By: Atty. Gregorio B. Austral, CPA
A dead person cannot be an incorporator
AZ 17/31 Realty, Inc., a close corporation, was incorporated on April 23, 2008 with the primary purpose:
[T]o acquire by purchase, donation, lease[,] or otherwise, and to own, use, improve, develop, subdivide, sell, mortgage, exchange[,] lease, develop[,] and hold for investment or otherwise, real estate of all kinds, whether improve, manage[,] or otherwise dispose of buildings, houses, apartment, and other structures of whatever kind, together with their appurtenances.
By Letter 9 dated January 9, 2016 addressed to the Compliance and Enforcement Department (CED) of the SEC, Locsin-Garcia sought to revoke the incorporation and registration of AZ 17/31 Realty, Inc. on ground of fraud committed in procuring its certificate of registration. She essentially alleged that one of the incorporators, Pacita, had long been dead at the time of its incorporation.
In the Articles of Incorporation (AOI) of AZ 17/31 Realty, Inc., Pacita signed as incorporator with her Tax Identification Number 11 as proof of identity when in truth and in fact, she has been already six-feet below the ground since August 17, 2004, or three and a half (3 1/2) years from date of incorporation on April 23, 2008.
Per verification with the National Statistics Office (NSO), the CED found that Pacita died due to cardiopulmonary arrest on August 17, 2004, at the age of ninety (90). As reflected in the death certificate, the informant was Enrique.
Is Pacita qualified as an incorporator of AZ 17/31 Realty?
No.
A deceased person like Pacita has no legal capacity to enter into contractual relations and cannot be the subject of a right. The pertinent provisions of the Civil Code ordain:
ARTICLE 37. Juridical capacity, which is the fitness to be the subject of legal relations, is inherent in every natural person and is lost only through death. Capacity to act, which is the power to do acts with legal effect, is acquired and may be lost.
ARTICLE 42. Civil personality is extinguished by death.
The effect of death upon the rights and obligations of the deceased is determined by law, by contract, and by will.
Juridical capacity, which is the fitness to be the subject of legal relations, is lost through death. Except to answer for debts legally demandable upon the estate, a deceased person cannot anymore enter into any contractual relation.