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Florencio Ordain v. BF Homes

This case involves a complaint filed by BF Homes, Inc. against the Local Superior of the Franciscan Sisters of the Immaculate Philippines (LSFSIPI) and Florencio Orendain for the reconveyance of property. BF Homes argued that Orendain sold the property in his individual capacity without proper title, and that the sale price was inadequate, amounting to fraud. The issue is whether the regional trial court has jurisdiction over the reconveyance suit. The Supreme Court ruled that jurisdiction lies with the regional trial court, not the Securities and Exchange Commission, because this is a civil matter involving the unauthorized sale of property, not an intra-corporate dispute.

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191 views2 pages

Florencio Ordain v. BF Homes

This case involves a complaint filed by BF Homes, Inc. against the Local Superior of the Franciscan Sisters of the Immaculate Philippines (LSFSIPI) and Florencio Orendain for the reconveyance of property. BF Homes argued that Orendain sold the property in his individual capacity without proper title, and that the sale price was inadequate, amounting to fraud. The issue is whether the regional trial court has jurisdiction over the reconveyance suit. The Supreme Court ruled that jurisdiction lies with the regional trial court, not the Securities and Exchange Commission, because this is a civil matter involving the unauthorized sale of property, not an intra-corporate dispute.

Uploaded by

Rafael
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Florencio Ordain v.

BF Homes
G.R. No. 146313 October 31, 2006

FACTS:

BF Homes, Inc. is a domestic corporation operating under Philippine laws and


organized primarily to develop and sell residential lots and houses and other related
realty business.

Records show that respondent BF Homes had to avail itself of financial assistance
from various sources to enable it to buy properties and convert them into residential
subdivisions. This resulted in its incurring liabilities amounting to
P1,542,805,068.23 as of July 31, 1984. On the other hand, during its business
operations, it was able to acquire properties and assets worth PhP 2,482,843,358.81 as
of July 31, 1984, which, if liquidated, were more than enough to pay all its creditors.

Despite its solvent status, it filed a Petition for Rehabilitation and for Declaration
in a State of Suspension of Payments. SEC ordered the appointment of a rehabilitation
receiver, FBO Management Networks, Inc., with Orendain as Chairman to prevent
paralyzation of BF Homes’ business operations. Deed of Absolute Sale was executed by
and between BF Homes, represented by 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.

BF Homes filed a Complaint with the Regional Trial Court against LSFSIPI and Orendain
for reconveyance of the property alleging that the LSFSIPI transacted with Orendain in
his individual capacity and therefore, neither FBO Management, Inc. nor Orendain had
title to the property transferred. Moreover, it averred that the selling price was grossly
inadequate or insufficient amounting to fraud and conspiracy with the LSFSIPI.
ISSUE:
Is the reconveyance suit within the jurisdiction of the Regional Trial Court?
RULING:
YES. The reconveyance suit within the jurisdiction of the Regional Trial Court.
It is the RTC which has jurisdiction. Clearly, the controversy involves matters
purely civil in character and is beyond the ambit of the limited jurisdiction of the SEC.
The better policy in determining which body has jurisdiction over a case would be to
consider not only the status or relationship of the parties but also the nature of the
question that is the subject of their controversy. More so, the first element requires that
the controversy must arise out of intra-corporate or partnership relations between any
or all of the parties and the corporation, partnership or association of which they are
stockholders, members or associates; between any or all of them and the corporation,
partnership or association of which they are stockholders, members or associates,
respectively; and between such corporation, partnership or association and the State
insofar as it concerns their individual franchises. The second element requires that the
dispute among the parties be intrinsically connected with the regulation of the
corporation. If the nature of the controversy involves matters that are purely civil in
character, necessarily, the case does not involve an intra-corporate controversy. The
determination of whether a contract is simulated or not is an issue that could be
resolved by applying pertinent provisions of the Civil Code.
The LSFSIPI is neither an officer nor a stockholder of BF Homes, and this case
does not involve intra-corporate proceedings. In addition, the seller Orendain, is being
sued in his individual capacity for the unauthorized sale of the property in controversy.
In addition, jurisdiction over the case for reconveyance is clearly vested in the RTC as
provided in paragraph (2) Section 19 of Batas Pambansa Bilang 129.

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