Alhambra v. Cir Digest

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UNDERGROUND CASE DIGESTS without the permission of
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Flores v. Mallare-Phillips G.R. # L-66620 • Republic Act 3531, amending Section 18 of
the Corporation Law, is silent, it is true, as to
FACTS when such act of extension may be made.
But even with a superficial knowledge of
• Plaintiff files 1 complaint against 2 distinct defendants before
corporate principles, it does not take much
the RTC under distinct separate causes of action. Total amount
of the claim is with RTC jurisdiction, but individual claim is effort to reach a correct conclusion. For,
under MTC jurisdiction. RTC dismisses the complaint. implicit in Section 77 heretofore quoted
• is that the privilege given to prolong
ISSUE
corporate life under the amendment
• W/N Alhambra can extend its corporate life, under RA 3531? NO
HELD must be exercised before the expiry of
• From July 15 to October 28, 1963, when the term fixed in the articles of
Alhambra made its attempt to extend its incorporation.
corporate existence, its original term of fifty • Fletcher has written: "Since the privilege of
years had already expired (January 15, extension is purely statutory, all of the
1962); it was in the midst of the three-year statutory conditions precedent must be
grace period statutorily fixed in Section 77 complied with in order that the extension
of the Corporation Law wherein may be effectuated. And, generally these
continuance of a "dissolved" conditions must be complied with, and the
corporation as a body corporate for steps necessary to effect the extension
3years has for its purpose the final must be taken, during the life of the
closure of its affairs, and no other; the corporation, and before the expiration
corporation is specifically enjoined from of the term of existence as original
"continuing the business for which it was fixed by its charter or the general law,
established". The liquidation of the since, as a rule, the corporation is ipso
corporation's affairs set forth in Section 77 facto dissolved as soon as that time
became necessary precisely because its life expires. So where the extension is by
had ended. For this reason alone, the amendment of the articles of incorporation,
corporate existence and juridical the amendment must be adopted before
personality of that corporation to do that time.
business may no longer be extended. • True that the Alabama Supreme Court has
stated in one case. that a corporation
Page 1 of 3 | ALBERTO ANBOCHI ATILLO AVILA CHUA GUERRERO DELA ROSA MIRANDA REVOTE REYES SALVADOR SUAREZ SULIT TAYAG
the author.
empowered by statute to renew its • Alhambra brings into argument Republic Act
corporate existence may do so even after 1932, which amends Section 196 of the
the expiration of its corporate life, provided Insurance Act. Congress, Alhambra points
renewal is taken advantage of within the out, must have been aware of Republic Act
extended statutory period for purposes of 1932 when it passed Republic Act 3531.
liquidation. That ruling, however, is Since the phrase "on or before", etc., was
inherently weak as persuasive omitted in Republic Act 3531, which
authority for the situation at bar for at contains no similar limitation, it follows,
least two reasons: First. That case was a according to Alhambra, that it is not
suit for mandamus to compel a former necessary to extend corporate existence on
corporate officer to turn over books or before the expiration of its original term.
and records that came into his • Thus, the only possible drawbacks of
possession and control by virtue of his Alhambra might be that, instead of the new
office. The holding on the continued corporation (Alhambra Industries, Inc.) being
existence of the corporation was a mere written off, the old one (Alhambra Cigar &
dictum. Second. Alabama's law is Cigarette Manufacturing Company, Inc.) has
different. Corporations in that state were to be wound up; and that the old corporate
authorized not only to extend but also to name cannot be retained fully in its exact
renew their corporate existence. form.17 What is important though is that the
• Alhambra draws attention to another case11 word Alhambra, the name that counts [it has
which declares that until the end of the goodwill], remains.
extended period for liquidation, a dissolved
corporation "does not become an
extinguished entity". But this statement was
obviously lifted out of context. That case
dissected the question whether or not suits
can be commenced by or against a
corporation within its liquidation period.
Which was answered in the affirmative. For,
the corporation still exists for the settlement
of its affairs.
the author.

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