TEAM ENERGY CORPORATION (FORMERLY: MIRANT PAGBILAO CORPORATION

AND SOUTHERN ENERGY QUEZON, INC.) v. COMMISSIONER OF INTERNAL

REVENUE;
G.R. No. 197663, March 14, 2018

REPUBLIC OF THE PHILIPPINES REP. BY THE BUREAU OF INTERNAL REVENUE

v. TEAM ENERGY CORPORATION
G.R. No. 197770, March 14, 2018

LEONEN, J.

FACTS:

Team Energy is a VAT-registered entity engaged in power generation and electricity

sale to National Power Corporation (NPC) under a Build, Operate, and Transfer
scheme. It filed with the Bureau of Internal Revenue (BIR) "an Application for
Effective Zero-Rate of its supply of electricity to the NPC, which was subsequently
approved. On December 17, 2004, Team Energy filed with the Revenue District Office
No. 60 in Lucena City a claim for refund of unutilized input VAT in the amount of P
83,465,353.50, for the first to fourth quarters of taxable year 2003 and appealed on
July 22, 2005 before the CTA its 2003 quarter VAT claims.

Commissioner averred that the amount claimed by Team Energy was not properly
documented and that NPC's exemption from taxes did not extend to its electricity
supplier such as Team Energy. Alleging that alleged that it was imperative upon
Team Energy to prove its compliance with the registration requirements of a VAT
taxpayer; the invoicing and accounting requirements for VAT-registered persons;
and the checklist of requirements for a VAT refund under Revenue Memorandum
Order No. 53-98. Commissioner contended that Team Energy must prove that the
claims were filed within the prescriptive periods and that the input taxes being
claimed had not been applied against any output tax liability or were not carried over
in the succeeding quarters.

On the disallowance of some of its input VAT claims, Team Energy submits that "at
the time when the unutilized input VAT was incurred in 2003, the applicable NIRC
provisions did not create a distinction between an official receipt and an invoice in
substantiating a claim for refund."

The Commissioner maintains that Team Energy is not entitled to any tax refund or
credit because it cannot qualify for VAT zero-rating under RA No. 9136 (Electrical
Power Industry Reform Act (EPIRA) Law) for failure to submit its ERC Registration
and Certificate of Compliance.
 ISSUE/s:

1. WON Team Energy's judicial claim was filed beyond the 30-day period
required in Section 112(D);
2. WON the VAT invoices and VAT official receipts may be interchanged to
comply with the substantiation requirements for refunds of excess or
unutilized input tax;
3. WON failure to submit the Registration and Certificate of Compliance issued
by the Energy Regulatory Commission (ERC) disqualifies it from claiming a
tax refund/credit.

HELD:
1. YES, Team Energy's judicial claim was filed beyond the 30-day period required in
Section 112(D). The law is clear that resort to an appeal with the CTA should be
made within 30 days either from receipt of the decision denying the claim or the
expiration of the 120-day period given to the Commissioner to decide the claim.
Compliance with the 120+30-day periods under Section 112 of the 1997 NIRC is
mandatory and jurisdictional. Exempted from this are VAT refund cases that are
prematurely filed before the CTA or before the lapse of the 120-day period between
December 10, 2003, when the BIR issued Ruling No. DA-489-03, and October 6,
2010, when this Court promulgated CIR vs. Aichi.

The administrative claim for refund was filed on December 17, 2004. Thus, BIR had
120 days to act on the claim, or until April 16, 2005. Team Energy, in turn, had until
May 16, 2005 to file a petition with the CTA but filed its appeal only on July 22,
2005, or 67 days late. A claim for input VAT refund or credit is construed strictly
against the taxpayer. Accordingly, there must be strict compliance with the
prescriptive periods and substantive requirements set by law before a claim for tax
refund or credit may prosper. The mere fact that Team Energy has proved its excess
input VAT does not entitle it as a matter of right to a tax refund or credit. Thus, the
CTA En Banc correctly denied its claim for refund due to prescription.

2. NO, claimants of tax refunds have the burden to prove their entitlement to the claim
under substantive law and the factual basis of their claim. Moreover, in claims for
VAT refund/credit, applicants must satisfy the substantiation and invoicing
requirements under the NIRC and other implementing rules and regulations. In
AT&T vs. CIR (2014), the Court held that there was a clear delineation between
official receipts and invoices and that these documents could not be used
interchangeably. According to the Court, Section 113 on invoicing requirements
must be read in conjunction with Sections 106 and 108, which specifically
delineates sales invoices for sales of goods and official receipts for sales of services.
The Court reiterated that to claim a refund of unutilized or excess input VAT,
purchase of goods or properties must be supported by VAT invoices, while
purchase of services must be supported by VAT official receipts.
 Strict compliance with substantiation and invoicing requirements is necessary
considering VAT's nature and VAT system's tax credit method, where tax payments
are based on output and input taxes and where the seller's output tax becomes the
buyer's input tax that is available as tax credit or refund in the same transaction. It
ensures the proper collection of taxes at all stages of distribution, facilitates
computation of tax credits, and provides accurate audit trail or evidence for BIR
monitoring purposes. The CTA further pointed out that the non-interchangeability
between VAT official receipts and VAT invoices avoids having the government refund
a tax that was not even paid.

3. NO, Team Energy's refund claim is premised on Section 108(B)(3) of the 1997 NIRC,
in relation to NPC's charter and not on the EPIRA Law, the requirements under the
EPIRA are inapplicable. To qualify its electricity sale to NPC as zero-rated, Team
Energy needs only to show that it is a VAT-registered entity and that it has complied
with the invoicing requirements under Section 108(B)(3) of the 1997 NIRC, in
conjunction with Section 4.108-1 of Revenue Regulations No. 7-95.
 PHILIPPINE AIRLINES, INC. (PAL) v. COMMISSIONER OF INTERNAL REVENUE
G.R. Nos. 206079-80, January 17, 2018

COMMISSIONER OF INTERNAL REVENUE v. PHILIPPINE AIRLINES, INC. (PAL)

G.R. No. 206309, January 17, 2018

LEONEN, J.

FACTS:

A refund claim was filed by Philippine Airlines, Inc. (PAL) for final taxes withheld on its
interest income from its peso and dollar deposits with China Banking Corporation
(Chinabank), JP Morgan Chase Bank (JPMorgan), Philippine Bank of Communications
(PBCom), and Standard Chartered Bank (Standard Chartered) (collectively, Agent
Banks).
PAL made US dollar and Philippine peso deposits and placements in the following
Philippine banks: Chinabank, JPMorgan, PBCom, and Standard Chartered. PAL earned
interest income from these deposits and the Agent Banks deducted final withholding
taxes and allegedly remitted to the Bureau of Internal Revenue as final withholding tax..

PAL asserts that it is entitled to a refund of the withheld taxes because it is exempted
from paying the tax on interest income under its franchise, Presidential Decree No.
1590. PAL also insists that it is unequivocally exempt from final withholding taxes, and
consequently, for as long as it duly establishes that taxes were withheld from its income,
it must be refunded. It maintains that proof of actual remittance is not necessary. It
contends that the Certificates of Final Taxes Withheld issued by the Agent Banks are
prima facie evidence of actual remittance. However, the Commissioner refused to grant
the claim, arguing that PAL failed to prove the remittance of the withheld taxes to the
Bureau of Internal Revenue.

The CTA Special First Division found that PAL was exempted from final withholding tax
on interest on bank deposits. However, it ruled that PAL failed to adequately
substantiate its claim because it did not prove that the Agent Banks, with the exception
of JPMorgan, remitted the withheld amounts to the BIR. PAL only presented documents
which showed the total amount of final taxes withheld for all branches of the banks. As
such, the amount of tax withheld from and to be refunded to PAL could not be
ascertained with particularity. It ruled that the Certificates of Final Tax Withheld at
Source are not sufficient to prove remittance.

ISSUE: WON PAL is required to prove the remittance to the Bureau of Internal Revenue
of the final withholding tax on its interest from currency bank deposits to be entitled to
tax refund.
HELD: No.
The Court ruled that PAL is entitled to its claim for refund for taxes withheld by
Chinabank, PBCom, and Standard Chartered. Remittance need not be proven. PAL needs
only to prove that taxes were withheld from its interest income. The taxes on interest
income from bank deposits are in the nature of a withholding tax. Thus, the party liable
for remitting the amounts withheld is the withholding agent of the Bureau of Internal
Revenue. The withholding agent is the payor liable for the tax, and any deficiency in its
amount shall be collected from it. Should the BIR find that the taxes were not properly
remitted, its action is against the withholding agent, and not against the taxpayer.

Here, PAL is the income earner and the payee of the final withholding tax, and the Agent
Banks are the withholding agents who are the payors responsible for the deduction and
remittance of the tax. The failure of the Agent Banks to remit the amounts does not
affect and should not prejudice PAL. In case of failure of remittance of taxes, the Bureau
of Internal Revenue's cause of action is against the Agent Banks. Thus, PAL is not
obliged to remit, let alone prove the remittance of, the taxes withheld.

Considering that the Certificates were presented, the burden of proof shifts to the
Commissioner, who needs to establish that they were incomplete, false, or issued
irregularly. However, the Commissioner did no such thing. Thus, these Certificates are
sufficient evidence to establish the withholding of the taxes. The taxes withheld from
PAL are considered its full and final payment of taxes. Necessarily, when taxes were
withheld and deducted from its income, PAL is deemed to have paid them. Considering
that PAL is exempted from paying the withholding tax, it is rightfully entitled to a
refund.

The Court ruled that the CTA is not limited by the evidence presented in the
administrative claim in the BIR. The claimant may present new and additional evidence
to the CTA to support its case for tax refund. The power of the CTA to exercise its
appellate jurisdiction does not preclude it from considering evidence that was not
presented in the administrative claim in the BIR. Here, the Commissioner failed to act on
PAL's administrative claim. If she had acted on the refund claim, she could have directed
PAL to submit the necessary documents to prove its case.
 UNIVERSITY PHYSICIANS SERVICES INC. - MANAGEMENT, INC., vs.
COMMISSIONER OF INTERNAL REVENUE
G.R. No. 205955, March 7, 2018
MARTIRES, J.

FACTS:

UPSI-MI filed its Annual Income Tax Return (ITR) for the year ended December 31,
2006 with BIR reflecting an income tax overpayment. Subsequently, on November
14, 2007, petitioner filed an Annual ITR for the short period fiscal year ended March
31, 2007, reflecting the income tax overpayment from the previous period as "Prior
Year’s Excess Credit". But Petitioner filed an amended Annual ITR for the short period
fiscal year ended March 31, 2007, reflecting the removal of the amount of the instant
claim in the ''Prior Year's Excess Credit". Petitioner filed with the respondent, a claim
for refund and/or issuance of a Tax Credit Certificate (TCC) representing the alleged
excess and unutilized creditable withholding taxes for 2006.
CTA Division and CTA En Banc ruled denied the petition and reasoned that UPSI-MI
effectively exercised the carry-over option under Section 76 of the NIRC. UPSI-MI
argued that the irrevocability rule under Section 76 of the NIRC is not applicable for
the reason that it did not carry over to the succeeding taxable period the 2006 excess
income tax credit. UPSI-MI added that the subject excess tax credits were
inadvertently included in its original 2007 ITR, and such mistake was rectified in the
amended 2007 ITR. Thus, UPSI-MI insisted that what should control is its election of
the option "To be issued a Tax Credit Certificate" in its 2006 ITR.

ISSUE: WON UPSI-MI may still be entitled to the refund of its 2006 excess tax credits
when it thereafter filed its income tax return (for the short period ending 31 March
2007) indicating the option of carry-over.

HELD: No.
The Court held that it can not subscribe to the suggestion that the irrevocability rule
enshrined in Section 76 of the NIRC applies to either of the options of refund or
carry-over. The law assumes the interpretation that the irrevocability is limited only
to the option of carry-over such that a taxpayer is still free to change its choice after
electing a refund of its excess tax credit.

When a corporation overpays its income tax liability as adjusted at the close of the
taxable year, it has two options: (1) to be refunded or issued a tax credit certificate,
or (2) to carry over such overpayment to the succeeding taxable quarters to be
applied as tax credit against income tax due. Once the carry-over option is taken, it
becomes irrevocable such that the taxpayer cannot later on change its mind in order
to claim a cash refund or the issuance of a tax credit certificate of the very same
amount of overpayment or excess income tax credit.

UPSI-MI is barred from recovering its excess creditable tax through refund or TCC. It
is undisputed that despite its initial option to refund its 2006 excess creditable tax,
UPSI-MI subsequently indicated in its 2007 short-period FAR that it carried over the
2006 excess creditable tax and applied the same against its 2007 income tax due. The
CTA was correct in considering UPSI-MI to have constructively chosen the option of
carry-over, for which reason, the irrevocability rule forbade it to revert to its initial
choice. It does not matter that UPSI-Ml had not actually benefited from the carry-over
on the ground that it did not have a tax due in its 2007 short period. Neither may it
insist that the insertion of the carry-over in the 2007 FAR was by mere mistake or
inadvertence. As previously laid down, the irrevocability rule admits of no
qualifications or conditions.

In sum, the petitioner is clearly mistaken in its view that the irrevocability rule also
applies to the option of refund or tax credit certificate. In view of the court's finding
that it constructively chose the option of can-y-over, it is already barred from
recovering its 2006 excess creditable tax through refund or TCC even if it was its
initial choice.
 PATRICIA CABRIETO DELA TORRE, REPRESENTED BY BENIGNO T. CABRIETO,
JR. v. PRIMETOWN PROPERTY GROUP, INC.
G.R. No. 221932, February 14, 2018
PERALTA, J.

FACTS:
Respondent Primetown is primarily engaged in holding, owning and developing real
estate, such as the Century Citadel Inn, Makati Prime Century Tower and Makati
Prime City. It expanded its real estate business in Cebu City where it constructed 2
condotel projects. However, the ascent of respondent was arrested and its shares
were brought down by the Asian financial crisis in 1997. It experienced financial
difficulties due to the devaluation of the Philippine peso, the increase in interest rates
and lack of access to adequate credit. Thus, in 2003, respondent filed a petition for
corporate rehabilitation with prayer for suspension of payments and actions. The
rehabilitation court issued a Stay Order.

Petitioner dela Torre filed a Motion for Leave to Intervene seeking judicial order for
specific performance, i.e., for respondent to execute in her favor a deed of sale
covering Unit 3306, Makati Prime Citadel Condominium which she bought from the
former as she had allegedly fully paid the purchase price. Respondent opposed the
motion arguing that it was filed out of time considering that the Stay Order was
issued.

RTC granted petitioner's motion for intervention. CA revered the decision founding
that when the Stay Order was issued, the rehabilitation court is empowered to
suspend all claims against respondent whether monetary or otherwise which
includes petitioner's action or claim to execute a certificate of title in her favor.

Petitioner contends that her claim against respondent was not suspended with the
issuance of the Stay Order because when the order was issued on August 15, 2003,
she had long already fully paid the purchase price of the condominium unit she
bought from respondent and that claims refer to debts or demands of pecuniary
nature or the assertion that money be paid by the company under rehabilitation to its
creditors, but her prayer for the execution of a deed of absolute sale is not a claim of
this character as to be covered and suspended under the Stay Order.

ISSUE: WON Petitioner's prayer in intervention for respondent to execute the deed of
sale in her favor for the condominium unit is a claim as defined under the Interim
Rules.

HELD: Yes.
While respondent is undergoing rehabilitation, the enforcement of all claims against
it is stayed. Rule 2, Section 1 of the Interim Rules defines a claim as referring to all
claims or demands of whatever nature or character against a debtor or its property,
whether for money or otherwise. The definition is all-encompassing as it refers to all
actions whether for money or otherwise. There are no distinctions or exemptions.
Corporate rehabilitation contemplates a continuance of corporate life and activities
in an effort to restore and reinstate the corporation to its former position of
successful operation and solvency, the purpose being to enable the company to gain a
new lease on life and allow its creditors to be paid their claims out of its earnings. An
essential function of corporate rehabilitation is the Stay Order which is a mechanism
of suspension of all actions and claims against the distressed corporation upon the
due appointment of a management committee or rehabilitation receiver.

The justification for the suspension of actions or claims, without distinction, pending
rehabilitation proceedings is to enable the management committee or rehabilitation
receiver to effectively exercise its/his powers free from any judicial or extra-judicial
interference that might unduly hinder or prevent the "rescue" of the debtor company.
To allow such other actions to continue would only add to the burden of the
management committee or rehabilitation receiver, whose time, effort and resources
would be wasted in defending claims against the corporation instead of being
directed toward its restructuring and rehabilitation.

Petitioner's prayer in intervention for respondent to execute the deed of sale in her
favor for the condominium unit is a claim as defined under the Interim Rules.
 CAROLINA QUE VILLONGCO, ANA MARIA QUE TAN, ANGELICA QUE GONZALES,
ELAINE VICTORIA QUE TAN AND EDISON WILLIAMS QUE TAN v. CECILIA QUE
YABUT, EUMIR CARLO QUE CAMARA AND MA. CORAZON QUE GARCIA,
G.R. No. 225022, February 05, 2018

CECILIA QUE YABUT, EUMIR CARLO QUE CAMARA AND MA. CORAZON QUE
GARCIA v. CAROLINA QUE VILLONGCO, ANA MARIA QUE TAN, ANGELICA QUE
GONZALES, ELAINE VICTORIA QUE TAN AND EDISON WILLIAMS QUE TAN
G.R. No. 225024, February 5, 2018
TIJAM, J.

FACTS:

Phil-Ville Development and Housing Corporation (Phil-Ville) is a family corporation

founded by Geronima Gallego Que (Geronima) that is engaged in the real estate
business. Geronima owned 3,140 shares of stock while the remaining 196,860 shares
were equally distributed among Geronima's 6 children. By virtue of the Sale of Shares
of Stocks dated June 11, 2005 purportedly executed by Cecilia as the attorney-in-fact
of Geronima, Cecilia allegedly effected an inequitable distribution of the 3,140 shares
that belonged to Geronima and reflected in the General Information Sheets filed by
Phil-Ville. Cecilia Que, et al. proceeded with the scheduled annual stockholder's
meeting participated only by a few stockholders. In the said meeting, they elected the
new members of the Board of Directors and officers of Phil-Ville, Cecilia Que, et al.

Cecilia Que, et al., filed a Motion for Additional Time to file Answer on March 7, 2014
arguing that the summons was not properly served on them. The RTC however
denied said motion since it should have been filed within 10 days or on March 2,
2014, in accordance with Section 5; Rule 6 of the Interim Rules of Procedure for
Intra-Corporate Controversies. CA, while it declared the RTC decision void for
violating Section 14, Article VIII of the Constitution, the CA however declared the
annual stockholders meeting conducted by Cecilia Que, et al. void for lack of quorum.

Carolina, et al., alleged in their petition that the RTC Decision did not violate Section
14, Article VIII of the Constitution since the decision clearly stated the facts and the
law on which it was based. They alleged that "the decision thoroughly passed upon
all the allegations in the complaint, vis-a-vis the Judicial affidavit of x x x Carolina x x
x, which remains unrebutted."

Carolina et. al., claimed that the basis for determining quorum should have been the
total number of undisputed shares of stocks of Phil-Ville. Thus, excluding the 3,142
shares from the 200,000 outstanding capital stock, the proper basis of determining
the presence of quorum should be 196,858 shares of stocks.
ISSUE/s:

1. WON the Motion for Extension of Time to File Answer filed by Cecilia Que, et al. was
a voluntary appearance on their part.

2. WON RTC Decision is void for violating Section 14, Article VIII of the Constitution.

3. WON the total outstanding capital stocks, without distinction as to disputed or

undisputed shares of stock, is the basis in determining the presence of quorum.

HELD:
1. Yes. The Motion for Extension of Time to file Answer is a voluntary appearance on
the part of Cecilia, et al. It is well-settled that jurisdiction over the person of the
defendant in a civil case is obtained through a valid service of summons. When there
is no service of summons upon the defendant, the court acquires no jurisdiction over
his person, and a judgment rendered against him is null and void. However, the
invalidity of the service of summons is cured by the voluntary appearance of the
defendant in court and their submission to the court's authority. Seeking an
affirmative relief is inconsistent with the position that no voluntary appearance had
been made, and to ask for such relief, without the proper objection, necessitates
submission to the Court's jurisdiction.

2. Yes. Under Section 14, Article VIII of the Constitution, no decision shall be
rendered by any court without expressing therein clearly and distinctly the facts and
the law on which it is based. Section 1 of Rule 36 of the Rules of Court provides that a
judgment or final order determining the merits of the case shall be in writing
personally and directly prepared by the judge, stating clearly and distinctly the facts
and the law on which it is based, signed by him and filed with the clerk of the court.

It should be emphasized that the mere fact that the defendant was not able to file an
answer does not automatically mean that the trial court will render a judgment in
favor of the plaintiff. The trial court must still determine whether the plaintiff is
entitled to the reliefs prayed for. Thus, it is incumbent upon the RTC to clearly and
distinctly state the facts and the legal basis on which it based its decision. This is
sadly not followed by the RTC in its Decision dated March 14, 2014. The RTC merely
adopted the allegations of Carolina et al. without any rhyme or reason. The decision
merely stated that quorum was not established during the annual stockholders
meeting conducted by Cecilia Que, et al. and that only 98,428 shares were present
during the said meeting without any explanation or justification as to why the trial
court ruled that way.

3. Yes. The 200,000 outstanding capital stocks of Phil-Ville should be the basis for
determining the presence of a quorum, without any distinction. Therefore, to
constitute a quorum, the presence of 100,001 shares of stocks in Phil-Ville is
necessary. We agree with the CA when it held that only 98,430 shares of stocks were
present during stockholders meeting, therefore, no quorum had been established.
The right to vote is inherent in and incidental to the ownership of corporate stocks. It
is settled that unissued stocks may not be voted or considered in determining
whether a quorum is present in a stockholders' meeting. Only stocks actually issued
and outstanding may be voted. Thus, for stock corporations, the quorum is based on
the number of outstanding voting stocks. The distinction of undisputed or disputed
shares of stocks is not provided for in the law or the jurisprudence. Ubi lex non
distinguit nec nos distinguere debemus — when the law does not distinguish we
should not distinguish.
DR. GIL J. RICH v. GUILLERMO PALOMA III, ATTY. EVARISTA TARCE AND ESTER
L. SERVACIO
G.R. No. 210538, March 07, 2018

REYES, JR., J.

FACTS:
Petitioner Dr. Gil Rich lent P1M to his brother, Estanislao Rich (Estanislao). The
agreement was secured by a real estate mortgage over a 1000-square-meter parcel
of land with improvements. When Estanislao failed to make good on his obligations
under the loan agreement, the petitioner foreclosed on the subject property via a
public auction sale conducted by respondent Guillermo Paloma III, Sheriff IV of the
RTC. The petitioner was declared the highest bidder, and subsequently, was issued a
Certificate of Sale as purchaser/mortgagee.

Without the petitioner's knowledge, however, and prior to the foreclosure, Estanislao
entered into an agreement with Maasin Traders Lending Corporation (MTLC), where
loans and advances amounting to P2.6 million were secured by a real estate
mortgage over the same property. Respondent Ester L. Servacio (Servacio), as
president of MTLC, exercised equitable redemption after the foreclosure
proceedings. Respondent Paloma issued a Deed of Redemption in favor of MTLC.

Petitioner claimed that MTLC no longer has juridical personality to effect the
equitable redemption as it has already been dissolved by the SEC. He also asserted
that there was a pending case against respondent Servacio for allegedly forging
Estanislao's signature on the same real estate mortgage that respondent Servacio
used as basis for her equitable redemption of the subject property.

The case was called for pre-trial. Unfortunately, neither defendant Servacio nor her
lawyer appeared, and as a result of which, defendant Servacio was "declared as in
default." The petitioner thus presented his evidence ex parte. RTC rendered a
Decision in the petitioner's favor. CA granted Servacio’s appeal, finding that forgery
cannot be presumed and must be proved by clear, positive, and convincing evidence,
which the petitioner was unable to fulfill. CA likewise emphasized that the assailed
real estate mortgage between Estanislao and MTLC was duly notarized and thus
enjoyed the presumption of authenticity and due execution, which again, the
petitioner was unable to disprove. CA, however, affirmed the RTC finding that
respondent Servacio's reasons for her non-appearance as well as her counsel's
absence during the pre-trial were unjustified to warrant a liberal application of
Section 4, Rule 18 of the Rules of Court.

Petitioner contends that respondent Servacio violated Section 13, Rule 44 of the
Rules of Court when the latter's Appellant's Brief, which was submitted to the CA,
"failed to contain a subject index with page of reference and compliant statement of
facts."
Petitioner further argues that respondent Servacio failed to contest the RTC finding
that MTLC has already lost its juridical personality upon the redemption of the
subject property, which makes the legal action void.

ISSUE:

1. WON an appeal may be dismissed on account of the failure of the appellant’s brief
to comply with the rules.

2. WON a corporation not invested with corporate personality at the time of

redemption may redeem a property.

HELD:
1. No. The guiding principle is that if the citations found in the appellants brief could
sufficiently enable the CA to locate expeditiously the portions of the records referred
to, then there is substantial compliance with the requirements of Section 13, Rule 44
of the Rules of Court.

Here, CA did not exercise the discretion to dismiss the appeal based on the absence of
"a subject index with page of reference and compliant statement of facts" in the
appellant's brief. Clearly, the CA did not find that the tenets of justice and fair play
were disregarded by this omission. Rather, the CA chose to decide the case on the
merits, which impliedly found the appellant's brief to be substantially sufficient
insofar as the guiding principle mentioned above is concerned. Absent any grave
abuse of discretion in the application of the rules, the Court could not, and would not,
interfere with the CA findings. Considering too that the petitioner merely (1) quoted
the provisions of the rules that the appellant's brief "violated" and (2) showed the
insufficiencies in the appellant's brief, but did not present any proof of any grave
abuse of discretion on the part of the CA, the Court would not now dismantle a ruling
that was reached based on a discretion which was not improperly exercised.

2. No. A corporation which has already been dissolved, be it voluntarily or

involuntarily, retains no juridical personality to conduct its business save for those
directed towards corporate liquidation. This consists of (1) collection of all that is
due the corporation, (2) the settlement and adjustment of claims against it, and (3)
the payment of its debts. This continued existence would only be for the purposes 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."

Two things must be said of the foregoing in relation to the facts of this case. First, if
MTLC entered into the real estate mortgage agreement with Estanislao after its
dissolution, then resultantly, such real estate mortgage agreement would be void ab
initio because of the non-existence of MTLC's juridical personality.

Second, if, however, MTLC entered into the real estate mortgage agreement prior to
its dissolution, then MTLC's redemption of the subject property, even if already after
its dissolution (as long as it would not exceed three years thereafter), would still be
valid because of the liquidation/winding up powers accorded by Section 122 of the
Corporation Code to MTLC.

Here, by the time MTLC executed the real estate mortgage agreement, its juridical
personality has already ceased to exist. The agreement is void as MTLC could not
have been a corporate party to the same. To be sure, a real estate mortgage is not
part of the liquidation powers that could have been extended to MTLC. It could not
have been for the purposes 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." It is, in fact, a new business in which MTLC no longer has any
business pursuing.