Clemente vsGalvan

Facts: plaintiff and defendant organized a civil partnership. Hardly a year after such organization, the plaintiff commenced the present case to ask for the dissolution of the partnership. On petition of the plaintiff a receiver and liquidator to take charge of the properties and business for the partnership while the same was not yet definitely dissolved, was appointed, the person chosen being Juan D. Mencarini. The latter was already discharging the duties of his office when the court, by virtue of a petition ex parte of the plaintiff, issued the order requiring said receiver to deliver to him (plaintiff) certain machines which were then at Nos. 705-707 Ylaya Street, Manila. To comply with said order, the receiver delivered to plaintiff the keys to the place where the machines were found, which was the same place where defendant had his home; but before he could take actual possession of said machines, upon the strong opposition of defendant, the court, on motion of the latter, suspended the effects of its order. In the meantime the judgment rendered in another case entitle Jose Echevarria vs. Enrique Clemente, for the recovery of a sum of money were made executor; and in order to avoid the attachment and subsequent sale of the machines by the sheriff for the satisfaction from the proceeds thereof of the judgments rendered in the case aforcited, plaintiff agreed with the intervenor to execute, as he in fact executed in favor of the latter, a deed of mortgage encumbering the machines described in said deed in which it is stated that "they are situated on Singalong Street No. 1163", which is a place entirely different from the house Nos. 705 and 707 on Ylaya Street hereinbefore mentioned. The one year agreed upon in the deed of mortgage for the fulfillment by the plaintiff of the obligation he had contracted with the intervenor, having expired, the latter commenced his to collect his mortgage credit. The intervenor, as plaintiff in the said case, obtained judgment in his favor because the defendant did not interpose any defense or objection. The machines which the intervenor said were mortgaged to him were then in factin custodia legis, as they were under the control of the receiver and liquidator Juan D. Mencarini. It was, therefore, useless for the intervenor to attach the same in view of the receiver's opposition; and the question having been brought to court, it decided that nothing could be done because the receiver was not a party to the case which the intervenor instituted to collect his aforesaid credit. The question ended thus because the intervenor did not take any other step until he thought of joining in this case as intervenor.___________________

Issue: WON plaintiff was able to take possession of the machines subject to the deed of mortgage?/ WON the mortgage valid? /Owner of the property (machines)?___________________

Ruling: No. From the foregoing facts, 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, as they had been delivered to him by the receiver, does not help him in any way 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. Furthermore, when he attempted to take actual possession of the machines, the defendant did not allow him to do so. Consequently, 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 oft-mentioned deed of mortgage 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. 705-707 and the former are on Singalong Street No. 1163. It cannot be said that Exhibit B-1, allegedly a supplementary contract between the plaintiff and the intervenor, shows that the machines referred to in the deed of mortgage are the same as those in dispute and which are found on Ylaya Street because said exhibit being merely a private document, the same cannot vary or alter the terms of a public document which is Exhibit B or the deed of mortgage._____________________Nevertheless, the evidence of record shows that the machines in contention originally belonged to the defendant and from him were transferred to the partnership Galvan y Compania. This being the case, said machines belongs to the partnership and not to him, and shall belong to it until partition is effected according to the result thereof after the liquidation.US V CLARINPedro Larin (complainant) delivered to Tarug a sum of money for the purpose of engaging in the buy and sell business of mangoes conducted by the latter and 2 others (Clarin and de Guzman). All of them agreed that the profits were to be divided equally between him and them. The business profited but Larin did not receive his share in the profits and the three men did not render account of the capital. Larin then filed a complaint for estafa and information was subsequently issued against Clarin which then brought about his conviction in the CFI. Hence, the instant appeal.Issue: Is the criminal action the proper recourse for the aggrieved party?Ruling:No. The P172.00 having been received by the partnership, the business commenced and profits accrued, the action that lies with the partner who furnished the capital for the recovery of his money is not a criminal action for estafa, but a civil one arising from the partnership contract for a liquidation of the partnership and a levy on its assets if there should be any.The then Penal Code provides that those who are guilty of estafa are those who, to the prejudice of another, shall appropriate or misapply any money, goods, or any kind of personal property which they may have received as a deposit on commission for administration or in any other producing the obligation to deliver or return the same, (as, for example, in commodatum, precarium, and other unilateral contracts which require the return of the same thing received) does not include money received for a partnership; otherwise the result would be that, if the partnership, instead of obtaining profits, suffered losses, as it could not be held liable civilly for the share of the capitalist partner who reserved the ownership of the money brought in by him, it would have to answer to the charge of estafa, for which it would be sufficient to argue that the partnership had received the money under obligation to return it.In the Matter of the Petition for Authority to Continue Use of the Firm Name Ozaeta, Romulo, etc (1979)Facts: Petition was filed by surviving partners of Atty. Sycip and Atty. Ozaeta praying that they be allowed to continue using the names of the partners who passed away for their respective firms. Petitioners contend that the continued use of the name of the deceased or former partner when permissible by local custom, is not unethical but care should be taken that no imposition or deception is practiced through this use. They also contend that no local custom prohibits the continued use of the deceased partners name in a professional firms name. There is no custom or usage in the Philippines, or at least in the Greater Manila Area, which recognizes that the name of a firm necessarily identifies the individual members of the firm.Issue: Whether the surviving partners may be allowed by the court to retain the name of the partners who already passed away in the name of the firm?Ruling: No! Inasmuch as Sycip, Salazar, Feliciano, Hernandez and Castillo and Ozaeta, Romulo, De Leon, Mabanta and Reyes are partnerships, the use in their partnership names of the names of deceased partners will run counter to Article 1815 of the Civil Code which provides:Art. 1815. Every partnership shall operate under a firm name, which may or may not include the name of one or more of the partners.Those who, not being members of the partnership, include their names in the firm name, shall be subject to the liability of a partner.It is clearly tacit in the above provision that names in a firm name of a partnership must either be those of living partners and, in the case of non-partners, should be living persons who can be subjected to liability. In fact, Article 1825 of the Civil Code prohibits a third person from including his name in the firm name under pain of assuming the liability of a partner. The heirs of a deceased partner in a law firm cannot he held liable as the old members to the creditors of a firm particularly where they are non-lawyers.GREGORIO MAGDUSA, ET AL., petitioners,vs.GERUNDIO ALBARAN, ET AL., respondents.Facts:Appellant and appellees, together with various other persons, had verbally formed a partnershipde facto, for the sale of general merchandise to which appellant contributed P2,000 as capital, and the others contributed their labor, under the condition that out of the net profits of the business, 25% would be added to the original capital, and the remaining 75% would be divided among the members in proportion to the length of service of each. Sometime in 1953 and 1954, the appellees expressed their desire to withdraw from the partnership, and appellant thereupon made a computation to determine the value of the partners & shares to that date. The results of the computation were embodied in the document drawn in the handwriting of appellant. Appellees thereafter made demands upon appellant for payment, but appellant having refused, they filed the initial complaint in the court below.Appellant defended by denying any partnership with appellees, whom he claimed to be mere employees of his.The Court of First Instance of Bohol dismissed the complaint on the ground that the others were indispensable parties but had not been impleaded.Upon appeal, the Court of Appeals reversed the decision, ruling that it is not an action for dissolution of a partnership and winding up of its affairs or liquidation of its assets in which the interest of other partners who are not brought into the case may be affected. The action of the plaintiffs is one for the recovery of a sum of money with Gregorio Magdusa as the principal defendant. The partnership, with Gregorio Magdusa as managing partner, was brought into the case as an alternative defendant only.

IssueWhether or not appellees & action can be entertained, because in the distribution of all or part of a partnerships assets, all the partners have no interest and are indispensable parties without whose intervention no decree of distribution can be validly entered.

Held:It cannot be entertained. A partners share cannot be returned without first dissolving and liquidating the partnership, for the return is dependent on the discharge of the creditors, whose claims enjoy preference over those of the partners; and it is self-evident that all members of the partnership are interested in his assets and business, and are entitled to be heard in the matter of the firms liquidation and the distribution of its property. The liquidation drawn by appellant is not signed by the other members of the partnership besides appellees and appellant; it does not appear that they have approved, authorized, or ratified the same, and, therefore, it is not binding upon them. At the very least, they are entitled to be heard upon its correctness.In addition, unless a proper accounting and liquidation of the partnership affairs is first had, the capital shares of the appellees, as retiring partners, cannot be repaid, for the firms outside creditors have preference over the assets of the enterprise, and the firms property cant be diminished to their prejudice. Finally, the appellant cannot be held liable in his personal capacity for the payment of partners shares for he does not hold them except as manager of, or trustee for, the partnership. It is the latter that must refund their shares to the retiring partners. Since not all the members of the partnership have been impleaded, no judgment for refund can be rendered.MACDONALD vs. NATIONAL CITY BANK OF NEW YORKFacts:Stasikinocey is a partnership formed by da Costa,Gorcey, Kusik and Gavino. It was denied registration by the SEC due to confusion between the partnership and Cardinal Rattan. Cardinal Rattan is the business name or style used byStasikinocey. Da Costa and Gorcey are the general partners of Cardinal Rattan. Moreover, Da Costa is the managing partner of Cardinal Rattan. Stasikinocey had an overdraft account with National City Bank, which was later converted into an ordinary loan due the partnerships failure in paying its obligation.The ordinary loan was secured by a chattel mortgage over 3vehicles. During the subsistence of the loan, the vehicles were sold to MacDonald and later on, MacDonald sold 2 of the 3vehicles to Gonzales. The bank brought an action for recovery of its credit and foreclosure of the chattel mortgage upon learning of these transactions.Issue: Since an unregistered commercial partnership unquestionably has no juridical personality, can it have a domicile so that the registration of a chattel mortgage therein is notice to the world?Held: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. Where a partnership not duly organized has been recognizedas 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.

Island Sales, Inc. vs. United Pioneers Gen. Construction Co., 65 SCRA 544Application of Art. 1816 of CC

Facts:The defendant company, a general partnership, purchased from the plaintiff a motor vehicle on the installment basis under 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, the plaintiff sued the defendant company for the unpaid balance. The general partners were included as co-defendants. Lumauig, a general partner, failed to answer the complaint. However, defendant Lumauig was dismissed by the motion of the plaintiff. The rest of defendants failed to appear at the hearing and were declared in default. Judgment was rendered against the partnership and the four partners. Partner A moved to reconsider, saying that since there were five general partners, the joint and subsidiary liability of each partner should not exceed one-fifth of the obligations of the company. The lower court denied the motion, hence the appeal.

Issue:Should the four partners be held liable for the obligation of the company in view of the dismissal of the complaint with respect to Partner Lumauig?

Ruling:No. There were 5 general partners when the promissory note in question was executed for and in behalf of the partnership. Since the liability of the partners are pro rata, the liability of each partner shall be limited to only one fifth of the obligations of the company. The fact that the complaint against Partner Lumauig was dismissed, upon motion of plaintiff, does not unmake Lumauig as a general partner in the defendant company.Santiago Syjuco, Inc. vs. Castro

Facts: Back in November 1964, Eugenio Lim, for and in his own behalf and as attorney-in-fact of his mother, the widow Maria Moreno (now deceased) and of his brother Lorenzo, together with his other brothers, Aramis, Mario and Paulino, and his sister, Nila, all hereinafter collectively called the Lims, borrowed from petitioner Santiago Syjuco, Inc. (hereinafter, Syjuco only) the sum of P800,000.00. The loan was given on the security of a first mortgage on property registered in the names of said borrowers as owners in common under Transfer Certificates of Title Numbered 75413 and 75415 of the Registry of Deeds of Manila. Thereafter additional loans on the same security were obtained by the Lims from Syjuco, so that as of May 8, 1967, the aggregate of the loans stood at P2,460,000.00, exclusive of interest, and the security had been augmented by bringing into the mortgage other property, also registered as owned pro indiviso by the Lims under two titles: TCT Nos. 75416 and 75418 of the Manila Registry.

There is no dispute about these facts, nor about the additional circumstance that as stipulated in the mortgage deed the obligation matured on November 8, 1967; that the Lims failed to pay it despite demands therefor; that Syjuco consequently caused extra-judicial proceedings for the foreclosure of the mortgage to be commenced by the Sheriff of Manila; and that the latter scheduled the auction sale of the mortgaged property on December 27, 1968. The attempt to foreclose triggered off a legal battle that has dragged on for more than twenty years now, fought through five (5) cases in the trial courts, two (2) in the Court of Appeals, and three (3) more in this Court, with the end only now in sight.

To stop the foreclosure, the Lims filed cases every time petitioner would schedule the effect of the mortgage. In one of these cases a complaint was presented, not in their individual names, but in the name of a partnership of which they themselves were the only partners: "Heirs of Hugo Lim." The complaint advocated the theory that the mortgage which they, together with their mother, had individually constituted (and thereafter amended during the period from 1964 to 1967) over lands standing in their names in the Property Registry as owners pro indiviso, in fact no longer belonged to them at that time, having been earlier deeded over by them to the partnership, "Heirs of Hugo Lim", more precisely, on March 30, 1959, hence, said mortgage was void because executed by them without authority from the partnership.____________

Issue: Can rights of the mortgage property transfer to a third person? (Art. 1819)____________

Ruling: Yes. It is a fact that despite its having been contributed to the partnership, allegedly on March 30, 1959, the property was never registered with the Register of Deeds in the name of the partnership, but to this date remains registered in the names of the Lims as owners in common. The original mortgage deed of November 14, 1964 was executed by the Lims as such owners, as were all subsequent amendments of the mortgage. Preclusive of the respondent partnership's claim to the mortgaged property is the last paragraph of Article 1819 of the Civil Code, which contemplates a situation duplicating the circumstances that attended the execution of the mortgage in favor of Syjuco and therefore applies foursquare thereto:

Where the title to real property is in the names of all the partners a conveyance executed by all the partners passes all their rights in such property.

The term "conveyance" used in said provision, which is taken from Section 10 of the American Uniform Partnership Act, includes a mortgage.

Interpreting Sec. 10 of the Uniform Partnership Act, it has been held that the right to mortgage is included in the right to convey. This is different from the rule in agency that a special power to sell excludes the power to mortgage (Art. 1879).