Cordova v. Reyes Daway Lim Bernardo Lindo Rosales Law Offices, et al.

Chapter 1

Source: Cordova versus Reyes Daway Lim Bernardo Lindo Rosales Law Offices, et al. two thousand seven

Doctrine

When property subject of a liquidation proceeding is sold without authority and the proceeds are commingled with the liquidating corporation's assets, the owner of the property is not treated as a preferred claimant over the other creditors. He becomes an ordinary creditor entitled only to participate pro rata in the distribution of the estate's assets, subject to the rules governing liquidation.

Legal interest is not recoverable where the claim is not a loan or forbearance of money and the amount due has already been accounted for in the liquidation process. Based on internal knowledge of Philippine law, the controlling consideration is the nature of the claim and the status of the claimant in the liquidation hierarchy.