TAI TONG CHUACHE & CO.v. THE INSURANCE COMMISSION and TRAVELLERS MULTI-INDEMNITY FACTS:Complainants acquired from a certain Rolando Gonzales a parcel of land and a building located at San Rafael Village, Davao City. Complainants assumed the mortgage of the building in favor of S.S.S., which building was insured with respondent S.S.S. Accredited Group of Insurers forP25,000.00.On April 19, 1975, Azucena Palomo obtained a loan from Tai Tong Chuache Inc. in the amount of P100,000.00. To secure the payment of the loan, a mortgage was executed over the land and the building in favor of Tai Tong Chuache & Co. On April 25, 1975, Arsenio Chua, representative of Thai Tong Chuache & Co. insured the latter's interest with Travellers Multi-Indemnity Corporation for P100,000.00 (P70,000.00 for the building and P30,000.00 for the contents thereof).On June 11, 1975, Pedro Palomo secured a Fire Insurance Policy No. F- 02500, covering the building for P50,000.00 with respondent Zenith Insurance Corporation. On July 16, 1975,another Fire Insurance Policy No. 8459 was procured from respondent Philippine BritishAssuranceCompany,coveringthesamebuildingforP50,000.00andthecontentsthereofforP70,000.00.On July 31, 1975, the building and the contents were totally razed by fire. Based on the computation of the loss, including the Travellers Multi- Indemnity, respondents, Zenith Insurance, Phil. British Assurance and S.S.S. Accredited Group of Insurers, paid their corresponding shares of the loss. Complainants were paid the following: P41,546.79 by Philippine British Assurance Co., P11,877.14 by Zenith Insurance Corporation, and P5,936.57by S.S.S. Group of Accredited Insurers (Par. 6. Amended Complaint). Demand was made from respondent Travellers Multi-Indemnity for its share in the loss but the same was refused. Hence, complainants demanded from the other three (3) respondents the balance of each share in the loss based on the computation of the Adjustment Standards Report excluding Travellers Multi-Indemnity in the amount of P30,894.31 (P5,732.79-Zenith Insurance: P22,294.62, Phil. British: and P2,866.90, SSS Accredited) but the same was refused, hence, thisaction.

ISSUE: Whether the suit was properly filed by petitioners as real party in interest.

HELD: Yes. It should be borne in mind that petitioner being a partnership may sue and be sued in its name or by its duly authorized representative. The fact that Arsenio Lopez Chua is the representative of petitioner is not questioned. Petitioner's declaration that Arsenio Lopez Chuaacts as the managing partner of the partnership was corroborated by respondent insurance company. Thus Chua as the managing partner of the partnership may execute all acts of administration including the right to sue debtors of the partnership in case of their failure to pay their obligations when it became due and demandable. Or at the very least, Chua being a partner of petitioner Tai Tong Chuache & Company is an agent of the partnership. Being an agent, it is understood that he acted for and in behalf of the firm. Public respondent's allegation that the civil case filed by Arsenio Chua was in his capacity as personal creditor of spouses Palomo has no basis. The respondent insurance company having issued a policy in favor of herein petitioner which policy was of legal force and effect at the time of the fire, it is bound by its terms and conditions. Upon its failure to prove the allegation of lack of insurable interest on the part of the petitioner, respondent insurance company is and must be held liable.

EVANGELISTA & CO. v. ABAD SANTOSFACTS:On October 9, 1954 a co-partnership was formed under the name of "Evangelista & Co." On June 7, 1955 the Articles of Co-partnership were amended so as to include herein respondent, Estrella Abad Santos, as industrial partner, with herein petitioners Domingo C. Evangelista, Jr., Leonarda Atienza Abad Santos and Conchita P. Navarro, the original capitalist partners, remaining in that capacity, with a contribution of P17,500 each. On December 17, 1963 herein respondent filed suit against the three other partners, alleging that the partnership, which was also made a party-defendant, had been paying dividends to the partners except to her; and that notwithstanding her demands the defendants had refused and continued to refuse to let her examine the partnership books or to give her information regarding the partnership affairs or to pay her any share in the dividends declared by the partnership. The defendants, in their answer, denied ever having declared dividends or distributed profits of the partnership; denied likewise that the plaintiff ever demanded that she be allowed to examine the partnership books; and by way of affirmative defense alleged that the amended Articles of Co-partnership did not express the true agreement of the parties, which was that the plaintiff was not an industrial partner; that she did not in fact contribute industry to the partnership.

ISSUE:Whether Abad Santos is entitled to see the partnership books because she is an industrial partner in the partnership

HELD:Yes, Abad Santos is entitled to see the partnership books. The Supreme Court ruled that according to

ART. 1299. Any partner shall have the right to a formal account as to partnership affairs:

(1)If he is wrongfully excluded from the partnership business or possession of its property by his co-partners;(2)If the right exists under the terms of any agreement;(3)As provided by article 1807;(4)Whenever other circumstances render it just and reasonable."

In the case at hand, the company is estopped from denying Abad Santos as an industrial partner because it has been 8 years and the company never corrected their agreement in order to show their true intentions. The company never bothered to correct those up until Abad Santos filed a complaint.

Clemente vs. GalvanFacts:Plaintiff and defendant organized a civil partnership which they named "Galvan y Compaia" to engage in the manufacture and sale of paper and other stationery. Plaintiff ask for dissolution which the defendant confirm but with a condition that having covered a deficit incurred by the partnership amounting to P4,000 with his own money, plaintiff reimburse him of one-half of said sum. Juan D. Mencarini, assigned as receiver and liquidator. Upon acting on his duty, the court ordered him to deliver certain machines which were then at Nos. 705-707 Ylaya Street. 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 judgments rendered in cases Nos. 42794 and 43070 ordering Clemente to pay a sum of money.vHe mortgage the machines with his nephew, the intervenor (plaintiff in the herein case.) For having expired the terms in the mortgage the intervenor commenced case No. 49629 to collect his mortgage credit.

Issue:W/N the mortgage between Clemente and his nephew (intervenor, plaintiff in the case) is valid?

Rule:No. 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 belong to the partnership and not to him, and shall belong to it until partition is effected according to the result thereof after the liquidation. Also, Clemente did not have actual possession of the machines, he could not in any manner mortgage them.

TECK SEING AND CO., LTD., petitioner-appellee.SANTIAGO JO CHUNG, ET AL., partners,vs.PACIFIC COMMERCIAL COMPANY, ET AL., creditors-appellants.

Facts:In an insolvency proceedings of petitioner-establishment, SociedadMercantil, Teck Seing &Co., Ltd., creditors Pacific Commercial and others filed a motion with the Court to declare the individual partners parties to the proceeding, for each to file an inventory, and for each to be adjudicated as insolvent debtors.

ISSUE:Whether the fact that the firm name "Teck Seing & Co.,Ltd." does not contain the name of all or any of the partners asprescribed by the Code of Commerce prevents the creation ofa general partnership.

HELD:Professor Jose A. Espiritu, asamicus curi, states: My opinion is that such a fact alone cannot and will not be a sufficient cause of preventing the formation ofa general partnership, especially if the other requisites are present and the requisite regarding registration of the articles of association in the Commercial Registry has been complied with, as in the present case. I do not believe that the adoption of a wrong name is a material fact to be taken into consideration in this case; first, because the mere fact that a person uses a name not his own does not prevent him from being bound in a contractor an obligation he voluntarily entered into; second, because such a requirement of the law is merely a formal and not necessarily an essential one to the existence ofthe partnership, and as long as the name adopted sufficiently identity the firm or partnership intended to use it, the acts and contracts done and entered into undersuch a name bind the firm to third persons; and third, because the failure of the partners herein to adopt the correct name prescribed by law cannot shield them from their personal liabilities, as neither law nor equity will permit them to utilize their own mistake in order to put the blame on third persons, and much less, on the firm creditors in order to avoid their personal possibility.

PNB v. LOFACTS: In September 1916, SeveroEugenioLo and Ling, together with Ping, Hun, Lam and Peng formed a commercial partnership under the name of Tai Sing and Co., with a capital of P40,000 contributed by said partners. The firm name was registered in the mercantile registrar in the Province of Iloilo. Ping, in the articles of partnership, was assigned as the general manager. However, in 1917, he executed a special power of attorney in favor of Lam to act in his behalf as the manager of the firm. Subsequently, Lam obtained aloanfrom PNB theloanwas under the firms name. In the same year, Ping died in China. From 1918 to 1920, the firm, via GM Lam, incurred otherloansfrom PNB. Theloanswere not objected by any of the partners. Later, PNB sued the firm for non-payment. Lo, in his defense, argued that he cannot be liable as a partner because the partnership, according to him, is void; that it is void because the firms name did not comply with the requirement of the Code of Commerce that a firm name should contain the names of all of the partners, of several of them, or only one of them. Lo also argued that the acts of Lam after the death of Ping is not binding upon the other partners because the special power of attorney shall have already ceased.

ISSUE:Whether or not Lo is correct in both arguments.

HELD:No. The anomalous adoption of the firm name above noted does not affect the liability of the general partners to third parties under Article 127 of the Code of Commerce. The object of the Code of Commerce in requiring a general partnership to transact business under the name of all its members, of several of them, or of one only, is to protect the public from imposition and fraud; it is for the protection of the creditors rather than of the partners themselves. It is unenforceable as between the partners and at the instance of the violating party, but not in the sense of depriving innocent parties of their rights who may have dealt with the offenders in ignorance of the latter having violated the law; and that contracts entered into by a partnership firm defectively organized are valid when voluntarily executed by the parties, and the only question is whether or not they complied with the agreement. Therefore, Lo cannot invoke in his defense the anomaly in the firm name which they themselves adopted. Lo was not able to prove his second argument. But even assuming arguendo, his second contention does not deserve merit because (a) Lam, in acting as a GM, is also a partner and his actions were never objected to by the partners, and (b) it also appeared from the evidence that Lo, Lam and the other partners authorized some of theloans.

Elmo Muasque vs CA

Facts:ElmoMuasque,inbehalfofGalanandMuasquepartnershipasContractor,entered into a written contract with Tropical Commercial Co., through its branch managerRamonPons,forremodelingof Tropicalsbuildingin Cebu.The consideration for the entire services is P25,000 to be paid: 30% upon signing ofcontract, and balance on 3equal installments of P6,000 every 15working days. First payment of check worthP7,000 waspayable toMuasque, whoindorsed itto Galan for purposes of depositing the amount andpaying the materials already used. But since Galan allegedly misappropriated P6,183.37 of the check for personal use, Muasque refused to indorsethe second checkworth P6,000.Galan then informedTropical ofthemisunderstandingbetweenhimandMuasqueandthispromptedTropicaltochangethepayeeofthesecondcheckfromMuasquetoGalanandAssociates(thedulyregisterednameofGalanandMuasquepartnership).Despite the misappropriation, Muasque alone was able to finish the project.The two remaining checks were properly issued to Muasque. Muasque filed a complaint for payment of sum of money plus damages against Galan, Tropical and Pons for the amount covered by the first and second checks. CebuSouthernHardwareCoandBlueDiamondGlassPalace wereallowedas intervenors having legal interest claiming against Muasue and Galan for materials used.

Issue: W/N Muasque and Galan are partners?

Held:YES. Tropical had every right to presume the existence of the partnership:a.Contractstatesthatagreementwasentered intobyGalanand Muasqueb. The first check issue in the nameof Muasque was indorsed to GalanThe relationship was made to appear as a partnership.

LA COMPAIA MARITIMA v. MUOZ

FACTS:On the 31st day of March, 1905, the defendants Francisco Muoz, Emilio Muoz, and Rafael Naval formed on ordinary general mercantile partnership under the name of Francisco Muoz & Sons for the purpose of carrying on the mercantile business in the Province of Albay which had formerly been carried on by Francisco Muoz. 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 Muoz, he contributed nothing to the partnership and received nothing from it.

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

HELD:Yes, Muoz 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

Pacific Commercial Company v. Aboitiz & Martinez

FACTS: In 1919, Arnaldo de Silva, Guillermo Aboitiz, Vidal Aboitiz and Jose Martinez formed a partnership. De Silva, Guillermo, and Vidal were the capitalist partners while Martinez was the industrial partner. The articles of partnership contained, among others, that Martinez may also be liable for losses but only to the extent of his shares in the profits which was at 30%.The partnership incurredloansfrom Pacific Commercial Company which the partnership failed to pay. The partnerships property was exhausted but there remained an unpaid balance for which PCC sued the partnership. The trial court issued a judgment where it ordered that the deficiency should be satisfied by the properties of the three capitalist partners; that in the event the properties of the three will not be enough, the remaining balance shall issue against the property of Martinez. Martinez appealed the decision.

ISSUE:Whether or not Martinez is liable for the said debt.

HELD:Yes. As held in the case ofLa Compaia Maritama vs Francisco Muoz et al,all the members of a general partnership are liable with all their property for the results of the duly authorized transactions made in the name and for the account of the partnership. All the members of the general co-partnership, be they or be they not managing partners of the same are liable personally andin solidumwith all their property for the results of the transaction made in the name and for the account of the partnership. The Supreme Court also emphasized that liability for losses relates merely to the distribution of losses among the partners themselves in the settlement of the partnership affairs and has no reference to partnership obligations or liabilities to third parties.

Santiago v. Castro

FACTS:Back in November 1964, the Lims, borrowed from petitioner Santiago Syjuco, Inc., 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 ownedpro indivisoby the Lims under two titles: TCT Nos. 75416 and 75418 of the Manila Registry. On November 8, 1967, the Lims failed to pay it despite demands therefore; 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 the Supreme Court. One of the complaints filed by the Lims was filed 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 ownerspro 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:Whether the mortgage executed by the Lims be attributable to their partnership

HELD:Yes, the mortgage executed by the Lims is attributable to their partnership. The Supreme Court held that the legal fiction of a separate juridical personality and existence will not shield it from the conclusion of having such knowledge which naturally and irresistibly flows from the undenied facts. It would violate all precepts of reason, ordinary experience and common sense to propose that a partnership, as such, cannot be held accountable with knowledge of matters commonly known to all the partners or of acts in which all of the latter, without exception, have taken part, where such matters or acts affect property claimed as its own by said partnership. The silence and failure of the partnership to impugn said mortgage within a reasonable time, let alone a space of more than seventeen years, brought into play the doctrine of estoppel to preclude any attempt to avoid the mortgage as allegedly unauthorized. There is no reason to distinguish between the Lims, as individuals, and the partnership itself, since the former constituted the entire membership of the latter. In other words, despite the concealment of the existence of the partnership, for all intents and purposes and consistently with the Lims' own theory, it was that partnership which was the real party in interest in all the actions; it was actually represented in said actions by all the individual members thereof, and consequently, those members' acts, declarations and omissions cannot be deemed to be simply the individual acts of said members, but in fact and in law, those of the partnership.

Macdonald v. Natl City Bank of New YorkFacts:StasikinoceyisapartnershipformedbydaCosta, Gorcey, Kusik and Gavino. It was denied registration by the SEC due to a confusion between the partnership and CardinalRattan. Cardinal Rattan isthe business name or styleused b yStasikinocey. Da Costa and Gorcey are the general partners ofCardinal Rattan. Moreover, Da Costa is the managing partnerof Cardinal Rattan. Stasikinocey hadan overdaft account with Nationa City Bank, which waslater converted into an ordinary loan due thepartnerships failure inpaying its obligation. Theordinaryloanwassecuredbyachattelmortgageover3vehicles. 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 itscreditand foreclosureof thechattelmortgageupon learning of these transactions.

Issue:WONthepartnership,Stasikinoceyisestoppedfromassertingthatitdoesnothavejuridicalpersonality since it is an unregistered commercial partnership [YES]

Held:While an unregistered commercial partnership has nojuridical 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 ofthe equitable principle of estoppel. Where a partnership not duly organized has been recognizedassuchinitsdealingswithcertainpersons,itshallbeconsideredaspartnershipbyestoppelandthepersonsdealing withitare estoppedfromdenying itspartnership existence