LA COMPAÑIA MARITIMA v.

MUÑOZ
G.R. No. L-3704; December 12, 1907

FACTS:
         
On the 31st day of March, 1905, the defendants Francisco Muñoz, Emilio Muñoz, and Rafael Naval
formed on ordinary general mercantile partnership under the name of Francisco Muñoz & Sons for
the purpose of carrying on the mercantile business in the Province of Albay which had formerly been
carried on by Francisco Muñoz.
In the articles of partnership, it is expressly stated that they have agreed to form, and do form, an
ordinary, general mercantile partnership. The object of the partnership, as stated in the fourth
paragraph of the articles, is a purely mercantile one and all the requirements of the Code of
Commerce in reference to such partnership were complied with. The articles of partnership were
recorded in the mercantile registry in the Province of Albay.
Rafael Naval was entitled by the articles of agreement to a fixed salary of P2,500 as long as he was
in charge of the branch office established at Ligao
The argument of the appellees seems to be that, because no yearly or monthly salary was assigned
to Emilio Muñoz, he contributed nothing to the partnership and received nothing from it.

ISSUE:
          Whether Muñoz is liable to third person even if he is an industrial partner

RULING
Yes, Muñoz is liable to third persons even if he is an industrial partner.
The Supreme Court held that in limited partnership, the Code of Commerce recognizes a difference
between general and special partners, but in a general partnership there is no such distinction — all
the members are general partners. The fact that some may be industrial and some capitalist partners
does not make the members of either of these classes alone such general partners.
         
Our construction of the article is that it relates exclusively to the settlement of the partnership affairs
among the partners themselves and has nothing to do with the liability of the partners to third
persons; that each one of the industrial partners is liable to third persons for the debts of the firm; that
if he has paid such debts out of his private property during the life of the partnership, when its affairs
are settled he is entitled to credit for the amount so paid, and if it results that there is not enough
property in the partnership to pay him, then the capitalist partners must pay him.

Our conclusion is upon this branch of the case that neither on principle nor on authority can the
industrial partner be relieved from liability to third persons for the debts of the partnership
MACDONALD vs. NATIONAL CITY BANK OF NEW YORK [G.R. No. L-7991. May 21, 1956.] 
 Facts:
 
Stasikinocey is a partnership formed by da Costa, Gorcey, Kusik and Gavino. It was denied
registration by the SEC due to a confusion between the partnership and Cardinal Rattan. Cardinal
Rattan is the business name or style used by Stasikinocey. Da Costa and Gorcey are the general
partners of Cardinal Rattan. Moreover, Da Costa is the managing partner of Cardinal Rattan.
Stasikinocey had an overdaft account with Nationa City Bank, which was later converted into an
ordinary loan due the partnership’s failure in paying its obligation. The ordinary loan was secured by a
chattel mortgage over 3 vehicles. During the subsistence of the loan, the vehicles were sold to
MacDonald and later on, MacDonald sold 2 of the 3 vehicles to Gonzales. The bank brought an
action for recovery of its credit and foreclosure of the chattel mortgage upon learning of these
transactions. Held: While an unregistered commercial partnership has no juridical personality,
nevertheless, where two or more persons attempt to create a partnership failing to comply with all the
legal formalities, the law considers them as partners and the association is a partnership in so far as it
is a favorable to third persons, by reason of the equitable principle of estoppel. Where a partnership
not duly organized has been recognized as such in its dealings with certain persons, it shall be
considered as “partnership by estoppel” and the persons dealing with it are estopped from denying its
partnership existence.
 
Issue: WON the partnership, Stasikinocey is estopped from asserting that it does not have juridical
personality since it is an unregistered commercial partnership
 
Ruling: Yes. While an unregistered commercial partnership has no juridical personality, nevertheless,
where two or more persons attempt to create a partnership failing to comply with all the legal
formalities, the law considers them as partners and the association is a partnership in so far as it is a
favorable to third persons, by reason of the equitable principle of estoppel. Da Costa and Gorcey
cannot deny that they are partners of the partnership Stasikinocey, because in all their transactions
with the National City Bank they represented themselves as such. McDonald cannot disclaim
knowledge of the partnership Stasikinocey because he dealt with said entity in purchasing two of the
vehicles in question through Gorcey and Da Costa. The sale of the vehicles to MacDonald being void,
the sale to Gonzales is also void since a buyer cannot have a better right than the seller. As was held
in Behn Meyer & Co. vs. Rosatzin, where a partnership not duly organized has been recognized as
such in its dealings with certain persons, it shall be considered as “partnership by estoppel” and the
persons dealing with it are estopped from denying its partnership existence. If the law recognizes a
defectively organized partnership as de facto as far as third persons are concerned, for purposes of
its de facto existence it should have such attribute of a partnership as domicile.
G.R. No. L-11840 December 10, 1963
ANTONIO C. GOQUIOLAY, ET AL., plaintiffs-appellants, vs. WASHINGTON Z. SYCIP, ET AL.,
defendants-appellees RESOLUTION ON THE MOTION FOR RECONSIDERATION
FACTS: In the main decision, the Supreme Court upheld the validity of the sale of the lands owned by
the partnership Goquiolay & Tan Sin An, made by Kong Chai Pin, Tan Sin An’s widow. The sale was
executed in Kong Chai Pin’s dual capacity as Administratrix of her husband’s estate and as partner in
lieu of her husband. In Goquiolay’s motion for reconsideration, he insisted that Kong Chai Pin never
became more than a limited partner. He also contended that she is incapacitated by law to manage
the affairs of the partnership and that the sale should be set aside because it was executed with the
intent to defraud appellant of his share in the properties sold. The appellant admitted that he was
asked if he can let Kong Chai Pin continue to manage the properties as she had no other means of
income. He said that “she could just do it and besides I am not interested in agricultural lands. I
allowed her to take care of the properties in order to help her and because I believe in God and
wanted to help her”. The appellant subsequently ratified his testimony and stated that the plantation
was being occupied at that time by the widow and they are receiving quite a lot of benefit from the
plantation.
ISSUE: Did Kong Chai Pin have the authority to sell the disputed properties? Is the sale valid?
Ruling: The widow was no a mere agent , because she had become a partner upon her partner’s
death, as expressly provided in the articles of co-partnership. Even more, granting that by succession
to her husband, the widow only became a limited partner, Goquiolay’s authorization to manage the
partnership was proof that he considered and recognized her as general partner. Under Article 148,
last paragraph of the Code of Commerce, the appellant could not empower the widow, if she were
only a limited partner, to administer the properties of the firm, even as a mere agent. By seeking
authority to manage partnership property, Tan Sin An's widow showed that she desired to be
considered a general partner. By authorizing the widow to manage partnership property (which a
limited partner could not be authorized to do), Goquiolay recognized her as such partner, and is now
in estoppel to deny her position as a general partner, with authority to administer and alienate
partnership property. In addition, Article XII of the Articles of Co-Partnership involved expressly
stipulated that in the event of the death of any of the partners at any time before the expiration of said
term, the copartnership shall not be dissolved but will have to be continued and the deceased partner
shall be represented by his heirs or assigns in said co-partnership. The Articles did not provide that
the heirs of the deceased would be merely limited partner; on the contrary they expressly stipulated
that in case of death of either partner "the co-partnership ... will have to be continued" with the heirs
or assigns. It certainly could not be continued if it were to be converted from a general partnership
into a limited partnership, since the difference between the two kinds of associations is fundamental;
and specially because the conversion into a limited association would leave the heirs of the deceased
partner without a share in the management. Hence, the contractual stipulation does actually
contemplate that the heirs would become general partners rather than limited ones. Since the sale by
the widow was in conformity with the express objective of the partnership, "to engage * * * in buying
and selling real estate" as provided in Art IV, No. 1 of the Articles of Copartnership, it cannot be
maintained that the sale was made in excess of her powers as general partner.
Singsong v. Isabela Sawmill G.R. No. L-27343, February 28, 1979, Fernandez, J.

Facts: In 1951, defendants entered into a contract of partnership under the firm name “Isabela
Sawmill”. In 1956 the plaintiff sold to the partnership a motor truck and two tractors. The partnership
was not able to pay their whole balance even after demand was made. One of the partners withdrew
from the partnership but instead of terminating the said partnership it was continued by the two
remaining partners under the same firm name. Plaintiffs also seek the annulment of the assignment
of right with chattel mortgage entered into by the withdrawing partner and the remaining partners. The
appellants contend that the chattel mortgage may no longer be nullified because it had been judicially
approved and said chattel mortgage had been judicially foreclosed.
 
Issue: Whether the withdrawal of one of the partners dissolved the partnership.
 
Ruling:
 
 It does not appear that the withdrawal of the partner was not published in the newspapers. The
appellees and the public in general had a right to expect that whatever, credit they extended to the
remaining partners could be enforced against the properties of the partnership. The withdrawing
partner cannot be relieved from her liability to the creditor of the partnership due to her own fault by
not insisting on the liquidation of the partnership. Though she had acted in good faith, the appellees
also acted in good faith in extending credit to the partnership. Where one of two innocent persons
must suffer, that person who gave occasion for the damages to be caused must bear the
consequences. Technically, the partnership was dissolved by the withdrawal of one of the partners.
Through her acts of entering into a memorandum with the remaining partners misled the creditors that
they were doing business with the partnership. Hence, from the order of the lower court ordering the
withdrawing partner to pay the plaintiffs, she is thus entitled for reimbursement from the remaining
partners.
DE LA ROSA V. ORTEGA GO-COTAYGR No.L-24243. January 15, 1926 (48 Phil 605)

FACTS: Go Lio and Vicente Go Sengco formed a partnership and opened a store in Nueva Ecija.
Later onGo Lio went to China and Vicente Go Sengco died and his son Enrique Ortega Go-Cotay
tookcharge of the business. Go Lio died in China, one of his children went to the Philippines and filed
a petition for the appointment of Ildefonso de la Rosa as administrator of the intestate estate of GoLio
which was granted by CFI of Nueva Ecija. Ildefonso, in his capacity as administrator of theintestate
estate of Go Lio, requested Enrique to wind up the business and deliver to him the
portioncorresponding to the deceased Go Lio. Enrique denied the petition, alleging the business was
hisexclusively. Ildefonso filed with CFI of Nueva Ecija a complaint against Enrique in which he prayed
that Enrique be sentenced to deliver to him one half of the property of said partnership. OnAugust 3,
1918, the CFI of Nueva Ecija appointed three persons as commissioners to make aninventory,
liquidate and determine the one-half belonging to the plaintiff of all the property of the partnership. On
August 9, 1918, in order to prevent one of the commissioners from assuming theoffice of receiver,
pursuant to the order of the court dated August 3, 1918, the defendant filed a bond in the sum of
P10,000 which authorized him to continue in possession of the property. From1913-1917 the
partnership had a profit of 25k. Defendant filed an appeal with the SC but wasremanded to the court
of origin for being immature and with instruction to enter a final order withthe liquidation of the
partnership. Lower court appointed three commissioners and discovered thatthe partnership suffered
a net loss of 89k from 1919-1922. Since there was no profit plaintiff hadnothing to recover.
Issue:
 WON the partnership should bear the losses incurred.
Ruling:
 No.The Court held that the defendant was a receiver. Prior August 3, 1918, defendantassumed
complete responsibility for the business by objecting to the appointment of a receiver as prayed for by
the plaintiff, and giving a bond therefore. Until that date his acts were those of amanaging partner,
binding against the partnership; but thereafter his acts were those of a receiver.A receiver has no
right to carry on and conduct a business unless he is authorized or directed bythe court to do so, and
such authority is not derived from an order of appointment to take and preserve the property. It
does not appear that the defendant as a receiver was authorized by thecourt to continue the business
of the partnership in liquidation. This being so, he is personallyliable for the losses that the business
may have sustained. The partnership must not, therefore, beliable for the acts of the defendant in
connection with the management of the business until August3, 1918, the date when he ceased to be
a member and manager in order to become receiver.