Mr. Ricardo Deen Gonzales

May 12, 1986 Mr. Ricardo Deen Gonzales 10 Rizal Street, Nasipit Agusan del Norte Sir : This refers to your letter dated March 31, 1986 requesting for opinion on the queries posed therein. It appears therein that Maria Artega Deen Agricultural Corporation filed an application for a fishpond permit (lease agreement) with the Bureau of Fisheries and Aquatic Resources in 1969. Said application was rejected in 1977 on the ground that its corporate existence had expired in 1976. You alleged, however, that subsequently, you incorporated a new corporation under the name Deen Agricultural Corporation in 1978. Your queries are as follows: cdll "1. Is not the ground of lapse of corporate life a mere technicality which when it works hardships, must be set aside as trivialities, so that a case shall be judged on its merits? 2. Is not the three (3) year winding-up period available to the corporation or its trustees to pursue its interest in the fish pond application, or does the lapse of corporate life ipso facto nullify property rights earned during its existence? 3. Was not the Corporation deprived of a vested property right without due process, considering that the ground relied on by the BFAR was never an issue in the proceedings to adjudicate the proper awardee according to the merits of the conflict? 4. Should the corporation be penalized if an Administrative Body, for reasons only known to it omits to do its duty, i.e. to act within a reasonable time on matters pending before it? 5. Is it lawful to award a fishpond lease agreement over the same area to a party whose application was filed only four (4) years after the corporation had filed its own in 1969 and upon notice and investigation, was found to be a mere usurper who conspired with the corporation's caretaker to circumvent the caretakership contract entered into by the latter with the corporation? Anent your queries Nos. 1 and 2, Section 122 of the Corporation Code provides: "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 persecuting 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 ." (emphasis supplied) It is clear from the foregoing provision that "upon the expiration of the period fixed, the corporation ceases to exist and is dissolved ipso facto, except for purposes connected with the winding up and liquidation." (Agbayani Commentaries and Jurisprudence of Commercial Laws in the Philippines citing 16 Fletcher 671).While the corporation is automatically dissolved, after the expiration of its term, it continues to exist after dissolution and within three years thereafter only for the specific purpose of closing up its business .Thus, the Commission previously ruled that after the expiration of the term of existence of a corporation, " it becomes incapable of making contracts or receiving a grant ".( SEC Opinion dated November 13, 1978 addressed to Atty. Elvino Grana citing 7 RCL Corps.,par. 745).The incorporation of the new corporation "Deen Agricultural Corporation" is of no significance considering that the corporate records of both corporations on file within this Office do not show that the same is a continuation of the corporate existence of the dissolved "Maria Artega Deen Agricultural Corporation" whose term of existence expired on February 13, 1977. Hence, for all legal purposes, the same should be treated as a new and separate entity. LexLib As regards queries Nos. 3, 4 and 5 we regret to inform you that we cannot render any comment thereon considering that the matters treated therein fall within the jurisdiction of the Bureau of Fisheries and Aquatic Resources. Please be advised accordingly. Very truly yours, (SGD.) JULIO A. SULIT, JR. Acting Chairman