Facts Part Consists Only of The Essential Facts Relevant To The Ruling in The Case While The Issue Should Be

BM1905
TASK PERFORMANCE
Case Digest
A digest is a summary of the Supreme Court cases. It has three (3) parts: facts, issue, and ruling. The
facts part consists only of the essential facts relevant to the ruling in the case while the issue should be
relevant to the topic under which the case belongs. The ruling should answer the issue raised in the case.
 The cases can be found on elibrary.judiciary.gov.ph

 The case digest should be handwritten on a sheet of yellow pad paper.
 Provide key takeaways from each part of the case digest based from your understanding.
De Facto Corporation
G.R. No. 119002 International Express Travel & Tour Services, Inc., Petitioner, Vs. Hon. Court of
Appeals, Henri Kahn, Philippine Football Federation, Respondents, October 19, 2000
Facts:
Petitioner International Express Travel and Tour Services, Inc., through its managing director, wrote a letter
to the Philippine Football Federation (Federation), through its president private respondent Henri Kahn,...
wherein the former offered its services as... a travel agency to the latter.[1] The offer was accepted.
Petitioner secured the airline tickets for the trips of the athletes and officials of the Federation to the South
East Asian Games in Kuala Lumpur as well as various other trips to the People's Republic of China and
Brisbane.
The Federation made two partial payments... petitioner wrote the Federation, through the private
respondent a demand letter requesting for P265, 894.33... Pet... the Federation, through the Project
Gintong Alay, paid the amount of P31,603.00
Henri Kahn issued a personal check for P50, 000 as partial payment for the outstanding balance of the
Federation. [5] Thereafter, no further payments were made despite repeated demands.
Petitioner sued Henri Kahn in his personal capacity and as President of the Federation and impleaded the
Federation as an alternative defendant.
Petitioner sought to hold Henri Kahn... liable for the unpaid balance for the tickets purchased by the
Federation on the ground that Henri Kahn allegedly guaranteed the said obligation.
Trial court rendered judgment and ruled in favor of the petitioner and declared Henri Kahn personally liable
for the unpaid obligation of the Federation
Defendant Henri Kahn would have been correct in his contentions had it been duly established that
defendant Federation is a corporation. The trouble, however, is that neither the plaintiff nor the defendant
Henri Kahn has adduced any evidence proving the corporate existence... of the defendant Federation.
Henri Kahn elevated the above decision to the Court of Appeals.
Respondent court rendered a decision reversing the trial court... dismissing the complaint against
defendant Henri S. Kahn
In finding for Henri Kahn, the Court of Appeals recognized the juridical existence of the Federation. It
rationalized that since petitioner failed to prove that Henri Kahn guaranteed the obligation of the
Federation, he should not be held liable for the same as said entity... has a separate and distinct
personality from its officers.
Issue:
The resolution of the case at bar hinges on the determination of the existence of the Philippine Football
Federation as a juridical person.
Ruling:
As correctly observed by the appellate court, both R.A. 3135 and P.D. No. 604 recognized the juridical
existence of national sports associations.
It is a basic postulate that before a corporation may acquire juridical personality, the State must give its
consent either in the form of a special law or a general enabling act. We cannot agree with the view of the
appellate court and the private respondent that the Philippine Football Federation came into existence
upon the passage of these laws.
Clearly the above cited provisions require that before an entity may be considered as a national sports
association, such entity must be recognized by the accrediting organization, the Philippine Amateur Athletic
Federation under R.A. 3135, and the Department of Youth and Sports Development under P.D. 604. This
fact of recognition, however, Henri Kahn failed to substantiate.
In attempting to prove the juridical existence of the Federation, Henri Kahn attached to his motion for
reconsideration before the trial court a copy of the constitution and... By-laws of the Philippine Football
Federation. Unfortunately, the same does not prove that said Federation has indeed been recognized and
accredited by either the Philippine Amateur Athletic Federation or the Department of Youth and Sports
Development.
Thus being said, it follows that private respondent Henry Kahn should be held liable for the unpaid
obligations of the unincorporated Philippine Football Federation. It is a settled principal in corporation law
that any person acting or purporting to act on behalf of a... corporation, which has no valid existence,
assumes such privileges and becomes personally liable for contract, entered into or for other acts
performed as such agent.
We cannot subscribe to the position taken by the appellate court that even assuming that the Federation
was defectively incorporated, the petitioner cannot deny the corporate existence of the Federation because
it had contracted and... Dealt with the Federation in such a manner as to recognize and in effect admit its
existence. The doctrine of corporation by estoppel is mistakenly applied by the respondent court to the
petitioner. The application of the doctrine applies to a third... party only when he tries to escape liability on
a contract from which he has benefited on the irrelevant ground of defective incorporation.[16] In the case
at bar, the petitioner is not trying to escape liability from the contract but rather is the one... claiming from
the contract.
WHEREFORE, the decision appealed from is REVERSED and SET ASIDE. The decision of the Regional
Trial Court of Manila, Branch 35, in Civil Case No. 90-53595 is hereby REINSTATED.
Rubric for grading:
CRITERIA PERFORMANCE INDICATORS POINTS

Included significant facts and clear legal issues and jurisdictions,
Content 6
and provided clear conclusions and answers
Grammar Used correct grammar, punctuation, spelling, and capitalization 1
Organization of Expressed the points in clear and logical arrangement of ideas in
Ideas 2
the paragraph
Format Adhered to the required style or appearance 1
TOTAL 10
06 Task Performance 1 *Property of STI

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Facts Part Consists Only of The Essential Facts Relevant To The Ruling in The Case While The Issue Should Be

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BM1905

 The cases can be found on elibrary.judiciary.gov.ph

Rubric for grading:

CRITERIA PERFORMANCE INDICATORS POINTS

06 Task Performance 1 *Property of STI

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