De Salvatierra vs Judge Lorenzo Garlitos and Segundino Refuerzo

 Manuela Vda de Salvatierra entered into a contract of lease with Philippine Fibers Producers
Co., Inc (PFPC).
 PFPC was represented by its president Segundino Refuerzo.
 The dispute happened when PFPC failed to comply with its obligations, thus de Salvatierra sued
PFPC.
 The lower court ruled in favor of de Salvatierra and ordered the execution of judgment against
Refuerzo's property. Later, the LC granted the motion of Refuerzo that he cannot be held
personally liable to the execution of judgment because he is a mere agent of the corporation.
 De Salvatierra argued that Refuerzo is personally liable because he made her believed that PFPC
was a legitimate corporation.

Issue:

WON Refuerzo can be held personally liable to the execution of judgment?

Held:

Yes.

As a genral 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 non-existent
has no personality and would be incompetent to act and appropriate for itself the powers and attribute
of a corporation as provided by law; it cannot create agents or confer authority on another to act in its
behalf; thus, those who act or purport to act as its representatives or agents do so without authority and
at their own risk.