G.R. No. L-1256 October 23, 1903
features contained in the contract as found
VICENTE W. PASTOR, plaintiff-appellant,
vs.
MANUEL GASPAR, ET AL., defendants-
appellees.
FACTS
On November, 1900, there existed in Manila
a partnership composed of Macario Nicasio
and the defendant Gaspar under the name
"Nicasio and Gaspar." It owned the steam
launch Luisa, and its only business was the
relating to this launch.
Desiring to increase this business, on the 24th
day of November, 1900, a contract was
made between the firm of Nicasio and
Gaspar on the one side, and on the other
side the plaintiff, the defendants Eguia,
Iboleon, and Monserrat, and one Hermoso.
This contract recites that Nicasio and
Gaspar, by writing of the same date, have
enlarged the business of their partnership;
have bought six lorchas, which are named,
and that, needing money with which to pay
for the lorchas and the necessary repairs
thereon, the parties of the second part have
furnished them 28,000 pesos as loan, the
amount furnished by each being named.
The firm of Nicasio and Gaspar then
acknowledges the receipt of these
amounts.
In the contract, Nicasio and Gaspar
undertakes to return the amount loaned to
the plaintiff within a period of ten years from
the date of the instrument and to guarantee
the fulfillment of the said payment they
pledge to the same parties the 6 launches.
It was provided in the seventh clause that
the launch Luisa was not included in this
contract.
It is alleged in the complaint, and not
denied by the answer, that the contract
thus entered into on November 24, 1900,
was in July, 1901, dissolved and terminated,
and the lorchas sold by mutual consent.
The cause of action set forth in the
complaint is that there was actually a
partnership between the parties to the
contract of November 24, and that the
consent of the agent of the plaintiff to its
dissolution and the sale of the lorchas was
obtained by fraud of the defendants. The
prayer of the complaint is that the
dissolution of the partnership and the sale of
the lorchas be declared null, and that the
plaintiff be restored to his rights therein, and
if this cannot be done that he recover of the
defendants damages in the sum of 42,500
pesos.
Issue: WON the transaction between the
parties a loan or a contract of partnership.
Ruling: It was a LOAN in view of the ff.
by the SC:
(a) It is twice stated positively that Nicasio
and Gaspar are the only partners and the
only persons interested in the partnership of
Nicasio and Gaspar, to which statements
Pastor and his associates assented to when
he signed the document;
(b) It is stated, also distinctly and positively,
that the money has been furnished as a
loan;
(c) Nicasio and Gaspar bind themselves in
the contract to repay the amount
something that they would not be bound to
do were the contract one of partnership;
(d) In the contract, Nicasio and Gaspar
create in favor of Pastor and his associates a
right of pledge over the launches, a thing
inconsistent with the idea of partnership;
(e) Nicasio and Gaspar are to be
considered as consignees only as long as
they do not pay the debt. This indicates that
they had a right to pay it;
(f) They bind themselves not to alienate the
launches until they had paid the debt
indicating clearly that by paying the debt
they could do so, a thing inconsistent with
the idea of a partnership; and
(g) It is also stated that the launch Luisa is
not included in the contract.
It was also ruled that, the fact that Pastor et.
al., was to share in the profits and losses of
the business and that Nicasio and Gaspar
should answer for the payment of the debt
only with the launches and not with their
property, indicate that the petitioner was a
partner. But these provisions are not
conclusive. The rights of third persons are not
concerned. The parties could, in making the
contract, if they choose, take some
provisions from the law of partnership and
others from the law of loans. Loans with a
right to receive a part of the profits in lieu of
interests are not uncommon. As between
the parties, such a contract is not one of a
partnership.
[G.R. No. 127347. November 25, 1999]
ALFREDO N. AGUILA, JR vs. CA
FELICIDAD S. VDA. DE ABROGAR
FACTS
The RTC dismissed the case but the CA
reversed the RTC’s decision and held that
the MOA executed was a pactum
commissorium.
and
One of Aguila Jr.’s contentions was that he
is not the real party in interest but A.C.
Aguila & Co., against which this case should
have been brought.

Aguila Jr., is the manager of A.C. Aguila &
Sons, Co., a partnership engaged in lending
activities. Felicidad Abrogar and her late
husband, Ruben M. Abrogar, were the
registered owners of a house and lot, in
Marikina, Metro Manila.
Felicidad with the consent of her late
husband, and A.C. Aguila & Sons, Co.,
represented by Aguila, entered into a
Memorandum of Agreement, which
provided that Felicidad has the right to
repurchase the lot from Aguila within 90
days. If Felicidad fails to repurchase the lot
within the said period, Felicidad is obliged to
deliver the property to Aguila within 15 days
and the MOA is deemed cancelled with the
Deed of absolute sale (N.B.: buyer in the
contract is A.C.Aguila & Sons Co. not Aguilar
Jr., himself) taking its place which was
executed on the same day. Felicidad also
executed an SPA authorizing Aguila to
cause the cancellation of the earlier TCT
and issuance of new certificate in the name
of A.C. Aguila & Sons, Co., in the event
Felicidad failed to redeem the subject
property as provided in the MOA.
Felicidad failed to redeem the property
within the 90-day period. Hence, pursuant to
the SPA mentioned above, Aguila Jr.,
caused the cancellation of TCT No. 195101
and the issuance of a new certificate of title
in the name of A.C. Aguila and Sons, Co.
Felicidad then received a letter from the
counsel for A.C. Aguila & Sons, Co.,
demanding she vacate the premises within
15 days after receipt of the letter and
surrender its possession peacefully to A.C.
Aguila & Sons, Co. Otherwise, the latter
would bring the appropriate action in court,
but Felicidad refused to vacate so A.C.
Aguila & Sons Co. filed an ejectment suit.
The MTC Marikina, RTC Pasig, CA, and SC- all
ruled in favor of A.C. Aguila & Sons
Felicidad filed a petition for declaration of
nullity of a deed of sale with the RTC
Marikina on December 4, 1993. She alleged
the signature of her husband on the deed of
sale was a forgery because he was already
dead when the deed was supposed to
have been executed on June 11, 1991.
ISSUE/HELD:
WON Aguila Jr. is the real party in interest
RULING:
NO, it is A.C. Aguila & Sons. Rule 3.2 of the
Rules of Court of 1964, under which the
complaint in this case was filed, provided
that every action must be prosecuted and
defended in the name of the real party in
interest. A real party in interest is one who
would be benefited or injured by the
judgment, or who is entitled to the avails of
the suit. Any decision rendered against a
person who is not a real party in interest in
the case cannot be executed. Hence, a
complaint filed against such a person should
be dismissed for failure to state a cause of
action
Under Art. 1768 of the Civil Code, a
partnership has a juridical personality
separate and distinct from that of each of
the partners. The partners cannot be held
liable for the obligations of the partnership
unless it is shown that the legal fiction of a
different juridical personality is being used
for fraudulent, unfair, or illegal purposes. In
this case, Felicidad has not shown that A.C.
Aguila & Sons, Co., as a separate juridical
entity, is being used for fraudulent, unfair, or
illegal purposes. Moreover, the title to the
subject property is in the name of A.C.
Aguila & Sons, Co. and the Memorandum of
Agreement was executed between
Felicidad, with the consent of her late
husband, and A. C. Aguila & Sons, Co.,
represented by Aguila Jr. Hence, it is the
partnership, not its officers or agents, which
should be impleaded in any litigation
involving property registered in its name. A
violation of this rule will result in the dismissal
of the complaint.
Since Aguila Jr. is not the real party in
interest against whom this action should be
prosecuted makes it unnecessary to discuss
the other issues raised by him.
G.R. No. L-25532 February 28, 1969
COMMISSIONER OF INTERNAL
REVENUE, petitioner,
vs.
WILLIAM J. SUTER and THE COURT OF TAX
APPEALS, respondents.
FACTS
A limited partnership, named "William J.
Suter 'Morcoin' Co., Ltd.," was formed on 30
September 1947 by herein respondent
William J. Suter as the general partner, and
Julia Spirig and Gustav Carlson, as the
limited partners. The partners contributed,
respectively, P20,000.00, P18,000.00 and
P2,000.00 to the partnership. On 1 October
1947, the limited partnership was registered
with the Securities and Exchange
Commission. The firm engaged, among
other activities, in the importation,
marketing, distribution and operation of
automatic phonographs, radios, television
sets and amusement machines, their parts
and accessories. It had an office and held
itself out as a limited partnership, handling
and carrying merchandise, using invoices,
bills and letterheads bearing its trade-name,
maintaining its own books of accounts and
bank accounts, and had a quota allocation
with the Central Bank.
In 1948, however, general partner Suter and
limited partner Spirig got married and,
thereafter, on 18 December 1948, limited
partner Carlson sold his share in the
partnership to Suter and his wife. The sale
was duly recorded with the Securities and
Exchange Commission on 20 December
1948.
The limited partnership had been filing its
income tax returns as a corporation, without
objection by the herein petitioner,
Commissioner of Internal Revenue, until in
1959 when the latter, in an assessment,
consolidated the income of the firm and the
individual incomes of the partners-spouses
Suter and Spirig resulting in a determination
of a deficiency income tax against
respondent Suter in the amount of P2,678.06
for 1954 and P4,567.00 for 1955.
Respondent Suter protested the assessment,
and requested its cancellation and
withdrawal, as not in accordance with law,
but his request was denied. Unable to
secure a reconsideration, he appealed to
the Court of Tax Appeals, which court, after
trial, rendered a decision, on 11 November
1965, reversing that of the Commissioner of
Internal Revenue.
ISSUE
Whether or not the partnership was
dissolved after the marriage of the partners,
respondent William J. Suter and Julia Spirig
Suter and the subsequent sale to them by
the remaining partner, Gustav Carlson, of his
participation of P2,000.00 in the partnership
for a nominal amount of P1.00.
RULING
No, the limited partnership was not
dissolved.
“A husband and a wife may not
enter into a contract of general
copartnership, because under the Civil
Code, which applies in the absence of
express provision in the Code of Commerce,
persons prohibited from making donations
to each other are prohibited from entering
into universal partnerships. (2 Echaverri 196)
It follows that the marriage of partners
necessarily brings about the dissolution of a
pre-existing partnership. “
What the law prohibits was when the
spouses entered into a general partnership.
In the case at bar, the partnership was
limited.
The petitioner-appellant has evidently failed
to observe the fact that William J. Suter
"Morcoin" Co., Ltd. was not a
universal partnership, but a particular one.
As appears from Articles 1674 and 1675 of
the Spanish Civil Code, of 1889 (which was
the law in force when the subject firm was
organized in 1947), a universal partnership
requires either that the object of the
association be all the present property of
the partners, as contributed by them to the
common fund, or else "all that the partners
may acquire by their industry or work during
the existence of the partnership". William J.
Suter "Morcoin" Co., Ltd. was not such a
universal partnership, since the contributions
of the partners were fixed sums of money,
P20,000.00 by William Suter and P18,000.00
by Julia Spirig and neither one of them was
an industrial partner. It follows that William J.
Suter "Morcoin" Co., Ltd. was not a
partnership that spouses were forbidden to
enter by Article 1677 of the Civil Code of
1889.
 partner; in fact, Art. 1815. Every
In The Matter of the Petition for Authority to Article 1840 of partnership shall operate
Continue Use of the Firm Name “Ozaeta, the Civil Code under a firm name, which
Romulo, De Leon…” etc. explicitly may or may not include
92 SCRA 1 July 30, 1979 sanctions the the name of one or more
practice. (SEE of the partners.
FACTS LAST PAR. ART.
1840) Those who, not being
Two separate Petitions were filed before the members of the
Supreme Court 1) by the surviving partners The use by the partnership, include their
of Atty. Alexander Sycip, who died on May person or names in the firm name,
5, 1975, and 2) by the surviving partners of partnership shall be subject to the
Atty. Herminio Ozaeta, who died on continuing the liability, of a partner.
February 14, 1976, praying that they be business of the
allowed to continue using, in the names of partnership It is clearly tacit in the
their firms, the names of partners who had name, or the above provision that
passed away. In the Court's Resolution of name of a names in a firm name of a
September 2, 1976, both Petitions were deceased partnership must either be
ordered consolidated. partner as part those of living partners
thereof, shall and in the case of non-
Petitioners contend that the continued use not of itself partners, should be living
of the name of a deceased or former make the persons who can be
partner when permissible by local custom, is individual subjected to liability.
not unethical but care should be taken that property of the
no imposition or deception is practiced deceased Article 1840 treats more of
through this use. They also contend that no partner liable a commercial partnership
local custom prohibits the continued use of for any debts with a good will to
a deceased partner’s name in a contracted by protect rather than of a
professional firm’s name; there is no custom such person or professional partnership,
or usage in the Philippines, or at least in the partnership with no saleable good will
Greater Manila Area, which recognizes that but whose reputation
the name of a law firm necessarily identifies depends on the personal
the individual members of the firm. qualifications of its
individual members.

ISSUE - a professional
partnership has no good
WON the two law firms are entitled to will to be distributed
continue using the name or including the (based on individual skills)
name of their deceased partner.
A partnership for the
RULING practice of law cannot be
likened to partnerships
NO. formed by other
professionals or for
Petitions were DENIED - petitioners were business.
advised to drop the names "SYCIP" and
"OZAETA" from their respective firm names. 2. In regulating A partnership for the
Those names may, however, be included in other practice of law is not a
the listing of individuals who have been professions, legal entity. It is a mere
partners in their firms indicating the years such as relationship or association
during which they served as such. accountancy for a particular purpose. ...
and It is not a partnership
Petitioners' desire to preserve the Identity of engineering (a formed for the purpose of
their firms in the eyes of the public must bow profession carrying on trade or
to legal and ethical impediment requiring the business or of holding
same degree of property." Thus, it has
PETITIONER’S COURT’S RULING trust and been stated that "the use
ARGUMENT confidence), of a nom de plume (pen
1. Under the Although said parties the legislature name), assumed or trade
law, a were indeed in has authorized name in law practice is
partnership is partnerships with the the adoption of improper.
not prohibited deceased, the continued firm names
from continuing use in their partnership without any
its business names of the names of restriction as to
under a firm deceased partners will the use, in such
name which run counter to Article 1815 firm name, of
includes the of the Civil Code which the name of a
name of a provides: deceased
deceased partner
(Indication that well-publicized
no in all
fundamental newspapers of
policy is general
offended by circulation for
the practice in several days;
issue – the stationeries
characteristics now being used
of trade name) by them carry
(COMPARISON new
OF PRACTICE letterheads
OF LAW TO indicating the
OTHER years when
PARTNERSHIPS their respective
FORMED BY deceased
OTHER partners were
PROFESSIONALS connected with
OR FOR the firm;
BUSINESS). petitioners will
notify all
leading
3. The Canons It is true that Canon national and
of Professional 33 does not consider as international
Ethics are not unethical the continued law directories
transgressed by use of the name of a of the fact of
the continued deceased or former their respective
use of the partner in the firm name deceased
name of a of a law partnership when partners'
deceased such a practice deaths.
partner in the is permissible by local (Common
firm name of a custom but the Canon Knowledge and
law partnership warns that care should be Initiative to
(SEE CANON taken that no imposition inform the
33) /(AND 3.1. or deception is practiced public)
No local through this use.
custom 5. The U.S. Courts have
prohibits the It must be conceded that continued use consistently allowed the
continued use in the Philippines, no local of a deceased continued use of a
of a deceased custom permits or partner's name deceased partner's name
partner's name allows the continued use in the firm in the firm name of law
in a professional of a deceased or former name of law partnerships. But that is so
firm's name.) partner's name in the firm partnerships because it is sanctioned
names of law has been by custom.
... The partnerships. Firm names, consistently
continued use under our custom, Identify allowed by U.S. Not so in this jurisdiction
of the name of the more active and/or Courts and is an where there is no local
a deceased or more senior members or accepted custom that sanctions the
former partner partners of the law firm. practice in the practice.
when legal profession
permissible by of most Moreover, judicial
local custom, is countries in the decisions applying or
not unethical world. interpreting the laws form
but care should part of the legal
be taken that system. Deen and Perkins
no imposition or cases (issued its
deception is Resolutions directing
practiced lawyers to desist from
through this including the names of
use. deceased partners in their
firm designation) it laid
down a legal rule against
4. There is no Possibility of deception which no custom or
possibility of cannot be ruled out practice to the contrary,
imposition or (people might be guided even if proven, can
deception by the familiar ring in prevail.
because the seach of a distinguisehd This is not to speak of our
deaths of their lawyer) civil law which clearly
respective ordains that a partnership
deceased is dissolved by the death
partners were of any partner.
G.R. No. 109248 July 3, 1995
GREGORIO F. ORTEGA, TOMAS O. DEL
CASTILLO, JR., and BENJAMIN T. BACORRO
vs.
HON. COURT OF APPEALS, SECURITIES AND
EXCHANGE COMMISSION and JOAQUIN L.
MISA
FACTS
On December 19, 1980, respondent Misa
associated himself together, as senior
partner with petitioners Ortega, del Castillo,
Jr., and Bacorro, as junior partners. On Feb.
17, 1988, respondent Misa wrote a letter
stating that he is withdrawing and retiring
from the firm and asking for a meeting with
the petitioners to discuss the mechanics of
the liquidation.
On June 30, 1988, petitioner filed a petition
to the Commission's Securities Investigation
and Clearing Department for the formal
dissolution and liquidation of the
partnership. On March 31, 1989, the hearing
officer rendered a decision ruling that the
withdrawal of the petitioner has not
dissolved the partnership.
On appeal, the SEC en banc reversed the
decision of the Hearing Officer and held
that the withdrawal of Attorney Joaquin L.
Misa had dissolved the partnership of "Bito,
Misa & Lozada." The Commission ruled that,
being a partnership at will, the law firm
could be dissolved by any partner at
anytime, such as by his withdrawal
therefrom, regardless of good faith or bad
faith, since no partner can be forced to
continue in the partnership against his will.
The Court of Appeals, finding no reversible
error on the part of respondent Commission,
AFFIRMED in toto the SEC decision and order
appealed from.
Hence, this petition.
ISSUES
1. WON the partnership is a partnership
at will.
2. WON the withdrawal of private
respondent dissolved the partnership
regardless of his good or bad faith.
RULINGS
1. YES. The SC upheld the ruling of the
CA regarding the nature of the
partnership.
A partnership that does not fix its
term is a partnership at will. That the
law firm "Bito, Misa & Lozada," and
now "Bito, Lozada, Ortega and
Castillo," is indeed such a partnership
need not be unduly belabored.
The partnership agreement (amended
articles of 19 August 1948) does not provide
for a specified period or undertaking. The
"DURATION" clause simply states:
"5. DURATION. The partnership
shall continue so long as
mutually satisfactory and
upon the death or legal
incapacity of one of the
partners, shall be continued
by the surviving partners."
The birth and life of a partnership at
will is predicated on the mutual desire and
consent of the partners. The right to choose
with whom a person wishes to associate
himself is the very foundation and essence
of that partnership. Its continued existence
is, in turn, dependent on the constancy of
that mutual resolve, along with each
partner's capability to give it, and the
absence of a cause for dissolution provided
by the law itself.
2. Verily, any one of the partners may,
at his sole pleasure, dictate a
dissolution of the partnership at will.
He must, however, act in good faith,
not that the attendance of bad faith
can prevent the dissolution of the
partnership4 but that it can result in a
liability for damages.
In passing, neither would the presence
of a period for its specific duration or the
statement of a particular purpose for its
creation prevent the dissolution of any
partnership by an act or will of a
partner. Among partners,7 mutual agency
arises and the doctrine of delectus
personae allows them to have the power,
although not necessarily the right, to dissolve
the partnership. An unjustified dissolution by
the partner can subject him to a possible
action for damages.
G.R. No. L-49982 April 27, 1988
ELIGIO ESTANISLAO, JR., petitioner,
vs.
THE HONORABLE COURT OF APPEALS,
REMEDIOS ESTANISLAO, EMILIO and
LEOCADIO SANTIAGO,respondents.
FACTS
Petitioner and private respondents
are brothers and sisters who are co-owners
of certain lots at the corner of Annapolis
and Aurora Blvd., Quezon City which were
then being leased to the Shell Company of
the Philippines Limited (SHELL). They agreed
to open and operate a gas station thereat
to be known as Estanislao Shell Service
Station with an initial investment of P
15,000.00 to be taken from the advance
rentals due to them from SHELL for the
occupancy of the said lots owned in
common by them.
A joint affidavit was executed by
them on April 11, 1966 which was prepared
by Atty. Democrito Angeles They agreed to
help their brother, petitioner herein, by
allowing him to operate and manage the
gasoline service station of the family. They
negotiated with SHELL. For practical
purposes and in order not to run counter to
the company's policy of appointing only
one dealer, it was agreed that petitioner
would apply for the dealership. Respondent
Remedios helped in managing the bussiness
with petitioner from May 3, 1966 up to
February 16, 1967.
On May 26, 1966, the parties herein
entered into an Additional Cash Pledge
Agreement with SHELL wherein it was
reiterated that the P 15,000.00 advance
rental shall be deposited with SHELL to cover
advances of fuel to petitioner as dealer with
a proviso that said agreement "cancels and
supersedes the Joint Affidavit dated 11 April
1966 executed by the co-owners." 2
For sometime, the petitioner
submitted financial statements regarding
the operation of the business to private
respondents, but therafter petitioner failed
to render subsequent accounting. Hence
through Atty. Angeles, a demand was
made on petitioner to render an
accounting of the profits.
The financial report of December 31,
1968 shows that the business was able to
make a profit of P 87,293.79 and that by the
year ending 1969, a profit of P 150,000.00
was realized.
Thus, on August 25, 1970 private
respondents filed a complaint in the Court
of First Instance of Rizal against petitioner
praying among others that the latter be
ordered:
 to render an accounting of the profits;
• to execute a public document
embodying all the provisions of the
partnership agreement;
• to pay the plaintiffs their lawful
shares and participation in the net profits of
the business.
After trial on the merits, on October
15, 1975, Hon. Lino Anover who was then the
temporary presiding judge of Branch IV of
the trial court, rendered judgment dismissing
the complaint and counterclaim and
ordering private respondents to pay
petitioner P 3,000.00 attorney's fee and
costs. Private respondent filed a motion for
reconsideration of the decision.
On December 10, 1975, Hon.
Ricardo Tensuan who was the newly
appointed presiding judge of the same
branch, set aside the aforesaid derision and
rendered another decision in favor of said
respondents.
Petitioner then interposed an appeal
to the Court of Appeals enumerating seven
(7) errors allegedly committed by the trial
court. In due course, a decision was
rendered by the Court of Appeals on
November 28,1978 affirming in toto the
decision of the lower court with costs
against petitioner.
Hence, this petition.
ISSUE
WON a partnership was established by and
among the petitioner and the private
respondents as regards the ownership and
or operation of the gasoline service station
business.
RULING
YES. The Joint Affidavit of April 11, 1966
(Exhibit A), clearly stipulated by the
members of the same family that the
P15,000.00 advance rental due to them
from SHELL shall augment their "capital
investment" in the operation of the gasoline
station.
Moreover other evidence in the record
shows that there was in fact such
partnership agreement between the parties.
This is attested by the testimonies of private
respondent Remedies Estanislao and Atty.
Angeles. Petitioner submitted to private
respondents periodic accounting of the
business. 4 Petitioner gave a written authority
to private respondent Remedies Estanislao,
his sister, to examine and audit the books of
their "common business' aming
negosyo). 5 Respondent Remedios assisted
in the running of the business. There is no
doubt that the parties hereto formed a
partnership when they bound themselves to
contribute money to a common fund with
the intention of dividing the profits among
themselves.
G.R. No. L-18703 August 28, 1922 be predicated, this partnership must suffer
the consequences of such a failure, and
INVOLUNTARY INSOLVENCY OF CAMPOS must be adjudged insolvent.
RUEDA & CO., S. en C., appellee,
vs.
PACIFIC COMMERCIAL CO., ASIATIC
PETROLEUM CO., and INTERNATIONAL
BANKING CORPORATION,petitioners-
appellants.

FACTS

Campos, Rueda & Co., a limited

partnership, is indebted to the appellants:
Pacific Commercial Co. , Asiatic Petroleum
Co, and International Banking Corporation
amounting to not less than P1,000.00 (which
were not paid more than 30 days prior to
the date of the filing by petitioners of the
application for voluntary insolvency).

The partnership Campos Rueda & Co.,

voluntarily filed an application for a judicial
decree adjudging itself insolvent.

The trial court denied the petition on the

ground that it was not proven, nor alleged,
that the members of the aforesaid firm were
insolvent at the time the application was
filed; and that was said partners are
personally and solidarily liable for the
consequence of the transactions of the
partnership, it cannot be adjudged insolvent
so long as the partners are not alleged and
proven to be insolvent.

From this judgment the petitioners appeal to

the Supreme Court, on the ground that the
finding of the lower court s erroneous.

ISSUE

Whether or not a limited partnership, such as

the which has failed to pay its obligation
with three creditors for more than thirty days,
may be held to have committed an act of
insolvency, and thereby be adjudged
insolvent against its will.

RULING

The Philippine statutes consider a

limited partnership as a juridical entity for all
intents and purposes, which personality is
recognized in all its acts and contracts (art.
116, Code of Commerce). This being so and
the juridical personality of a limited
partnership being different from that of its
members, it must, on general principle,
answer for, and suffer, the consequence of
its acts as such an entity capable of being
the subject of rights and obligations. If, as in
the instant case, the limited partnership of
Campos Rueda & Co. Failed to pay its
obligations with three creditors for a period
of more than thirty days, which failure
constitutes, under our Insolvency Law, one
of the acts of bankruptcy upon which an
adjudication of involuntary insolvency can
G.R. No. L-8576 February 11, 1915 against the individual partners
constituting the firm. In case the
VARGAS and COMPANY, plaintiff-appellee, individual members of the firm must
vs. be separately served with process,
CHAN HANG CHIU, ET AL., defendants- the rule also prevails that they must
appellants. be parties to the action, either
plaintiffs or defendant, and that the
FACTS action cannot be brought in the
name of or against the company
itself.
On the 19th day of August, 1911, an
2. If it is necessary to serve the partners
action was begun by Chan Hang Chiu
individually, they are entitled to be
against the plaintiff in this case as a
heard individually in the action and
mercantile association duly organized under
they must, therefore, be made
the laws of the Philippine Islands, to recover
parties thereto so that they can be
a sum of money. The summons and
heard. It would be idle to serve
complaint were placed in the hands of the
process on individual members of a
sheriff, delivering to and leaving with one
partnership if the litigation were to
Jose Macapinlac personally true copies
be conducted in the name of the
thereof, he being the managing agent of
partnership itself and by the duly
said Vargas & Co. at the time of such
constituted officials of the
service. On July 2, 1912, the justice's court of
partnership exclusively.
Manila rendered judgment against Vargas
& Co. for the sum of 372.28.
In this case, it is apparent that the
plaintiff is acting contrary to its own
It is plaintiff’s contention that Vargas
contention by bringing the action in the
& Co. being a partnership, it is necessary, in
name of the company. If not served with
bringing an action against it, to serve the
process, then the action should be
summons on all of the partners, delivering to
brought in the individual names of the
each one of them personally a copy
partners and not in the name of the
thereof; and that the summons in this case
company itself.
having been served on the managing
agent of the company only, the service was
of no effect as against the company and
the members thereof and the judgment
entered by virtue of such a service was void.

Issue:

Whether or not it is indispensable in bringing

an action to a partnership to serve summons
to all parties thereof.

Held:

No, it is dispensable.

REASONS

1. It has been the universal practice in

the Philippine Islands since American
occupation, and was the practice
prior to that time, to treat companies
of the class to which the plaintiff
belongs as legal or juridical entities
and to permit them to sue and be
sued in the name of the company,
the summons being served solely on
the managing agent or other official
of the company specified by the
section of the Code of Civil
Procedure referred to. The plaintiff
brings this action in the company
name and not in the name of the
members of the firm. Actions against
companies of the class to which
plaintiff belongs are brought,
according to the uninterrupted
practice, against such companies in
their company names and not
G.R. No. L-48113 April 7, 1947
NGO TIAN TEK and NGO HAY, petitioner,
vs.
PHILIPPINE EDUCATION CO.,
INC., respondent.
FACTS
As far back as the year 1925, the Modern
Box Factory was established at 603
Magdalena Street, Manila. It was at first
owned by Ngo Hay, who three years later
was joined by Ngo Tian Tek as a junior
partner. The modern Box Factory dealt in
pare and similar merchandise and
purchased goods from the plaintiff and its
assignors in the names of the Modern Box
Factory, Ngo Hay and Co., Go Hay Box
Factory, or Go Hay.
When that concern, through Vicente Tan,
sought credit with the plaintiff and its
assignors, Ngo Hay, in conversations and
interviews with their officers and employees,
represented that he was the principal owner
of such factory, that the Lee Guan Box
Factory and the Modern Box Factory
belonged to the same owner, and that the
Lee Guan Box Factory was a subsidiary of
the Modern Box Factory.
By agreement of the parties, the case was
heard before a referee, Attorney Francisco
Dalupan, who in due time submitted his
report holding the defendants jointly and
severally liable to the plaintiff for the sum of
P16,070.14 plus attorney's fees and interest
at the rates specified in the report. On
March 6, 1939, the Court of First Instance of
Manila rendered judgment was affirmed by
the Court of Appeals in its decision of
January 31, 1941, now the subject of the
Supreme Court’s review at the instance of
the partnership Ngo Tian Tek and Ngo Hay,
petitioner herein.
During the pendency of the case, Ngo Hay
died.
ISSUE
Whether or not the case filed against the
partnership will be dismissed because of the
death of the partner, Ngo Hay.
RULING
NO. It is sufficient to state that the petitioner
Ngo Tian Tek and Ngo Hay is sued as a
partnership possessing a personality distinct
from any of the partners.

There is evidence that many goods

purchased in the name of the Lee Guan Box
Factory were delivered to the Modern Box
Factory by the employees of the plaintiff
and its assignors upon the express direction
of Vicente Tan. There is also evidence that
the collectors of the sellers were requested
by Vicente Tan to collect — and did collect
— from the Modern Box Factory the bills
against the Lee Guan Box Factory. In the
fact the record shows many checks signed
by Ngo Hay or Ngo Tian Tek in payment of
accounts of the Lee Guan Box Factory.

Furthermore, — and this seems to be

conclusive-Ngo Hay, testifying for the
defense, admitted that 'he' was the owner
of the Lee Guan Box Factory in and before
the year 1934, but that in January, 1935, 'he'
sold it, by the contract of sale to Vicente
Tan, who had been his manager of the
business. Tan declared also that before
January, 1935, the Lee Guan Box Factory
pertained to Ngo Hay and Ngo Tian Tek.

The Philippine Education Co., Inc., instituted

in the Court of First Instance of Manila an
action against the defendants, Vicente
Tan alias Chan Sy and the partnership of
Ngo Tian Tek and Ngo Hay, for the recovery
of some P16,070.14, unpaid cost of
merchandise purchased by Lee Guan Box
Factory from the plaintiff and five other
corporate entities which, though not parties
to the action, had previously assigned their
credits to the plaintiff, together with
attorney's fees, interest and costs.