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    Knecht Vs UCC

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    Xing Keet Lu
    This document summarizes a court case between Knecht and Knecht Inc. vs. United Cigarette Inc. The case involves a property that was originally owned by Rose Packing Company and was mortgaged to the Philippine Commercial and Industrial Bank. Rose Packing then sold the property to United Cigarette but additional collateral was required by the bank. United Cigarette did not provide the additional collateral. Meanwhile, Rose Packing tried to sell the same property to other buyers without informing United Cigarette. The court ruled that United Cigarette, even though now dissolved, could still pursue execution of a judgment through its trustee or liquidator for the benefit of stockholders, creditors, and others with legal

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    Knecht Vs UCC

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    Xing Keet Lu
    111 views2 pages
    This document summarizes a court case between Knecht and Knecht Inc. vs. United Cigarette Inc. The case involves a property that was originally owned by Rose Packing Company and was mortgaged to the Philippine Commercial and Industrial Bank. Rose Packing then sold the property to United Cigarette but additional collateral was required by the bank. United Cigarette did not provide the additional collateral. Meanwhile, Rose Packing tried to sell the same property to other buyers without informing United Cigarette. The court ruled that United Cigarette, even though now dissolved, could still pursue execution of a judgment through its trustee or liquidator for the benefit of stockholders, creditors, and others with legal

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    Original Title

    344. Knecht vs UCC

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    This document summarizes a court case between Knecht and Knecht Inc. vs. United Cigarette Inc. The case involves a property that was originally owned by Rose Packing Company and was mortgaged to the Philippine Commercial and Industrial Bank. Rose Packing then sold the property to United Cigarette but additional collateral was required by the bank. United Cigarette did not provide the additional collateral. Meanwhile, Rose Packing tried to sell the same property to other buyers without informing United Cigarette. The court ruled that United Cigarette, even though now dissolved, could still pursue execution of a judgment through its trustee or liquidator for the benefit of stockholders, creditors, and others with legal

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    111 views2 pages

    Knecht Vs UCC

    Uploaded by

    Xing Keet Lu
    This document summarizes a court case between Knecht and Knecht Inc. vs. United Cigarette Inc. The case involves a property that was originally owned by Rose Packing Company and was mortgaged to the Philippine Commercial and Industrial Bank. Rose Packing then sold the property to United Cigarette but additional collateral was required by the bank. United Cigarette did not provide the additional collateral. Meanwhile, Rose Packing tried to sell the same property to other buyers without informing United Cigarette. The court ruled that United Cigarette, even though now dissolved, could still pursue execution of a judgment through its trustee or liquidator for the benefit of stockholders, creditors, and others with legal

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 2

    344.

    KNECHT AND KNECHT INC.


    vs.
    UNITED CIGARETTE INC.
    GR NO. 139370 JULY 4, 2002

    FACTS:

    Rose Packing Company, Inc. (Rose Packing), a domestic corporation, owns


    parcels of land one of which is covered by TCT No. 73620 which was mortgaged with the
    Philippine Commercial and Industrial Bank (PCIB). Said parcels of land were later sold to
    United Cigarette Corporation (UCC), through its President Rene Knecht, where Rose
    Packing made a warranty that the lots are free from all liens and encumbrances,
    except the real estate mortgage constituted over the area covered by TCT No. 73620.
    Before the deed of sale could be executed, the parties found that Rose
    Packing’s actual obligation with the PCIB far exceeded the P250,000.00 which UCC
    assumed to pay under their agreement. So the PCIB demanded additional collateral from
    UCC as a condition precedent for the approval of the sale of the mortgaged property.
    However, UCC did not comply.
    Meanwhile, Rose Packing again offered to sell the same lots to other
    prospective buyers without the knowledge of UCC and without returning to the latter
    the earnest money it earlier paid.

    ISSUE:

    Whether or not the execution of the judgment would still lie against a dissolved
    corporation.

    RULING:

    YES.

    In Reburiano vs. Court of Appeals, a case with similar facts, this Court Held:
    “ the trustee (of a dissolved corporation) may commence a suit which can proceed to
    final judgment even beyond the three-year period (of liquidation), no reason can be
    conceived why a suit already commenced by the corporation itself during its existence,
    not by a mere trustee who, by fiction, merely continues the legal personality of the
    dissolved corporation, should not be accorded similar treatment – to proceed to final
    judgment and execution thereof.”
    The dissolution of UCC itself, or the expiration of its three-year liquidation
    period, should not be a bar to the enforcement of its rights as a corporation. One of
    these rights, to be sure, includes the UCC’s right to seek from the court the execution
    of a valid and final judgment in Civil Case No. 9165 – through its trustee/liquidator
    Encarnacion Gonzales Wong – for the benefit of its stockholders, creditors and any
    other person who may have legal claims against it. To hold otherwise would be to allow
    petitioners to unjustly enrich themselves at the expense of UCC. This, in effect,
    renders nugatory all the efforts and expenses of UCC in its quest to secure justice,
    not to mention the undue delay in disposing of this case prejudicial to the
    administration of justice.

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