G.R. No.

45664

September 28, 1937

ANSELMO CLAUDIO, MANUEL G. GOYENA, and LUIS S. FLORES, as

directors of the "Cotabato & Cagayan Mining Association",
petitioners,
vs.
FRANCISCO ZANDUATE, Judge of First Instance of Manila, C. P.
NEUFFER, WILLIAM MEYER, ARTHUR SKILES, JOSE ARANETA, and
J. C. COWPER, respondents.
Petitioners ANSELMO CLAUDIO, MANUEL G. GOYENA, and LUIS S.
FLORES organized "Cotabato & Cagayan Mining Association", together
with the respondents C. P. NEUFFER, WILLIAM MEYER, ARTHUR SKILES,
JOSE ARANETA, and J. C. COWPER. The respondents in this case filed civil
case No. 51510 of the Court of First Instance of Manila was instituted to ask
for: (1) the dissolution of the association named "Cotabato & Cagayan
Mining Association"; (2) an accounting by the petitioners, the defendants in
the above-entitled case, of the money and property, personal or otherwise,
belonging to said association, that have passed through their hands, and of
those still in their possession; and (3) the appointment of a receiver to take
charge of the properties of the association of the "Cotabato & Cagayan
Mining Association" have not been registered in the Mercantile Registry of
the Bureau of Commerce and Industry, as required by law (b) that
notwithstanding the fact that the herein petitioners, defendants in the
above-entitled case, had not secured a permit to sell shares of said
association, as required by law, they had been selling and offering for sale
to the public, and they themselves acquired, some of said shares; (c) that
notwithstanding the fact that the association has 279 members who have
subscribed to the original shares thereof, no meeting was ever held with the
exception of that held in September, 1936, at which M. W. Rice was elected
president of the executive committee, Anselmo Claudio as vice-president,
Manuel G. Goyena as secretary-treasurer, and Luis S. Flores and C. P.
Neuffer as members; (d) that as M. W. Rice had resigned his position as
president, Anselmo Claudio was elected to succeed him by the members of
the executive committee; (e) that notwithstanding the fact that the
association had been formed for purposes of location, exploration and
exploitation of mining claims in Cagayan, Island of Luzon, and Cotabato,
Island of Mindanao, it never had and does not actually have any mining
claim of any kind; ( f ) that as said association has no legal existence, the
defendants, as members of the executive committee thereof, are not

authorized to discharge the offices to which they were elected; (g) that the
defendants have squandered the funds of the association for salaries and in
payment of other expenses, and have abandoned the properties thereof
located at Palimbang River, Cotabato; and (h) that to avoid the squandering
of the funds of the association and the loss of its other properties, a receiver
should be appointed in the meantime to take charge of keeping and
preserving the same.
The therein defendants, petitioners herein, answering the petition of
the therein plaintiffs and herein respondents for the issuance of a writ of
preliminary injunction and for the appointment of a receiver, admitted it as
a fact that they organized the "Cotabato & Cagayan Mining Association" on
August 28, 1936, claiming, however, to have done so at the instance and
solicitation of M. W. Rice.
The court through Judge Zandueta, granted the prayer of the
respondents and appointed J. C. COWPER as a receiver.
Issue:
Whether or not the Judge exceeded his jurisdiction and abused his
discretion when he appointed the receiver?
Ruling:
Yes, In order that a receiver may be appointed in a case, an
application under oath to that effect must be filed, alleging all the facts
necessary to convince the court to grant the same, for the purpose of
preserving the property which is the subject of litigation and protecting
thereby the rights of all the parties interested therein. This is due to the fact
that, as stated by this court in the case of Velasco & Co. vs. Gochuico & Co.
(28 Phil., 39), the power to appoint a receiver is a delicate one; that said
power should be exercised with extreme caution and only when the
circumstances so demand, either because there is imminent danger that the
property sought to be placed in the hands of a receiver be lost or because
they run the risk of being impaired, endeavoring to avoid that the injury
thereby caused be greater than the one sought to be averted. For this
reason, before the remedy is granted, the consequences or effects thereof
should be considered or, at least, estimated in order to avoid causing
irreparable injustice or inquiry to others who are entitled to as much
consideration as those seeking it.

The association, as a party affected thereby, is undoubtedly as much

entitled, if not more entitled than the plaintiffs and defendants, to be heard
in the case, in matters affecting its existence as well as the appointment of a
receiver applied for.
It necessarily follows from the foregoing that in order that the
respondents judge could exercise his jurisdiction or authority to appoint a
receiver in the case under consideration, he should have required the
inclusion therein, as necessary parties, of the "Cotabato & Cagayan Mining
Association" or of the other members not included as such parties; or at
least, the plaintiffs should have brought the action for themselves and in the
name of the association in question, or for the benefit of the other members,
respondents judge undoubtedly acted in excess of his jurisdiction and
abused his discretion.

G.R. No. L-39780 November 11, 1985

ELMO
MUASQUE,
petitioner,
vs.
COURT OF APPEALS,CELESTINO GALAN TROPICAL COMMERCIAL
COMPANY and RAMON PONS, respondents.
Petitioner Elmo Muasque filed a complaint for payment of sum of
money and damages against respondents Celestino Galan, Tropical
Commercial, Co., Inc. (Tropical) and Ramon Pons, alleging that the

petitioner entered into a contract with respondent Tropical through its

Cebu Branch Manager Pons for remodelling a portion of its building without
exchanging or expecting any consideration from Galan although the latter
was casually named as partner in the contract; that by virtue of his having
introduced the petitioner to the employing company (Tropical). Galan would
receive some kind of compensation in the form of some percentages or
commission; that Tropical, under the terms of the contract, agreed to give
petitioner the amount of P7,000.00 soon after the construction began and
thereafter, the amount of P6,000.00 every fifteen (15) days during the
construction to make a total sum of P25,000.00; that on January 9, 1967,
Tropical and/or Pons delivered a check for P7,000.00 not to the plaintiff but
to a stranger to the contract, Galan, who succeeded in getting petitioner's
indorsement on the same check persuading the latter that the same be
deposited in a joint account; that on January 26, 1967 when the second
check for P6,000.00 was due, petitioner refused to indorse said cheek
presented to him by Galan but through later manipulations, respondent
Pons succeeded in changing the payee's name from Elmo Muasque to
Galan and Associates, thus enabling Galan to cash the same at the Cebu
Branch of the Philippine Commercial and Industrial Bank (PCIB) placing the
petitioner in great financial difficulty in his construction business and
subjecting him to demands of creditors to pay' for construction materials,
the payment of which should have been made from the P13,000.00 received
by Galan; that petitioner undertook the construction at his own expense
completing it prior to the March 16, 1967 deadline;that because of the
unauthorized disbursement by respondents Tropical and Pons of the sum of
P13,000.00 to Galan petitioner demanded that said amount be paid to him
by respondents under the terms of the written contract between the
petitioner and respondent company.
The respondents answered the complaint by denying some and
admitting some of the material averments and setting up counterclaims.
Issues:
Whether or not MUASQUE and Galan are partners?
Ruling:
Yes, The records will show that the petitioner entered into a con-tract
with Tropical for the renovation of the latter's building on behalf of the
partnership of "Galan and Muasque.

There is nothing in the records to indicate that the partner-ship

organized by the two men was not a genuine one. If there was a falling out
or misunderstanding between the partners, such does not convert the
partnership into a sham organization.
Respondent Tropical therefore, had every right to presume that the
petitioner and Galan were true partners. If they were not partners as
petitioner claims, then he has only himself to blame for making the
relationship appear otherwise, not only to Tropical but to their other
creditors as well. The payments made to the partnership were, therefore,
valid payments.
Under Article 1816 of the Civil Code," All partners, including
industrial ones, shall be liable prorate with all their property and after all
the partnership assets have been exhausted, for the contracts which may be
entered into the name and fm the account cd the partnership, under its
signature and by a person authorized to act for the partner-ship. ...". this
provision should be construed together with Article 1824 which provides
that: "All partners are liable solidarily with the partnership for everything
chargeable to the partnership under Articles 1822 and 1823." In short,
while the liability of the partners are merely joint in transactions entered
into by the partnership, a third person who transacted with said partnership
can hold the partners solidarily liable for the whole obligation if the case of
the third person falls under Articles 1822 or 1823.
The obligation is solidary, because the law protects him, who in good
faith relied upon the authority of a partner, whether such authority is real or
apparent. That is why under Article 1824 of the Civil Code all partners,
whether innocent or guilty, as well as the legal entity which is the
partnership, are solidarity liable.