Reyes v.

Bancom (Rio)
G.R. No. 190286
January 11, 2018
Sereno, C.J.
BEFORE THE SC: Petition for review on certiorari
PETITIONERS: RAMON E. REYES AND CLARA R. PASTOR
RESPONDENT: BANCOM DEVELOPMENT CORP.

SUMMARY: Marbella incurred loan obligations from Bancom Development Corp for a
condominium project as evidenced by Promissory Notes. It was guaranteed by the Reyes Group.
Due to nonpayment of loan, Bancom filed a complaint with the RTC Makati against: (a)
Marbella as principal debtor; and (b) the Reyes Group as guarantors of the loan. RTC and CA
ruled in favor of Bancom. Reyes Group filed for an MR arguing that the action must be
considered abated pursuant to Section 122 of the Corporation Code because the Certificate
of Registration issued to Bancom had been revoked by SEC on May 31, 2004, and that no trustee
or receiver had been appointed to continue the suit.
Whether the present action should be deemed abated by the revocation by the SEC of the
Certificate of Registration issued to Bancom. NO
The revocation of Bancom's Certificate of Registration does not justify the abatement of the
present action. Section 122 (now Section 139) of the Corporation Code states that a corporation
whose charter is annulled, or whose corporate existence is otherwise terminated, may continue as
a body corporate for a limited period of three years, but only for certain specific purposes. Thus,
the mere revocation of the charter of a corporation does not result in the abatement of
proceedings, because it loses only its right to sue and be sued in its name upon expiration of the
3-year period and that even if there is no assigned receiver or assignee, the directors are
considered trustees by legal implication. Also, as a consequence of Section 145, the
corresponding liability of the debtors of a dissolved corporation is deemed subsisting. To rule
otherwise would be to sanction unjust enrichment. As such, the Reyes Group as guarantors of the
loans of Marbella, are liable to Bancom, because the obligations under the PNs and the
Continuing Guaranty, respectively, are plain and unqualified.
CLV Outline:
Mere revocation of the charter of a corporation does not result in the abatement of proceedings,
since the Board of Directors are considered trustees by legal implication even without Bancom
conveying its assets to a receiver/assignee. Under [Section 184 of Revised Corporation Code],
the corresponding liabilities of the debtors of a dissolved corporation remain subsisting;
otherwise, this would sanction the unjust enrichment of debtors. Reyes v. Bancom Dev. Corp.,
851 SCRA 133 (2018).
It is evident from the foregoing discussion of law and jurisprudence that the mere revocation of
the charter of a corporation does not result in the abatement of proceedings. Since its directors
are considered trustees by legal implication, the fact that Bancom did not convey its assets to a
receiver or assignee was of no consequence. It must also be emphasized that the dissolution of a
creditor-corporation does not extinguish any right or remedy in its favor under [Section 184 of
Revised Corporation Code]. As a necessary consequence of the above rule, the corresponding
liability of the debtors of a dissolved corporation must also be deemed subsisting. To rule
otherwise would be to sanction the unjust enrichment of the debtor at the expense of the
corporation. Reyes v. Bancom Development Corp., 850 SCRA 544 (2018).
FACTS:
Before this Court is a Petition for Review on Certiorari filed by Ramon E. Reyes and Clara R.
Pastor seeking to reverse the Decision and the Resolution of the CA. CA affirmed the ruling of
the RTC holding petitioners jointly and severally liable to respondent Bancom Development
Corporation (Bancom) as guarantors of certain loans obtained by Marbella Realty, Inc.
(Marbella).
The dispute in this case originated from a Continuing Guaranty executed in favor of Bancom
Development Corp (Bancom) by Angel E. Reyes, Sr., Florencio Reyes, Jr., Rosario R. Du,
Olivia Arevalo, and the two petitioners herein, Ramon E. Reyes and Clara R. Pastor (the Reyes
Group).

In the instrument, the Reyes Group agreed to guarantee the full and due payment of obligations
incurred by Marbella under an Underwriting Agreement with Bancom. It included the obligation
of Marbella to Bancom amounting to P2,828,140.32, evidenced by Promissory Notes (PN).
Marbella was unable to pay the PN, it issued 4 sets of replacement PNs which it still failed to
pay. Thus, Bancom filed a Complaint for Sum of Money with RTC Makati amounting to
P4,300,247.35 against: (a) Marbella as principal debtor; and (b) the Reyes Group as guarantors
of the loan.

Marbella and Reyes Group argued that they had been forced to execute the PNs and the
Continuing Guaranty against their will. The Marbella II project was entered into by Bancom,
Reyes Group (as owner of the land), Fereit Realty Development Corporation (the sister company
of Bancom, as construction developer).

This condominium project faced financial difficulties and allegedly the Reyes Group was forced
to enter into a Memorandum of Agreement to take on part of the loans obtained by Fereit from
Bancom for the development of the project. Marbella was supposedly compelled to assume
Fereit's obligation.

RTC held that Marbella and the Reyes Group are solidarily liable to Bancom

CA affirmed
Upon appeal, the CA denied the appeal citing the undisputed fact that Marbella and the Reyes
Group had failed to comply with their obligations under the PNs and the guaranty.

Reyes Group filed a Motion for Reconsideration of the CA decision on the following grounds:
a) PNs were not meant to be binding because the funds released to Marbella by
Bancom were not loans, but merely additional financing.
b) The action must be considered abated pursuant to Section 122 of the
Corporation Code. They pointed out that the Certificate of Registration issued to
Bancom had been revoked by SEC on May 31, 2004, and that no trustee or
receiver had been appointed to continue the suit; in fact, even Bancom's former
 counsel was compelled to withdraw its appearance from the case, as it could no
longer contact the corporation.
c) In its supplement to the MR, it attached a Certificate of Corporate
Filing/Information issued by the SEC, confirming the revocation of Bancom’s
Certificate of Registration.

CA denied the Motion for Reconsideration.

ISSUE: Whether the present action should be deemed abated by the revocation by the SEC
of the Certificate of Registration issued to Bancom – No

HELD: The revocation of Bancom's Certificate of Registration does not justify the
abatement of the present action.

Section 122 (now Section 139) of the Corporation Code provides that a corporation whose
charter is annulled, or whose corporate existence is otherwise terminated, may continue as a
body corporate for a limited period of three years, but only for certain specific purposes
enumerated by law. These include the prosecution and defense of suits by or against the
corporation, and other objectives relating to the settlement and closure of corporate affairs.

The exception was given in Sumera v. Valencia, where the Court ruled that “if a receiver or
assignee is appointed, with or without a transfer of its properties within three years, the legal
interest passes to the assignee, the beneficial interest remaining in the members, stockholders,
creditors and other interested persons; and said assignee may bring an action, prosecute that
which has already been commenced for the benefit of the corporation, or defend the latter
against any other action already instituted or which may be instituted even outside of the
period of three years.”

In Gelano v. CA, the Court further added that, “in the absence of a receiver or an assignee,
suits may be instituted or continued by a trustee specifically designated for a particular matter,
such as a lawyer representing the corporation.”

In Clemente v. CA, the Court said that, “the board of directors of the corporation may be
considered trustees by legal implication for the purpose of winding up its affairs.”

Section 145 (now Section 184) also states that, “no right or remedy in favor of or against any
corporation, its stockholders, members, directors, trustees, or officers, nor any liability incurred
by any such corporation, stockholders, members, directors, trustees, or officers, shall be removed
or impaired either by the subsequent dissolution of said corporation or by any subsequent
amendment or repeal of this Code or of any part thereof.”

Given the above, the mere revocation of the charter of a corporation does not result in the
abatement of proceedings, because it loses only its right to sue and be sued in its name upon
expiration of the 3-year period and that even if there is no assigned receiver or assignee, the
directors are considered trustees by legal implication.
Also, as a consequence of Section 145, the corresponding liability of the debtors of a
dissolved corporation is deemed subsisting. To rule otherwise would be to sanction the unjust
enrichment of the debtor at the expense of the corporation.

As such, the Reyes Group as guarantors of the loans of Marbella, are liable to Bancom.
The obligations of Marbella and the Reyes Group under the PNs and the Continuing Guaranty,
respectively, are plain and unqualified. The Reyes Group, agreed to become liable if any of
Marbella's guaranteed obligations were not duly paid on the due date. There is absolutely no
support for the assertion that these agreements were not meant to be binding.

Lastly, the Court said that, even if the other agreements referred to by petitioners are taken into
account, the result would be the same. Because, it is evident from the provisions that Bancom
extended additional financing to Marbella on the condition that the loan would be paid upon
maturity.

The Petition for Review is hereby DENIED, and the Decision dated 25 June 2009 and the
Resolution dated 9 November 2009 issued by the Court of Appeals in CA-G.R. CV No. 45959
are AFFIRMED with MODIFICATION. Petitioners Ramon E. Reyes and Clara R. Pastor are
jointly and severally liable with Marbella Manila Realty, Inc., Angel E. Reyes, Sr., Florencio
Reyes, Jr., Rosario R. Du and Olivia Arevalo.