Alabang Development Corporation vs Alabang Hills Village

G.R. No. 187456 June 2, 2014 ALABANG DEVELOPMENT CORPORATION, Petitioner, vs. ALABANG ILL! VILLAGE A!!OCIATION "n# RA$AEL TINIO, Respondents.

Peralta,  J. Ponen%e& Peralta, J.

$"'%(& 1. Alabang Development Corporati on,developer of Alabang Hills Village led a complaint for Injnction and Damages against Alabang Hills Village Association Inc., and its president, Rafael for allegedl! starting t"e constrction of a mlti#prpose "all and a s$imming pool on one of t"e parcels of land still o$ned b! ADC, $it"ot t"e latter%s consent and approval, and despite demand, failed to desist from constrcting t"ereof.

&. In its ans$er $it" conter#claim, AHVAI AHVAI denied ADC%s ADC%s allegations and made t"e follo$ing claims' a. ("at ADC "as no legal capacit! to se becase its corporate e)istence $as alread! dissolved b! t"e *ecrities and +)c"ange Corporation on a! &-, &/. b. ("at ADC "as no case of action as it $as merel! "olding t"e propert! in trst for AHVAI as benecial o$ner t"ereof. c. ("at t"e lot is part of t"e open space re0ired re0ired b! la$ to be provided in t"e sbdivision. /. ("e R(C R(C dismissed ADC%s complaint "olding t"at' a. It "as no personalit! to se and t"at sbject area is a reserved area for t"e benet of t"e "omeo$ners as re0ired b! la$. b. H2R3 "as e)clsive jrisdiction over t"e dispte bet$een ADC and AHVAI. 4. ADC led a 5otice of Appeal to elevate t"e case to t"e CA, $"ic" also denied its appeal, "olding t"at it "ad no capacit! to se as it $as alread! defnct. e)#&

 ("e *preme *preme Cort'

 ("e CA cited cited t"e case for t"e prpose prpose of restating restating and distingis"ing t"e jrisprdential denition of t"e terms 6lac7 of capacit! to se8 and 6lac7 of personalit! to se98 and of appl!ing t"ese denitions to t"e present case. ("s, t"e fact t"at, nli7e in t"e instant case, t"e corporations involved in t"e Colmbia case $ere foreign corporations is of no moment. ("e denition of t"e term 6lac7 of capacit! to se8 ennciated in t"e said case still applies to t"e case at bar. Indeed, as "eld b! t"is Cort and as correctl! cited b! t"e CA in t"e case of Columbia' Columbia' 6:l;ac7 of legal capacit! to se means t"at t"e plainti< is not in t"e e)ercise of "is civil rig"ts, or does not "ave t"e necessar! 0alication to appear in t"e case, or does not "ave t"e c"aracter or representation "e claims:9; =lac7 of capacit! to se% refers to a plainti<%s general disabilit! to se, sc" as on accont of minorit!, insanit!, incompetence, lac7 of jridical personalit! or an! ot"er general dis0alications of a part!. >8 In t"e instant case, petitioner lac7s capacit! to se becase it no longer possesses jridical personalit! b! reason of its dissoltion and lapse of t"e t"ree#!ear grace period provided nder *ection 1&& of t"e  Corporation Code, Code, as $ill be discssed belo$. ?it" respect to t"e second assigned error, *ection 1&& of t"e Corporation Code Code provides as follo$s' *+C. 1&&. Corporate li0idation. @ +ver! corporation $"ose c"arter e)pires b! its o$n limitation or is annlled b! forfeitre or ot"er$ise, or $"ose corporate e)istence for ot"er prposes is terminated in an! ot"er manner, s"all nevert"eless be contined as a bod! corporate for t"ree /B !ears after t"e time $"en it $old "ave been so dissolved, for t"e prpose of prosecting and defending sits b! or against it and enabling it to settle and close its a
2pon $inding p of t"e corporate a In t"e absence of trstees, t"is Cort rled, t"s' > *till in t"e absence of a board of directors or trstees, t"ose "aving an! pecniar! interest in t"e assets, inclding not onl! t"e s"are"olders bt li7e$ise t"e creditors of t"e corporation, acting for and in its be"alf, mig"t ma7e proper representations $it" t"e *ecrities and +)c"ange Commission, $"ic" "as primar! and sEcientl! broad jrisdiction in matters of t"is natre, for $or7ing ot a nal settlement of t"e corporate concerns. In t"e instant case, t"ere is no dispte t"at petitioner%s corporate registration $as revo7ed on a! &-, &/. 3ased on t"e above#0oted provision of la$, it "ad t"ree !ears, or ntil a! &-, &-, to prosecte or defend an! sit b! or against it. ("e sbject complaint, "o$ever, $as led onl! on ctober 1J, &-, more t"an t"ree !ears after sc" revocation.

t"e Complaint t"at 6:p;lainti< is a dl! organied and e)isting corporation nder t"e la$s of t"e P"ilippines, $it" capacit! to se and be sed. ) ) )8 Petitioner, nonet"eless, insists t"at a corporation ma! still se, even after it "as been dissolved and t"e t"ree#!ear li0idation period provided nder *ection 1&& of t"e Corporation Code "as passed. Petitioner cites t"e cases of Gelano v. Court of Appeals, Knecht v. United Cigarette Corporation, and Pepsi-Cola Products Philippines, Inc. v. Court of Appeals, as at"orit! to spport its position. ("e Cort, "o$ever, agrees $it" t"e CA t"at in t"e abovecited cases, t"e corporations involved led t"eir respective complaints $"ile t"e! $ere still in e)istence. In ot"er $ords, t"e! alread! "ad pending actions at t"e time t"at t"eir corporate e)istence $as terminated.  ("e import of t"is Cort%s rling in t"e cases cited b! petitioner is t"at t"e trstee of a corporation ma! contine to prosecte a case commenced b! t"e corporation $it"in t"ree !ears from its dissoltion ntil rendition of t"e nal jdgment, even if sc" jdgment is rendered be!ond t"e t"ree#!ear period allo$ed b! *ection 1&& of t"e Corporation Code. Ho$ever, t"ere is not"ing in t"e said cases $"ic" allo$s an alread! defnct corporation to initiate a sit after t"e lapse of t"e said t"ree#!ear period. n t"e contrar!, t"e factal circmstances in t"e abovecited cases $old s"o$ t"at t"e corporations involved t"erein did not initiate an! complaint after t"e lapse of t"e t"ree#!ear period. In fact, as stated above, t"e actions $ere alread! pending at t"e time t"at t"e! lost t"eir corporate e)istence. In t"e present case, petitioner led its complaint not onl! after its corporate e)istence $as terminated bt also be!ond t"e t"ree#!ear period allo$ed b! *ection 1&& of t"e Corporation Code.  ("s, it is clear t"at at t"e time of t"e ling of t"e sbject complaint petitioner lac7s t"e capacit! to se as a corporation. (o allo$ petitioner to initiate t"e sbject complaint and prse it ntil nal jdgment, on t"e grond t"at sc" complaint $as led for t"e sole prpose of li0idating its assets, $old be to circmvent t"e provisions of *ection 1&& of t"e Corporation Code. As to t"e last isse raised, t"e basic and pivotal isse in t"e instant case is petitioner%s capacit! to se as a corporation and it "as alread! been settled t"at petitioner indeed lac7s sc" capacit!.

?H+R+R+, t"e sbject jdgment of t"e lo$er cort ordering t"e register of deeds of etro anila, a7ati 3ranc" IV to reconstitte from Decree 5o. 11F and t"e plan and tec"nical descriptions sbmitted, t"e alleged certicate of title, original and o$nerKs dplicate cop!, in t"e name of anela A0ial is "ereb! annlled and set aside, and t"e petition for reconstittion is ordered dismissed.

 ("e temporar! restraining order of Lne &F, 1JG issed against respondents is "ereb! made and declared permanent. ?it" costs  jointl! and severall! against private respondents.

 ("e Division Cler7 of Cort is "ereb! directed to frnis" t"e Honorable inister of Lstice a cop! of t"e decision at bar as $ell as a cop!, for read! reference, of t"e decision of Lanar! &F, 1JG1 in t"e related 3ernal case, M.R. 5o. #41-G, previosl! ordered frnis"ed to "imB for t"e instittion of appropriate criminal proceedings against private respondents and all ot"ers $"o "ave assisted or conspired $it" t"em as ma! be $arranted b! t"e evidence of record.

* RD+R+D.