Al Hambra Cigar vs SEC

FACTS: On January 15, 1912, Alhambra Cigar & Cigarette Manufacturing

Company, Inc. was incorporated. Its lifespan was for 50 years so on
January 15, 1962, it expired. Thereafter, its Board authorized its liquidation.
Under the prevailing law, Alhambra has 3 years to liquidate.
In 1963, while Alhambra was liquidating, Republic Act 3531 was enacted. It
amended Section 18 of the Corporation Law; it empowered domestic
private corporations to extend their corporate life beyond the period fixed
by the articles of incorporation for a term not to exceed fifty years in any
one instance. Previous to Republic Act 3531, the maximum non-extendible
term of such corporations was fifty years.
Alhambra now amended its articles of incorporation to extend its lifespan
for another 50 years. The Securities and Exchange Commission (SEC)
denied the amended articles of incorporation.
ISSUE: Whether or not a corporation under liquidation may still amend its
articles of incorporation to extend its lifespan.
HELD: No. Alhambra cannot avail of the new law because it has already
expired at the time of its passage. When a corporation is liquidating
pursuant to the statutory period of three years to liquidate, it is only
allowed to continue for the purpose of final closure of its business and no
other purposes. In fact, within that period, the corporation is enjoined from
“continuing the business for which it was established”. Hence, Alhambra’s
board cannot validly amend its articles of incorporation to extend its
lifespan.