SECOND DIVISION

[G.R. No. 205291. November 12, 2014.]

COMPANY REGISTRATION AND MONITORING DEPARTMENT AND SECURITIES AND EXCHANGE
COMMISSION, EN BANC, petitioners, vs. CHING BEE TRADING CORPORATION, respondent.
NOTICE
Sirs/Mesdames :
Please take notice that the Court, Second Division, issued a Resolution dated 12 November 2014 which
reads as follows:
G.R. No. 205291 — Company Registration and Monitoring Department and Securities and Exchange
Commission, En Banc v. Ching Bee Trading Corporation.

SUMMARY: The case involves a dispute between Ching Bee Trading Corporation (CBTC) and the
Securities and Exchange Commission (SEC) over CBTC's attempt to extend its corporate life by filing
amended articles of incorporation. The core question is whether CBTC should be granted an extension
to file its amendments despite the original term's expiration.
FACTS:

 CBTC was registered with the SEC on December 23, 1960, with a corporate life of 50 years, set to
expire on December 23, 2010.
 On December 22, 2010, CBTC filed for an extension of its term by submitting amended articles of
incorporation to the SEC's Company Registration and Monitoring Department (CRMD).
 CRMD rejected the application due to a missing Director's Certificate indicating stockholder
approval of the amendment.
 CBTC was verbally advised by the CRMD processor to submit a letter requesting an extension to
fulfill the requirement, which CBTC did on December 23, 2010.
 The SEC denied the extension request on January 6, 2011, referring to a policy against filing
amended articles of incorporation after a corporation's original term has expired.
 The Court of Appeals (CA) reversed the SEC's decision, citing Section 17 of the Corporation Code,
which requires giving incorporators reasonable time to correct or modify objectionable portions in
amendments.
ISSUE:
Whether CBTC is entitled to an additional time to file its amended articles of incorporation extending its
corporate life despite its attempt to file it before the original term expired.
HELD:

 A corporation ceases to exist when its corporate term expires, rendering its acts invalid unless
mandated by law.
 Section 11 of the Corporation Code allows corporations to extend their terms, provided the
extension is applied for within five years before the original expiry date.
 The Code doesn't specify when within this five-year period the application must be made.
 CBTC's application, submitted one day before its term ended, was within the five-year window.
 CRMD rejected the application due to a missing Director's Certificate, and CBTC was advised
verbally to submit an extension request.
 The CA correctly invoked Section 17 of the Code, which requires the SEC to provide reasonable
time to correct deficiencies in amendments.
 The term "reasonable time" means the necessary duration for a diligent person to complete tasks,
considering rights and potential loss.
 The CRMD's failure to give CBTC adequate time to comply with requirements was a procedural
lapse.
 The SEC's stance that extension should be secured within the corporation's life places undue
burden on the corporation, whereas both the corporation and the SEC share this responsibility.
 The Court ruled that despite the initial rejection, CBTC should have been granted reasonable time
to correct deficiencies.
 The CRMD's miscommunication caused CBTC's misunderstanding of the proper procedure.
 The Code's doctrine of relation supports treating CBTC's compliance in good faith as if made before
the term's expiration.
 Thus, CBTC's application for extension is valid, and the SEC is ordered to process it promptly.
 The petition is denied, and the SEC is instructed to process CBTC's application for extension
promptly.