De Los Reyes v. Lukban and Borja, 35 Phil. 757 G.R. No. 10695, December 15, 1916 FACTS: Teodor Teodoro o delo deloss Reye Reyess bro brough ughtt a suit suit in in the the Court Court of First First Instanc Instance e of Ma ni la ag ai ns t Vi ce nt e Lu kba n an d Es pi ri di on B or or ja j a t o r ec ec ov ov er er f ro ro m t h e m p a y m e n t f o r t h e m e r c h a n d i s e t h e y b o u g h t o n c r e d i t b y t h e f i r m L uk uk ba ba n & Borja from the plaintiff's ship supply store named La In dus tri a. A judgm judgmen entt was was rend render ered ed,, o on n which which the the def defen enda dant nt firm firm was ord ere d to pay the sum of P1, 086 .65 wi th in ter est th er eo n am ou nti ng to P1,102 P1,102.95 .95.. Esper Esperidi idion on Borj Borja a paid paid P52 P522.6 2.69. 9. Teodor Teodoro o delo deloss Reye Reyess later later on brou gh t a su it ag ai ns t Lu kb an & Borj a t o r eco ver the sum of P85 3, the rema remain ining ing unpa unpaid id bala balance nce plus plus lega legall inter interes est. t. Defe nda nt Luk ban con ten ded t ha ha t h e i s n ot o t l ia i a bl bl e, e , h e w as a s m er er el el y a n i n d u s t r i a l p a r t n e r i n t h e f i r m a n d i t w a s B o r j a w h o f u r n i s h e d t h e capital. A s i t w a s p r o v e n o n t r i a l t h a t t h e p a r t n e r s h i p h a s n o m o r e remaining property, as it is alre alread ady y insol insolve vent nt,, the the cour courtt rend render ered ed judg judgme ment nt hol din g B orj a a nd Luk ban joi ntl y a nd sev eral ly li able to pay the sum to plaintiff de los Reyes. ISSUE: ISSUE: Is a creditor entitled to collect individually from the partners the amount of the debt that the dissolved partne rshi p ow ed at the time of i ts disso dissolu luti tion on? ? RULING: Yes. Yes. The The cre creditor itor has has the the right ight to recov ecover er from rom the partn artner erss ther thereo eoff i n t h e m a n n e r p r o v i d e d b y A r t . 1 2 7 o f t h e C o d e o f C o m m e r c e ( n o w gove govern rned ed by Art. rt. 181 1816 6 of of the the Civ Civilil Code Code of the the Phi Phililipp ppin ines es). ). Art. rt. 127 127 of the the Cod Code e of Commerce provides:"All the members of the general co-partnership, be they or be theynot managing partners of the same, are personally and severally liablewith all their properties for the results of the transactions made in the na me and for the acc oun t o f t he par tne rsh ip , u nde r t he sig nat ure of the latte latter, r, and and by the the pers person on auth author oriz ized ed to make make use use thereof". PACIFIC PACIFIC COMMERCI COMMERCIAL AL COMPA COMPANY NY vs. ABOIT ABOITIZ IZ &MARTIN MARTINEZ, EZ,ET AL., 48 Phil.841. G.R. G. R. No. No . L-25 L- 2500 007, 7, Marc Ma rch h 2, 1926 19 26 FACTS: Arnaldo F. de Silva, Guillermo Aboitiz, Vidal Aboitiz and Jose Martinez formed a regular, collective, mercantile partnership with a capital of P40,000 as contributed equally by de Silva and the two Aboitiz while Jose Martinez was an in du st ri al pa rtn er wi th no ca pi tal co nt ri bu ti on . As provid provided ed in the the article article of partn partners ership hip,, Mart Martinez inez was to receiv receive e 30% 30% of of the the profits and shall also be responsible for l osses which should not exceed 30%. 30%. The partne partnersh rship, ip, throug through h Guil Guiller lermo mo Aboit Aboitiz, iz, execu executed ted a prom promiss issory ory no te in fa vo r of Pac if ic Co mm er ci al Co mp any in the sum of P23,168.71 wi th interest at 12% per annum. They executed a ch attel mortgage to secure the note. D u e t o th th ei e i r fa fa ili l u re re to t o p ay ay th t h e ir i r o bl bl i ga ga ti ti o n, n, t he he c ha ha tt t t el el m o r t g a g e w a s f o r e c l o s e d a n d s o l d a t P 2 , 0 0 0 w h i c h w a s p a i d o v e r t o plai plaint ntif ifff Pac Pacif ific ic Co. Co. Due Due to non non pay payme ment nt of the the rem remai aini ning ng bala balanc nce, e, plai plaint ntiff iff bro ugh t a sui t for recovery of unpaid balance with interest against the partnership. A judgment was rendered in favor of plaintiff and the partnership was ordered to pay the sum of P27,951.68 and the interest amou amount ntin ing g to to P21 ,16 8.7 1 a t 10% per ann um unt il ful ly pai d pl us fees . T he jud gmen t furt furthe herr prov provid ided ed that that the the exec execut utio ion n should first issue against the property of the partnership Aboitiz & Martinez and in the event of the insolvency of the partnership, it might issue against the property of de Silva and Aboitiz and in the event of insolvency, then against the property of Jose Martinez. Defendant Martinez appealed appealed to the decision and invoked that under Art.141 of the Code of Commerce, he is merely an industrial partner, thus, he cannot be held liable for the partnership's debt. ISSUE: Is ISSUE: Is an industrial partner liable for partnership's debt? RULING Yes. RULING Yes. Th e l ang uag e o f Art. 127 of the Cod e of Com mer ce is cle ar and and spe speci cifi fic c and and must must be take taken n to to mea mean n exa exact ctly ly what it says, namely, that a l l t h e m e m b e r s o f a g e n e r a l c o p a r t n e r s h i p a r e l i a b l e w i t h a l l t h e i r propert y for th e resu lts of the dul y autho rize d tran sacti ons ma de in th e name name and and for for the the acco accoun untt of the the partnership. Defendant's reliance to Art. 141 is misplaced. This article of the Code of Commerce relates merely to the distribution of losses among partners themselves in the settlement of the partnership affairs and has no obligations to third parties. Island Sales, Inc. v. United Pioneers General Construction Company, Et. AlG.R. No. L-22493, July 31, 1975 FACTS: United Pioneers General Construction Company is a general partnership formed by Benjamin Daco, Daniel Guizona, Noel Sim, Augusto Palisoc and Romulo Lumauig. In 1961, United Pioneers purchased by installment a motor vehicle from Island Sales, I nc. United Pioneers defaulted in its payment hence it was sued and the 5 partners were impleaded as co-defendants. 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 co-defendants co-defendants shall pay Island Sales in case United Pioneers’ property will not be enough to satisfy its indebtedness to Island Sales.
ISSUE: What is the extent of the liability of the partners considering that one partner was removed as a co-defendant on motion of Island Sales? HELD: Their liability is pro-rata pursuant to Article 1816 of the Civil Code. But is should be noted that since there were 5 partners when the purchase was made in behalf of the partnership, the liability of each partner should be 1/5th (of the company’s obligation) each. The fact that the complaint against Lumauig was dismissed, upon motion of the Island Sales, does not unmake Lumauig as a general partner in the company. In so moving to dismiss the complaint, Island Sales merely condoned Lumauig’s individual liability to them.
Island sales inc vs. United Pioneers genereal construction Facts: United Pioneers General Construction Company is a general partnership formed by Benjamin Daco, Daniel Guizona, Noel Sim, Augusto Palisoc and Romulo Lumauig. In 1961, United Pioneers purchased by installment a motor vehicle from Island Sales, Inc. United Pioneers defaulted in its payment hence it was sued and the 5 partners were impleaded as co-defendants. 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 co-defendants shall pay Island Sales in case United Pioneers’ property will not be enough to satisfy its indebtedness to Island Sales. ISSUE: What is the extent of the liability of the partners considering that one partner was removed as a codefendant on motion of Island Sales? HELD: Their liability is pro-rata pursuant to Article 1816 of the Civil Code. But is should be noted that since there were 5 partners when the purchase was made in behalf of the partnership, the liability of each partner should be 1/5 (of the company’s obligation) each. The fact that the complaint against Lumauig was dismissed, upon motion of the Island Sales, does not unmake Lumauig as a general partner in the company. In so moving to dismiss the complaint, Island Sales merely condoned Lumauig’s individual liability to them. th
