G.R. No. 76879 & G.R. No. 77143. October 3, 1990. BF HOMES, INCORPORATED, petitioner, vs. COURT OF APPEALS, ROSALINDA R. ROA and VICENTE MENDOZA, respondents. ROSALINDA ROA and VICENTE MENDOZA, petitioners, vs. COURT OF APPEALS and BF HOMES, INCORPORATED, respondents.
FACTS:

BF Homes, Inc. obtained a loan from Rosalinda R. Roa and Vicente Mendoza, secured by a promissory note and post-dated checks. Subsequently, BF Homes filed a Petition for Rehabilitation and Suspension of Payments with the Securities and Exchange Commission (SEC) under P.D. No. 902-A. Despite this pending rehabilitation petition, Roa and Mendoza filed a collection suit with the Regional Trial Court (RTC) of Quezon City to recover the loan and obtained a writ of preliminary attachment against BF Homes’ properties. BF Homes moved to dismiss or suspend the civil case, citing the SEC’s exclusive jurisdiction over claims due to the rehabilitation proceedings. The RTC denied the motion, asserting jurisdiction as the claim arose from a simple loan contract.
The Court of Appeals initially dismissed the civil case and nullified the attachment but, on reconsideration, amended its decision. It upheld the RTC’s jurisdiction but ordered the suspension of proceedings until the SEC-appointed Management Committee (later replaced by a Rehabilitation Receiver) was impleaded as the party defendant. It also maintained the dissolution of the writ of attachment. Both parties sought reconsideration; BF Homes objected to the continuation of proceedings even after substitution, while Roa and Mendoza contested the substitution order and the dissolution of the attachment without a counter-bond.

ISSUE

The core issues were: (1) whether the civil case for collection of a sum of money should proceed or be suspended in light of the corporate rehabilitation proceedings; and (2) whether the writ of preliminary attachment was properly dissolved.

RULING

The Supreme Court granted both petitions in part, setting aside the Court of Appeals’ decision. On the first issue, the Court ruled that all actions for claims against a corporation under rehabilitation must be suspended pursuant to Section 6(c) of P.D. No. 902-A. This suspension is automatic upon the SEC’s creation of a management committee or appointment of a rehabilitation receiver, aiming to prevent a scramble for the corporation’s assets and to enable equitable restructuring for the benefit of all creditors. The purpose is to allow the rehabilitation receiver to effectively manage the corporation’s affairs free from litigation. Therefore, the RTC proceedings in the collection case were ordered suspended for a period of ten years from the approval of the rehabilitation plan, subject to SEC modification, and the directive to implead the receiver was deemed unnecessary.
On the second issue, the Court reinstated the writ of preliminary attachment. It held that the dissolution was improper because no hearing was conducted as required by Rule 57 of the Rules of Court when a motion to quash a writ is filed. The Court of Appeals erroneously dissolved the writ based solely on the argument that BF Homes’ assets were under the receiver’s custody, which was deemed sufficient security. The Supreme Court clarified that while the issuance of an attachment is ex parte, its dissolution after issuance requires a hearing with notice to the applicant. Since this procedural requirement was not observed, the dissolution was invalid, and the writ was reinstated to preserve the claim pending the outcome of the rehabilitation.