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Facts:
Subsequently,
Kelam
obtained
several loans from PNB the loan
was under the firms name. He
mortgaged
certain
personal
properties of Tai Sing & Co. as a
security for the loans.
ISSUES:
(1) Whether or not the anomaly in the
firm name can be a ground for the
appellants to evade liability against
the bank?
(2) W/N the loans by the attorney-infact Kelam from PNB executed after
the death of the managing partner,
Say Lian Ping, were valid?
(3) W/N Defendants are jointly and
severally liable to PNB? (Note:
this case was decided in 1927.
New Civil Code provision on
the
members
of
a
general
partnership, be they managing
partners thereof or not, shall be
personally and solidarily liable with
all their property, for the results of
the transactions made in the name
and for the account of the
partnership, under the signature of
the latter, and by a person
authorized to use it.
HELD:
(1) 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 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, appellants cannot invoke in
his defense the anomaly in the firm
name which they themselves adopted.
(2) Appellants were not able to prove
the alleged death of the managing
partner, Say Lian Ping. But even
assuming arguendo, his second
contention does not deserve merit
because (a) Kelam, 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, Kelam, Ng Khey ling and Yap
Seng, and authorized Sy Tit as
manager,
the
latter
having
obtained the loan from the Plaintiff
Bank.
Insurance
companies
issued
insurance policies in the total
amount of P40,000 in the name of
Sharruf & Co.
Office
Ltd.,
and
Springfield
Insurance Co., to pay the partners
Salomon Sharruf and Elias Eskenazi
P40,000 plus 8% interest.
ISSUE: W/N the Defendant insurance
companies may be liable for the payment
of insurance claims of Plaintiffs-appellees,
notwithstanding the change in their
business name?
HELD: Yes
While it is true that at the
beginning the plaintiffs had been doing
business in said name of "Sharruf & Co.",
insuring their business in said name, and
upon executing the contract of partnership
on August 26, 1933, they changed the title
thereof to "Sharruf & Eskenazi," the
membership of the partnership in question
remained unchanged, the same and only
members of the former, Salomon Sharruf
and Elias Eskenazi, being the ones
composing the latter, and it does not
appear that in changing the title of the
partnership they had the intention of
defrauding the herein defendant insurance
companies.
Therefore, the responsibility of said
defendants to the plaintiffs by virtue of the
respective insurance policies has not been
altered.