G.R. No.

L-43350 December 23, 1937

CAGAYAN FISHING DEVELOPMENT CO., INC., plaintiff-appellant,
vs.
TEODORO SANDIKO, defendant-appellee.
Arsenio P. Dizon for appellant.
Sumulong, Lavides and Sumulong for appellee.
LAUREL, J.:

FACTS:
Manuel Tabora is the registered owner of four parcels of land. The four parcels were
mortgaged for loans and indebtedness. However, Tabora executed a public document (Exhibit
A) by virtue of which the four parcels of land owned by him was sold to the plaintiff company,
which at that time is still under the process of incorporation.
A year later, the BOD of said company adopted a resolution authorizing its president to
sell the four parcels of lands in question to Teodoro Sandiko. Exhibits B, C and D were
thereafter made and executed. Exhibit B is a deed of sale where the plaintiff sold, ceded and
transferred to the defendant the four parcels of land. Exhibit C is a promissory note drawn by
the defendant in favor of the plaintiff. Exhibit D is a deed of mortgage executed where the four
parcels of land were given a security for the payment of the promissory note. Defendant failed
to pay thus plaintiff filed a collection of sum of money in the Court of First Instance in Manila.
The latter rendered judgment absolving the defendant. Plaintiff has appealed to this court and
makes an assignment of various errors.
ISSUE:
WON the sale made by the plaintiff corporation is valid.
HELD:
The contract here was entered into not between Manuel Tabora and a non-existent
corporation but between the Manuel Tabora as owner of the four parcels of lands on the one
hand and the same Manuel Tabora, his wife and others, as mere promoters of a corporations on
the other hand. For reasons that are self-evident, these promoters could not have acted as
agent for a projected corporation since that which no legal existence could have no agent. 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, however, under the peculiar facts and
circumstances of the present the court declined to extend the doctrine of ratification which
would result in the commission of injustice or fraud to the candid and unwary. A corporation,
until organized, has no life and therefore no faculties. Cagayan Fishing Devt Corp could not
and did not acquire the four parcels of land sold by Tabora, it also follows that it did not possess
any resultant right to dispose of them by sale to the defendant, Teodoro Sandiko. The
corporation had no juridical personality to enter into a contract.
Corporations are creatures of the law, and can only come into existence in the manner
prescribed by law. It should have a full and complete organization and existence as an entity
before it can enter into any kind of a contract or transact any business.