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Goquiolay v Sycip (1963, Reyes) Parties: Petitioner: Goquiolay/ Respondent: Was in!

ton Sycip Partners ip: "an Sin #n and #ntonio Goquiolay $octrine: W ere t e partners ip %usiness is to deal in &erc andise and !oods, i'e', &ova%le property, t e sale o( its real property (i&&ova%les) is not )it in t e ordinary po)ers o( a partner, %ecause it is not in line )it t e nor&al %usiness o( t e (ir&' *ut ) ere t e e+press and avo)ed purpose o( t e partners ip is to %uy and sell real estate (as in t e present case), t e i&&ova%les t us acquired %y t e (ir& (ro& part o( its stoc,-in-trade, and t e sale t ereo( is in pursuance o( partners ip purposes, ence )it in t e ordinary po)ers o( t e partner' .acts: (note t is is a &otion (or reconsideration o( earlier S/ case, 0 included so&e (acts o( t e (irst case too (or it to &a,e sense cu1 i( %ased on actual case alone not in! &a,es sense) "an Sin #n and Goquiolay entered into a !eneral co&&ercial partners ip under t e partners ip na&e 2"an Sin #n and #ntonio Goquiolay3 (or t e purpose o( dealin! in real estate' " e a!ree&ent lod!ed upon "an Sin #n t e sole &ana!e&ent o( t e partners ip a((airs' " e li(eti&e o( t e partners ip )as (i+ed at ten years and t e #rticles o( /o-partners ip stipulated t at in t e event o( deat o( any o( t e partners %e(ore t e e+piration o( t e ter&, t e partners ip )ill not %e dissolved %ut )ill %e continued %y t e eirs or assi!ns o( t e deceased partner' *ut t e partners ip could %e dissolved upon &utual a!ree&ent in )ritin! o( t e partners' " e partners ip ad 49 lots' "an Sin #n died and is )i(e 5on! / ai Pin su%sequently %eco&e t e ad&inistratri+ o( t e estate' 6n(ortunately t e partners ip ad a lot o( de%t and 5on! / ai Pin t us (ile a petition in t e pro%ate court (or aut ority to sell all 49 lots' *ein! !ranted t is aut ority, 5on! / ai Pin t en sold all 49 lots to Sycip and 7ee' W en Goquiolay learned a%out t e sale to Sycip and 7ee, e (iled a petition in t e intestate proceedin!s to set aside t e order o( t e pro%ate court approvin! t e sale in so (ar as is interest over t e parcels o( land sold )as concerned' 8e t en (iled a case a!ainst Sycip and 7ee' Goquiolay )as %asically as,in! t at t e sale %e rescinded and t e lands !iven %ac, to t e partners ip %ecause 5on! / ai Pin did not ave t e aut ority to dispose o( t e 49 lots %ecause s e )as only a li&ited partner' " e case t en )ent all t e )ay to t e S/ and t e S/ ruled in (avor o( Sycip' Petitioner Goquiolay no) (iles t is &otion (or reconsideration o( t at case' " e issue o( ) et er or not t e sale )as valid in!es on t e aut ority o( 5on! / ai Pin to alienate t e properties' Petitioner9s ar!u&ents: 1' " e aut ority !ien %y Goqiolay to 5on! / ai Pin )as only to manage t e property, and t at it did not include t e po)er to alienate, citin! #rticle 1:13 o( t e /ivil /ode o( 1;;9' <' 5on! / ai Pin even i( s e )as a !eneral partner did not ave t e ri! t to alienate t e real estate properties o( t e partners ip Respondent: (no ar!u&ents stated in t e case %ut (ro& t e loo,s o( t e decision t ey )ere assertin! t at t ey )ere innocent %uyers in !ood (ait and t us t e sale )as valid as to t e&' #!ain, not speci(ically stated) "/ and /# = no &ention in t e case 0ssue: W>? t e sale )as valid' / W>? s e )as a li&ited or !eneral' Partner' #ssu&in! 5on! / ai Pin )as a !eneral partner, W>? s e ad t e ri! t to alienate Real propoerties o( t e partners ip' 8eld: " e sale )as valid, 5on! / ai Pin )as a !eneral partner ) o ad aut ority to sell t e lots' Kong Chai Pin was not a mere agent, because she had become a partner upon her husband's death, as expressly provided by the articles of copartnership. Even more, granting that by succession to her husband, Tan in !n, the widow only became a limited partner, Goquiolay's authorization to manage the partnership property was proof that he considered and recognized

her as general partner, at least since "#$%. The reason is plain& 'nder the law (!rticle "$), last paragraph, Code of Commerce*, appellant could not empower the widow, if she were only a limited partner, to administer the properties of the firm, even as a mere agent& +imited partners may not perform any act of administration with respect to the interests of the copartnership, not even in the capacity of agents of the managing partners. (Emphasis supplied*. ,y see-ing authority to manage partnership property, Tan in !n's widow showed that she desired to be considered a general partner. ,y authori.ing the widow to manage partnership property (which a limited partner could not be authori.ed to do*, /o0uiolay recogni.ed her as such partner, and is now in estoppel to deny her position as a general partner, with authority to administer and alienate partnership property. The Court pointed out in their main decision that the heir ordinarily becomes a limited partner for his own protection, because he would normally prefer to avoid any liability in excess of the value of the estate inherited so as not to 1eopardi.e his personal assets. ,ut this statutory limitation of responsibility being designed to protect the heir, the latter may disregard it and instead elect to become a collective or general partner, with all the rights and privileges of one, and answering for the debts of the firm not only with the inheritance but also with the heir's personal fortune. This choice pertains exclusively to the heir, and does not re0uire the assent of the surviving partner. 2t must be remembered that the articles of co3partnership here involved expressly stipulated that& 2n the event of the death of any of the partners at any time before the expiration of said term, the co3partnership shall not be dissolved but will have to be continued and the deceased partner shall be represented by his heirs or assigns in said co3partnership (!rt. 422, !rticles of Co3Partnership*. The !rticles did not provide that the heirs of the deceased would be merely limited partners5 on the contrary, they expressly stipulated that in case of death of either partner 6the co-partnership ... will have to be continued6 with the heirs or assigns. 2t certainly could not be continued if it were to be converted from a general partnership into a limited partnership, since the difference between the two -inds of associations is fundamental5 and specially because the conversion into a limited association would have the heirs of the deceased partner without a share in the management. 7ence, the contractual stipulation does actually contemplate that the heirs would become general partners rather than limited ones. 8urthermore, the sale was valid as to third persons (2.e ycip* because 9- no)in! t at %y la) a li&ited partner is %arred (ro& &ana!in! t e partners ip %usiness or property, t ird parties (li,e t e purc asers) ) o (ound t e )ido) possessin! and &ana!in! t e (ir& property )it t e acquiescence (or at least )it out apparent opposition) o( t e survivin! partners )ere per(ectly @usti(ied in assu&in! t at s e ad %eco&e a !eneral partner, and, t ere(ore, in ne!otiatin! )it er as suc a partner, avin! aut ority to act (or, and in %e al( o( t e (ir&'A :. ;es. he had authority to sell even the <eal properties of the partnership. " e /ourt in t is case said t at it is i&portant to di((erentiate %et)een real estate acquired and eld as 2 stock-intrade and real estate eld &erely as 2business site (or t e partners ip' W ere t e partners ip %usiness is to deal in &erc andise and !oods, i'e', &ova%le property, t e sale o( its real property (i&&ova%les) is not )it in t e ordinary po)ers o( a partner, %ecause it is not in line )it t e nor&al %usiness o( t e (ir&' *ut ) ere t e e+press and avo)ed purpose o( t e partners ip is to %uy and sell real estate (as in t e present case), t e i&&ova%les t us acquired %y t e (ir& (ro& part o( its stoc,-in-trade, and t e sale t ereo( is in pursuance o( partners ip purposes, ence )it in t e ordinary po)ers o( t e partner' 2n Chester vs. Dickerson, %$ =. ;. ", "> !m. <ep. %%?& !nd hence, when the partnership business is to deal in real estate, one partner has ample power, as a general agent of the firm, to enter into an executory contract for the sale of real estate. Since t e sale %y t e )ido) )as in con(or&ity )it t e e+press o%@ective o( t e partners ip, Ato en!a!e ''' inbuying and selling real estateA (#rt' 0B, ?o' 1 #rticles o( /opartners ip), it can not %e &aintained t at t e sale )as &ade in e+cess o( er po)er as !eneral partner' $ispositive: " e &otion (or reconsideration is $C?0C$'

-5ester

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