RP Vs Marsman

REPUBLIC of the PHILIPPINES vs. MARSMAN DEVELOPMENT CORP.
Basically, MDC ENDED UP GETTING JUDICIALLY DISSOLVED

L-18956  Burgess was appointed liquidator of the Marsman
27 April 1976  Although it was shown that MDC did indeed get extrajudicially
dissolved, there is no claim that the affairs of said corporation had
Marsman Devt. Corp was a timber license holder with concessions in already been finally liquidated or settled.
Camarines Norte.  An ammended complaint was instituted to include Burgess as a
party in interest in the case.
Investigations led to the discovery that certain taxes were due upon the
Corporation. ISSUE: WON ACTION CAN PROCEED AGAINST THE LIQUIDATOR WHO HAS
 BIR assessed MDC 3 times for unpaid taxes. NOT LIQUIDATED THE ASSETS OF THE CORPORATION AFTER THE
 The assessments were acknowledged by Atty. Moya with demands PROVISIONAL 3 YEAR PERIOD --- YES
for specification and request for exemptions  While section 77 of the Corporation Law provides for a three-year
 Defendants admit having received the final tax notices as shown by period for the continuation of the corporate existence of the
corporation letters. corporation for purposes of liquidation, there is nothing in said
provision which bars an action for the recovery of the debts of the
MDC protested the assessment of P45,541.66 and reiterated its request corporation against the liquidator thereof, after the lapse of the
for specification of the items disputing the assessment in question. said three-year period.
 The stress given by appellants to the extinction of the corporate and
Finding no merit in the protests of the defendant corporation, the BIR juridical personality as such of MDC by virtue of its extra-judicial
issued a warrant of distraint and levy against MDC dissolution which admittedly took place on April 23, 1954 is
 This was again acknoweldge in writing by MDC with reiteration of its misdirected.
request for a specification of the different items of the assessment,  While Section 77 of the Corporation Law does provide that:
subject to the right to contest the legality and validity of the same Every corporation whose charter expires by its own limitation or is
within 30 days after receipt of said specifications. annulled by forfeiture or otherwise, or whose corporate existence for
other purposes is terminated in any other manner, shall nevertheless
The next communication is a demand from the CIR to MDC of the be continued as a body corporate for three years after the time
assessment of P45,541.66 which has remained unpaid. when it would have been so dissolved, for the purpose of
 Informed MDC that if they do not settle said tax obligation within prosecuting and defending suits by or against it and of enabling it
five days from receipt thereof, the BIR will be constrained to file an gradually to settle and close its affairs, to dispose of and convey its
action in Court for the collection thereof without further notice. property and to divide its capital stock, but not for the purpose of
 To which MDC replied that it needed more time to go over the continuing the business for which it was established.
records and vouchers, and requesting for an extension of 10 days
plus reiterated its previous request. the next provision, Section 78, adds for clarification:
(Note: We could probably get away with reciting the facts more or less this  At any time during said three years said corporation is authorized
way: MDC is a timber license holder corporation … it had deficiencies with and empowered to convey all of its property to trustees for the
the BIR … because of its non-compliance and with a prior warning from the benefit of members, stock-holders, creditors, and others interested.
BIR, the BIR proceeded to have it extrajudicially dissolved.) From and after any such conveyance by the corporation of its
property in trust for the benefit of its members, stockholders,
creditors, and others in interest, all interest which the corporation perceptible, if the corporation had been dissolved without leaving
had in the property terminates, the legal interest vests in the any assets whatsoever with the liquidator.
trustee, and the beneficial interest in the members, stockholders,
creditors, or other persons in interest. --- MDC LOST
 It is to be recalled that the assessments against appellant

corporation for deficiency taxes due for its operations since 1947
were made by the Bureau of Internal Revenue on October 15, 1953,
September 13, 1954 and November 8, 1954, such that the first was
before its dissolution and the last two not later than six months
after such dissolution.
o Thus, in whatever way the matter may be viewed, the
Government became the creditor of the corporation
before the completion of its dissolution by the liquidation
of its assets.
o Appellant F.H. Burgess, whom it chose as liquidator,
became in law the trustee of all its assets for the benefit of
all persons enumerated in Section 78, including its
creditors, among whom is the Government, for the taxes
herein involved.
 To assume otherwise would render the extra-judicial dissolution
illegal and void, since, according to Section 62 of the Corporation
Law, such kind of dissolution is permitted only when it "does not
affect the rights of any creditor having a claim against the
corporation.”
 It is immaterial that the present action was filed after the expiration
of three years after April 23, 1954, for at the very least, and
assuming that judicial enforcement of taxes may not be initiated
after said three years despite the fact that the actual liquidation has
not been terminated and the one in charge thereof is still holding
the assets of the corporation, obviously for the benefit of all the
creditors thereof, the assessment aforementioned, made within the
three years, definitely established the Government as a creditor of
the corporation for whom the liquidator is supposed to hold assets
of the corporation.
 As to the allegation that appellant Burgess has not in fact received
any property or asset of the corporation, that is a matter that can
well be taken care of in the execution of the judgment which may
be rendered herein, albeit it seems some kind of fraud would be

RP Vs Marsman

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REPUBLIC of the PHILIPPINES vs. MARSMAN DEVELOPMENT CORP.

Basically, MDC ENDED UP GETTING JUDICIALLY DISSOLVED

 It is to be recalled that the assessments against appellant

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