Int'l. Express vs. CA Digests

International Express vs.
CA (Report Digest)
Facts:
• In this case, respondent Philippine Football Federation, through its president,

private respondent, Henri Kahn availed the services of petitioner International
Express Travel and Tour Services, Inc.
• International Express 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 their other various trips to China and to Brisbane.
• For the tickets received, the Federation made several payments to International
Express. Its president, Henri Kahn, even issued a personal check as another
payment. However, all these payments weren’t sufficient to cover the whole
balance. Despite several demands made by International Express, the Federation
did not make any further payments.
• Thus, International Express filed a civil case suing Henri Kahn in his personal capacity
and as the president of the Federation, and impleaded the Federation as an
alternative defendant. International Express sought to hold Henri Kahn liable for the
unpaid balance of the tickets purchased by the Federation on the ground that Henri
Kahn allegedly guaranteed the said obligation.
• Henri Kahn contended that the petitioner has no cause of action against him either
in his personal capacity or in his official capacity as the president of the Federation,
which, according to him, has a separate and distinct juridical personality. On the
other hand, the Federation failed to file its counterclaim, hence, it was declared in
default by the trial court.
• Thereafter, the trial court rendered judgment in favor of petitioner International
Express and declared Henri Kahn personally liable for the unpaid obligation of the
Federation. According to the RTC, neither of the parties adduced any evidence
proving that the Federation is a Corporation with a separate and distinct juridical
personality.
• The RTC emphasized that a voluntary unincorporated association, like the
defendant Federation has no power to enter into, or to ratify, a contract. The
contract entered into by its officers or agents on behalf of such association is not
binding on, or enforceable against it. The officers or agents are themselves
personally liable.
• Henri Kahn, then, elevated the decision of the RTC to herein respondent, Court of
Appeals, wherein the CA recognized the juridical existence of the Federation. The
CA ruled that since the petitioner International Express failed to prove that Henri
Kahn guaranteed the obligation of the Federation, Henri Kahn shall not be held
liable for the same has a separate and distinct personality from its officers.
• Further, the CA stated that petitioner International Express can no longer deny the
corporate existence of the Federation because it contracted and dealt with the
Federation in such a manner as to recognize and in effect admit its existence.
• Thus, the petitioner seeks recourse to the SC to reverse the rulings of the CA.
Issue(s):
• Whether or not the Philippine Football Federation has a separate and distinct
juridical personality which makes its president, Henri Kahn, not liable for the
Federation’s unpaid obligations
• Whether or not the doctrine of corporation by estoppel applies in this case
Held:
1. No. The Court held that although certain laws such as R.A. 3135 and P.D. 604
recognizes the juridical existence of national sports associations, their corporate
status does not automatically take place upon the passage of the said laws, but
instead, they shall apply to the government in order to recognize their juridical
existence. Nowhere in the provisions of the said laws can be found that the
Philippine Football Association came into existence as a corporation, upon the
passage of such laws. Thus, the Court ruled that the Federation is not a national
sports association within the purview of the said laws and does not have corporate
existence of its own, making its president, Henri Kahn, liable for its unpaid
obligations.
2. The doctrine of corporation by estoppel does not apply in this case, and such
doctrine was mistakenly applied by the respondent CA to herein petitioner
International Express. The Court held that the doctrine applies to a third party only
when he tries to escape liabilities on a contract from which he has benefited on the
irrelevant ground of defective incorporation. 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. Thus, petitioner International express cannot be estopped from assailing
the corporate existence of the Federation.
FIRST DIVISION
[G.R. No. 119020. October 19, 2000.]
INTERNATIONAL EXPRESS TRAVEL & TOUR SERVICES, INC.,

petitioner, vs. HON. COURT OF APPEALS, HENRI KAHN,
PHILIPPINES FOOTBALL FEDERATION, respondents.
DECISION
KAPUNAN, J : p
On June 30 1989, 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. AaCEDS
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
total cost of the tickets amounted to P449,654.83. For the tickets received, the
Federation made two partial payments, both in September of 1989, in the total
amount of P176,467.50. 2
On 4 October 1989, petitioner wrote the Federation, through the private
respondent a demand letter requesting for the amount of P265,894.33. 3 On 30
October 1989, the Federation, through the Project Gintong Alay, paid the
amount of P31,603.00. 4
On 27 December 1989, Henri Kahn issued a personal check in the amount

of P50,000 as partial payment for the outstanding balance of the Federation. 5
Thereafter, no further payments were made despite repeated demands.
This prompted petitioner to file a civil case before the Regional Trial Court
of Manila. 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. 6
Henri Kahn filed his answer with counterclaim. While not denying the
allegation that the Federation owed the amount P207,524.20, representing the
unpaid balance for the plane tickets, he averred that the petitioner has no
cause of action against him either in his personal capacity or in his official
capacity as president of the Federation. He maintained that he did not
guarantee payment but merely acted as an agent of the Federation which has
a separate and distinct juridical personality. 7
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Int'l. Express vs. CA Digests

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International Express vs.

• In this case, respondent Philippine Football Federation, through its president,

[G.R. No. 119020. October 19, 2000.]

INTERNATIONAL EXPRESS TRAVEL & TOUR SERVICES, INC.,

On June 30 1989, petitioner International Express Travel and Tour

On 27 December 1989, Henri Kahn issued a personal check in the amount

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