"xxx.
Here are select January 2013 rulings of the Supreme Court of the Philippines on commercial law:
Dissolution; continuation of business. Section 122 of the Corporation Code prohibits a dissolved corporation from continuing its business, but allows it to continue with a limited personality in order to settle and close its affairs, including its complete liquidation. Thus:
Sec. 122. Corporate liquidation. – Every corporation whose charter expires by its own limitation or is annulled by forfeiture or otherwise, or whose corporate existence for other purposes is terminated in any other manner, shall nevertheless be continued as a body corporate for three (3) years after the time when it would have been so dissolved, for the purpose of prosecuting and defending suits by or against it and enabling it to settle and close its affairs, to dispose of and convey its property and to distribute its assets, but not for the purpose of continuing the business for which it was established.(emphasis supplied)
The Court fails to find in the prayers any intention to continue the corporate business of FQB+7. The Complaint does not seek to enter into contracts, issue new stocks, acquire properties, execute business transactions, etc. Its aim is not to continue the corporate business, but to determine and vindicate an alleged stockholder’s right to the return of his stockholdings and to participate in the election of directors, and a corporation’s right to remove usurpers and strangers from its affairs. The Court fails to see how the resolution of these issues can be said to continue the business of FQB+7. Vitaliano N. Aguirre II and Fidel N. Aguirre II and Fidel N. Aguirre vs. FQB+, Inc., Nathaniel D. Bocobo, Priscila Bocobo and Antonio De Villa,G.R. No. 170770. January 9, 2013.
Dissolution; board of directors. A corporation’s board of directors is not rendered functus officio by its dissolution. Since Section 122 allows a corporation to continue its existence for a limited purpose, necessarily there must be a board that will continue acting for and on behalf of the dissolved corporation for that purpose. In fact, Section 122 authorizes the dissolved corporation’s board of directors to conduct its liquidation within three years from its dissolution. Jurisprudence has even recognized the board’s authority to act as trustee for persons in interest beyond the said three-year period. Thus, the determination of which group is the bona fideor rightful board of the dissolved corporation will still provide practical relief to the parties involved. Vitaliano N. Aguirre II and Fidel N. Aguirre II and Fidel N. Aguirre vs. FQB+, Inc., Nathaniel D. Bocobo, Priscila Bocobo and Antonio De Villa, G.R. No. 170770. January 9, 2013.
Dissolution; effect on property rights. A party’s stockholdings in a corporation, whether existing or dissolved, is a property right which he may vindicate against another party who has deprived him thereof. The corporation’s dissolution does not extinguish such property right. Section 145 of the Corporation Code ensures the protection of this right, thus:
Sec. 145. Amendment or repeal. – No right or remedy infavor of or against any corporation, its stockholders, members, directors, trustees, or officers, nor any liabilityincurred by any such corporation, stockholders, members, directors, trustees, or officers, shall be removed or impaired either by the subsequent dissolution of said corporation or by any subsequent amendment or repeal of this Code or of any part thereof. (Emphasis supplied.)
Vitaliano N. Aguirre II and Fidel N. Aguirre II and Fidel N. Aguirre vs. FQB+, Inc., Nathaniel D. Bocobo, Priscila Bocobo and Antonio De Villa, G.R. No. 170770. January 9, 2013.
(Hector thanks Patrick Henry D. Salazar for his assistance to Lexoterica.)
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