G.R. No. 45485 ; May 3, 1939
Tiburcio Sumera, as receiver of the corporation “Devota de Nuestra Señora de la Correa”, plaintiff-appellant, vs. Eugenio Valencia, defendant-appellee.

FACTS

A corporation, “Devota de Nuestra Señora de la Correa,” was voluntarily dissolved in 1928. Its manager, Eugenio Valencia, had withdrawn P600 from corporate funds. During liquidation, an assignee (later replaced by receiver Tiburcio Sumera) demanded payment. Valencia paid P200, leaving a P400 balance. In 1936, Sumera, as receiver, filed a complaint to recover the P400. Valencia raised the defense of prescription, arguing that under Section 77 of the Corporation Law ( Act No. 1459 ), actions must be brought within three years after the corporation’s dissolution (February 14, 1928). The trial court initially ruled for Sumera but, upon reconsideration, dismissed the case based on this prescription period.

ISSUE

Does the three-year period for bringing actions after corporate dissolution under Section 77 of the Corporation Law apply when a receiver or assignee has been appointed to liquidate the corporate assets?

RULING

No. The Supreme Court reversed the trial court’s order of dismissal. The three-year period in Section 77 applies when the corporation itself, through its own officers, conducts the liquidation. However, when a receiver or assignee is appointed by the court to take charge of the corporate assets for liquidation, the legal interest passes to that assignee. The assignee may institute actions necessary for liquidation even after the expiration of the three-year period following dissolution. Therefore, the action filed by the receiver was not barred by prescription. The case was remanded to the trial court for decision on the merits.

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