California law provides that a domestic corporation that fails to pay certain taxes and penalties may have its corporate rights and privileges suspended.  Cal. Rev. & Tax. Code § 23301.  While suspended, a corporation may not prosecute or defend an action or even appeal from an adverse judgment.  A corporation can regain its powers by filing all required tax returns, paying the necessary taxes, penalties and fees, and applying to the Franchise Tax Bard for a certificate of revivor.  Cal. Rev. & Tax. Code § 23305.  Importantly, revival of corporate powers is without prejudice to any action, defense or right that accrued by reason of the suspension.  Cal. Rev. & Tax. Code § 23305a (voidable, but not rescinded, contracts are subject to cure under Section 23305.1).

What happens when a notice of appeal is timely filed by a suspended corporation?  The California Supreme Court has held that revival of corporate powers will validate an earlier invalid notice of appeal even if the time for filing a notice of appeal had run before the revival.  Bourhis v. Lord, 56 Cal. 4th 320 (2013).

Matters are quite different, however, when a statute of limitations is at issue.  If a suspended corporation commences an action while suspended and the statute of limitations runs before the corporation is revived, then the revival does not prevent the running of the statute.

If The Subjunctive Mood Is Moribund Why Do We Still Use It?

In Tabarrejo v. Superior Court, 2014 Cal. App. LEXIS 1177 (Cal. App. 6th Dist. Nov. 24, 2014), the California Labor Commissioner awarded an employee over $130,000 for unpaid wages and wage-related claims.  The corporate employer appealed the order to the Superior Court and posted an undertaking as required by Labor Code § 98.2. The corporation, although suspended, filed a notice of appeal.  When the corporation thereafter failed to revive itself, it argued that the Superior Court lacked jurisdiction to accept the undertaking that it had posted when it filed its notice of appeal.  The Court of Appeal, however, did not buy that argument:

When PRH [the corporation] filed its appeal in the trial court, there was always a possibility that it would cure its incapacity by reviving its corporate powers.  . . . That PRH elected not to revive its powers and retroactively validate its prior litigation activity did not retroactively divest the court of jurisdiction to hear the appeal.  The court had jurisdiction over the parties and the subject matter when the appeal and the undertaking were filed; it also had jurisdiction months later to dismiss the action based on PRH's incapacity.  PRH's decision not to cure its incapacity affected PRH's right to proceed with the litigation, but it did not divest the trial court of jurisdiction.

Id. at *32-*33.

The Court of Appeal's holding hinges upon the potential, yet contrary to fact, status of the corporation.  In Latin, actions that didn't occur or that might occur are expressed in what is known as the subjunctive mood.  Much to the dismay of many a student, the Romans really liked the subjunctive mood.  English, however, uses the subjunctive mood only rarely (H.W. Fowler called it "moribund").  Perhaps the most common example in English is the use of "were" instead of "was" as in "If I were you, . . .".   It is also why resolutions are often expressed using "be" as in "I move that Ms. Jones be nominated . . .".

Tabarrejo is an odd case.  It's not often that you see an appellant argue that the court doesn't have jurisdiction over an appeal initiated by the appellant.  The motivation in this case was to set aside the forfeiture of the undertaking to the employee.