G.R. No. L-11442; May 23, 1958
MANUELA T. VDA. DE SALVATIERRA, petitioner, vs. HON. LORENZO C. GARLITOS, in his capacity as Judge of the Court of First Instance of Leyte, Branch II, and SEGUNDINO REFUERZO, respondents.

FACTS

Petitioner Manuela T. Vda. de Salvatierra, owner of a parcel of land, entered into a contract of lease on March 7, 1954, with the “Philippine Fibers Producers Co., Inc.,” represented by its president, respondent Segundino Q. Refuerzo. The contract stipulated a 10-year lease, planting of crops, and delivery to the lessor of 30% of the net income from harvests. Alleging non-compliance, Salvatierra filed a complaint for accounting, rescission, and damages against the corporation and Refuerzo. The defendants were declared in default, and the court rendered judgment on June 8, 1955, in favor of Salvatierra, ordering accounting and payment, and rescinding the lease. After the judgment became final, a writ of execution was issued, and the sheriff attached properties registered in Refuerzo’s name. On January 31, 1956, Refuerzo filed a motion claiming the judgment was void as to him personally, as the complaint contained no allegation of his personal liability. The lower court granted the motion and ordered the release of his attached properties. Salvatierra’s petition for relief was denied, prompting her to file this certiorari action to nullify the lower court’s order.

ISSUE

1. Whether the lower court acted with grave abuse of discretion in granting Refuerzo’s motion for relief from judgment, considering it was filed beyond the reglementary period prescribed by Rule 38 of the Rules of Court.
2. Whether respondent Segundino Refuerzo can be held personally liable for the obligations under the lease contract, considering he signed as president of an unregistered corporation.

RULING

1. Yes, the lower court acted with grave abuse of discretion. The motion for relief was filed on January 31, 1956, which was 7 months and 23 days after the June 8, 1955 decision. This filing was beyond the six-month maximum period prescribed by Section 3, Rule 38 of the Rules of Court. The periods under Rule 38 are non-extendible and never interrupted. Therefore, the motion was filed out of time, and the lower court should not have entertained it.
2. Yes, respondent Segundino Refuerzo can be held personally liable. The Philippine Fibers Producers Co., Inc. was an unregistered association without juridical personality. As a general rule, a person dealing with an association recognizing its corporate existence may be estopped from denying it. However, this does not apply where fraud is involved, and here, Salvatierra was made to believe the corporation was duly organized. Since an unincorporated association has no legal personality, it cannot confer authority to act on its behalf. Consequently, a person who acts as an agent for a non-existent principal is personally regarded as the principal, assuming all rights and liabilities. Refuerzo, as the moving spirit and representative of the unregistered corporation, assumed the risk and is personally liable for the contracts he entered into on its behalf. His liability is not limited to that of a corporate shareholder.
The Supreme Court granted the petition for certiorari, set aside and nullified the lower court’s order dated March 21, 1956, and ordered costs against respondent Segundino Refuerzo.