Article 1815 – Partnership Name

PETITION FOR AUTHORITY TO CONTINUE USE OF THE FIRM NAME “SYCIP, SALAZAR, FELICIANO, HERNANDEZ &
CASTILLO".

PETITION FOR AUTHORITY TO CONTINUE USE OF THE FIRM NAME “SYCIP, SALAZAR, FELICIANO, HERNANDEZ &
CASTILLO.”
July 30, 1979

Facts:
Petitions were filed by the surviving partners of Atty. Alexander Sycip, who died on May 5, 1975 and by the surviving
partners of Atty. Herminio Ozaeta, who died on February 14, 1976, praying that they be allowed to continue using, in
the names of their firms, the names of partners who had passed away.
Petitioners contend that the continued use of the name of a deceased or former partner when permissible by local
custom, is not unethical but care should be taken that no imposition or deception is practiced through this use. They
also contend that no local custom prohibits the continued use of a deceased partner’s name in a professional firm’s
name; there is no custom or usage in the Philippines, or at least in the Greater Manila Area, which recognizes that the
name of a law firm necessarily identifies the individual members of the firm.
Issue:
WON the surviving partners may be allowed by the court to retain the name of the partners who already passed away in
the name of the firm? NO

Held:
In the case of Register of Deeds of Manila vs. China Banking Corporation, the SC said:
The Court believes that, in view of the personal and confidential nature of the relations between attorney and client,
and the high standards demanded in the canons of professional ethics, no practice should be allowed which even in a
remote degree could give rise to the possibility of deception. Said attorneys are accordingly advised to drop the names
of the deceased partners from their firm name.
The public relations value of the use of an old firm name can tend to create undue advantages and disadvantages in the
practice of the profession. An able lawyer without connections will have to make a name for himself starting from
scratch. Another able lawyer, who can join an old firm, can initially ride on that old firm’s reputation established by
deceased partners.
The court also made the difference from the law firms and business corporations:
A partnership for the practice of law is not a legal entity. It is a mere relationship or association for a particular purpose.
… It is not a partnership formed for the purpose of carrying on trade or business or of holding property.” Thus, it has
been stated that “the use of a nom de plume, assumed or trade name in law practice is improper.
We find such proof of the existence of a local custom, and of the elements requisite to constitute the same, wanting
herein. Merely because something is done as a matter of practice does not mean that Courts can rely on the same for
purposes of adjudication as a juridical custom.
Petition suffers legal and ethical impediment.
2 Jo Chung Cang v. Pacific Commercial Co.

Facts:

 In an insolvency proceedings of petitioner-establishment, “Sociedad Mercantil, Teck Seing &Co., td.!, creditors,
"acific 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.
 RTC granted the motion but subsequently denied it.
 Hence, this appeal.

Issue:

Whether the nature of the mercantile establishment, Teck Seing & Co., Ltd. is a limited partnership.

Held:

No. The contract of partnership established a general partnership.

By process of elimination, Teck Seing & Co., Ltd. Is not a corporation nor an accidental partnership (ointtt account
association).

To establish a limited partnership, there must be, at least, one general partner and the name of at least one of the
general partners must appear in the firm name. This requirement has not been fulfilled. Those who seek to avail
themselves of the protection of laws permitting the creation of limited partnerships must show a substantially full
compliance with such laws. It must be noted that all the requirements of the Code have been met with the sole
exception of that relating to the composition of the firm name.

The legal intention deducible from the acts of the parties controls in determining the existence of a partnership. If they
intend to do a thing w/c in law constitutes a partnership, they are partners although their very purpose was to avoid the
creation of such relation. Here the intention of the persons making up, Teck Seing & Co., Ltd. was to establish
partnership w/c they erroneously denominated as a limited partnership.

Order appealed from is reversed.

Article 1816 -

ISLAND SALES, INC., vs. UNITED PIONEERS GENERAL CONSTRUCTION COMPANY, ET. AL G.R. No. L-22493 July 31, 1975
general partnership, Condonation
FACTS:

The defendant company, a general partnership duly registered under the laws of the Philippines, purchased from the
plaintiff a motor vehicle on the installment basis and for this purpose executed a promissory note for P9,440.00, payable
in twelve equal monthly installments of P786.63, the first installment payable on or before May 22, 1961 and the
subsequent installments on the 22nd day of every month thereafter, until fully paid, with the condition that failure to
pay any of said installments as they fall due would render the whole unpaid balance immediately due and demandable.

Having failed to receive the installment due on July 22, 1961, the plaintiff sued the defendant company for the unpaid
balance amounting to P7,119.07. Benjamin C. Daco, Daniel A. Guizona, Noel C. Sim, Romulo B. Lumauig, and Augusto
Palisoc were included as co-defendants in their capacity as general partners of the defendant company.

Daniel A. Guizona failed to file an answer and was consequently declared in default.

Subsequently, on motion of the plaintiff, the complaint was dismissed insofar as the defendant Romulo B. Lumauig is
concerned.

When the case was called for hearing, the defendants and their counsels failed to appear. Consequently, the trial court
authorized the plaintiff to present its evidence ex-parte.

The defendants Benjamin C. Daco and Noel C. Sim moved to reconsider the decision claiming that since there are five
general partners, the joint and subsidiary liability of each partner should not exceed one-fifth ( 1/ 5 ) of the obligations
of the defendant company.

The trial court denied the said motion notwithstanding the conformity of the plaintiff to limit the liability of the
defendants Daco and Sim to only one-fifth ( 1/ 5 ) of the obligations of the defendant company.

ISSUE:

Is the dismissal of the complaint to favor one of the general partners of a partnership increases the joint and subsidiary
liability of each of the remaining partners for the obligations of the partnership.

RULING:

Condonation by creditor or share in partnership debt of one partner does not increase pro-rata liability of other
partner.

In the instant case, there were five general partners when the promissory note in question was executed for and in
behalf of the partnership. Since the liability of the partners is pro rata, the liability of the appellant Benjamin C. Daco
shall be limited to only one-fifth ( 1/ 5 ) of the obligations of the defendant company. The fact that the complaint against
the defendant Romulo B. Lumauig was dismissed, upon motion of the plaintiff, does not unmake the said Lumauig as a
general partner in the defendant company. In so moving to dismiss the complaint, the plaintiff merely condoned
Lumauig’s individual liability to the plaintiff.

The appealed decision as thus clarified was AFFIRMED.

Petitioner Elmo Munasque in behalf of the partnership “Galan & Munasque” as a Contractor' entered into a written
contract with respondent “Tropical” for remodelling of its Cebu Branch building. A total amount of P25,0000 was to be
paid under the contract for the entire services of the Contractor. The first payment made by Tropical was in the form of
a check for P7,000 in the name of petitioner.

Petitioner endorsed the check in favour of Galan to enable the latter to deposit it in the bank and pay for the materials
and labor used. A misunderstanding ensued between Munasque and Galan which came to the knowledge of Tropical
thus, the second check issued by the latter was drawn in the name of “Galan and Associates” and was encashed by
Galan.. Meanwhile the construction continued through the sole efforts of petitioner which caused him to borrow
money from a certain Mr. Espina. Two check were subsequently given to petitioner pursuant to a court order. Petitioner
filed a complaint for payment of sum of money and damages against the respondents seeking to recover the amounts
covered by the two checks and the additional expenses that petitioner incurred in the construction.

Ruling of Lower and Appellate Courts: Both the trial and appellate courts absolved respondents from any liability and
held petitioner together with Galan Jointly liable to intervenors Cebu Southern Hardware Company and Blue Diamond
Glass Palace for the credit that they extended to the partnership.

Issue: Whether or not Petitioner Munasque solidarily or jointly liable with Respondent Galan to pay the credits of
intervenors Blue Diamond Glass and Cebu Southern Hardware

Held:

Petitioner is solidarily liable with respondent Galan to pay the credits of the two intervenors. Therefore petitioner may
recover from respondent Galan any amount that he pays' in his capacity as a partner, to the above intervenors. Aricle
1816 should be construed together with article 1824 which provides that : “All partners are liable solidarily with the
partnership for everything chargeable to the partnership under articles 1822 and 1823.

The obligation is solidary because the law protects him, who in good faith relied upon the authority of a partner,
whether such authority is real or apparent.

That is why under Article 1824 of the Civil Code all partners, whether innocent or guilty, as well as the legal entity which
is the partnership, are solidarily liable. In this case, ' Tropical, Blue Diamond and Cebu Hardware hade every reason to
believe that partnership existed between petitioner and Galan, thus, it is fair that consequences of any wrongful act
committed by any of the partners therein should be answered solidarily by all the partners and the partnership as a
whole. As between Munasque and Galan, justice so dictates that Munasque be reimbursed by Galan for the payments
made by the former as it was satisfactorily established that Galan acted in bad faith in his dealings with Munasque as a
partner.