Facts:

The case involves International Express Travel and Tour Services, Inc. (petitioner) against Henri Kahn, the Philippine Football Federation, and the Court of Appeals (respondents). On June 30, 1989, the petitioner, through its managing director, sent a letter to the Philippine Football Federation, represented by its president, Henri Kahn, offering travel agency services. The Federation accepted the offer, and the petitioner subsequently secured airline tickets for the Federation's athletes and officials for various trips, including the South East Asian Games in Kuala Lumpur. The total cost of the tickets amounted to P449,654.83, of which the Federation made partial payments totaling P176,467.50 in September 1989. On October 4, 1989, the petitioner sent a demand letter for the outstanding balance of P265,894.33. The Federation made a partial payment of P31,603.00 on October 30, 1989, and Kahn issued a personal check for P50,000 on December 27, 1989, but no further payments ...

Facts:

1. Offer and Acceptance of Services

   • On June 30, 1989, petitioner International Express Travel and Tour Services, Inc. (IETTSI) offered its services as a travel agency to the Philippine Football Federation (PFF) through its president, Henri Kahn. The offer was accepted, and IETTSI secured airline tickets for the Federation's athletes and officials for various trips, including the South East Asian Games in Kuala Lumpur. The total cost of the tickets amounted to P449,654.83.

2. Partial Payments and Demand for Payment

   • The Federation made two partial payments in September 1989, totaling P176,467.50. On October 4, 1989, IETTSI sent a demand letter to the Federation for the unpaid balance of P265,894.33. On October 30, 1989, the Federation, through Project Gintong Alay, paid P31,603.00. On December 27, 1989, Henri Kahn issued a personal check for P50,000 as partial payment. No further payments were made despite repeated demands.

3. Filing of Civil Case

   • IETTSI filed a civil case before the Regional Trial Court (RTC) of Manila, suing Henri Kahn in his personal capacity and as President of the Federation. The Federation was impleaded as an alternative defendant. IETTSI sought to hold Kahn personally liable for the unpaid balance, alleging that he guaranteed the obligation.

4. Defenses and Default

   • Henri Kahn denied personal liability, asserting that he acted as an agent of the Federation, which has a separate juridical personality. The Federation failed to file an answer and was declared in default by the trial court.

5. Trial Court Decision

   • The RTC ruled in favor of IETTSI, holding Henri Kahn personally liable for the unpaid obligation. The court found that the Federation was not a corporation and that Kahn, as its president, was personally liable for contracts entered into on its behalf.

6. Appeal to the Court of Appeals

   • The Court of Appeals reversed the RTC decision, ruling that the Federation had juridical existence and that Henri Kahn was not personally liable. The appellate court also denied IETTSI's motion for reconsideration, which sought to hold the Federation liable, as the Federation was not a party to the appeal.

7. Supreme Court Petition

   • IETTSI elevated the case to the Supreme Court, arguing that the Court of Appeals erred in recognizing the Federation's corporate existence and in not holding Kahn personally liable.

Issue:

• (Unlock)

Ruling:

• (Unlock)

Ratio:

1. Juridical Existence of the PFF

   • The Court ruled that the PFF does not have corporate existence. While Republic Act No. 3135 and Presidential Decree No. 604 recognize national sports associations, they do not automatically confer corporate status. The PFF failed to prove that it was recognized or accredited by the Philippine Amateur Athletic Federation or the Department of Youth and Sports Development.

2. Personal Liability of Henri Kahn

   • As president of an unincorporated association, Henri Kahn is personally liable for contracts entered into on behalf of the PFF. Under corporation law, a person acting on behalf of a non-existent corporation assumes personal liability for obligations incurred.

3. Doctrine of Corporation by Estoppel

   • The doctrine of corporation by estoppel applies only to third parties who try to escape liability by claiming defective incorporation. Since IETTSI is the party seeking to enforce the contract, the doctrine does not apply.