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ANTONIO PARDO(PLAINTIFF),petitioner,W

vs.
THE HERCULES LUMBER CO., INC., and IGNACIO FERRER(DEFENDANT),respondents.

Facts:
Petitioner, a stockholder in the Hercules Lumber Company, Inc., and Respondentdefendant, Ignacio
Ferrer, as acting secretary of the said company, has refused to permit the petitioner or his agent to inspect
the records and business transactions of the said Hercules Lumber Company, Inc., at times desired by the
petitioner.

In this connection petitionerasserts that in article 10 of the Bylaws of the respondent corporation it is
declared that "Every shareholder may examine the books of the company and other documents pertaining
to the same upon the days which the board of directors shall annually fix." It is further averred that at the
directors' meeting of the respondent corporation held on February 16, 1924, the board passed a resolution
to the following effect:

The board also resolved to call the usual general (meeting of shareholders) for March 30 of the present
year, with notice to the shareholders that the books of the company are at their disposition from the 15th to
25th of the same month for examination, in appropriate hours.

The contention for the respondent is that this resolution of the board constitutes a lawful restriction on the
right conferred by statute and it is insisted that as the petitioner has not availed himself of the permission to
inspect the books and transactions of the company within the ten days thus defined, his right to inspection
and examination is lost, at least for this year.

Issue: W/N petitioner has the right to examine the said books?

Held: Yes

It may be admitted that the officials in charge of a corporation may deny inspection when sought at unusual hours or
under other improper conditions but neither the executive officers nor the board of directors have the power to
deprive a stockholder of the right altogether. A bylaw unduly restricting the right of inspection is undoubtedly invalid.

Under a statute similar to our own it has been held that the statutory right of inspection is not affected by the
adoption by the board of directors of a resolution providing for the closing of transfer books thirty days before an
election. (Statevs. St. Louis Railroad Co., 29 Mo., Ap., 301.)

It will be noted that our statute declares that the right of inspection can be exercised "at reasonable hours." This
means at reasonable hours on business days throughout the year, and not merely during some arbitrary period of a
few days chosen by the directors.

Wherefore, the petitioner is entitled to relief. The demurrer is, therefore, sustained and the writ ofmandamuswill
issue as prayed, with the costs against the respondent. So ordered.
PANG LIM and BENITO GALVEZ,plaintiffsappellees,
vs.
LO SENG,defendantappellant. W

Facts:

>For several years prior to June 1, 1916, two of the litigating parties herein, namely, Lo Seng and Pang Lim,
Chinese residents of the City of Manila, were partners, under the firm name of Lo Seng and Co., in the business of
running a distillery, known as "El Progreso," in the Municipality of Paombong, in the Province of Bulacan.

>Upon the expiration of this lease a new written contract, in the making of which Lo Yao was represented by one Lo
Shui as attorney in fact, became effective whereby the lease was extended for fifteen years.

>On June 1, 1916, Pang Lim sold all his interest in the distillery to his partner Lo Seng, thus placing the latter in the
position of sole owner.

>On June 28, 1918, Lo Shui, again acting as attorney in fact of Lo Yao, executed and acknowledged before a notary
public a deed purporting to convey to Pang Lim and another Chinaman named Benito Galvez, the entire distillery
plant including the land used in connection therewith.

>Thereafter Pang Lim and Benito Galvez demanded possession from Lo Seng, but the latter refused to yield and
the present action of unlawful detainer was thereupon initiated by Pang Lim and Benito Galvez in the court of the
justice of the peace of Paombong to recover possession of the premises.

From the decision of the justice of the peace the case was appealed to the Court of First Instance, where judgment
was rendered for the plaintiffs and the defendant thereupon appealed to the Supreme Court.

Issue: W/N Plaintiffsappellees has the right to terminate the lease?

Held: No

Plaintiff Pang Lim has occupied a double role in the transactions which gave rise to this litigation, namely, first, as
one of the lessees and secondly, as one of the purchasers now seeking to terminate the lease.

While yet a partner in the firm of Lo Seng and Co., Pang Lim participated in the creation of this lease, and when he
sold out his interest in that firm to Lo Seng this operated as a transfer to Lo Seng of Pang Lim's interest in the firm
assets, including the lease and Pang Lim cannot now be permitted, in the guise of a purchaser of the estate, to
destroy an interest derived from himself, and for which he has received full value.

Both therefore had been in relations of confidence with Lo Seng and in that position had acquired knowledge of the
possibilities of the property and possibly an experience which would have enabled them, in case they had acquired
possession, to exploit the distillery with profit. On account of his status as partner in the firm of Lo Seng and Co.,
Pang Lim knew that the original lease had been extended for fifteen years and he knew the extent of valuable
improvements that had been made thereon.

Certainly, as observed in the appellant's brief, it would be shocking to the moral sense if the condition of the law
were found to be such that Pang Lim, after profiting by the sale of his interest in a business, worthless without the
lease, could intervene as purchaser of the property and confiscate for his own benefit the property which he had sold
for a valuable consideration to Lo Seng.

Above all other persons in business relations, partners are required to exhibit towards each other the highest degree
of good faith. In fact the relation between partners is essentially fiduciary, each being considered in law, as he is in
fact, the confidential agent of the other. It is therefore accepted as fundamental in equity jurisprudence that one
partner cannot, to the detriment of another, apply exclusively to his own benefit the results of the knowledge and
information gained in the character of partner. Thus, it has been held that if one partner obtains in his own name and
for his own benefit the renewal of a lease on property used by the firm, to commence at a date subsequent to the
expiration of the firm's lease, the partner obtaining the renewal is held to be a constructive trustee of the firm as to
such lease.

CATALAN vs. GATCHALIAN 105 Phil 1270

FACTS:

>Catalan and Gatchalian are partners. They mortgaged two lots to Dr. Marave together with the improvements
thereon to secure a credit from the latter.

>The partnership failed to pay the obligation. The properties were sold to Dr. Marave at a public auction.

> Catalan redeemed the property and he contends that title should be cancelled and a new one must be issued in
his name.

ISSUE: Did Catalans redemption of the properties make him the absolute owner of the lands?

HELD: No.

Under Article 1807 of the NCC every partner becomes a trustee for his copartner with regard to any benefits or
profits derived from his act as a partner.

The right of redemption pertains to the owner of the property as it was the partnership which owned the property, in
this case, it was only the partnership which could properly exercise the right of redemption.

Consequently, when Catalan redeemed the properties in question, he became a trustee and held the same in trust
for his copartner Gatchalian, subject to his right to demand from the latter his contribution to the amount of
redemption.
R. Y. HANLON,plaintiffappellee,
vs.
JOHN W. HAUSSERMANN and A. W. BEAM,defendantsappellants.
GEORGE C. SELLNER,intervener

Facts:

>The Benguet Consolidated Mining Company is a corporation which was organized in 1903. In the year 1909 the
milling plant of said company, situated near Baguio in the subprovince of Benguet, Philippine Islands upon a partially
developed quartz mine, was badly damaged and partly destroyed by high water, and in 1911 it was completely
destroyed by like causes. The company was thereafter without working capital, and without credit, and therefore
unable to rebuild the plant.

> In October and November 1913, and for a long time prior thereto, the defendant John W. Haussermann and A. W.
Beam were shareholders in said mining company and members of its board of directors, and were at said time
vicepresident and secretarytreasurer, respectively, of said company.

> In October, 1913, the plaintiff R. Y. Hanlon, an experienced mining engineer, upon the solicitation of the defendant
Beam, presented to the board of directors of the Benguet Consolidated Mining Company a proposition for the
rehabilitation of the company.

>Thus it created a contract between them and Intervener Sellner to promote the rehabilitation of a mining company.
The parties agreed to raise money on the said plan within six months by obtaining subscriptions to shares of the
mining company. It was expressly stipulated that the failure of one to perform within the stipulated period would
discharge the others. Hanlon defaulted in his part.

>Under the contract, Defendants were discharged from their obligations. Thereafter the Defendants considered
themselves released from the said contract, and presented a new plan for the rehabilitation of the company. The
new plan(BEAM PROJECT) was adopted and Defendants succeeded in raising the price of the stock of the
company and made large profits.d

>Plaintiff Hanlon brought an action to compel the Defendants to account for his share in the profits which he claimed
the Defendants obtained by virtue of their contract.
Issue: W/N the defendants are accountable to plaintiff as a fiduciary for the profits?

Held: No

After the termination of an agency, partnership, or joint adventure, each of the parties is free to act in his own
interest, provided he has done nothing during the continuance of the relation to lay a foundation for an undue
advantage to himself.

To act as agent for another does not necessarily imply the creation of a permanent disability in the agent to act for
himself in regard to the same subjectmatter and certainly no case has been called to our attention in which the
equitable doctrine above referred to has been so applied as to prevent an owner of property from doing what he
pleased with his own after such a contract as that of November 5, 1913, between the parties to this lawsuit had
lapsed.

In the present case so far as we can see, the defendants acted in good faith for the accomplishment of the common
purpose and to the full extent of their obligation during the continuance of their contract and if Sellner had not
defaulted, or if Hanlon had been able to produce the necessary capital from some other source, during the time set
for raising the money, the original project would undoubtedly have proceeded to its consummation. Certainly, no act
of the defendants can be pointed to which prevented or retarded its realization and we are of the opinion that, under
the circumstances, nothing more could be required of the defendants than a full and honest compliance with their
contract. As this had been discharge through the fault of another they can not be held liable upon it.

ANTONIO LIM TANHU, DY OCHAY, ALFONSO LEONARDO NG SUA and CO OYO(DEFENDANTS),petitioners,


vs.
HON. JOSE R. RAMOLETE as Presiding Judge, Branch III, CFI, Cebu and TAN PUT(PLAINTIFF),respondents.

Facts:

>Plaintiff Respondent Tan alleged that she "is the widow of Tee Hoon Lim Po Chuan, who was a partner in the
commercial partnership, Glory Commercial Company ,with Antonio Lim Tanhu and Alfonso Ng Sua that
"defendantPetitioners Antonio Lim Tanhu, Alfonso Leonardo Ng Sua, Lim Teck Chuan, and Eng Chong Leonardo,
through fraud and machination, took actual and active management of the partnership and although Tee Hoon Lim
Po Chuan was the manager of Glory Commercial Company, defendants managed to use the funds of the
partnership to purchase lands and building's in the cities of Cebu, Lapulapu, Mandaue, and the municipalities of
Talisay and Minglanilla, some of which were hidden, but the description of those already discovered.

>After the death of the Respondents husband, the Defendants, without liquidation continued the partnership by
purportedly organizing a corporation and acquired lands using the money and assests of the partnership.

>It appears that Respondents husband was in control of the affairs and the running of the partnership and the lands
in question were acquired by Defendants long after the partnership had been automatically dissolved as a result of
the death of respondents wife.

>She prayed for ordering the defendants to render an accounting of the real and personal properties of the Glory
Commercial Company

Issue: W/N respondent is entitled to an accounting?

Held: No

Article 1807 is not applicable. Since Respondents husband was in control of the affairs of the partnership, it is hard
to believe that Defendants could have defrauded Respondents husband of the amounts she was claiming.

The more logical inference is that if Defendants had obtained any portion of the funds of the partnership for
themselves, it must have been with the knowledge and consent of Respondents husband, for which reason no
accounting could be demanded from them therefor, considering that Art 1807 refers only to what is taken by a
partner without the consent of the other partner or partners.

Since the properties supposed to have been acquired by Defendants with partnership funds appear to have been
transferred to their names long after the dissolution of the partnership, the Defendants have no obligation to account
to anyone for such acquisitions in the absence of clear proof that they had violate the trust of Respondents
husband, during the existence of the partnership.

G.R. No. 70926 January 31, 1989

DAN FUE LEUNG(DEFENDANT),petitioner,


vs.
HON. INTERMEDIATE APPELLATE COURT and LEUNG YIU (PLAINTIFF),respondents. W

Facts:

>This case originated from a complaint filed by respondent Leung Yiu to recover the sum equivalent to twentytwo
percent (22%) of the annual profits derived from the operation of Sun Wah Panciteria since October, 1955 from
petitioner Dan Fue Leung.

>The Sun Wah Panciteria, a restaurant, was registered as a single proprietorship and its licenses and permits were
issued to and in favor of petitioner Dan Fue Leung as the sole proprietor. Respondent Leung Yiu adduced evidence
during the trial of the case to show that Sun Wah Panciteria was actually a partnership and that he was one of the
partners having contributed P4,000.00 to its initial establishment.

>This is evidenced by a receipt identified as Exhibit "A" wherein the petitioner acknowledged his acceptance of the
P4,000.00 by affixing his signature thereto.

>The petitioner denied having received from the private respondent the amount of P4,000.00 and he did not receive
any contribution at the time he started the Sun Wah Panciteria. He used his savings from his salaries as an
employee at Camp Stotsenberg in Clark Field and later as waiter at the Toho Restaurant amounting to a little more
than P2,000.00 as capital in establishing Sun Wah Panciteria.

>To bolster his(petitioner) contention that he was the sole owner of the restaurant, the petitioner presented various
government licenses and permits showing the Sun Wah Panciteria was and still is a single proprietorship solely
owned and operated by himself alone. Fue Leung also flatly denied having issued to the private respondent the
receipt

>The trial court gave credence to that of the plaintiffs. It was affirmed by the Court of Appeals.

>The petitioner raises the issue of prescription. He argues that:

The Hon. Respondent Intermediate Appellate Court gravely erred in not resolving the issue of prescription in favor of
petitioner.

The alleged receipt is dated October 1, 1955 and the complaint was filed only on July 13, 1978 or after the lapse of
twentytwo (22) years, nine (9) months and twelve (12) days. From October 1, 1955 to July 13, 1978,no written
demandswere ever made by private respondent.

The petitioner's argument is based on Article 1144 of the Civil Code which provides:

Art. 1144. The following actions must be brought within ten years from the time the right of action accrues:

(1) Upon a written contract

(2) Upon an obligation created by law

(3) Upon a judgment.

in relation to Article 1155 thereof which provides:

Art. 1155. The prescription of actions is interrupted when they are filed before the court, when there is a written
extrajudicial demand by the creditor, and when there is any written acknowledgment of the debt by the debtor.'

Issue: W/N prescription shall apply in the case at bar?

Held: No

The argument is not welltaken.

The private respondent is a partner of the petitioner in Sun Wah Panciteria. The requisites of a partnership which are
1) two or more persons bind themselves to contribute money, property, or industry to a common fund and 2)
intention on the part of the partners to divide the profits among themselves (Article 1767, Civil Code Yulo v. Yang
Chiao Cheng, 106 Phil. 110)have been established.

As stated by the respondent, a partner shares not only in profits but also in the losses of the firm. If excellent
relations exist among the partners at the start of business and all the partners are more interested in seeing the firm
grow rather than get immediate returns, a deferment of sharing in the profits is perfectly plausible. It would be
incorrect to state that if a partner does not assert his rights anytime within ten years from the start of operations,
such rights are irretrievably lost. The private respondent's cause of action is premised upon the failure of the
petitioner to give him the agreed profits in the operation of Sun Wah Panciteria. In effect the private respondent was
asking for an accounting of his interests in the partnership.

It is Article 1842 of the Civil Code in conjunction with Articles 1144 and 1155 which is applicable. Article 1842 states:

The right to an account of his interest shall accrue to any partner, or his legal representative as
against the winding up partners or the surviving partners or the person or partnership continuing
the business, at the date of dissolution, in the absence or any agreement to the contrary.

Regarding the prescriptive period within which the private respondent may demand an accounting, Articles 1806,
1807, and 1809 show that the right to demand an 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.
G.R. No. 126334November 23, 2001

EMILIO EMNACE(DEFENDANT),petitioner,
vs.
COURT OF APPEALS, ESTATE OF VICENTE TABANAO, SHERWIN TABANAO, VICENTE WILLIAM TABANAO,
JANETTE TABANAO DEPOSOY, VICENTA MAY TABANAO VARELA, ROSELA TABANAO and VINCENT
TABANAO(PLAINTIFF),respondents.

Facts:
Emilio Emnace, Jacinto Divinagracia and Vicente Tabanao formed a partnership engaged in the fishing
industry. In 1986, Jacinto decided to leave the partnership hence they agreed to dissolve the partnership.
At that time, the partnership has an estimated asset amounting to P30,000,000.00.
HOWEVER, until the death of Vicente Tabanao in 1994, Emnace never rendered an accounting either to
Vicente or his heirs. Emnace reneged on his promise to turn over Tabanaos share which is 1/3 of the
P30M.
The heirs of Tabanao then sued Emnace. Emnace argued, among others, that the heirs are barred by
prescription hence they can no longer demand an accounting.
He contends that the partnership was dissolved in 1986 and that was the time when Tabanaos (and his
heirs) right to inquire into the business affairs accrued that said right has expired in 1990 or 4 years after.
So beyond 1990, they can no longer inquire.
ISSUE:Whether or not Emnace is correct?
HELD:No.
Prescription has not run in this case, it has never begun.
The three final stages of partnership are: a) dissolution, b) winding up, and c) termination.
In this case, Emnace and his partners dissolved their partnership but such did not perfect the dissolution because no
accounting took place.
The partnership, although dissolved, continues to exist and its legal personality is retained, at which time it
completes the winding up of its affairs, including the partitioning and distribution of the net partnership assets to the
partners. For as long as the partnership exists, any of the partners (or legal representative in this case the heirs of
Tabanao) may demand an accounting of the partnerships business.
Prescription of the said right starts to run only upon the dissolution of the partnership when the final accounting is
done.
When a final accounting is made, it is only then that prescription begins to run.In the case at bar, no final
accounting has been made, and that is precisely what the heirs are seeking in their action before the trial court,
since Emnace has failed or refused to render an accounting of the partnerships business and assets.Hence, the
said action is not barred by prescription.

Contrary to petitioner's protestations that respondents' right to inquire into the business affairs of the partnership
accrued in 1986, prescribing four (4) years thereafter, prescription had not even begun to run in the absence of a
final accounting. Article 1842 of the Civil Code provides:

The right to an account of his interest shall accrue to any partner, or his legal representative as against the
winding up partners or the surviving partners or the person or partnership continuing the business, at the
date of dissolution, in the absence of any agreement to the contrary.

Applied in relation to Articles 1807 and 1809, which also deal with the duty to account, the abovecited provision
states that the right to demand an accounting accrues at the date of dissolution in the absence of any agreement to
the contrary. When a final accounting is made, it is only then that prescription begins to run. In the case at bar, no
final accounting has been made, and that is precisely what respondents are seeking in their action before the trial
court, since petitioner has failed or refused to render an accounting of the partnership's business and assets. Hence,
the said action is not barred by prescription.
SERGIO V. SISON,PlaintiffAppellant,

v.

HELEN J. MCQUAID,DefendantAppellee.W

Facts:

>On March 28, 1951, plaintiff brought an action in the Court of First Instance of Manila against defendant, alleging
that during the year 1938 the latter borrowed from him various sums of money, aggregating P2,210, to enable her to
pay her obligation to the Bureau of Forestry and to add to her capital in her lumber business, receipt of the amounts
advanced being acknowledged in a document, Exhibit A, executed by her on November 10, 1938 and attached to
the complaint

>That as defendant was not able to pay the loan in 1938, as she had promised, she proposed to take in plaintiff as a
partner in her lumber business, plaintiff to contribute to the partnership the said sum of P2,210 due him from
defendant in addition to his personal services that plaintiff agreed to defendants proposal and, as a result, there
was formed between them, under the provisions of the Civil Code, a partnership in which they were to share alike in
the income or profits of the business, each to get onehalf thereof.

>That before the last World War, the partnership sold to the United States Army 230,000 board feet of lumber for
P13,800

>For the collection of which sum defendant, as manager of the partnership, filed the corresponding claim with the
said army after the war that the claim was "finally" approved and the full amount paid the complaint does not say
when but defendant has persistently refused to deliver onehalf of it, or P6,900, to plaintiff notwithstanding
repeated demands, investing the whole sum of P13,800 for her own benefit.

>Defendant filed a motion to dismiss on the grounds that plaintiffs action had already prescribed, that plaintiffs
claim was not provable under the Statute of Frauds, and that the complaint stated no cause of action.

Issue: W/N he is entitled of such profits?

Held : No

Plaintiff seeks to recover from defendant onehalf of the purchase price of lumber sold by the partnership to the
United States Army. But his complaint does not show why he should be entitled to the sum he claims.

It does not allege that there has been a liquidation of the partnership business and the said sum has been found to
be due him as his share of the profits.

The proceeds from the sale of a certain amount of lumber cannot be considered profits until costs and expenses
have been deducted. Moreover, the profits of a business cannot be determined by taking into account the result of
one particular transaction instead of all the transactions had. Hence, the need for a general liquidation before a
member of a partnership may claim a specific sum as his share of the profits.

In view of the foregoing, the order of dismissal is affirmed, but on the ground that the complaint states no cause of
action and without prejudice to the filing of an action for accounting or liquidation should that be what plaintiff really
wants.
G.R. No. 413 February 2, 1903

JOSE FERNANDEZ,plaintiffappellant,W
vs.
FRANCISCO DE LA ROSA,defendantappellee.

Facts:
>Plaintiffappellant Fernandez alleges that in January, 1900, he entered into a verbal agreement with
defendantappellee Dela Rosa to form a partnership for the purchase of cascoes and the carrying on of the
business of letting the same for hire in Manila, and Dela Rosa is to buy the cascoes and each partner to furnish for
that purpose such amount of money as he could, the profits to be divided proportionately

>Fernandez furnished Dela Rosa sums to purchase and repair cascoes, the latter taking the titles in his own name
that in April the parties undertook to draw up articles of partnership for the purpose of embodying the same in an
authentic document, but that the defendant having proposed a draft of such articles which differed materially from
the terms of the earlier verbal agreement, and being unwillingly to include the 2nd casco in the partnership, they
were unable to come to any understanding and no written agreement was executed

>That the defendant having in the meantime had the control and management of the two cascoes, the plaintiff made
a demand for an accounting upon him, which the defendant refused to render, denying the existence of the
partnership altogether.

>Dela Rosa admits that the project of forming a partnership in the casco business in which he was already engaged
to some extent individually was discussed between himself and the plaintiff in January, 1900, but he denies that any
agreement was ever consummated. He denies that the plaintiff furnished any money in January, 1900, for the
purchase of the first casco, or for repairs on the same.

Issue: If such partnership existed, did the return to Plaintiff of the money effect a waiver by him of his right to an
accounting of the profits already realized by the partnership as well as a termination of the partnership?

Held: No.

>The failure of the attempt to agree upon partnership articles and after the defendant had been operating the
cascoes for some time, the defendant returned to the plaintiff 1,125 pesos, in two different sums, one of 300 and one
of 825 pesos. The only evidence in the record as to the circumstances under which the plaintiff received these sums
is contained in his answer to the interrogatories proposed to him by the defendant, and the whole of his statement
on this point may properly be considered in determining the fact as being in the nature of an indivisible admission.
He states that both sums were received with an express reservation on his part of all his rights as a partner. We find
this to be the fact.

There was no intention on the part of the plaintiff to relinquish his rights as a partner nor did he give any ground
whatever to make defendant believe that he intended to relinquish them. On the contrary, plaintiff notified defendant
when he accepted the money that he waived none of his rights in the partnership.

Furthermore, the money fell short of the capital contributed by Plaintiff and it was possible that profits might have
been realized from the business during the period in which Defendant was administering it and if so, still retained in
Defendants hands. For these reasons, the acceptance of the money was not in itself inconsistent with the
continuance of the partnership relations, as would have been the case had Plaintiff withdrawn his entire interest in
the partnership. The acceptance of the money by the plaintiff did not have the effect of terminating the legal
existence of the partnership by converting it into asocietas leonina, as claimed by counsel for the defendant. There
was, therefore, mothing upon which a waiver, express or implied, could be predicated.

The result is that we hold and declare that a partnership was formed between the parties in January, 1900, the
existence of which the defendant is bound to recognize that cascoes No. 1515 and 2089 constitute partnership
property, and that the plaintiff is entitled to an accounting of the defendants administration of such property, and of
the profits derived therefrom. This declaration does not involve an adjudication as to any disputed items of the
partnership account.

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JOSE GARRIDO,plaintiffappellant,
vs.
AGUSTIN ASENCIO,defendantappellee

Facts:

>Plaintiff and defendant were members of a partnership doing business under the firm name ofAsencio y Cia. The
business of the partnership did not prosper and it was dissolved by mutual agreement of the members.

>The plaintiff brings this action to recover from the defendant, who appears to have been left in charge of the books
and the funds of the firm, the amount of the capital which he had invested in the business.

>It appears from the record that there is evidence which tends to show that the plaintiff himself made entries in these
books touching particular transactions in which he happened to be interested so that while it is clear that the
defendant was more especially burdened with the care of the books and accounts of the partnership, it would appear
that the plaintiff had equal rights with the defendant in this regard, and that during the existence of the partnership
they were equally responsible for the mode in which the books were kept and that the entries made by one had the
same effect as if they had been made by the other.

>At the trial the principal question at issue was the amount of the profits or losses of the business of the partnership
during the period of its operation. The plaintiff made no allegation as to profits, but denied defendant's allegation as
to the losses.

Issue: What is the effect of Plaintiffs failure to point out specifically any fraudulent or erroneous items appearing in
the account?

Held:

Such failure should be construed as a strong circumstance indicating the accuracy of the account.

We that in view of the testimony of record that the plaintiff jointly with the defendant kept these books, made entries
therein, and was responsible with him therefor, the doctrine laid down in Behn, Meyer & Co.,vs. Rosatzin (5 Phil.
Rep., 660) is applicable in this case, and the correctness of the entries in these books must be taken to be admitted
by him, except so far as it is made to appear that they are erroneous as a result of fraud or mistake.
It appears from the record that the statement of account, the vouchers, and the books of the company were placed
at the disposition of the plaintiff for more than six weeks prior to the trial, and that during the trial he was given every
opportunity to indicate any erroneous or fraudulent items appearing in the account, yet he was unable, or in any
event he declined to specify such items, contenting himself with a general statement to the effect that there must be
some mistake, as he did not and could not believe that the business had been conducted at a loss.

JOSE ORNUM and EMERENCIANA ORNUM,petitioners,


vs.
MARIANO, LASALA, et al.,respondent

Facts:

1. In 1908 Pedro Lasala, father of the respondents, and Emerenciano Ornum formed a partnership

2. Lasala as capitalist while Ornum will be the industrial partner.

3. Lasala delivered the sum of P1,000 to Ornum who will conduct a business at his place of residence in
Romblon.

4. In 1912, when the assets of the partnership consisted of outstanding accounts and old stock of
merchandise, Emerenciano Ornum, following the wishes of his wife, asked for the dissolution of the
Lasala, Emerenciano .

5. Ornum looked for some one who could take his place and he suggested the names of the petitioners who
accordingly became the new partners.

6. Upon joining the business, the petitioners, contributed P505.54 as their capital

7. The new partnership Pedro Lasala had a capital of P1,000,appraised value of the assets of the former
partnership, plus the said P505.54 invested by the petitioners who, as industrial partners, were to run the
business in Romblon.
8. After the death of Pedro Lasala, his children the respondents succeeded to all his rights and interest in the
partnership.

9. The partners never knew each other personally.

10. No formal partnership agreement was ever executed.

11. The petitioners, as managing partners, were received half of the net gains, and the other half was to be
divided between them and the Lasala Group in proportion to the capital put in by each Group.

12. During the course divided, but the partners were given the election, as evidenced by the statements of
accounts referred to in the decision of the Court of Appeals, to invest their respective shares in such profits
as additional capital.

13. The petitioners accordingly let a Greater part of their profits as additional investment in the partnership.

14. After twenty years the business had grown to such an extent that is total value, including profits, amounted
to P44,618.67.

15. Statements of accounts were periodically prepared by the petitioners and sent to the respondents who
invariably did not make an' objection thereto.

16. Before the last statement of accounts was made, the respondents had received P5,387.29 by way of
profits.

17. The last and final statement of accounts, dated May 27, 1932 and prepared by the petitioners after the
respondents had announced their desire to dissolve the partnership,

18. Pursuant to the request contained in this letter, the petitioners remitted and paid to the respondents the
total amount corresponding to them under the above quoted statement of accounts which, however, was
not signed by the latter.

19. Thereafter the complaint in this case was filed by the respondents, praying for an accounting and final
liquidation of the assets of the partnership.

20. The Court of First Instance of Manila held that the last and final statement of accounts prepared by the
petitioners was tacitly approved and accepted by the respondents who, by virtue of the above quoted letter
of Father Mariano Lasala, lost their right to a further accounting from the moment they received and
accepted their shares as itemized in said statement.

21. This judgment was reversed by the Court of Appeals principally on the ground that as the final statement
of accounts remains unsigned by the respondents, the same stands disapproved.

22. The decision appealed by the petitioners.

Issue: W/N the respondents are entitled to further liquidation?

Held: No

After accepting his shares without any reservation, Respondents virtually confirmed his approval of the statement of
accounts and its signing thereby became a mere formality to be complied with by the respondents exclusively.

His refusal to sign, after receiving the shares amounted to a waiver of that formality in favor of Petitioners who had
already performed their obligation. This approval prevents any right on the part of the respondents to a further
liquidation, unless they can show there was fraud or mistake in said approval.

In the absence of any finding of fraud or prejudicial error committed by the petitioners in the rendition of their
accounts, which were tacitly, approved by their respondents, who asked for and received their participation in
accordance with the liquidation, we think it would only occasion unnecessary trouble and expense to both parties to
require further accounting and remand the case to the trial court for further proceedings. Nine years of litigation in
three instances should be enough to afford the parties in this case their day in court. It would be scandalous to
prolong it under the circumstances. After all, it's only a tempest in a teapot.
EVANGELISTA & CO., DOMINGO C. EVANGELISTA, JR., CONCHITA B. NAVARRO and LEONARDA ATIENZA
ABAD SABTOS,petitioners,
vs.
ESTRELLA ABAD SANTOS,respondent.

Facts:

>On October 9, 1954 a copartnership was formed under the name of "Evangelista & Co." On June 7, 1955 the
Articles of Copartnership were amended so as to include herein respondent, Estrella Abad Santos, as industrial
partner, with herein petitioners Domingo C. Evangelista, Jr., Leonarda Atienza Abad Santos and Conchita P.
Navarro, the original capitalist partners, remaining in that capacity, with a contribution of P17,500 each

>On December 17, 1963 herein respondent filed suit against the three other partners, alleging that the partnership,
which was also made a partydefendant, had been paying dividends to the partners except to her and that
notwithstanding her demands the defendants had refused and continued to refuse to let her examine the partnership
books or to give her information regarding the partnership affairs or to pay her any share in the dividends declared
by the partnership

>The defendants, in their answer, denied ever having declared dividends or distributed profits of the partnership
denied likewise that the plaintiff ever demanded that she be allowed to examine the partnership books and by way
of affirmative defense alleged that the amended Articles of Copartnership did not express the true agreement of the
parties, which was that the plaintiff was not an industrial partner that she did not in fact contribute industry to the
partnership.

ISSUE: Whether respondent Abad Santos is entitled to see the partnership books because she is an industrial
partner in the partnership?

HELD: Yes.

Respondent has faithfully complied with her prestation with respect to the other partners. This is clearly shown by
the fact that it was only after the filing of the complaint by Respondent and the answer thereto that appellants
exercised their right to exclusion by alleging in their supplemental answer dated July 29, 1964 or after around nine
years from June 7, 1955 the agreement aforementioned.

Having always known respondent as a city judge even before she joined the appellant company as an industrial
partner, it took the appellants so many years before excluding her from said company. There was no pretense even
on the part of the appellants(petitioner) that respondent engaged in any business antagonistic to that of
appellant(petitioner) company. Furthermore, the theory that respondent has never been an industrial partner cannot
be reconciled with the agreement evidenced by the amended articles of partnership.

As an industrial partner, respondent has the right under Art 1809 for a formal accounting and to receive her share in
the net profit that may result from such accounting.

ART. 1809. Any partner shall have the right to a formal account as to partnership affairs:

(1)If he is wrongfully excluded from the partnership business or possession of its property by his copartners

(2)If the right exists under the terms of any agreement

(3)As provided by article 1807

(4)Whenever other circumstances render it just and reasonable."


INOCENCIA DELUAO and FELIPE DELUAOplaintiffsappellees,
vs.
NICANOR CASTEEL and JUAN DEPRA,defendants,
NICANOR CASTEEL,defendantappellant.

FACTS:

>Subject of this Resolution is the appellees' motion of February 8, 1969 for reconsideration of our decision of
December 24, 1968.

> In 1940 Nicanor Casteel unsuccessfully registered a fishpond in a big tract of swampy land, 178.76 hectares, in
the then sitio of Malalag, municipality of Padada, Davao for 3 consecutive times because the Bureau of Fisheries did
not act upon his previous applications.

>Despite the said rejection, Casteel did not lose interest. Because of the threat poised upon his position by the other
applicants who entered upon and spread themselves within the area, Casteel realized the urgent necessity of
expanding his occupation thereof by constructing dikes and cultivating marketable fishes. But lacking financial
resources at that time, he sought financial aid from his uncle Felipe Deluao.

>On November 25, 1949 Inocencia Deluao (wife of Felipe Deluao) as party of the first part, and Nicanor Casteel as
party of the second part, executed a contract denominated a "contract of service". On the same date the above
contract was entered into, Inocencia Deluao executed a special power of attorney in favor of Jesus Donesa.

> The appellees argue that the contract of service, ex. A, is not by itself a transfer or sublease but merely an
agreement to divide or transfer, and that pursuant to its intended "ultimate undertaking" of dividing the fishpond into
two equal parts the appellant is under obligation, conformably with the law on obligations and contracts, to execute a
formal transfer and to secure official approval of the same. They allege that actual division of the fishpond was
predicated on a favorable decision in the then pending DANR cases 353 and 353B that the pendency of the said
cases served to suspend implementation of the agreement to divide and that after the DANR Secretary ruled in
Casteel's favor, the suspensive condition was fulfilled and the ultimate undertaking to divide the fishpond became a
demandable obligation.

ISSUE: Whether or not the parties can now validly divide the said fishpond as agreed upon by them?

HELD: NO.

The appellees seem to have failed to grasp the rationale of our decision. We discussed at length in the said
decision and in the resolution of their first proposition above that the contract of partnership to divide the fishpond
between them after such award became illegal because it is at war with several prohibitory laws. As such, it cannot
be made subject to any suspensive condition the fulfillment of which could allegedly make the ultimate undertaking
therein a demandable obligation. It is an elementary rule in law that a partnership cannot be formed for an illegal
purpose or one contrary to public policy and that where the object of a partnership is the prosecution of an illegal
business or one which is contrary to public policy, the partnership is void. And since the contract is null and void, the
appellant is not bound to execute a formal transfer of onehalf of the fishpond and to secure official approval of the
same.

A contract of partnership to exploit a fishpond pending its award to any qualified party or applicant is VALID BUT a
contract of partnership to divide the fishpond after such award is ILLEGAL. One of the causes of dissolution is any
event which make it unlawful for the business of the partnership to be carried on or for the members to carry it on in
partnership.
ENRIQUE CLEMENTE,plaintiffappellee,
vs.
DIONISIO GALVAN,defendantappellee.
JOSE ECHEVARRIA,intervenorappellant.

Facts:

>On June 6, 1931, plaintiff and defendant organized a civil partnership which they named "Galvan y Compaia" to
engage in the manufacture and sale of paper and other stationery. They agreed to invest therein a capital of
P100,000, but as a matter of fact they did not cover more than onefifth thereof, each contributing P10,000.

>A year after such organization, the plaintiff commenced the present case in the abovementioned court to ask for
the dissolution of the partnership and to compel defendant to whom the management thereof was entrusted to
submit an accounting of his administration and to deliver to him his share as such partner.

>In his answer defendant expressed his conformity to the dissolution of the partnership and the liquidation of its
affairs

>Before final liquidation of its affairs, Plaintiffappelle filed a petition asking the court to order the delivery of certain
machines to him and to charge their value against his portion in the partnership. This was granted by the court.
However, before Plaintiff could take actual possession of said machines, and upon strong opposition of Defendant,
the court suspended the effects of its previous order.

In the meantime, judgments for moneyrecovery cases against the partnership were rendered. To avoid the
attachment and subsequent sale of the machines by the sheriff for the satisfaction of said judgments, Plaintiff
mortgaged the machines to his nephew. When the terms in the mortgage expired, Plaintiffs nephew commenced a
case to collect his mortgage credit. However this was dismissed thus the present petition.

ISSUE: Can either of the partners claim ownership over property belonging to the partnership before liquidation?

Held: No. (Article 1811)

It is clear that plaintiff could not obtain possession of the machines in question. The constructive possession
deducible from the fact that he had the keys to the place where the machines were found (Ylaya Street Nos.
705707), as they had been delivered to him by the receiver, does not help him any because the lower court
suspended the effects of the other whereby the keys were delivered to him a few days after its issuance and
thereafter revoked it entirely in the appealed decision.

If he did not have actual possession of the machines, he could not in any manner mortgage them, for while it is true
that the oftmentioned deed of mortgage Exhibit B was annotated in the registry of property, it is no less true the
machines to which it refers are not the same as those in question because the latter are on Ylaya Street Nos.
705707 and the former are on Singalong Street No. 1163.

The machines in contention originally belonged to the defendant and from him were transferred to the partnership.
This being the case, said machines belong to the partnership and not to him, and shall belong to any partner until
partition is effected according to the result thereof after the liquidation.

MAURO LOZANA,plaintiffappellee,
vs.
SERAFIN DEPAKAKIBO,defendantappellant.W

Facts:

>On November 16, 1954 plaintiff Mauro Lozana entered into a contract with defendant Serafin Depakakibo wherein
they established a partnership capitalized at the sum of P30,000, plaintiff furnishing 60% thereof and the defendant,
40%, for the purpose of maintaining, operating and distributing electric light and power in the Municipality of
Dumangas, Province of Iloilo, under a franchise issued to Mrs. Piadosa Buenaflor.

> However, the franchise or certificate of public necessity and convenience in favor of the said Mrs. Piadosa
Buenaflor was cancelled and revoked by the Public Service Commission on May 15, 1955.

> Evidently because of the cancellation of the franchise in the name of Mrs. Piadosa Buenaflor, plaintiff herein
Mauro Lozana sold a generator, Buda (diesel), 75 hp. 30 KVA capacity, Serial No. 479, to the new grantee Olimpia
D. Decolongon, by a deed dated October 30, 1955 (Exhibit "C").(no liquidation)

>Defendant Serafin Depakakibo, on the other hand, sold one Crossly Diesel Engine, 25 h. p., Serial No. 141758, to
the spouses Felix Jimenea and Felina Harder, by a deed dated July 10, 1956.

>Lozana brought action against Depakakibo alleging the latter wrongfully detained the Generator Buda and wooden
posts to which he is entitled to the possession of. Lozano prayed the properties be delivered back to him.

>CFI ordered sheriff to take possession of the properties and the delivery thereof to Lozano. Depakakibo alleged
properties have been contributed to the partnership and therefor he is not unlawfully detaining them. In addition,
Lozano sold his contribution to partnership in violation of terms of their agreement.

> CFI declared Lozano owner of and entitled to the equipment. Depakakibo appealed decision to the Supreme
Court.

ISSUE: W/N partnership is void or the act of the partnership in furnishing electric current to the franchise holder
without previous approval of Public Service Commission render the partnership void? W/N disposal of contribution of
parties is allowed?

Held:No

As it appears from the above stipulation of facts that the plaintiff and the defendant entered into the contract of
partnership, plaintiff contributing the amount of P18,000, and as it is not stated therein that there has been a
liquidation of the partnership assets at the time plaintiff sold the Buda Diesel Engine on October 15, 1955, and since
the court below had found that the plaintiff had actually contributed one engine and 70 posts to the partnership, it
necessarily follows that the Buda diesel engine contributed by the plaintiff had become the property of the
partnership.

As properties of the partnership, the same could not be disposed of by the party contributing the same without the
consent or approval of the partnership or of the other partner. (Clementevs.Galvan, 67 Phil., 565).

The fact of furnishing the current to the holder of the franchise alone, without the previous approval of the Public
Service Commission, does not per se make the contract of partnership null and void from the beginning and render
the partnership entered into by the parties for the purpose also void and nonexistent.

Under the circumstances, therefore, the court erred in declaring that the contract was illegal from the beginning and
that parties to the partnership are not bound therefor, such that the contribution of the plaintiff to the partnership did
not pass to it as its property. It also follows that the claim of the defendant in his counterclaim that the partnership be
dissolved and its assets liquidated is the proper remedy, not for each contributing partner to claim back what he had
contributed.

THE LEYTESAMAR SALES CO., and RAYMUNDO TOMASSI,petitioners,W


vs.
SULPICIO V. CEA, in his capacity as Judge of the Court of First Instance of Leyte and OLEGARIO
LASTRILLA,respondents.

Facts:

>A suit for damages by the Plaintiffpetitioner LeyteSamar Sales Co. (hereinafter called LESSCO) and Raymond
Tomassi against the Far Eastern Lumber & Commercial Co. (unregistered commercial partnership hereinafter called
FELCO), Arnold Hall, Fred Brown and Jean Roxas, judgment against defendants jointly and severally for the amount
of P31,589.14 plus costs was rendered on October 29, 1948.

>The decision having become final, the sheriff sold at auction on June 9, 1951 to Robert Dorfe and Pepito Asturias
"all the rights, interests, titles and participation" of the defendants in certain buildings and properties described in the
certificate, for a total price of eight thousand and one hundred pesos.

>But on June 4, 1951 Respondent Olegario Lastrilla filed in the case a motion, wherein he claimed to be the owner
by purchase on September 29, 1949, of all the "shares and interests" of defendant Fred Brown in the FELCO, and
requested "under the law of preference of credits" that the sheriff be required to retain in his possession so much of
the deeds of the auction sale as may be necessary "to pay his right".

>The judge in his order of June 13, 1951, granted Lastrilla's motion by requiring the sheriff to retain 17 per cent of
the money "for delivery to the assignee, administrator or receiver" of the FELCO.

>And on motion of Lastrilla, the court on August 14, 1951, modified its order of delivery and merely declared that
Lastrilla was entitled to 17 per cent of the properties sold

>It is from this declaration and the subsequent orders to enforce it1that the petitioners seek relief by certiorari

Issue: W/N respondent Lastrilla is a partner of FELCO having purchased the share and interest of defendant FRED
BROWN after CFI rendered unfavorable judgment, but prior to the auction sale, hence he can claim to the proceeds
of the sale?

Held: No

The record is not very clear, but there are indications, and we shall assume for the moment, that Fred Brown (like
Arnold Hall and Jean Roxas) was a partner of the FELCO, was defendant in Civil Case No. 193as such partner,and
that the properties sold at auction actually belonged to the FELCO partnership and the partners.

We shall also assume that the sale made to Lastrilla on September 29, 1949, of all the shares of Fred Brown in the
FELCO was valid. (Remember that judgment in this case was entered in the court of first instance a year before.)

The result then, is that on June 9, 1951 when the sale was effected of the properties of FELCO to Roberto Dorfe and
Pepito Asturias, Lastilla was already a partner of FELCO.

Now, does Lastrilla have any proper claim to the proceeds of the sale? If he was a creditor of the FELCO, perhaps
or maybe. But he was no. The partner of a partnership is not a creditor of such partnership for the amount of his
shares. That is too elementary to need elaboration.

TECK SEING AND CO., LTD.,petitionerappellee.


SANTIAGO JO CHUNG, ET AL.,partners,
vs.
PACIFIC COMMERCIAL COMPANY, ET AL.,creditorsappellants. W

Facts:

>Following the presentation of an application to be adjudged an insolvent by the "Sociedad Mercantil, Teck Seing &
Co., Ltd.," the creditors, the Pacific Commercial Company, Piol & Company, Riu Hermanos, and W. H. Anderson &
Company, filed a motion in which the Court was prayed to enter an order:
> "(A) Declaring the individual partners as described in paragraph 5 parties to this proceeding (B) to require each of
said partners to file an inventory of his property in the manner required by section 51 of Act No. 1956 and (C) that
each of said partners be adjudicated insolvent debtors in this proceeding."

>The contention of the creditors and appellants is that the partnership contract established a general partnership.

> The trial judge first granted the motion.

>Opposed by the counsel upon the Contention that Teck Seing & Co., Ltd., is"una sociedad mercantil "de facto"
solamente"(only ade factocommercial association), and that the decision of the Supreme court in the case of
HungManYocvs. KiengChiongSeng [1906], 6 Phil., 498), is controlling.That the partnership in question was
merelyde factoand that, therefore, giving effect to the provisions of article 120 of the Code of Commerce, the right
of action was against the persons in charge of the management of the association.

>Thus, subsequently, on opposition being renewed, denied it.

>It is from this last order that an appeal was taken in accordance with section 82 of the Insolvency Law.

Issue: whether or not Teck Seing & Co. is a de facto commercial association thus right of action must be against the
person in charge of the management of the association and not against the association and the members thereof?

Held: No

Laying the facts of the case of HungManYocvs. KiengChiongSeng,supra, side by side with the facts before us, a
marked difference is at once disclosed. In the cited case, the organization of the partnership was not evidenced by
any public document here, it is by a public document.

In the cited case, the partnership naturally could not present a public instrument for record in the mercantile registry
here, the contract of partnership has been duly registered. But the two cases are similar in that the firm name failed
to include the name of any of the partners.

On the question of whether the fact that the firm name "Teck Seing & Co., Ltd." 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,
Professor Jose A. Espiritu, asamicus curi, states:

My opinion is that such a fact alone cannot and will not be a sufficient cause of preventing the formation of
a general partnership, especially if the other requisites are present and the requisite regarding registration
of the articles of association in the Commercial Registry has been complied with, as in the present case.

I do not believe that the adoption of a wrong name is a material fact to be taken into consideration in this
case

first, because the mere fact that a person uses a name not his own does not prevent him from being bound
in a contract or an obligation he voluntarily entered into

second, because such a requirement of the law is merely a formal and not necessarily an essential one to
the existence of the partnership, and as long as the name adopted sufficiently identity the firm or
partnership intended to use it, the acts and contracts done and entered into under such a name bind the
firm to third persons and third, because the failure of the partners herein to adopt the correct name
prescribed by law cannot shield them from their personal liabilities, as neither law nor equity will permit
them to utilize their own mistake in order to put the blame on third persons, and much less, on the firm
creditors in order to avoid their personal possibility.

Here, the intention of the persons making up Teck Seing & co., Ltd. was to establish a partnership which they
erroneously denominated a limited partnership. If this was their purpose, all subterfuges resorted to in order to
evade liability for possible losses, while assuming their enjoyment of the advantages to be derived from the relation,
must be disregarded.

The partners who have disguised their identity under a designation distinct from that of any of the members of the
firm should be penalized, and not the creditors who presumably have dealt with the partnership in good faith.

Articles 127 and 237 of the Code of Commerce make all the members of the general copartnership liable personally
andin solidumwith all their property for the results of the transactions made in the name and for the account of the
partnership. Section 51 of the Insolvency Law, likewise, makes all the property of the partnership and also all the
separate property of each of the partners liable. In other words, if a firm be insolvent, but one or more partners
thereof are solvent, the creditors may proceed both against the firm and against the solvent partner or partners, first
exhausting the assets of the firm before seizing the property of the partners.
PHILIPPINE NATIONAL BANK,plaintiffappellee,
vs.
SEVERO EUGENIO LO, ET AL.,defendants.
SEVERIO EUGENIO LO, NG KHEY LING and YEP SENG,appellants
Facts:
>In September 1916, Severo Eugenio Lo and Ling, together with Ping, Hun, Lam and Peng formed a commercial
partnership under the name of Tai Sing and Co., with a capital of P40,000 contributed by said partners. The firm
name was registered in the mercantile registrar in the Province of Iloilo. Ping, in the articles of partnership, was
assigned as the general manager.
>However, in 1917, he executed a special power of attorney in favor of Lam to act in his behalf as the manager of
the firm. Subsequently, Lam obtained a loan from PNB the loan was under the firms name. In the same year, Ping
died in China. From 1918 to 1920, the firm, via GM Lam, incurred other loans from PNB. The loans were not
objected by any of the partners.
>Later, PNB sued the firm for nonpayment. Lo, in his defense, argued that he cannot be liable as a partner because
the partnership, according to him, is void that it is void because the firms name did not comply with the requirement
of the Code of Commerce that a firm name should contain the names of all of the partners, of several of them, or
only one of them.
>Lo also argued that the acts of Lam after the death of Ping is not binding upon the other partners because the
special power of attorney shall have already ceased.
Issue:Whether or not Lo is correct in both arguments.
Held:No.
The anomalous adoption of the firm name above noted does not affect the liability of the general partners to third
parties under Article 127 of the Code of Commerce.
The object of the Code of Commerce in requiring a general partnership to transact business under the name of all its
members, of several of them, or of one only, is to protect the public from imposition and fraud it is for the protection
of the creditors rather than of the partners themselves.
It is unenforceable as between the partners and at the instance of the violating party, but not in the sense of
depriving innocent parties of their rights who may have dealt with the offenders in ignorance of the latter having
violated the law and that contracts entered into by a partnership firm defectively organized are valid when voluntarily
executed by the parties, and the only question is whether or not they complied with the agreement.
Therefore, Lo cannot invoke in his defense the anomaly in the firm name which they themselves adopted. Lo was
not able to prove his second argument. But even assuming arguendo, his second contention does not deserve merit
because (a) Lam, in acting as a GM, is also a partner and his actions were never objected to by the partners, and (b)
it also appeared from the evidence that Lo, Lam and the other partners authorized some of the loans.
NOTE:Under the New Civil Code, a firm name may or may not include the name of one or more of the partners
(Article 1815).
NICOLAS COPITCO,plaintiffappellee,
vs.
PEDRO YULO,defendantappellant.

Facts:

> Before February, 1903, Florencio Yulo and Jaime Palacios were partners in the operation of a sugar estate in
Victorias, Island of Negros, and had commercial dealings with a Chinaman named DySianco, who furnished them
with money and goods, and used to buy their crop of sugar.

> In February, 1903, the defendant, Pedro Yulo, father of the said Florencio, took charge of the latter's interest in the
abovementioned partnership, and he became a general partner with the said Jaime Palacios in the same business,
and he continued as such partner until about the end of 1904, dealing with DySianco in the same manner as the old
partnership had dealt with the latter.

> He(COpitco) then finds that the balance due from the firm Pedro Yulo and Jaime Palacios was 1,638.40 pesos,
Philippine currency, and orders judgment against the defendant, Pedro Yulo, for the entire amount, with interest.

ISSUE: Whether Yulo is liable for the entire debt of the partnership.

Held: No.

The partnership here was a civil partnership as distinguished from a mercantile partnership. The partners are
therefore not liable each for the whole debt of the partnership. (in a mercantile partnership, each partner is liable for
the whole debt)

Being a civil partnership, by the express provisions of articles 1698 and 1137 of the Civil Code, the partners are not
liable each for the whole debt of the partnership. The liability ispro rataand in this case Pedro Yulo is responsible to
plaintiff for only onehalf of the debt. The fact that the other partner, Jaime Palacios, had left the country can not
increase the liability of Pedro Yulo.

The judgment of the court below is reversed and judgment is ordered in favor of the plaintiff and against the
defendant, Pedro Yulo, for the sum of P819.20 pesos, Philippine Currency, with interest thereon at the rate of 6 per
cent per annum from the 12th day of January, 1905, and the costs of the Court of First Instance. No costs will be
allowed to either party in this court. So ordered.
ISLAND SALES, INC.,plaintiffappellee,
vs.
UNITED PIONEERS GENERAL CONSTRUCTION COMPANY, ET. AL defendants. BENJAMIN C.
DACO,defendantappellant.

Facts:

On April 22, 1961, the defendant company, a general partnership duly registered under the laws of the Philippines,
purchased from the plaintiff a motor vehicle on the installment basis and for this purpose executed a promissory note
for P9,440.00, payable in twelve (12) equal monthly installments of P786.63, the first installment payable on or
before May 22, 1961 and the subsequent installments on the 22nd day of every month thereafter, until fully paid,
with the condition that failure to pay any of said installments as they fall due would render the whole unpaid balance
immediately due and demandable.

Having failed to receive the installment due on July 22, 1961, the plaintiff sued the defendant company for the
unpaid balance amounting to P7,119.07. Benjamin C. Daco, Daniel A. Guizona, Noel C. Sim, Romulo B. Lumauig,
and Augusto Palisoc were included as codefendants in their capacity as general partners of the defendant
company.

Upon motion of Island Sales, Lumauig was removed as a defendant.


United Pioneers lost the civil case and the trial court rendered judgment ordering United Pioneers to pay the
outstanding balance plus interest and costs. It further decreed that the remaining 4 codefendants shall pay Island
Sales in case United Pioneers property will not be enough to satisfy its indebtedness to Island Sales.
Issue: whether or not the dismissal of the complaint to favor one of the general partners of a partnership increases
the joint and subsidiary liability of each of the remaining partners for the obligations of the partnership?
Held: No
Article 1816 of the Civil Code provides:
Art. 1816. All partners including industrial ones, shall be liablepro ratawith all their property and after all the
partnership assets have been exhausted, for the contracts which may be entered into in the name and for the
account of the partnership, under its signature and by a person authorized to act for the partnership. However, any
partner may enter into a separate obligation to perform a partnership contract.

In the instant case, there were five (5) general partners when the promissory note in question was executed for and
in behalf of the partnership. Since the liability of the partners is pro rata, the liability of the appellant Benjamin C.
Daco shall be limited to only onefifth (1/5) of the obligations of the defendant company. The fact that the complaint
against the defendant Romulo B. Lumauig was dismissed, upon motion of the plaintiff, does not unmake the said
Lumauig as a general partner in the defendant company. In so moving to dismiss the complaint, the plaintiff merely
condoned Lumauigs individual liability to the plaintiff.

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