FACTS:

This case involves a dispute over the validity of a rehabilitation court's order directing a third party, Belson Securities, Inc., to deliver cash dividends to the court-appointed receiver, Atty. Danilo L. Concepcion. The debtor, Advent Capital and Finance Corporation, objected to this order. Advent Capital filed a petition for rehabilitation with the Regional Trial Court, and Atty. Concepcion determined that the respondents, Nicasio and Editha Alcantara, owed Advent Capital P27,398,026.59 in trust fees.

Atty. Concepcion requested Belson to release the cash dividends held under the Alcantaras' trust account, arguing that it was part of Advent Capital's assets. However, Belson rejected this request, pointing to the objections raised by the Alcantaras and the lack of a proper order from the rehabilitation court. In response, Atty. Concepcion filed a motion asking the court to direct Belson to release the money. The rehabilitation court granted this motion.

The Court of Appeals later voided the rehabilitation court's order, stating that the cash dividends did not belong to Advent Capital and could not be used to settle trust fees. Advent Capital then appealed this decision to the Supreme Court, raising the sole issue of whether the cash dividends were considered corporate assets of Advent Capital that could be turned over to the rehabilitation receiver.

ISSUES:

1. Whether or not the cash dividends held by Belson Securities, Inc. and claimed by both Nicasio and Editha Alcantara and Advent Capital and Finance Corporation constitute corporate assets of Advent Capital that the rehabilitation court may, upon motion, require to be conveyed to the rehabilitation receiver for his disposition.

RULING:

1. No, the cash dividends held by Belson Securities, Inc. do not constitute corporate assets of Advent Capital. The Supreme Court held that the rehabilitation court does not have the jurisdiction to resolve ownership disputes between Advent Capital and third parties such as the Alcantaras. The rehabilitation court's role is limited to the assets and liabilities of the company proper, not those held in trust for third parties. Advent Capital must file a separate action for collection to recover the trust fees that it allegedly earned.

PRINCIPLES:

• Corporate Rehabilitation Rehabilitation proceedings are summary and non-adversarial in nature and do not contemplate the adjudication of claims that require a full trial on the merits.

• Trust Law The trust property, including proceeds or income, belongs to the trustor-beneficiaries (in this case, the Alcantaras). The trustee (Advent Capital) merely manages the assets and cannot unilaterally apply the property to its own claims.

• Jurisdiction The rehabilitation court does not have the power to resolve conflicts over ownership of assets between the debtor and third parties who are not creditors or debtors within the rehabilitation process.

• Procedural Due Process Claims that are disputed and require a full hearing must be resolved through separate, appropriate legal proceedings. The summary nature of rehabilitation proceedings cannot substitute for a full trial where due process is required.