringing an action against: a) AVCI b) Signatories to the check c) Officers/directors of AVCI Why? 3. Can the claimant-investor, through the SEC, compel the receiver to pay his claim? Your first query is answered in the affirmative in view of the provision of Sec. 6(c) of PD 902-A, which provides in part thus: " . . . . That upon appointment of a management committee, rehabilitation receiver, board or body, pursuant to this Decree, all actions for claims against corporation, partnerships or associations under management or receivership pending before any court, tribunal, board or body shall be suspended accordingly." In connection with your second query, the claimant may bring an action against said respondents should his case involve devices or schemes employed by or any acts of, the board of directors, business associates, its officers, amounting to fraud and misrepresentation which may be detrimental to the interest of the public and/or of the stockholders or organizations registered with the Commission. This office shall have the original and exclusive jurisdiction to hear and decide such case. (Sec. 5(a), P.D. 902-A). Relative to your third query, please be informed that "the appointment of a receiver vests in the court no absolute control over the property and no general authority to displace vested contract liens, and while a receiver will be appointed only on the application of one who appears to have an interest in the subject matter, yet when the appointment is made, the receiver is a mere officer of the court, and the appointment creates no lien in favor of any of the parties applying for it and gives no advantage or preference to such parties over other claimants to the property; it does not determine the rights of the parties." (Francisco Vicente, The Revised Rules of Court in the Philippines, Vol. IV-A, 1971 ed., p. 348, citing Pongos v. Hidalgo Enterprise, Inc., et al., G.R. No. L-3226, Aug. 30, 1949). The sole purpose and intent of having a receiver appointed for the corporation is to protect and preserve the property pending the litigation, and to prevent its alleged fraudulent disposal, so that in the end, the assets of the corporation may be kept intact and applied to the payment of the amount of any judgment which the plaintiff may recover and to the claims of any other creditors of the corporation . (Francisco Supra., p. 306). Claims against a corporation in the hands of a receiver should not be approved and paid without some formal and regular proceeding whereby their justice and correctness may be inquired into after a reasonable opportunity has been given to all the parties in interest to present objections and submit evidence in support of such objections . (Francisco p. 336, citing Whalen v. Pasig Iron Works, GR No. 4894, March 31, 1909, 13 Phil., 417. China Banking Corporation and Hahn v. Michelin & Cie, G.R. No. 36930, June 30, 1933, 58 Phil, 261). In the absence, therefore, of such formality, the Commission may not compel the receiver to pay the claim of the claimant-investor. Please be advised accordingly. prcd Very truly yours, (SGD.) JULIO A. SULIT, JR. Chairman