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    Albang Development Vs Alabang Hills - Digest

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    Gladys Viranda
    The Supreme Court affirmed the dismissal of a complaint filed by Alabang Development Corporation (ADC) seeking to enjoin construction on one of its parcels of land. [1] ADC's corporate registration had been revoked by the SEC in 2003. [2] Under the Corporation Code, a corporation whose registration is revoked continues to exist for 3 years to settle its affairs, but not to conduct new business. [3] ADC filed its complaint in 2006, more than 3 years after revocation, so it no longer had the capacity to file suit.

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    Albang Development Vs Alabang Hills - Digest

    Uploaded by

    Gladys Viranda
    89 views2 pages
    The Supreme Court affirmed the dismissal of a complaint filed by Alabang Development Corporation (ADC) seeking to enjoin construction on one of its parcels of land. [1] ADC's corporate registration had been revoked by the SEC in 2003. [2] Under the Corporation Code, a corporation whose registration is revoked continues to exist for 3 years to settle its affairs, but not to conduct new business. [3] ADC filed its complaint in 2006, more than 3 years after revocation, so it no longer had the capacity to file suit.

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    The Supreme Court affirmed the dismissal of a complaint filed by Alabang Development Corporation (ADC) seeking to enjoin construction on one of its parcels of land. [1] ADC's corporate registration had been revoked by the SEC in 2003. [2] Under the Corporation Code, a corporation whose registration is revoked continues to exist for 3 years to settle its affairs, but not to conduct new business. [3] ADC filed its complaint in 2006, more than 3 years after revocation, so it no longer had the capacity to file suit.

    Copyright:

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

    Albang Development Vs Alabang Hills - Digest

    Uploaded by

    Gladys Viranda
    The Supreme Court affirmed the dismissal of a complaint filed by Alabang Development Corporation (ADC) seeking to enjoin construction on one of its parcels of land. [1] ADC's corporate registration had been revoked by the SEC in 2003. [2] Under the Corporation Code, a corporation whose registration is revoked continues to exist for 3 years to settle its affairs, but not to conduct new business. [3] ADC filed its complaint in 2006, more than 3 years after revocation, so it no longer had the capacity to file suit.

    Copyright:

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

    ALABANG DEVELOPMENT CORPORATION vs.

    ALABANG HILLS VILLAGE ASSOCIATION and


    RAFAEL TINIO

    G.R. No. 187456 June 2, 2014

    FACTS:

    A complaint for injunction was filed before the RTC on October 19, 2006 by petitioner, Alabang
    Development Corporation (ADC) against Alabang Hills Village Association, Inc (AHVAI) and Rafael Tinio.
    Petitoner alleged that it is the developer of the Alabang Hills Village and still owns parcels of land therein.
    That sometime in 2006, AHVAI started construction of a multi-purpose hall and swimming pool on one
    the parcels of land still owned by ADC without the latter’s consent and approval. ADC prayed that
    injunction be issued and enjoined defendants from constructing said multi-purpose and swimming pool at
    the Alabang Hills Village.

    In its answer, AHVAI claimed that ADC has no legal capacity to sue since its existence as a
    registered corporate entity was revoked by the Securities and Exchange Commission (SEC) on May 26,
    2003 and that ADC has no cause of action because by law it is no longer the absolute owner but is
    merely holding the property in question in trust for the benefit of AHVAI as beneficial owner thereof.

    Consequently, RTC dismissed the petitioner claim on the ground that the latter has no personality
    to file the same. CA affirmed the ruling as RTC correctly dismissed petitioner's complaint as the same
    was filed when petitioner was already defunct and, as such, it no longer had capacity to file the said
    complaint.

    ISSUE:

    Whether CA erred in finding lack of capacity of ADC in filing the case.

    HELD:

    No.

    SEC. 122. Corporate liquidation.– Every corporation whose charter expires by its own limitation or
    is annulled by forfeiture or otherwise, or whose corporate existence for other purposes is terminated in
    any other manner, shall nevertheless be continued as a body corporate for three (3) years after the time
    when it would have been so dissolved, for the purpose 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, but not for the purpose of continuing the business for which it was established.

    At any time during said three (3) years, said corporation is authorized and empowered to convey
    all of its property to trustees for the benefit of stockholders, members, creditors, and other persons in
    interest. From and after any such conveyance by the corporation of its property in trust for the benefit of
    its stockholders, members, creditors and others in interest, all interest which the corporation had in the
    property terminates, the legal interest vests in the trustees, and the beneficial interest in the stockholders,
    members, creditors or other persons in interest.

    Upon winding up of the corporate affairs, any asset distributable to any creditor or stockholder or
    member who is unknown or cannot be found shall be escheated to the city or municipality where such
    assets are located.
    Except by decrease of capital stock and as otherwise allowed by this Code, no corporation shall
    distribute any of its assets or property except upon lawful dissolution and after payment of all its debts
    and liabilities.

    In the instant case, there is no dispute that petitioner's corporate registration was revoked on May
    26, 2003. Based on the above-quoted provision of law, it had three years, or until May 26, 2006, to
    prosecute or defend any suit by or against it. The subject complaint, however, was filed only on October
    19, 2006, more than three years after such revocation. It is likewise not disputed that the subject
    complaint was filed by petitioner corporation and not by its directors or trustees. In fact, it is even averred,
    albeit wrongly, in the first paragraph of the Complaint9 that "plaintiff is a duly organized and existing
    corporation under the laws of the Philippines, with capacity to sue and be sued. x x x"

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