SECOND DIVISION
G.R. No. 210538, March 07, 2018
DR. GIL J. RICH, Petitioner, v. GUILLERMO PALOMA III, ATTY. EVARISTA TARCE AND ESTER L. SERVACIO, Respondents.
D E C I S I O N
REYES, JR., J.:
A corporation which has already been dissolved, be it voluntarily or involuntarily, retains no juridical personality to conduct its business save for those directed towards corporate liquidation.
A parcel of residential land, located at Brgy. Abgao, Maasin City, Southern Leyte, covered by Tax Declaration ARP No. 07001-00584, in the name of Estanislao Rich, containing an area of 1,000 square meters, and bounded on the North by Donato Demetrio - remaining portion; on the East by Felimon Saavedra; on the South by Kangleon St.; and on the West by Tubman River.4When Estanislao failed to make good on his obligations under the loan agreement, the petitioner foreclosed on the subject property via a public auction sale conducted on March 14, 2005 by respondent Guillermo Paloma III, Sheriff IV of the RTC. The petitioner was declared the highest bidder, and subsequently, was issued a Certificate of Sale as purchaser/mortgagee.5
WHEREFORE, premises considered, this Court orders the following:Aggrieved, Servacio appealed the case to the CA, arguing that: (1) the allegations of forgery were not substantiated, nor were they duly proven in the proceedings before the RTC;13 and (2) the RTC erred in declaring the petitioner as in default despite a valid and meritorious excuse.14SO ORDERED.12
- Declaring the Real Estate Mortgage between Estanislao Rich and MLTC, Annex B (sic) to the Complaint, as null and void;
- Ordering the City Assessor of the City of Maasin, Southern Leyte to cancel the Deed of Redemption in favor of MTLC appearing on the Tax Declaration covering the property.
WHEREFORE, the appeal is GRANTED. The Decision dated November 10, 2008, 8th Judicial Region, Branch 25, Maasin City, Southern Leyte, in Civil Case No. R-3477 is REVERSED and SET ASIDE. The complaint for annulment of Deed of redemption, damages, attorney's fees, litigation expenses, with application for issuance of TRO and/or writ of preliminary prohibitory injunction is ordered DISMISSED. No costs.Hence, this petition.
SO ORDERED.19
- MAY AN APPEAL BE DISMISSED ON ACCOUNT OF THE FAILURE OF THE APPELLANT'S BRIEF TO COMPLY WITH THE RULES?
- MAY A CORPORATION NOT INVESTED WITH CORPORATE PERSONALITY AT THE TIME OF REDEMPTION REDEEM A PROPERTY?20
SECTION 13. Contents of appellant's brief. The appellant's brief shall contain, in the order herein indicated, the following:Any deviation from the required contents as provided thereunder is dealt with by Rule 50 of the Rules of Court. For the purpose of this case, the petitioner, while he did not so specify in his petition, actually anchors his plea on Section 1(f) of Rule 50, which particularly mentions the absence of page references in the subject index and statement of facts in the appellant's brief. It provides that:
(a) A subject index of the matter in the brief with a digest of the arguments and page references, and a table of cases alphabetically arranged, textbooks and statutes cited with references to the pages where they are cited;
(b) An assignment of errors intended to be urged, which errors shall be separately, distinctly and concisely stated without repetition and numbered consecutively;
(c) Under the heading "Statement of the Case," a clear and concise statement of the nature of the action, a summary of the proceedings, the appealed rulings and orders of the court, the nature of the judgment and any other matters necessary to an understanding of the nature of the controversy, with page references to the record;
(d) Under the heading "Statement of Facts," a clear and concise statement in a narrative form of the facts admitted by both parties and of those in controversy, together with the substance of the proof relating thereto in sufficient detail to make it clearly intelligible, with page references to the record;
(e) A clear and concise statement of the issues of fact or law to be submitted to the court for its judgments;
(f) Under the heading "Argument," the appellant's arguments on each assignment of error with page references to the record. The authorities relied upon shall be cited by the page of the report at which the case begins and the page of the report on which the citation is found;
(g) Under the heading "Relief," a specification of the order or judgment which the appellant seeks: and
(h) In cases not brought up by record on appeal, the appellant's brief shall contain, as an appendix, a copy of the judgment or final order appealed from. (16a, R46)
RULE 50To buttress his arguments, the petitioner pointed out that Section 13, Rule 44 of the Rules of Court uses the word "shall" which is thus "mandatory and compulsory."22 The petitioner further mentions that "an appealing party must strictly comply with the requisites laid down in the Rules of Court."23
Dismissal of Appeal
SECTION 1. Grounds for dismissal of appeal. - An appeal may be dismissed by the Court of Appeals, on its own motion or on that of the appellee, on the following grounds:
x x x x
(f) Absence of specific assignment of errors in the appellant's brief, or of page references to the record as required in Section 13, paragraphs (a), (c), (d) and (f) of Rule 44;.
x x x x (Emphasis and underscoring supplied)
x x x Rule 50, Section 1 which provides specific grounds for dismissal of appeal manifestly "confers a power and does not impose a duty." "What is more, it is directory, not mandatory." With the exception of Sec. 1(b), the grounds for the dismissal of an appeal are directory and not mandatory, and it is not the ministerial duty of the court to dismiss the appeal. The discretion, however, must be a sound one to be exercised in accordance with the tenets of justice and fair play having in mind the circumstances obtaining in each case.25 (Citations omitted)Indeed, consistent with the ruling in De Leon, the guiding principle in the resolution of the foregoing issues is that if the citations found in the appellants brief could sufficiently enable the CA to locate expeditiously the portions of the records referred to, then there is substantial compliance with the requirements of Section 13, Rule 44 of the Rules of Court.
"Winding up the affairs of the corporation means the collection of all assets, the payment of all its creditors, and the distribution of the remaining assets, if any among the stockholders thereof in accordance with their contracts, or if there be no special contract, on the basis of their respective interests. The manner of liquidation or winding up may be provided for in the cor orate by-laws and this would prevail unless it is inconsistent with law."27 (Citations omitted)These pronouncements draw their basis from Section 122 of the Corporation Code,28 which empowers every corporation whose corporate existence has been legally terminated to continue as a body corporate for three (3) years after the time when it would have been dissolved. This continued existence would only be for the purposes 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."29
This continuance of its legal existence for the purpose of enabling it to close up its business is necessary to enable the corporation to collect the demands due it as well as to allow its creditors to assert the demands against it. If this were not so, then a corporation that became involved in liabilities might escape the payment of its just obligations by merely surrendering its charter, and thus defeat its creditors or greatly hinder and delay them in the collection of their demand. This course of conduct on the part of corporations the law in justice to persons dealing with them does not permit. The person who has a valid claim against a corporation, whether it arises in contract or tort should not be deprived of the right to prosecute an action for the enforcement of his demands by the action of the stockholders of the corporation in agreeing to its dissolution. The dissolution of a corporation does not extinguish obligations or liabilities due by or to it.32 (Emphasis and underscoring supplied)In addition, and as expressly mentioned by the Corporation Code, this extended authority necessarily excludes the purpose of continuing the business for which it was established.33 The reason for this is simple: the dissolution of the corporation carries with it the termination of the corporation's juridical personality. Any new business in which the dissolved corporation would engage in, other than those for the purpose of liquidation, "will be a void transaction because of the non-existence of the corporate party."34
Endnotes:
* Acting Chief Justice per Special Order No. 2539, dated February 28, 2018.
1 Penned by then Associate, now Executive, Justice Gabriel T. Ingles, and concurred in by Associate Justices Pampio A. Abarintos and Pedro B. Corales; rollo, pp. 234-250.
2 Id. at 262-263.
3 Id. at 235.
4 Id. at 52-53.
5 Id.
6 Id. at 42, 70-71.
7 Id. at 42, 70-71, 235.
8 Id. at 73, 235.
9 Id. at 33.
10 Id.
11 Id. at 188.
12 Id. at 191.
13 Id. at 241.
14 Id. at 239-241.
15 Id. at 243.
16 Id. at 245-246.
17 Id. at 247.
18 SECTION 4. Appearance of parties. - It shall be the duty of the parties and their counsel to appear at the pre-trial. The non-appearance of a party may be excused only if a valid cause is shown therefor or if a representative shall appear in his behalf fully authorized in writing to enter into an amicable settlement, to submit to alternative modes of dispute resolution, and to enter into stipulations or admissions of facts and of documents. (n)
19Rollo, p. 249.
20 Id. at 24.
21 Id. at 27.
22 Id. at 27.
23 Id.
24 432 Phil. 775 (2002).
25 Id. at 789-790.
26 607 Phil. 581, 607 (2009).
27 Id. at 608.
28 Batas Pambansa Blg. 68 (1980).
29 Id.
30 252 Phil. 831, 840 (1989).
31 145 Ky 591,140 SW 1034 (1911).
32 Id.
33 Supra note 28.
34 Villanueva, Cesar L., Philippine Corporate Law, pp. 697 698.
35Rollo, p. 34.
36 Id. at 42, 70-71.
37 Id. at 73-74.