Case Summary (G.R. No. 119020)
Petitioner’s Allegations
Petitioner secured airline tickets for PFF’s athletes and officials totaling ₱449,654.83. After partial payments of ₱176,467.50 in September 1989 and further amounts of ₱31,603.00 and ₱50,000.00, an outstanding balance remained. Petitioner demanded payment but received no further remittances. It filed suit in the Regional Trial Court (RTC) of Manila, naming both Kahn (in his personal and official capacities) and PFF as defendants, alleging that Kahn had guaranteed the Federation’s obligation.
Respondents’ Position
Henri Kahn admitted the Federation’s indebtedness but denied personal liability, asserting he merely acted as agent of a distinct juridical entity. The PFF failed to answer and was declared in default. Kahn counterclaimed but did not dispute the amount owed.
Trial Court Ruling
The RTC found that PFF’s corporate existence was not proved. Treating it as an unincorporated association, the court held Kahn personally liable for contracts entered into on its behalf. It awarded petitioner ₱207,524.20 plus legal interest and ₱15,000.00 attorney’s fees, dismissing PFF from the suit.
Court of Appeals Ruling
The Court of Appeals (CA) reversed, recognizing PFF’s separate juridical personality based on R.A. 3135 and P.D. 604, and held that without proof of a personal guarantee, Kahn could not be held liable. The CA also denied petitioner’s alternative request to hold PFF liable, noting PFF was not a party to the appeal and that the RTC’s dismissal of PFF had become final.
Issue before the Supreme Court
Whether the Philippine Football Federation possesses juridical personality under R.A. 3135 or P.D. 604, and consequently whether Henri Kahn may be held personally liable for its unpaid obligations.
Applicable Law
– 1987 Philippine Constitution (post-1990 case) separation of powers and due process.
– Republic Act No. 3135 (Revised Charter of the Philippine Amateur Athletic Federation).
– Presidential Decree No. 604 (charter for the Department of Youth and Sports Development).
– Principles of corporation law, including requirement of state consent and doctrine of corporation by estoppel.
Supreme Court Analysis
The Court agreed that national sports associations may acquire corporate status but held that neither R.A. 3135 nor P.D. 604 itself creates specific associations. Both statutes require formal recognition—by the Philippine Amateur Athletic Federation under R.A. 3135 or by the Department of Youth and Sports Development under P.D. 604—before an entity gains juridical personality. PFF failed to present proof of such recognit
...continue readingCase Syllabus (G.R. No. 119020)
Facts
- On June 30, 1989, International Express Travel & Tour Services, Inc. (petitioner), through its managing director, offered travel-agency services to the Philippine Football Federation (Federation) via its president, Henri Kahn.
- The Federation accepted the offer; petitioner purchased airline tickets for Federation athletes and officials bound for the Southeast Asian Games in Kuala Lumpur, the People’s Republic of China, and Brisbane.
- Total cost of tickets amounted to ₱449,654.83.
- In September 1989, the Federation made two partial payments totaling ₱176,467.50.
- October 4, 1989: Petitioner sent a demand letter for the remaining balance of ₱265,894.33.
- October 30, 1989: Project Gintong Alay paid ₱31,603.00.
- December 27, 1989: Henri Kahn issued a personal check for ₱50,000 as partial payment.
- No further payments were made despite repeated demands.
Procedural History
- Petitioner filed a civil action in the Regional Trial Court (RTC) of Manila against Henri Kahn (in personal and official capacities) and alternatively against the Federation, seeking payment of the unpaid balance.
- Henri Kahn filed an answer with a counterclaim: he acknowledged the Federation’s debt of ₱207,524.20 but denied any personal guarantee and asserted the Federation’s separate juridical personality.
- The Federation defaulted for failure to answer.
- The RTC ruled for the petitioner, holding Kahn personally liable for the unpaid balance, dismissed the case against the Federation, and awarded ₱207,524.20 plus legal interest from July 5, 1990, and ₱15,000 attorney’s fee