Sancho v Lizarraga

Facts:

Sancho filed an action for rescission (resolution) of the partnership between him and Lizarraga. He
prayed for the reimbursement of hi investment

Lizarraga denied the allegations of Ptr and prayed for the dissolution of the partnership

CFI: found that defendant did not pay the contributed capital he had promised to invest. Ordering the
liquidation of the partnership.
APPEAL:

ISSUE: WON the partnership can be dissolved

RULING: The appeal is premature

1. Lizarraga failed to pay to the partnership the amount he promised to contribute. He in turn became
indebted to it for the remainder.

CAB: as found by the CFI, Lizarraga failed to pay the capital he is supposed to contribute.

2. Sancho is not entitled for resolution under 1124 because this provision talks about obligations in
general while 1681 and1682 is specifically for partnerships. The special provision for partnerships
prevails over the general provision of obligations
Tai Tong Chuache &CO v The insurance commission and traveller’s multi-indemnity corporation

FACTS:
Azucena Palomo obtained a loan from Tai Tong and secured it with a land and a building which was
insured with SSS Accredited Group of Insurers (only the building). Arsenio Chua insured the loan
with Travellers

Later, Pedro Palomo obtained a fire insurance policy covering the said building with Zenith Insurance
Corp and another fire Insurance from Ph British Assurance Company.

The building was razed by fire

Azucena and Pedro were paid by these insurances for the loss except for travelers hence they demanded
traveller’s share from the other 3 but the same was refused.

Traveller’s contended that they are not liable to complainants and to Tai Tong

The insurance commission denied sps Palomo’s complaint because Tai Tong was the one who obtained
the insurance with travellers, also, Ptr’s complaint was also dismissed because the complainant was
ANTONIO CHUA and not TAI TONG as per the certification issued by the CFI Davao

ISSUE: Is Antonio Chua the real party in interest?

RULING: Yes. He is a representative or an agent of the partnership

1. A partnership can sue and be sued in its name or by its duly authorized representative. As an agent,
the agent acts in behalf of his principal.

CAB: Since ptr is a partnership, the fact that Arsenio Chua is the representative of Ptr is not
questioned.

2. As managing partner, Arsenio may execute all acts of administration including the right to sue the
debtors of the partnership in case they failed to pay their obligations

CAB: applying 1800, a partner who is appointed manager in the articles of partnership may
execute all acts of administration and his power, as a general rule, is irrevocable without just or
lawful cause
George Litton v Hill & Ceron, et al

FACTS:
Litton delivered to Carlos Ceron mining claims and as a reply, Ceron recognized the receipt of such share
certificates and recognized his obligation to pay Litton of the sum of 1,150 leaving an unpaid balance of
720 in which resps failed to pay

Litton instituted an action in the CFI for the recovery of the said balance

CFI: ordered Carlos Ceron to PERSONALLY pay Litton and that the partnership was not liable
CA: affirmed the CFI

ISSUE: WON the partnership is liable for the remaining balance?

RULING: YES. The partnership is liable

1. contrary to the ruling of the CA, third persons are not bound in entering into a contract with any of the
two partners to ascertain won the other partner consents. Its knowledge is enough that it is contracting
with a partnership which is represented by one of the managing partners. There is a general
presumption that each partner is an authorized agent for the firm and can bind the firm and this
presumption is sufficient to permit third persons from entering into contracts with members of the
partnership. The agreement of the partners is none of the third person’s concern

CAB: when Litton transacted with Ceron, the latter a partner, it cannot be said that he entered
into a contract with Litton in his private capacity as partners are not allowed to engage in any
undertaking which is similar to the partnership.

2. Accdg to the MFR dated July 13, 1939, the stipulation in the article of partnership that any of the two
managing partners may contract and sign in the name of the partnership with the consent of the other,
undoubtedly creates an obligation between the two partners in asking the other’s consent and this is
beyond the jurisdiction of the third party to ascertain. A third person has a right to presume that the
partner whom he contracts had obtained the consent of the other partner as part of its ordinary course
of business.

3. Even against the will or absence of the consent of the other partner is not a basis for annulling the
contract that the other partner entered into with the third person but it only gives rise to a liability on
the part of the guilty partner.

4. Imposing to the third person the obligation to ascertain the consent of the other partner is a
hindrance to the effective conduct of business which in most cases requires promptness and dispatch.
Good faith and honesty are always presumed.
Dan Fue Leung v IAC Leung Yu

Facts:

Leung Yu gave 4k as capital to Sun Wah Panciteria as evidenced by a receipt and the testimonies of So Sia
and Antonio Ah Heng. The said receipt was signed by the ptr confirmed by an examination.

PR received from ptr 12k from the profits of the panciteria as evidenced by the ptr’s statement of
account after the check was cleared. PR demanded for the recovery of hi 22% share in the profits of the
partnership and at the same time, he was asking for an accounting.

Ptr later denied that he received the 4k capital from Yu, that it was thru his savings that he was able to
raise a capital and the panciteria was a sole proprietorship as it was registered under his name. he flatly
denied that he gave 12k to resp.

RTC: in favor of resp. resp is a partner and thus ordering ptr to pay resp his share in the profits of the
Panciteria.
CA: Affirmed then rtc

ISSUE: is Leung Yu a partner? If so what are his rights?

RULING: Leung Yu is a partner

1. Pr proved that he was a partner of the panciteria and the contributed capital is not a mere financial
assistance.

CAB: there was a stipulation made by resp and ptr that resp will have a share of 22% in the
profits of the panciteria. Therefore applying 1767, the elements of partnership are present.

2. The provisions of prescription under art 1144 in relation to art 1155 are not applicable. Resp is a
partner. It would be incorrect to state that if a partner does not assert his rights anytime within 10 yrs
from the start of the operations, such right is lost. The applicable prescriptive period is under arts 1806,
1807, and 1809, the following provision states that a right to demand accounting exists as long as the
partnership exists. Prescription begins to run only upon the dissolution of the partnership when the final
accounting is done.

CAB: there is no fact in the case that the partnership is being dissolved. Thus, Resp, as a partner
may demand accounting.
Emnace v CA

FACTS:
Ptr Emannce, Vicente Tabanao and Jacinto Divinagracia are partners and later they decided to dissolve
the partnership.
Ptr failed to render an accounting as to the assets and finances of the partnership. PRs are heirs of
Vicente Tabanao, demanded their share in the partnership. As their pleas went unheeded, the filed an
action for accounting, pmt of shares and division of assets against ptr.
Resp filed a motion to dismiss and raised the issue of jurisdiction because of the improper venue,
prescription and non pmt of docket fees

RTC: denied the motion to dismiss. As to the issue of prescription, it only commences to run upon the
dissolution of the partnership when the final acctg is done
CA:affirmed the RTC

ISSUE: (1) won the action has prescribed

RULING: The action did not prescribe

1. there are 3 stages of a partnership: (1) dissolution; (2) winding-up; (3) termination. The partnership,
although dissolved, continues to exist and its legal personality is retained, at which time it completes the
winding up of its affairs-partitioning, distribution of the net partnership assets. For as long as the
partnership exists, any of the partners may demand an accounting of the business. So in effect,
prescription starts only upon dissolution when the final accounting is done. Also applying 1807 and
1809, the right to demand an accounting accrues at the date of dissolution

CAB: no final accounting has been made as this is what the resps are seeking in this petition
since ptr refused to do so. The action did not prescribe yet
Jo Chung Cang v Pacific Commercial Co

FACTS:
Ptr Teck Seing and Co., LTD became insolvent and so the creditors, PRs, Pacific Commercial Company,
Pinol & Company, Riu Hermanos, and WH Anderson & Company filed a motion declaring ptr as individual
partners to file an inventory of their property, and the partners be adjudicated as insolvent debtors

As based on the facts, in order to form a limited partnership, all requisites must be complied with by the
parties but in the case at bar, the partners complied with the other requisites but it failed to comply with
the firm name requirement. Non-compliance with the requisites will render the partnership as a general
partnership- this is a contention of the creditors

RTC:
CA:

ISSUE: WON the firm name of Teck Seing & Co does not contain the name of all or any of the partners
as prescribed by the code of commerce prevents the creation of a general partnership

RULING: there is a contract of partnership. The failure of Teck Seing & Co to include their names in the
partnership name does not prevent the partnership from arising or contracts and obligations from
binding

1. According to the code of commerce, in general co-partnerships transacting a name of all its members
or of several of them or of one only, is wisely included in our commercial. It seeks to protect the
creditors than the partners

2. the absence of the firm name alone cannot abs will not be a sufficient cause of preventing the
formation of a general partnership especially if the other requisites are present. The adoption of the
wrong name is not a material fact because:

a. the mere fact that a person uses a name not his own does not prevent him from being bound
in a contract or obli he voluntarily entered.

b. such requirement is merely a formal and not necessarily an essential one to the existence of
the partnership

c. the failure of the partners herein to adopt the correct name prescribed by law cannot shield
them from their personal liabilities.
Compania Maritima v Munoz

FACTS:
Francisco Munoz & Sons is a general mercantile partnership for the the purpose of carrying on the
mercantile business. The partners are Francisco Munoz was a capitalist partner while Emilio Munoz and
Rafael Naval were industrial partners.

La Compania bought the present action to recover from the partnership a sum. The lower courts
acquitted Emilio Munoz and Rafael Naval from the said responsibility

ISSUES: WON industrial partners are not liable to third persons for the obligations contracted by the
partnership

RULING: neither on principle or authority can the industrial partner be relieved of such liability

1. applying art 1816, the partners are liable pro rata, even the industrial partners with all their property
if the properties of the partnership had already been exhausted. Apply 127 of the code of commerce

CAB: there is nothing in the works of Manresa and sanchez roman that shows that only capitalist
partners may be held liable
Delos Reyes v vicente lukban and Borja, def; vicente lukban, appellant

FACTS:
Resps are partners in the firm Lukban & Borja. The partnership was dissolved. Ptrs seek to recover to the
partners INDIVIDUALLY the remaining sum of the merchandise that they bought on credit. The court (in
case no 3759) adjudged the PARTNERSHIP to be liable. Espiridion Borja paid almost half of the portion of
the debt. Ptr went to court again to render Vicente and Espiridion liable of the remaining sum.

Espiridion alleged that the new action will amount into res judicata and that the action of plaintiff had
already prescribed
Lukban alleged that the issue had already been decided in a different case, that he is an INDUSTRIAL
PARTNER of the firm, that all the assets of the partnership had not been exhausted and lastly the action
had prescribed

RTC: vicente and Espiridion to be jointly and severally liable with plaintiff. The judgment has become
final with respect to Espiridion
CA:

ISSUE: who is liable in the remaining balance?

RULING: Espiridion Borja and Vicente Lukban are jointly and severally liable

1. In the contents of the writ of execution, the dissolved partnership had absolutely no property of its
own. Other creditors of the partnership had a hard time collecting their credits

2. Since the partnership had no more assets, it gives the right of action to the creditors to demand
personally to the individual partners as they are jointly and severally liable pursuant to art 127 code of
commerce.

3. no res judicata in this case. the parties are different in the current case
Munasque v CA, Galan, Tropical Commercial, Ramon Pons

FACTS:
Elmo Munasque entered into a contract with Tropical thru its manager Ramon Pons for the remodeling
of Tropical’s building without expecting any consideration from Celestino Galan although he was casually
named as PARTNER in the contract. Galan introduced Tropical to ptr.
In their contract, Tropical would give ptr 7,000 and later 6,000 until the amount 25, 00 will be fully pd
Tropical (Pons) delivered a check worth 7k but not to ptr but to Galan and all subsequent pmt was made
to Galan by employing manipulations thereby placing ptr in financial distress
Ptr demanded pmt to Tropical pursuant to the term of their contract
Ptr filed a complaint for pmt of sum of money and damages agaist resps
Cebu Southern Hardware Company and Blue Diamond Glass Palace intervened

RTC: ptr Munasque and Galan to pay “jointly and severally” the interveners and absolved defendants
and tropical Commercial
CA: affirmed the RTC

ISSUE: (1) WON there is a partnership; (2) WON Galan is guilty of malversing the pmts made to him

RULING:

1. there is a partnership between Ptr Elmo and Celestino Galan. There is nothing in the records to
indicate that the partnership organized by Elmo and Celestino was not a genuine one. Resp had every
right to presume that the ptr and Galan are partners and also they made it appear that there was
partnership between them.

CAB: accdg to the contract, it is stated there that the renovation contract was entered between
tropical and the partnership of Galan and Munasque.

2. the malversation issue was not an issue raised by ptr and also he denied the existence of the
partnership.

3. the liability of the partners under the law to third persons for contract executed by the partnership are
PRO RATA, NOT SOLIDARY as provided by art 1816 but this provision should be construed jointly with
other provisions like 1824 where a third person can hold the partnership solidarily liable for the whole
obligation. There is solidary liability as the law protects the person in GF who relied upon the real and
apparent authority of the partner.
CAB: tropical had every reason to believe that a partnership existed between the ptr and Galan
and no fault or error can be imputed against it for making the pmts to Galan and Associates and
delivering the same to them. Galan was a true partner with real authority on behalf of the partnership
with w/c he is dealing. The liability of ptr and Galan to the intervenors are joint and solidary

4. application of Art 1818.

CAB: since the parties of the contract are “Galan and Associates”, the ptr and Galan made it appear that
they are partners when both of them entered into the contract and putting their names therein. Tropical
is under no obligation to ascertain the relationship of the partners. It is enough that the partners made it
appear that such authority of the other is present
ANTONIO C. GOQUIOLAY and THE PARTNERSHIP "TAN SIN AN and ANTONIO C.
GOQUIOLAY, plaintiffs-appellants, vs.WASHINGTON Z. SYCIP, ET AL

FACTS:

RTC:
CA:

ISSUE:

RULING