Facts:

• In Sumera v. Valencia, G.R. No. 45486, decided on May 3, 1939, the case involved the recovery of P400 from Eugenio Valencia, the manager of a dissolved corporation named "Devota de Nuestra Seora de la Correa."
• The corporation, organized in 1920 in Paombong, Bulacan, Philippines, was engaged in the fishing industry.
• An investigation revealed that Valencia had withdrawn P600 from the corporation's remaining assets.
• A petition for the voluntary dissolution of the corporation was filed on September 26, 1927, and approved on February 14, 1928.
• Damaso P. Nicolas was appointed as the assignee to handle the liquidation of the corporation's properties.
• Nicolas demanded Valencia return the P600, to which Valencia initially agreed and paid P200 in May 1929, leaving a balance of P400.
• Nicolas later resigned and was replaced by Tiburcio Sumera, who filed a motion in the Court of First Instance of Bulacan to compel Valencia to pay the remaining P400.
• The motion was denied on March 5, 1936, but Sumera was allowed to bring the proper action.
• Sumera filed a complaint on June 6, 1936, seeking the recovery of P400 with 12% interest per annum from 1927 and P100 as indemnity.
• Valencia denied the allegations, claiming he had fully paid any obligation to the corporation and filed a counterclaim for P200 in damages.
• During the trial, the parties stipulated that Valencia admitted the genuineness of Exhibit X and had paid P200, but the remaining P400 was unpaid.
• They also agreed to present evidence on whether the action had prescribed.
• The Court of First Instance initially ruled in favor of Sumera, ordering Valencia to pay P400 with legal interest from June 5, 1936, plus costs.
• Upon Valencia's motion for reconsideration, the court amended its decision on November 2, 1936, dismissing the case on the ground that the action had prescribed under section 77 of Act No. 1459, as it was filed more than three years after the corporation's dissolution.
• Sumera appealed this decision, arguing that the court erred in applying the prescription period.

Issue:

• (Unlock)

Ruling:

• The Supreme Court reversed the order of the Court of First Instance, holding that the action had not prescribed.
• The case was remanded to the lower court for a decisi...(Unlock)

Ratio:

• The Supreme Court clarified that section 77 of Act No. 1459, which prescribes a three-year period for a dissolved corporation to continue its existence for the purpose of prosecuting and defending suits, is not applicable when the liquidation of the corporati...continue reading