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Lozana vs.

Depakakibo ISSUE:
W/N partnership is void or the act of the partnership in furnishing
FACTS: Lozana and Depakakibo established a partnership for the electric current to the franchise holder without previous approval of
purpose of maintaining, operating, and distributing electric light and Public Service Commission render the partnership void?
power in the Municipality of Dumangas. The partnership is W/N disposal of contribution of parties is allowed.
capitalized at the sum of P30, 000.00 where Lozana agreed to
furnish 60% while Depakakibo, 40%. However, the franchise for RULING:
venture in favor of Buenaflor was cancelled and revoked by the Partnership is valid. The fact of furnishing the current to the holder
Public Service Commission. Lozana thereafter sold Generator Buda of the franchise alone, without the previous approval of the Public
[Lozanas contribution to the partnership; no liquidation made] Service Commission, does not per se make the contract of
to Decologon. When the decision was appealed, a temporary partnership null and void from the beginning and render the
certificate of public convenience was issued in the name of partnership entered into by the parties for the purpose also void
Decolongon. Depakakibo sold one Crossly Diesel Engine and non-existent Disposal of Contributed Property to the
[Depakakibos contribution to the partnership] to Spouses Partnership. Facts show that parties entered into the contract of
Jimenea and Harder. Lozana brought action against Depakakibo partnership, Lozana contributing the amount of P18, 000, and there
alleging the latter wrongfully detained the Generator Buda and has not been liquidation prior to the sale of the contributed
wooden posts to which he is entitled to the possession of. Lozano properties: Buda Diesel Engine and 70 posts. It necessarily follows
prayed the properties be delivered back to him. CFI ordered sheriff that the Buda diesel engine contributed by the plaintiff had become
to take possession of the properties and the delivery thereof to the property of the partnership. As properties of the partnership,
Lozano. Depakakibo alleged properties have been contributed to the same could not be disposed of by the party contributing the
the partnership and therefor he is not unlawfully detaining them. In same without the consent or approval of the partnership or of the
addition, Lozano sold his contribution to partnership in violation of other partner.
terms of their agreement. CFI declared Lozano owner of and
entitled to the equipment. Depakakibo appealed decision to the
Supreme Court.
MAXIMILIANO SANCHO, vs. SEVERIANO LIZARRAGA ISSUE:
WON plaintiff acquired the right to demand rescission of the
FACTS: partnership contract according to article 1124 of the Civil Code.
The plaintiff brought an action for the rescission of the partnership
contract between himself and the defendant and the HELD:
reimbursement of his investment worth 50,000php with interest at The SC ruled that owing to the defendants failure to pay to the
12 per cent per annum form October 15, 1920, with costs, and any partnership the whole amount which he bound himself to pay, he
other just and equitable remedy against said defendant. The became indebted to the partnership for the remainder, with
defendant denies generally and specifically all the allegations of the interest and any damages occasioned thereby, but the plaintiff did
complaint and asked for the dissolution of the partnership, and the not thereby acquire the right to demand rescission of the
payment to him as its manager and administrator P500 monthly partnership contract according to article 1124 of the Code. Article
from October 15, 1920 until the final dissolution with interest. 1124 cannot be applied to the case in question, because it refers to
The CFI found that the defendant had not contributed all the capital the resolution of obligations in general, whereas articles 1681 and
he had bound himself to invest hence it demanded that the 1682 specifically refer to the contract of partnership in particular.
defendant liquidate the partnership, declared it dissolved on And it is a well known principle that special provisions prevail over
account of the expiration of the period for which it was constituted, general provisions. Hence, SC dismissed the appeal left the decision
and ordered the defendant, as managing partner, to proceed appealed from in full force.
without delay to liquidate it, submitting to the court the result of
the liquidation together with the accounts and vouchers within the
period of thirty days from receipt of notice of said judgment. The
plaintiff appealed from said decision praying for the rescission of
the partnership contract between him and the defendant in
accordance with Art. 1124.
MORA v. MATIC ISSUE:
Whether or not Mora Electric is liable to pay the City of Manila as
FACTS: stipulated in the contract with Matic and Quiogue.
Paulino Matic obtained from the City of Manila the
concession to provide the lighting system of the Manila HELD+RATIO:
North and South Cemeteries on All Saint's Day in 1934, for YES, Mora Electric is liable to pay.
the amount of P8,733, the payment of which was Mora Electric Co., Inc., bound itself in its contract with
guaranteed by Luzon Surety Co. Benita Quiogue to pay the City of Manila the P8,773.
Matic transferred his rights to said concession to Benita Having undertaken to pay this amount to the City of Manila,
Quiogue, authorizing her to enter into a contract with Mora Mora Electric Co., Inc., is under a duty to reimburse
Electric Co., Inc., to make the installation and to pay the whoever made good the amount for it, namely, Paulino
P8,773. Matic and Benita Quiogue.
Benita Quiogue entered into this contract with Mora Mora contends that Quiogue should share in the payment
Electric Co., Inc., each party binding itself to contribute the because what exists between them is a civil partnership (i.e.
necessary labor and material which the latter may be distribution of profits and losses).
unable to put up, and dividing the profits between them But the SC held that the amount now sought to be
after deducting there from all the necessary expenses for recovered is not claimed as loss or profit, but as the
labor, materials, cost of the current and the amount of contribution which Mora Electric Co., Inc., bound itself to
P8,773 which should be paid to the city, both parties also make to the partnership and which it was under a duty to
binding themselves, for this purpose, to report the expenses pay, although it was paid instead by Matic and Quiogue.
which each might have incurred. FINAL VERDICT: Appeal dismissed. SC affirmed CAs ruling
The business was a failure because it did not yield the
expected profit.
TORRES v. CA ISSUE: Whether or not there exists a partnership.

FACTS: HELD:
In 1969, sisters Antonia Torres and Emeteria Baring entered into a Yes. The joint venture agreement the sisters entered into with
joint venture agreement with Manuel Torres. Under the agreement, Manuel is a partnership agreement whereby they agreed to
the sisters agreed to execute a deed of sale in favor Manuel over a contribute property (their land) which was to be developed as a
parcel of land, the sisters received no cash payment from Manuel subdivision. While on the other hand, though Manuel did not
but the promise of profits (60% for the sisters and 40% for Manuel) contribute capital, he is an industrial partner for his contribution for
said parcel of land is to be developed as a subdivision. general expenses and other costs. Furthermore, the income from
Manuel then had the title of the land transferred in his name and he the said project would be divided according to the stipulated
subsequently mortgaged the property. He used the proceeds from percentage (60-40). Clearly, the contract manifested the intention
the mortgage to start building roads, curbs and gutters. Manuel also of the parties to form a partnership. Further still, the sisters cannot
contracted an engineering firm for the building of housing units. But invoke their right to the 60% value of the property and at the same
due to adverse claims in the land, prospective buyers were scared time deny the same contract which entitles them to it.
off and the subdivision project eventually failed. At any rate, the failure of the partnership cannot be blamed on the
The sisters then filed a civil case against Manuel for damages sisters, nor can it be blamed to Manuel (the sisters on their appeal
equivalent to 60% of the value of the property, which according to did not show evidence as to Manuels fault in the failure of the
the sisters, is whats due them as per the contract. partnership). The sisters must then bear their loss (which is 60%).
The lower court ruled in favor of Manuel and the Court of Appeals Manuel does not bear the loss of the other 40% because as an
affirmed the lower court. industrial partner he is exempt from losses.
The sisters then appealed before the Supreme Court where they
argued that there is no partnership between them and Manuel
because the joint venture agreement is void.
Cuenco v. Vda. De Manguerra The case of Concepcion
o Five deeds of donation were executed in favour of
FACTS five children. This left out Concepcion (who became
Concepcion (respondent) filed the initiatory complaint respondent in this case).
herein for specific performance against her uncle Miguel o Concepcion occupied Lot 903-A-6 and paid taxes for
Cuenco (petitioner, later substituted by Cuyegkeng). it.
o Concepcions father, the late Don Mariano Jesus o When Concepcion went to the Register of Deeds to
Cuenco (who became Senator) and Miguel Cuenco register the Lot 903-A-6, there was an adverse claim
formed the Cuenco and Cuenco Law Offices by Miguel saying that he was the absolute owner of
o Cuenco and Cuenco Law Offices served as lawyers said lot.
in two (2) cases entitled Valeriano Solon versus Miguels allegations
Zoilo Solon and Valeriano Solon versus Apolonia o He executed five deeds of donation to five children
Solon involving a dispute among relatives over of his brother because of the love, care and
ownership of lot 903 of the Banilad Estate gratitude <3 they exhibited during his long sickness.
Records of said cases indicate the name of the Miguel alone o Concepcion never visited him.
as counsel of record, but in truth and in fact, the real lawyer Miguel was able to take the witness stand but he became
behind the success of said cases was the influential Don sick and was not able to be present on cross-examination so
Mariano Jesus Cuenco his testimony was stricken off the record.
After winning the said cases: Marietta Cuyegkeng (her only daughter) substituted him in
o Lot 903-A: 5000 square meters (Don Mariano Jesus the case.
Cuencos attorneys fees) o She is the owner of the lot as he purchased it from
o Lot 903-B: 5000 square meters (Miguel Cuencos his father.
attorneys fees) o That she was aware of the case because her father
o Lot 903-C: 54,000 square meters (Solons retention) used to commute to Cebu to attend hearings.
Mariano Cuenco entrusted Lot 903 A to Miguel. o That she constructed a house on the said lot.
o Miguel was able to obtain in his own name a title Lower court and appellate court:
for Lot 903-A o Concepcion has the legal right of ownership over lot
o Miguel was under the obligation to hold the title in 903-A-6.
trust for his brother Marianos children by first o The CA ruled that the subject land "is part of the
marriage attorneys fees of Don Mariano Cuenco,
Lot 903-A was partitioned into six (6) sub-lots (Lots 903-A-1 predecessor-in-interest of Concepcion Cuenco vda.
to 903-A-6) to correspond to the six (6) children of de Manguerra and Miguel merely holds such
Marianos first marriage (Teresita, Manuel, Lourdes, property in trust for her.
Carmen, Consuelo, and Concepcion)
ISSUE: o Marianos children, including Concepcion, were the
Whether Concepcion is entitled to ownership of the property (Lot ones who shouldered the expenses incurred for the
903-A-6) subdivision of the property
o After the subdivision of the property, Marianos
RULING children -- including Concepcion -- took possession
Given as attorneys fees was one hectare of Lot 903, of of their respective portions thereof.
which two five-thousand square meter portions were o The legal titles to five portions of the property were
identified as Lot 903-A and Lot 903-B. That only Miguel transferred via a gratuitous deed of conveyance to
handled Civil Case No. 9040 does not mean that he alone is Marianos five children, following the allocations
entitled to the attorneys fees in the said cases. "When a specified in the subdivision plan prepared for
client employs the services of a law firm, he does not Lourdes Cuenco.
employ the services of the lawyer who is assigned to Respondent is not barred by laches. In the present case,
personally handle the case. Rather, he employs the entire respondent has persistently asserted her right to Lot 903-A-
law firm." Being a partner in the law firm, Mariano -- like 6 against petitioner
Miguel -- was likewise entitled to a share in the attorneys
fees from the firms clients.
Although Lot 903-A was titled in Miguels name, the
circumstances surrounding the acquisition and the
subsequent partial dispositions of this property eloquently
speak of the intent that the equitable or beneficial
ownership of the property should belong to Mariano and
his heirs.
o Lot 903-A was one half of the one-hectare portion
of Lot 903 given as attorneys fees by a client of the
law firm of Partners Miguel and Mariano Cuenco.
Lot 903-A was one half of the one-hectare portion
of Lot 903 given as attorneys fees by a client of the
law firm of Partners Miguel and Mariano Cuenco
o Miguel readily surrendered his Certificate of Title
and interposed no objection to the subdivision and
the allocation of the property to Marianos six
children, including Concepcion.
Chuache v Insurance Commission Travellers reasoned that the policy is endorsed to Arsenio Chua,
mortgage creditor
FACTS: Tai Tong Chuache & Co. filed a complaint in intervention claiming
Azucena Palomo bought a parcel of land and building the proceeds of the fire Insurance Policy issued by travellers
from Rolando Gonzales and assumed a mortgage of the building affirmative defense of lack of insurable interest that before the
in favor of S.S.S. which was insured with S.S.S. Accredited Group occurrence of the peril insured against the Palomos had already
of Insurers paid their credit due the petitioner
April 19, 1975: Azucena Palomo obtained a loan from Tai Tong
Chuache Inc. in the amount of P100,000 and to secure it, the ISSUE: W/N Tai Tong Chuache & Co. has insurable interest
land and building was mortgaged
June 11, 1975: Pedro Palomo secured a Fire Insurance HELD: YES. Travellers Multi-Indemnity Corporation to pay Tai Tong
Policy covering the building for P50,000 with Zenith Insurance Chuache & Co.
Corporation
July 16, 1975: another Fire Insurance policy was procured from when the creditor is in possession of the document of credit, he
Philippine British Assurance Company, covering the same need not prove non-payment for it is presumed
building for P50,000 and the contents thereof for P70,000 The validity of the insurance policy taken b petitioner was not
Before the occurrence of the peril insured against the Palomos assailed by private respondent. Moreover, petitioner's claim that
had already paid their credit due the the loan extended to the Palomos has not yet been paid was
July 31, 1975: building and the contents were totally razed by corroborated by Azucena Palomo who testified that they are still
fire indebted to herein petitioner
Palomo was able to claim P41,546.79 from Philippine British Chua being a partner of petitioner Tai Tong Chuache & Company
Assurance Co., P11,877.14 from Zenith Insurance Corporation is an agent of the partnership. Being an agent, it is understood
and P5,936.57 from S.S.S. Group of Accredited Insurers that he acted for and in behalf of the firm
but Travellers Multi-Indemnity refused so it demanded the Upon its failure to prove the allegation of lack of insurable
balance from the other three but they refused so they filed interest on the part of the petitioner, Travellers must be held
against them liable
Insurance Commission, CFI: absolved Travellers on the basis that
Arsenio Cua was claiming and NOT Tai Tong Chuache
Palomo Appealed
LITTON V. HILL & CERON the date of the transaction, the partnership between Hill and Ceron
was in existence In its decision, the CA said that the 6th paragraph
FACTS: of the articles of copartnership of Hill & Ceron provides that the
On February 14, 1934, George Litton, the plaintiff, sold and management of the business affairs of the copartnership shall be
delivered to Carlos Ceron, one of the managing partners of Hill & entrusted to both copartners, who shall jointly administer the
Ceron, a certain number of mining claims. Then, defendant Carlos business affairs of the copartnership. A written contract of the firm
Ceron delivered to Litton a document evidencing the fact that Ceron can only be signed by one of the partners if the other partner
of Hill & Ceron company received from Litton 17,000 shares of Big consented. Now, assuming that Ceron attempted to represent the
Wedge Mining Company, sold at P0.11 per share or total of P1,870. firm in this contract with the Litton, the latter has failed to prove
Ceron paid to Litton P1,150, leaving an unpaid balance of P720. that Hill had consented to such contract. It follows from the sixth
Unable to collect this sum from both Hill & Ceron and its surety, paragraph of the articles of partnership of Hill & Ceron that the
Visayan Surety & Insurance Corporation, Litton filed a complaint in management of the business of the partnership has been entrusted
the Court of First Instance of Manila against the said defendants for to both partners thereof, but the Supreme Court dissented from the
the recovery of the said balance. The court ordered Ceron view of the CA that for one of the partners to bind the partnership
personally to pay the amount and absolved the partnership Hill & the consent of the other is necessary. Third persons, like the
Ceron, Robert Hill and the Visayan Surety & Insurance Corporation. plaintiff, are not bound in entering into a contract with any of the
CA affirmed RTC, ruling that Ceron did not intend to represent and two partners, to ascertain whether or not this partner with whom
did not act for the firm Hill & Ceron in the transaction involved in the transaction is made has the consent of the other partner. The
this litigation. public need not make inquires as to the agreements had between
the partners. Its knowledge is enough that it is contracting with the
ISSUE:W/N Ceron represented the firm Hill & Ceron in buying some partnership, which is represented by one of the managing partners.
mining claims from Litton. There is a general presumption that each individual partner is an
authorized agent for the firm and that he has authority to bind the
HELD: firm in carrying on the partnership transactions. Furthermore, 2nd
YES. The Court ruled that the transaction made by Ceron with Litton paragraph of the articles of partnership of Hill & Ceron provides that
should be understood as effected by Hill & Ceron and binding upon the purpose or object of the copartnership is to engage in the
it. Primarily, Robert Hill admitted when he testified at the trial the business of brokerage in general. With that, none of the two
following: a) that he and Ceron, during the partnership, had the partners, under article 130 of the Code of Commerce, may legally
same power to buy and sell; b) that in said partnership Hill as well as engage in the business of brokerage in general as stock brokers,
Ceron made the transaction as partners in equal parts; c) that on security brokers and other activities pertaining to the business of
the partnership. Ceron, therefore, could not have entered into the between the two partners, which consists in asking the other's
contract of sale of shares with Litton as a private individual, but only consent before contracting for the partnership. This obligation of
as a managing partner of Hill & Ceron. The appealed decision is course is not imposed upon a third person who contracts with the
reversed and the defendants are ordered to pay to the plaintiff, partnership; it is not necessary for the third person to ascertain if
jointly and severally, the sum of P720, with legal interest. the managing partner with whom he contracts has previously
obtained the consent of the other. A third person may and has a
RESOLUTION OF MOTION FOR RECONSIDERATION OF THE CASE right to presume that the partner with whom he contracts has, in
FACTS: Robert Hill, one of the defendants sentenced in the decision the ordinary and natural course of business, the consent of his
to pay to the plaintiff, filed a motion for reconsideration, insisting copartner. This finds support in the legal presumption that the
that the appellant had not established that Carlos Ceron, another of ordinary course of business has been followed, and that the law has
the defendants, had the consent of his copartner, Hill, to enter with been obeyed. Therefore, unless the contrary is shown, the
the appellant into the contract whose breach gave rise to the presumption subsists. If we are to interpret the articles of
complaint. He said that it being stipulated in the articles of partnership in question by holding that it is the obligation of the
partnership that Hill and Ceron would, as managers, have the third person to inquire whether the managing copartner of the one
management of the business of the partnership, then Ceron could with whom he contracts has given his consent to said contract,
not ignore the fact that the consent of the Hill was necessary for the would operate to hinder business transactions.
validity of the contract. And, there being no evidence that said 2. NO. If Ceron stated to the appellant that he had the consent of
consent had been obtained, the complaint to compel compliance Hill, and if it turns out later that he did not have such consent, this
with the said contract had to be, as it must be in fact, a procedural would not annul the contract. Article 130 of the Code of Commerce,
failure. provides that when, not only without the consent, but even it is
against the will of any of the managing partners, a contract is
ISSUE: 1. W/N the consent of Hill was necessary for the validity of entered into with a third person who acts in good faith, and the
the contract entered into between Ceron and Litton. 2. W/N the transaction is of the kind of business in which the partnership is
lack of consent of a partner/s (Hill) would annul a contract entered engaged, as in the present case, said contract shall not be annulled,
into by another partner (Ceron). without prejudice to the liability of the guilty partner. This provision
is to protect a third person who contracts with one of the managing
HELD: partners of the partnership, thus avoiding fraud and deceit to which
1. NO. The stipulation in the articles of partnership that any of the he may easily fall a victim without this protection which the Code of
two managing partners may contract and sign in the name of the Commerce wisely provides. The motion for reconsideration is
partnership with the consent of the other, creates an obligation DENIED.