Ms. Magdalena Ysmael Philips

March 31, 1981 Ms. Magdalena Ysmael Philips President, Hacienda Benito Inc. Rm. 115 Limketkai Building Ortigas Ave.,Greenhills San Juan, Metro Manila RE : Extension of Corporate Liquidation Period of Hacienda Benito, Inc . Madam : We are in receipt of your letter requesting for the extension of the corporate file of your corporation for the following stated reasons: "1. The period for winding up and liquidation could not be sufficient for the purpose of terminating once and for all the transactions, corporate affairs and other businesses of the corporation; 2. Pending cases in court could not be terminated within the said period ...; 3. Inasmuch as Hacienda Benito, Inc. is engaged in real estate business and development, it would be necessary to extend the corporate life so that those who have not settled their affairs with the corporation may be enabled to do so." Your letter taken in its entirety leaves no doubt that what you are requesting is the extension of the three-years liquidation period and not extension of corporate life. In this regard attention is invited to Sec. 122 of the New Corporation Code, to wit: "SECTION 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 . xxx xxx xxx." (Emphasis ours) From the above-quoted provision of Law and precedents on the matter, it is settled that the law does not allow any extension of the three-year period. Even where it may be found impossible, within the three-year period to reduce disputed claims to judgment, nonetheless suits by or against a corporation abate when it ceases to be an entity capable of suing or being sued. (Fishers, the Philippine Law of Stock Corporation, pp. 390-391). However, this three-year limitation will not apply if a trustee is designated within the said period. Unless the trusteeship is limited in its duration by the Deed of Trust, there is no time limit within which the trustee must finish liquidation and he may sue and be sued as such even beyond the three-year period. (National Abaca, Corporation vs. Pore, G. R. No. L-16779, August 16, 1961; Board of Liquidators v. Kalaw, et al., G. R. No. L-18805, August 14, 1967). In view of the foregoing, it is suggested that on or before May 31, 1981, the termination of your three-year liquidation period, all the assets, properties, and interests of the corporation be transferred to trustee or trustees for the benefit of creditors, stockholders and other concerned. Please be guided accordingly. Very truly yours, (SGD.) ROSARIO N. LOPEZ Director Corporate and Legal Department