21. Cease v. CA G.R. No. L-33172 (1979) Facts: F together with his children A, B, C, D, and E bought TMP Co.

The charter of the company has lapsed after a few years and then a year after, F died. A and B wanted an actual division while C, D and E wanted reincorporation. C, D and E proceeded to incorporate themselves into the FLC Co. and registered it with the SEC. On the other hand, A and B initiated a special proceeding for the settlement of the estate of F and afterwards a civil case against C, D and E asking that the TMP Co. be declared identical with FLC Co. and that its properties be divided among Fs children. During the pendency of the civil case, the board of liquidators of TMP Co. executed an assignment and conveyance of properties in favor of FLC Co. The trial court, both assigned to hear the special proceeding and civil case, ruled in favor of A and B ruling that the properties registered in the name of FLC Co. and its predecessor in interest, TMP Co. during all the 50 years of its corporate existence are also properties if the estate of F. C, D and E argued before the SC that the action for partition should not have prospered in view of the repudiation of the co-ownership by TMP Co. when they already asserted ownership and corporate title over the properties adverse to the right of F or his estate. Issue: WON C, D and E can maintain adverse title and ownership over TMP Co. after the expiration of its charter. Ruling: When C, D and E adduced its defense and raised the issue of ownership, TMP Co.s corporate existence already terminated through the expiration of its charter. It is clear in Sec. 77 of Act No. 1459 (Corporation Law) that upon the expiration of the charter period, the corporation ceases to exist and is dissolved ipso facto expect for purposes connected with winding up and liquidation. The provision allows a 3-year period from expiration of the charter within which the entity gradually settles and closes its affairs, disposes and conveys its properties and to divide its capital stock, but not for the purpose of continuing the business for which it was established. At this terminal stage of its existence, TMP Co. may no longer persist to maintain adverse title and ownership of the corporate assets as against prospective distributees when at this time it merely holds the property in trust. Its assertion of ownership is not only a legal contradiction, but more so, to allow it to maintain adverse interest would certainly thwart the very purpose of liquidation and the final distribution of assets to proper parties.