3. Trustees of Dartmouth College V. Woodward, 17 U.S. (4 Wheat.

) 518 (1819)

DOCTRINE: A corporation is an artificial being, invisible, intangible, and existing only in contemplation of
law. Being the mere creature of law, it possesses only those properties which the charter of its creation
confers upon it either expressly or as incidental to its very existence. These are such as are supposed
best calculated to effect the object for which it was created. Among the most important are immortality,
and, if the expression may be allowed, individuality — properties by which a perpetual succession of
many persons are considered as the same, and may act as a single individual. They enable a corporation
to manage its own affairs and to hold property without the perplexing intricacies, the hazardous and
endless necessity, of perpetual conveyances for the purpose of transmitting it from hand to hand. It is
chiefly for the purpose of clothing bodies of men, in succession, with these qualities and capacities that
corporations were invented, and are in use. By these means, a perpetual succession of individuals are
capable of acting for the promotion of the particular object like one immortal being. But this being does
not share in the civil government of the country, unless that be the purpose for which it was created.

FACTS: In 1769, King George III of Great Britain granted a charter to Dartmouth College. This document
spelled out the purpose of the school, the structure to govern it, and gave the land to the college.

In 1816, the legislature of New Hampshire attempted to alter Dartmouth’s charter in order to reinstate the
College’s deposed president, placing placing the ability to appoint positions in the hands of the governor,
adding new members to the board of trustees, and creating a state board of visitors with veto power over
trustee decisions. This effectively converted the school from a private to a public institution. The College's
book of records, corporate seal, and other corporate property were removed.

The trustees of the College objected and sought to have the actions of the legislature declared
unconstitutional. They claimed that New Hampshire was overstepping its legal authority by interfering with
the contract of a private institution. The trustees had Daniel Webster, an alumnus of Dartmouth College,
to argue their positions, and sued William Woodward, the state-appointed secretary of the board of
Dartmouth under the new charter.

Webster argued that the New Hampshire legislature had violated the Contract Clause of the Constitution
by passing a law “impairing the Obligation of Contracts.” Webster and his team asserted that the state
legislature through its action had taken property rights from one group and given them to another group.

ISSUE: WON the amendment of the Charter violated the Contract Clause

RULING: Yes. In the decision written by Chief Justice John Marshall, the Court found that the college
charter was a contract and that the charter made it clear Dartmouth College was a private entity and not a
public one. Marshall explained the details of how a corporation functions:

A corporation is an artificial being, invisible, intangible, and existing only in contemplation of law. Being
the mere creature of law, it possesses only those properties which the charter of its creation confers upon
it either expressly or as incidental to its very existence. These are such as are supposed best calculated
to effect the object for which it was created. Among the most important are immortality, and, if the
expression may be allowed, individuality — properties by which a perpetual succession of many persons
are considered as the same, and may act as a single individual. They enable a corporation to manage its
own affairs and to hold property without the perplexing intricacies, the hazardous and endless necessity,
of perpetual conveyances for the purpose of transmitting it from hand to hand. It is chiefly for the purpose
of clothing bodies of men, in succession, with these qualities and capacities that corporations were
invented, and are in use. By these means, a perpetual succession of individuals are capable of acting for
the promotion of the particular object like one immortal being. But this being does not share in the civil
government of the country, unless that be the purpose for which it was created.

Contracts Clause applied to individual property rights and not to “the political relations between the
government and its citizens”.
“The provision of the Constitution never has been understood to embrace other contracts than those
which respect property, or some object of value, and confer rights which may be asserted in a court of
justice,” Chief Justice Marshall further explained.

Applying this reasoning, the Court further held that the state could not interfere with the college’s
corporate charter because it constituted a contract between private parties. “That a corporation is
established for purposes of general charity, or for education generally does not, per se, make it a public
corporation, liable to the control of the legislature,”

4. International Express Travel & Tour Services V. CA, Henri Khan and Philippine Football Federation GR
No. 119002. October 19, 2000

DOCTRINE: 1. It is a settled doctrine in corporation law that any person acting or purporting to act on behalf
of the corporation which has no valid existence assumed such privileges and becomes personally liable for
contract entered into or for other acts performed as such agent.

2. The application of the doctrine of corporation by estoppel applies to a third party only when he tries to
escape liability on a contract from which he has benefitted on the irrelevant ground of defective
incorporation.

FACTS: Petitioner offered its services as travel agency to respondent Philippine Football Federation.
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 tickets amounting to P449,654.83. The Federation made two partial payments, the
President of respondent, Henri Khan, also issued a personal check in the amount of P50,000. However,
the balance was not paid despite demands.
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. Khan averred petitioner has no cause of action against him. 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.

The trial court rendered a decision in favor of petitioner. CA reversed, holding that, ince petitioner failed to
prove that Henri Kahn guaranteed the obligation of the Federation, he should not be held liable for the
same as said entity has a separate and distinct personality from its officers.

ISSUE: Whether or not private respondent can be made personally liable for the liabilities of the
Philippines Football Federation.

RULING: Yes. A voluntary unincorporated association, like 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 binding or, as enforceable against it. The officers or agents are themselves personally liable.

In attempting to prove the juridical existence of the Federation, Henri Kahn attached to his motion for
reconsideration before the trial court a copy of the constitution and by-laws of the Philippine Football
Federation. Unfortunately, the same does not prove that said Federation has indeed been recognized and
accredited by either the Philippine Amateur Athletic Federation or the Department of Youth and Sports
Development. Accordingly, we rule that the Philippine Football Federation is not a national sports
association within the purview of the aforementioned laws and does not have corporate existence of its
own.

Thus being said, it follows that private respondent Henri Kahn should be liable for the unpaid obligations of
the unincorporated Philippine Football Federation. It is a settled principle in corporation law that any person
acting or purporting to act on behalf of the corporation which has no valid existence assumed such privileges
and becomes personally liable for contract entered into or for other acts performed as such agent.