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FACTS: Manuel Tabora is the registered owner of 4 parcels of land in Cagayan evidenced by a TCT.
To guarantee the payment of a P8K loan, Tabora executed a mortgage in favor of PNB on the 4 parcels
of land mentioned. A second mortgage was executed over the same lands to guarantee the payment of
another P7K loan. A third mortgage was executed in favor of Severina Buzon to whom Tabora owed
P2.9K. These mortgages were all annotated on the back of the TCT.

Subsequently, Tabora executed a public document through which the lands were sold to Cagayan
Fishing Development Co which was said to be under the process of incorporation. The sale was for one
peso subject to the mortgages in favor of PNB and Buzon, and with the condition that the TCT would
not be transferred in Cagayan Fishing's name until said company has fully paid Tabora's indebtedness
to PNB. It was only later in that year when Cagayan Fishing filed its articles of incorporation with the
Bureau of Commerce and Industry.

A year later, Cagayan Fishing's board of directors authorized its president, Jose Ventura, to sell the four
parcels of land to Teodoro Sandiko, a deed of sale, deed of mortgage and a promissory note were then
executed. Sandiko however, failed to pay the sum stated in the promissory note, thus, Cagayan Fishing
brought an action before the CFI Manila praying that Sandiko pay the amount with legal interest. The
CFI rendered judgement absolving Sandiko. Cagayan Fishing presented a motion for new trial which
was denied. Cagayan Fishing thus appealed to the SC.

ISSUE: Whether Sandiko can be liable on the promissory note

HELD: No, the CFI's decision was affirmed.

The sale between Tabora and Cagayan Fishing happened almost five months before the incorporation
of the company. Unquestionably, a duly organized corporation has the power to purchase and hold such
real property as the purposes for which shuch corporation was formed may permit and for this purpose
may enter into such contracts as may be necessary. But before a corporation may be said to be lawfully
organized, many things have to be done. Among other things, the law requires the filing of articles of
incorporation. Although there is a presumption that all the requirements of law have been complied
with, in this case, it cannot be denied that Cagayan Fishing was not yet incorporated before the sale
with Tabora. It was not even a de factor corporation at the time. Not being in legal existenc ethen, it did
not possess juridical capacity to enter into the contract.

Boiled down to its naked reality, the contract here was entered into not only between Manuel Tabora
and a non-existent corporation but between Manuel Tabora as owner of four parcels of land on the one
hand and the same Manuel Tabora, his wife and others, as mere promoters of a corporation on the other
hand. For reasons that are self-evident, these promoters could not have acted as agents for a projected
corporation since that which had no legal existence could have no agent. A corporation, until organized,
has no life and therefore no faculties.

This is not saying that under no circumstances may the acts of promoters of a corporation be ratified by
the corporation if and when subsequently organized. There are, of course, exceptions but they are not
present in this case. If the corporation could not and did not acquire the four parcels of land here
involved, it follows that it did not possess any resultant right to dispose of them by sale to the
defendant, Teodoro Sandiko.