CORPORATION LAW |

CASE DIGESTS
NATIONAL ABACA AND
OTHER FIBERS
CORPORATION vs. APOLONIA
PORE
August 16, 1961
Concepcion, J.
SUMMARY: National Abaca filed a collection suit against Pore.
When the lower court rendered a judgment, National filed an
appeal. Pore argues that National has no legal capacity to sue
because it was already abolished by E0 3!. National argued that
the E0 ga"e it 3 yrs within which it can file suits. #he $% that after
the e&piration of the 3'yr period, National can no longer proceed
with the case e"en if it was instituted within the period.
DOCTRINE: In the absence of statutory provision to the contrary,
pending actions by or against a corporation are abated upon expiration of
the period allowed by law for the liquidation of its affairs
FACTS:
- In a collection suit filed by National Abaca against Pore, the
former insisted that Pore was not able to account for the cash
advances it gave for the purchase of hemp.
- he !"I ruled and National tried to appeal #udgment. Pore filed an
$% to this on the ground that&
o plaintiff has no legal capacity to sue, it having abolished
by 'xecutive (rder No. )*+ of the President of the
Philippines, dated November +,,-./0
- National responded and stated that
o It shall nevertheless be continued as a body corporate for
a period of three 1)2 years from the effective date3 of said
executive order, which was November )0, -./0, 3for the
purpose of prosecuting and defending suits by or against it
and of enabling the 4oard of 5iquidators3 6 thereby
created 6 3gradually to settle and close its affairs3, . . .
and that this case was begun on November -,, -./), or
before the expiration of the period aforementioned
ISSUE:
whether an action, commenced within three 1)2 years after the abolition of
plaintiff, as a corporation, may be continued by the same after the expiration
of said period - N(
RATIO:
- In the absence of statutory provision to the contrary, pending
actions by or against a corporation are abated upon expiration of
the period allowed by law for the liquidation of its affairs.
- (ur !orporation 5aw contains no provision authori7ing a
corporation, after three 1)2 years from the expiration of its lifetime,
to continue in its corporate name actions instituted by it within said
period of three 1)2 years.
o in fact, section ** of said law provides that the
corporation shall 3be continued as a body corporate for
three 1)2 years after the time when it would have been . . .
dissolved, for the purposed of prosecuting and defending
suits by or against it . . .3, so that, thereafter, it shall no
longer en#oy corporate existence for such purpose.
o "or this reason, section *8 of the same law authori7es the
corporation, 3at any time during said three years . . . to
convey all of its property to trustees for the benefit of
members, stoc9holders, creditors and other interested3,
CORPORATION LAW |
CASE DIGESTS
evidently for the purpose, among others, of enabling said
trustees to prosecute and defend suits by or against the
corporation begun before the expiration of said period.
- (bviously, the complete loss of plaintiff:s corporate existence after
the expiration of the period of three 1)2 years for the settlement of
its affairs is what impelled the President to create a 4oard of
5iquidators, to continue the management of such matters as may
then be pending.
DISPOSITIVE