PO YENG CHEO

vs.
LIM KA YAM
FACTS:

Po Yeng Cheo, alleged sole owner of a business formerly conducted in the City of Manilaunder the style of Kwong
Cheong, as managing partner in said business and to recoverfrom him its properties and assets.

The defendant having died during the pendency of the cause in the court below and thedeath suggested of record,
his administrator, one Lim Yock Tock, was required to appearand make defense.

In a decision dated July 1, 1921, the Honorable C. A. Imperial, presiding in the courtbelow, found that the plaintiff was
entitled to an accounting from Lim Ka Yam, theoriginal defendant, as manager of the business already reffered to,
and he accordinglyrequired Lim Yock Tock, as administrator, to present a liquidation of said business withina stated
time.

This order bore no substantial fruit, for the reason that Lim Yock Tock personally knewnothing about the aforesaid
business (which had ceased operation more than ten yearspreviously) and was apparently unable to find any books
or documents that could shedany real light on its transaction.

However, he did submit to the court a paper written by Lim Ka Yam in life purporting togive, with vague and uncertain
details, a history of the formation of the Kwong CheongTay and some account of its disruption and cessation from
business in 1910.

To this narrative was appended a statement of assets and liabilities, purporting to showthat after the business was
liquidate, it was actually debtor to Lim Ka Yam to the extentof several thousand pesos.

Appreciating the worthlessness of this so-called statement, and all parties apparentlyrealizing that nothing more was
likely to be discovered by further insisting on anaccounting, the court proceeded, on December 27, 1921, to render
final judgment infavor of the plaintiff.
ISSUE:
Whether or not Lim Yock Tock has a right to interfere with the right the rights anddeceased partner.
RULINGS: No. In the first place, it is well settled that when a member of a mercantile partnership dies, the dutyof
liquidating its affair devolves upon the surviving member, or members, of the firm, not upon the legal representative of
the deceased partner. (Wahl vs. Donaldson Sim & Co., 5 Phil., 11;Sugo and Shibata vs. Green, 6 Phil., 744) And the
same rule must be equally applicable to a civilpartnership clothed with the form of a commercial association (art.
1670, Civil Code; Lichauco vs.Lichauco, 33 Phil., 350) Upon the death of Lim Ka Yam it therefore became the duty of
hissurviving associates to take the proper steps to settle the affairs of the firm, and any claim against him, or his
estate, for a sum of money due to the partnership by reason of anymisappropriation of its funds by him, or for
damages resulting from his wrongful acts as manager, should be prosecuted against his estate in administration in
the manner pointed out insections 686 to 701, inclusive, of the Code of Civil Procedure. Moreover, when it appears,
ashere, that the property pertaining to Kwong Cheong Tay, like the shares in the Yut Siong ChyipKonski and the
Manila Electric Railroad and Light Company, are in the possession of the deceasedpartner, the proper step for the
surviving associates to take would be to make application to thecourt having charge to the administration to require
the administrator to surrender suchproperty.But, in the second place, as already indicated, the proceedings in this
cause, considered in thecharacter of an action for an accounting, were futile; and the court, abandoning entirely
theeffort to obtain an accounting, gave judgment against the administrator upon the supposedliability of his intestate
to respond for the plaintiff's proportionate share of the capital andassets. But of course the action was not
maintainable in this aspect after the death of thedefendant; and the motion to discontinue the action as against the
administrator should havebeen granted.
___________________________________

MAXIMO GUIDOTE v.

ROMANA BORJA
(administratrix of the estate of Narciso Santos)1928 / Ostrand
FACTS
Maximo Guidote and Narciso Santos formed in 1918
a partnership business under the name of Taller Sinukuan, in which Santos
was the capitalist partner and Guidote was the industrial partner. Santos died in 1920. Guidote failed to liquidate the
affairs of the
partnership and to render an account thereof to Borja, the administratrix of Santos estate.

Guidote brought an action against Borja to recover a sum of money

[9k~], a part of which was alleged to be the netprofits from the business due Guidote, and the rest of the sum
consisting of advances allegedly made by Guidote.
Borja admitted
the partnerships existence and prayed that Guidote be ordered to render an accounting and to pay the
estate 25k as net
profits, credits, and property pertaining to Santos.Guidote called several witnesses and introduced a socalled accounting and a mass of documentary evidence
,which was so hopelessly and inextricably confused that the court could not consider it of much probative value.
The courtdismissed Guidote

s complaint and absolved Borja.

Guidote was ordered to render a full and complete accounting, verified byvouchers, of the partnership business.
Guidote rendered an account prepared by one Tomas Alfonso, a public accountant.
Numerous objections werepresented by Borja.
The court disapproved the account and ordered that Borja submit an accounting
from the date of thecommencement of the partnership up to the time the business was closed.
Borja presented an account and liquidation prepared by a public accountant, Santiago A. Lindaya, showing
abalance of P29k~ in
Borjas [Santos est
ate] favor.

At the hearing, Borja introduced the public accountant Jose Turiano Santiagoto testify as to the results of an audit
made by him of the partnership accounts. Santiago testified that he had prepared a separateaccounting or liquidation
similar in results to that prepared by Lindaya, but with a few differences in the sums total. [
Computation:
Santos is a creditor of the Taller Sinukuan in the sum of P26k. Guidote is a debtor to the Taller Sinukuan in the sum of
P20k.]
In order to contradict the conclusions of the two public accountants, Guidote presented Tomas Alfonso and
thebookkeeper, Pio Gaudier, as witnesses.

The trial court judge said that the testimonies of these witnesses are unreliable.

Tomas Alfonso
is the same public accountant who filed the liquidation Exhibit O on behalf of Guidote, in relation tothe partnership
business, which liquidation was disapproved by this court in a decision. The judge did not believe
Alfonsos proposition that Guidote, a
mere industrial partner, notwithstanding his having received 21k on the various jobs and contracts of the business
had actually expended and paid out 63k, of 44k in excess of the gross receipts ofthe business. It materially
contradicts
Guidotes
allegations to the effect that the advances that he [Guidote] madeamounted only to 2k.

Pio Gaudier
is the same bookkeeper who prepared three entirely separate and distinct liquidation for the samepartnership
business, and the court found that the testimony given by him at the last hearing is confusing,contradictory and
unreliable.

Other witnesses were given scant consideration

Chua Chak can neither read nor write English, Spanish, orTagalog; Claro Reyes was forced to admit that a certain
exhibit was not the original.
The court gave credence to the conclusions reached by the public accountants presented by Borja. Guidote
wasordered to pay P26k to Borja, with legal interest, plus costs.ISSUE & HOLDING
WON the trial court is correct in ordering Guidote to pay P26k to Borja.
YESRATIO
There may be some merit in
Guidotes

contention that the dismissal of his complaint was premature. The better practice would beento let the complaint
stand until the result of the liquidation of the partnership affairs was known. But under the circumstances, noharm
was done by the dismissal of
Guidotes
complaint.
GUIDOTES ARGUMENT

Since Santos, up to the time of his death, generally took care of the
partnerships
payments and collections, his legalrepresentatives were under the obligation to render accounts of the operations,
notwithstanding the fact that Guidote was in chargeof the business subsequent to the death of Santos.
GUIDOTES ARGUMENT IS UNAVAILING
Wahl v. Donaldson Sim & Co.
The death of one of the partners dissolves the partnership, but that the liquidation of its affairs is by law entrusted, not
to theexecutors of the deceased partner, but to the surviving partners or the liquidators appointed by them.
The rule for the conduct of a surviving partner
In equity, surviving partners are treated as
trustees
of the representatives of the deceased partner, with regard to the interest of thedeceased partner in the firm. As a
consequence of this trusteeship, surviving partners are held in their dealings with the firm assetsand the
representatives of the deceased to that nicety of dealing and that strictness of accountability required of and incident
to theposition of one occupying a confidential relation. It is the duty of surviving partners to render an account of the
performance of theirtrust to the personal representatives of the deceased partner, and to pay over to them the share
of such deceased member in thesurplus of firm property, whether it consists of real or personal assets.Guidote failed
to observe this rule, and he is not in position to complain if his testimony and that of his witnesses is discredited.
The appealed judgment is AFFIRMED.
RALLOS vs FELIX GO CHAN
FACTS:

Concepcion and Gerundia both surnamed Rallos were sisters and registered co-owners of a parcel of land

The sisters executed a SPECIAL POWER OF ATTORNEY in favor of their brother, Simeon Rallos, authorizing him to
sell for and in their behalf the said lot

March 3, 1955 Concepcion Rallos died September 12, 1955, Simeon sold the lot to Felix Go Chan- deed
registered in the Registry of Deeds and TCT was issued in the name of Felix Go Chan

Ramon Rallos, administrator of the Intestate estate of Concepcion filed a complaint praying that the sale be declared
UNENFORCEABLEand the share of Concepcion in the lot be reconveyed to her estate and that TCT in the name of
Felix Go Chan be cancelled and a new one be issued in the name of the corporation and the Intestate estate of
Concepcion

TC: in favor of Ramon deed of sale declared null and void insofar as the share of Concepcion, and ordered
Register of Deeds to issuenew TCT in the name of corporation and estate

CA: in favor of Felix Go Chan sales is VALIDISSUE: what is the legal effect of an act performed by an agent AFTER
the death of his principal? Is the sale valid?
HELD: NO

No one may contract in the name of another without being authorized by the latter, or unless he has by law a right to
represent him. Acontract entered into in the name of another by one who has no authority or the legal representation
or who has acted beyond his powers,shall be unenforceable, unless it is ratified, expressly or impliedly, by the person
on whose behalf it has been executed, before it is revoked by the other contracting party.
o
Out of the above given principles, sprung the creation and acceptance of the
RELATIONSHIP OF AGENCY
whereby one party,called the principal (
mandante
), authorizes another, called the agent (
mandatario
), to act for and in his behalf in transactions withthird persons.
o
The essential elements of agency are:(1)there is consent, express or implied of the parties to establish the
relationship;
(2)
the object is the execution of a juridical act in relation to a third person;
(3)
the agents acts as a representative and not for himself, and(4)the agent acts within the scope of his authority
o
AGENCY-basically personal representative and derivative in nature. The authority of the agent to act emanates
from the powers granted to him by his principal; his act is the act of the principal if done within the scope of the
authority.
Qui facit per alium facit se
. "He who acts through another acts himself"


ART 1919 CC- from A1709 of the Spanish CC- agency is extinguished by the death, civil interdiction, insanity or
insolvency of the principal or the agent

MANRESA: the juridical basis of agency is representation-it is not possible for the representation to continue to exist
once the death of either is established

POTHIER: agrees with Manresa; by the nature of agency, death extinguishes it

LAURENT: juridical tie between the principal and the agent is servered ipso jure

COMMON LAW: death of the principal effects instantaneous and absolute revocation of the authority of the agent
unless the power becoupled with an interest

GR: DEATH extinguishes agency

Exceptions:
1.
Art 1930 if it has been constituted in the common interest of the principal and of the agent, or in the interest of a 3
rd
person whohas accepted the stipulation in his favor 2.Art 1931 anything done by agent without the knowledge of
the death of the principal is valid and fully effective with respect tothird persons who may have contracted with him in
GF

Under 1931 there must be concurrence of the BOTH conditions below:1.that the agent acted without knowledge of
the death of the principal, and
2.
that the third person who contracted with the agent himself acted in good faith (GF-3
rd
person no knowledge of death of the principal
)

Since Ramon knew of the death of his sister Concepcion, Art 1931 is not applicable

Revocation by an act of the principal should be distinguished from revocation by operation of law such as the death of
the principal. In thelatter, the extinguishment is instantaneously effective

CC does not impose a duty on the heirs to notify the agent of the death of the principal (it is the reverse which is
required, heirs of agentmust notify principal of the death of the agent)

Whatever conflict of legal opinion was generated by

Cassiday v. McKenzie
in American jurisprudence, no such conflict exists in our ownfor the simple reason that our statute, the Civil Code,
expressly provides for two exceptions to the general rule that death of the principalrevokes ipso jure the agency