MANUELA VDA.

DE SALVATIERRA VS LORENZO purport to act as its representatives or agents do

GARLITOS so without authority and at their own risk.

In this case, Refuerzo was the moving spirit

DOCTRINE: Bordado Doctrine – When Not
Applicable
FACTS:
In 1954, Manuela Vda. De Salvatierra
entered into a lease contract with Philippine
Fibers Producers Co., Inc. (PFPC). PFPC was
represented by its president Segundino Refuerzo.
It was agreed that Manuela shall lease her land to
PFPC in exchange of rental payments plus shares
from the sales of crops.
behind PFPC. As such, his liability cannot be
limited or restricted that imposed upon [would-
be] corporate shareholders. In acting on behalf of
a corporation which he knew to be unregistered,
he assumed the risk of reaping the consequential
damages or resultant rights, if any, arising out of
such transaction.

However, PFPC failed to comply with its

obligations and so in 1955, Manuela sued PFPC
and she won. An order was issued by Judge
Lorenzo Garlitos of CFI Leyte ordering the
execution of the judgment against
Refuerzo‘s property (there being no property
under PFPC). Refuerzo moved for reconsideration
on the ground that he should not be held
personally liable because he merely signed the
lease contract in his official capacity as president
of PFPC. Garlitos granted Refuerzo‘s motion.

Manuela assailed the decision of the judge

on the ground that she sued PFPC without
impleading Refuerzo because she initially believed
that PFPC was a legitimate corporation. However,
during trial, she found out that PFPC was not
actually registered with the SEC (Tanga kasi)
hence Refuerzo should be personally liable.

ISSUE: W/N Manuela is correct.

HELD/RATIONALE: Yes.
It is true that as a general rule, the corporation has
a personality separate and distinct from its
incorporators and as such the incorporators
cannot be held personally liable for the obligations
of the corporation.

However, this doctrine is not applicable to

unincorporated associations. The reason behind
this doctrine is obvious: Since an organization
which before the law is nonexistent has no
personality and would be incompetent to act and
appropriate for itself the powers and attributes of
a corporation as provided by law;

It cannot create agents or confer authority on

another to act on its behalf, thus, those who act or