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Philippine Supreme Court Jurisprudence > Year 1907 > July 1907 Decisions > G.R. No. L-3704 December 12, 1907 - LA
COMPAÑIA MARITIMA v. FRANCISCO MUÑOZ
009 Phil 326:
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FIRST DIVISION
SYLLABUS
1. PARTNERSHIP; INDUSTRIAL PARTNERS. — In an ordinary general merchantile partnership the industrial partners
liable to third parties for the debts and obligations of the partnership.
2. ID; ID; SALARY TO PARTNER. — The mere payment of a salary to one of the partners of a concern and the subsequent
discontinuance of such salary does not destroy the interest of the partner nor relieve him from partnership liability.
3. ID; ACTION; JOINDER. — Both the partnership and the separate partners thereof may be joined in one action, but the
private property of the latter can not be taken in payment of the firm debts until the common property of the concern is
exhausted. (Art. 237, Code of Commerce.)
DECISION
The plaintiff brought this action in the Court of First Instance of Manila against the partnership of Francisco Muñoz &
Sons, and against Francisco Muñoz de Bustillo, Emilio Muñoz de Bustillo, and Rafael Naval to recover the sum of
P26,828.30, with interest and costs. Judgment was rendered in the court below acquitting Emilio Muñoz de Bustillo and
Rafael Naval of the complaint, and in favor of the plaintiff and against the defendant partnership, Francisco Muñoz &
Sons, and Francisco Muñoz de Bustillo form the sum of P26,828.30 with interest at the rate of 8 per cent per annum
from the 31st day of March, 1905, and costs. From this judgment the plaintiff appealed.
On the 31st day of March, 1905, the defendants Francisco Muñoz, Emilio Muñoz, and Rafael Naval formed on ordinary
general mercantile partnership under the name of Francisco Muñoz & Sons for the purpose of carrying on the
mercantile business in the Province of Albay which had formerly been carried on by Francisco Muñoz. Francisco Muñoz
was a capitalist partner and Emilio Muñoz and Rafael Naval were industrial partners.
It is said in the decision of the court below that in the articles of partnership it was called an ordinary, general
mercantile partnership, but that from the article it does not appear to be such a partnership. In the brief of the appellees
it is also claimed that it is not an ordinary, general commercial partnership. We see nothing in the case to support either
the statement of the court below in its decision or the claim of the appellees in their brief. In the articles of partnership
signed by the partners 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
ChanRobles Intellectual Property Division 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. If it should be held that the contract made
in this case did not create an ordinary, general mercantile partnership we do not see how one could be created.
The claim of the appellees that Emilio Muñoz contributed nothing to the partnership, either in property, money, or
industry, can not be sustained. He contributed as much as did the other industrial partner, Rafael Naval, the difference
between the two being that 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. If he had left that branch office soon after the partnership
was organized, he would have been in the same condition then that Emilio Muñoz was from the beginning. Such a
change would have deprived him of the salary P2,500, but would not have affected in any way the partnership nor have
produced the effect of relieving him from liability as a partner. The argument of the appellees seems to be that, because
no yearly or monthly salary was assigned to Emilio Muñoz, he contributed nothing to the partnership and received
nothing from it. By the articles themselves he was to receive at the end of five years one-eighth of the profits. It can not
be said, therefore, that he received nothing from the partnership. The fact that the receipt of this money was postponed
for five years is not important. If the contention of the appellees were sound, it would result that, where the articles of
partnership provided for a distribution of profits at the end of each year, but did not assign any specific salary to an
industrial partner during that time, he would not be a member of the partnership. Industrial partners, by signing the
articles, agree to contribute their work to the partnership and article 138 of the Code of Commerce prohibits them from
engaging in other work except by the express consent of the partnership. With reference to civil partnerships, section
1683 of the Civil Code relates to the same matter.
It is also said in the brief of the appellees that Emilio Muñoz was entirely excluded from the management of the
business. It rather should be said that he excluded himself from such management, for he signed the articles of
partnership by the terms of which the management was expressly conferred by him and the others upon the persons
therein named. That partners in their articles can do this, admits of no doubt. Article 125 of the Code of Commerce
requires them to state the partners to whom the management is intrusted. This right is recognized also in article 132. In
the case of Reyes v. The Compania Maritima (3 Phil. Rep., 519) the articles of association provided that the directors for
the first eight years should be certain persons named therein. This court not only held that such provision was valid but
also held that those directors could not be removed from office during the eight years, even by a majority vote of all the
stockholders of the company.
Emilio Muñoz was, therefore, a general partner, and the important question in the case is whether, as such general
partner, he is liable to third persons for the obligations contracted by the partnership, or whether he relieved from such
liability, either because he is an industrial partner or because he was so relieved by the express terms of the articles of
partnership.
"Twelfth. All profits arising from mercantile transactions carried on, as well as such as may be obtained from the sale of
property and other assets which constitute the corporate capital, shall be distributed, on completion of the term of five
years agreed to for the continuation of the partnership, in the following manner: Three-fourths thereof for the capitalist
partner Francisco Muñoz de Bustillo and one-eighth thereof for the industrial partner Emilio Muñoz de Bustillo y
Carpiso, and the remaining one-eighth thereof for the partner Rafael Naval y Garcia. If, in lieu of profits, losses should
result in the winding up of the partnership, the same shall be for the sole and exclusive account of the capitalist partner
Francisco Muñoz de Bustillo, without either of the two industrial partners participating in such losses." cralawvirtua1awlibrary
"ART. 140. Should there not have been stated in the articles of copartnership the portion of the profits to be received by
each partner, said profits shall be divided pro rata, in accordance with the interest each one has on the copartnership,
partners who have not contributed any capital, but giving their services, receiving in the distribution the same amount as
the partner who contributed the smallest capital." cralawvirtua1awlibrary
"ART. 141. Losses shall be charged in the same proportion among the partners who have contributed capital, without
including those who have not, unless by special agreement the latter have been constituted as participants therein." cralawvirtua1awlibrary
A comparison of these articles with the twelfth paragraph above quoted will show that the latter is simply a statement
of the rule laid down in the former. The article do not, therefore, change the rights of the industrial partners as they are
declared by the code, and the question may be reduced to the very simple one namely, Is an industrial partner in an
ordinary, general mercantile partnership liable to third persons for the debts and obligations contracted by the
July-1907 Jurisprudence partnership?
[G. R. No. L-3273. July 13, 1907.] THE UNITED STATES, Plaintiff-
Appellee, vs. QUIRINO PERALTA and VICENTE PERALTA, In limited partnership the Code of Commerce recognizes a difference between general and special partners, but in a
Defendants-Appellants. 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
[G. R. No. L-3556. July 13, 1907.] H. J. BLACK, Plaintiff, vs. CARL T. partners. There is nothing in the code which says that the industrial partners shall be the only general partners, nor is
NYGREN, acting provincial treasurer of the Province of Pampanga, there anything which says that the capitalist partners shall be the only general partners.
Defendant.
[G. R. No. L-3332. July 18, 1907.] THE UNITED STATES, Plaintiff- Article 127 of the Code of Commerce is as follows: jgc:chanrobles.com.ph
[G. R. No. L-3476. July 25, 1907.] DOROTEA MENDOZA, Plaintiff- Do the words "all the partners" found in this article include industrial partners? The same expression is found in other
Appellant, vs. CASIMIRO FULGENCIO and JOSE DE ASIS, Defendants- articles of the code. In article 129 it is said that, if the management of the partnership has not been limited by special
Appellees. act to one of the partners, all shall have the right to participate in the management. Does this mean that the capitalist
partners are the only ones who have that right, or does it include also industrial partners? Article 132 provides that,
[G. R. No. L-3348. July 26, 1907.] JULIAN NAVAL, Plaintiff-
Appellant, vs. HERMOGENES BENAVIDES, Defendant-Appellee. when in the articles of partnership the management has been intrusted to a particular person, he can not be deprived of
such management, but that in certain cases the remaining partners may appoint a comanager. Does the phrase
[G. R. No. L-3563. July 26, 1907.] THE UNITED STATES, Plaintiff- "remaining partners" include industrial partners, or is it limited to capitalist partners, and do industrial partners have no
Appellee, vs. MAXIMO AUSTRIA, ET AL., Defendants-Appellants. right to participate in the selection of the comanager? Article 133 provides that all the partners shall have the right to
examine the books of the partnership. Under this article are the capitalist partners the only ones who have such right?
[G. R. No. 3621. July 26, 1907.] THE UNITED STATES, Plaintiff- Article 135 provides that the partners can not use the firm name in their private business. Does this limitation apply only
Appellee, vs. MACARIO SAKAY, JULIAN MONTALBAN, LEON
VILLAFUERTE, and LUCIO DE VEGA, Defendants-Appellants. to capitalist partners or does it extend also to industrial partners? Article 222 provides that a general partnership shall
be dissolve by the death of one of the general partners unless it is otherwise provided in the articles. Would such a
[G. R. No. L-2997. July 27, 1907.] ANDRES BARTOLOME, Plaintiff- partnership continue if all the industrial partners should die? Article 229 provides that upon a dissolution of a general
Appellee, vs. SIMEON MANDAC, ET AL., Defendants-Appellants. partnership it shall be liquidated by the former managers, but, if all the partners do not agree to this, a general meeting
shall be called, which shall determine to whom the settlement of the affairs shall be intrusted. Does this phrase "all the
[G. R. No. L-3397. July 27, 1907.] THE UNITED STATES, Plaintiff-
Appellee, vs. BERNARDO ALAMEDA, Defendant-Appellant. partners" include industrial partners, or are the capitalist partners the only ones who have a voice in the selection of a
manager during a period of liquidation? Article 237 provides that the private property of the general partners shall not
[G. R. No. L-3431. July 27, 1907.] THE UNITED STATES, Plaintiff- be taken in payment of the obligations of the partnership until its property has been exhausted. Does the phrase "the
Appellee, vs. CHU CHIO, Defendant-Appellant. general partners" include industrial partners?
[G. R. No. L-3479. July 29, 1907.] THE UNITED STATES, Plaintiff- In all of these articles the industrial partners must be included. It can not have been intended that, in such a partnership
Appellee, vs. WILLIAM BOSTON, Defendant-Appellant.
as the one in question, where there were two industrial and only one capitalist partner, the industrial partners should
[G. R. No. L-3496. July 31, 1907.] THE UNITED STATES, Plaintiff- have no voice in the management of the business when the articles of partnership were silent on that subject; that when
Appellee, vs. URBANA NACION, Defendant-Appellant. the manager appointed mismanages the business the industrial partners should have no right to appoint a comanager;
that they should have no right to examine the books; that they might use the firm name in their private business; or that
G.R. No. L-3273 July 13, 1907 - UNITED STATES v. QUIRINO they have no voice in the liquidation of the business after dissolution. To give a person who contributed no more than,
PERALTA, ET AL.
say, P500, these rights and to take them away from a person who contributed his services, worth, perhaps, infinitely
008 Phil 200 more than P500, would be discriminate unfairly against industrial partners.
G.R. No. L-3556 July 13, 1907 - H.J. BLACK v. CARL T. NYGREN If the phrase "all the partners" as found in the articles other than article 127 includes industrial partners, then article 127
must include them and they are liable by the terms thereof for the debts of the firm.
008 Phil 205
But it is said that article 141 expressly declares to the contrary. It is to be noticed in the first place that this article does
G.R. No. L-3332 July 18, 1907 - UNITED STATES v. HARRY B.
MULFORD not say that they shall not be liable for losses. Article 140 declares how the profits shall be divided among the partners.
This article simply declares how the losses shall be divided among the partners. The use of the words se imputaran is
008 Phil 208 significant. The verb means abonar una partida a alguno en su cuenta o deducirla de su debito. Article 141 says nothing
about third persons and nothing about the obligations of the partnership.
G.R. No. L-3541 July 20, 1907 - UNITED STATES v. ESTEBAN
SEVILLA While in this section the word "losses" stand’s alone, yet in other articles of the code, where it is clearly intended to
009 Phil 700 impose the liability to third persons, it is not considered sufficient, but the word "obligations" is added. Thus article 148,
in speaking of the liability of limited partners, uses the phrase las obligaciones y perdidas. There is the same use of the
G.R. No. L-2646 July 25, 1907 - MARIA ROURA, ET AL. v. INSULAR two same words in article 153, relating to anonymous partnership. In article 237 the word "obligations" is used and not
GOVERNMENT the word "losses." cralawvirtua1awlibrary
008 Phil 275 It might very easily happen, therefor, that a civil partnership could be composed entirely of industrial partners. If it were,
according to the claim of the appellees, there would be no personal responsibility whatever for the debts of the
G.R. No. L-4011 August 1, 1907 - MAMERTA BANAL v. JOSE partnership. Creditors could rely only upon the property which the partnership had, which in the case of a partnership
SAFONT, ET AL.
organized for the practice of any art or profession would be practically nothing. In the case of Agustin v. Inocencio, 1
008 Phil 276 just decided by this court, it was alleged in the complaint, and admitted by the answer —
G.R. No. L-3574 August 2, 1907 - UNITED STATES v. NICOMEDES "That is partnership has been formed without articles of association or capital other than the personal work of each one
DE DIOS of the partners, whose profits are to be equally divided among themselves." cralawvirtua1awlibrary
G.R. No. L-3422 August 3, 1907 - UNITED STATES v. MANUEL "Personal or real property which each of the partners may possess at the time of the celebration of the agreement shall
SAMONTE continue to be their private property, the usufruct only passing to the partnership." cralawvirtua1awlibrary
008 Phil 286 It might very well happen in partnership of this kind that no one of the partners would have any private property and that
if they did the usufruct thereof would be inconsiderable.
G.R. No. L-3576 August 3, 1907 - FLORENCIO TERNATE v. MARIA
ANIVERSARIO
Having in mind these different cases which may arise in the practice, that construction of the law should be avoided
008 Phil 292 which would enable two persons, each with a large amount of private property, to form and carry on a partnership and,
upon the bankruptcy of the latter, to say to its creditors that they contributed no capital to the company but only their
G.R. No. L-3841 August 3, 1907 - CHUNG KIAT v. LIM KIO, ET AL. services, and that their private property is not, therefore, liable for its debts.
008 Phil 297
But little light is thrown upon this question by the authorities. No judgment of the supreme court of Spain has been
G.R. No. L-2730 August 7, 1907 - UNITED STATES v. BASILIO called to our attention, and we have been able to find none which refers in any way to this question. There is, therefore,
MORALES, ET AL. no authority from the tribunal for saying that an industrial partner is not liable to third persons for the debts of the
partnership.
008 Phil 300
In a work published by Lorenzo Benito in 1889 (Lecciones de derecho mercantil) it is said that industrial partners are
G.R. No. L-2837 August 7, 1907 - CALDER & CO. v. UNITED STATES
not liable for debts. The author, at page 127, divides general partnership into ordinary and irregular. The irregular
008 Phil 303 partnership are those which include one or more industrial partners. It may be said in passing that his views can not
apply to this case because the articles of partnership directly state that it is an ordinary partnership and do not state
G.R. No. L-2838 August 7, 1907 - MACONDRAY & CO. v. UNITED that it is an irregular one. But his view of the law seems to be derived from something other than the Code of
STATES Commerce now in force. He says: jgc:chanrobles.com.ph
G.R. No. L-3517 August 7, 1907 - UNITED STATES v. JOSE MAGNO, "This article would not need to be commented upon were it not because the writer entirely overlooked the fact that there
ET AL. might exist industrial partners who did not contribute with capital in money, credits, or goods, which partners generally
participate in the profits but not in the losses, and whose position must also be determined in the articles of
008 Phil 314 copartnership." (p. 128.)
G.R. No. L-3586 August 7, 1907 - UNITED STATES v. HIGINO
VELASQUEZ
And again: jgc:chanrobles.com.ph
"The only defect that can be pointed out in this article is the fact that it has been forgotten that in collective partnerships
008 Phil 321 there are industrial partners who, not being jointly liable for the obligations of the copartnership, should not include their
G.R. No. L-3608 August 7, 1907 - UNITED STATES v. ESTANISLAO
names in that of the firm." (p. 129.)
FLOIRENDO
As a logical result of his theory he says that an industrial partner has no right to participate in the administration of the
008 Phil 325 partnership and that his name can not appear in the firm name. In this last respect his view is opposed to that of
Manresa, who says (Commentaries on the Spanish Civil Code, vol. 11, p. 330):
G.R. No. L-3842 August 7, 1907 - VICTORINO RON, ET AL. v. FELIX
jgc:chanrobles.com.ph
MOJICA
"It only remains to us to state that a partner who contributes his industry to the concern can also confer upon it the
008 Phil 328 name or the corporate name under which such industry should be carried on. In this case, so long as the copartnership
lasts, it can enjoy the credit, reputation, and name or corporate name under which such industry is carried on; but upon
G.R. No. L-4008 August 7, 1907 - AGUSTIN GARCIA GAVIERES v. dissolution thereof the aforesaid name or corporate name pertains to the partner who contributed the same, and he
WILLIAM ROBINSON, ET AL. alone is entitled to use it, because such a name or style is an accessory to the work of industrial partner, and upon
008 Phil 332 recovering his work or his industry he also recovers his name or the style under which he exercised his activity. It has
thus been decided by the French court of cassation in a decision dated June 6, 1859." cralawvirtua1awlibrary
G.R. No. L-2836 August 8, 1907 - CALDER & CO. v. UNITED STATES
In speaking of limited partnerships Benito says (p. 144) that here are found two kinds of partners, one with unlimited
008 Phil 334 responsibility and the other with limited responsibility, but adopting his view as to industrial partners, it should be said
that there are three kinds of partners, one with unlimited responsibility, another with limited responsibility, and the third,
G.R. No. L-2840 August 8, 1907 - KUENZLE & STREIFF v. UNITED
STATES the industrial partner, with no responsibility at all. In Estasen’s recent publication on mercantile partnerships (Tratado
de las Sociedades Mercantiles) he quotes from the work of Benito, but we do not understand that he commits himself
008 Phil 339 to the doctrines therein laid down. In fact, in his former treatise, Instituciones de Derecho Mercantil (vol. 3, pp. 1-99), we
find nothing which recognizes the existence of these irregular general partnerships, or the exemption from the liability
G.R. No. L-4002 August 8, 1907 - LO PO v. H.B. McCOY to third persons of the industrial partners. He says in his latter work (p. 186) that according to Dr. Benito the irregular
008 Phil 343 general partner originated from the desire of the partnership to associate with itself some old clerk or employee as a
reward for his services and the interest which he had shown in the affairs of the partnership, giving him in place of a
G.R. No. L-3507 August 9, 1907 - ISABELO AGUIRRE v. fixed salary a proportionate part of the profits of the business. Article 269 of the Code of Commerce of 1829 relates to
OCCIDENTAL NEGROS, ET AL. this subject and apparently provides that such partners shall not be liable for debts. If this article was the basis for Dr.
Benito’s view, it can be so no longer, for it does not appear in the present code. We held in the case of Fortis v. Gutirrez
008 Phil 350
Hermanos (6 Phil. Rep., 100) that a mere agreement of that kind does not make the employee a partner.
G.R. No. L-2841 August 10, 1907 - RUBERT & GUAMIS v. UNITED
STATES An examination of the works of Manresa and Sanchez Roman on the Civil Code, and of Blanco’s Mercantile Law, will
shows that no one of these mentions in any way the irregular general partnership spoken of by Dr. Benito, nor is there
008 Phil 352 anything found in any one of these commentaries which in any way indicates that an industrial partner is not liable to
third persons for the debts of the partnership. An examination of the French law will also show that no distinction of
G.R. No. L-3488 August 10, 1907 - C.S. ROBINSON, ET AL. v. THE
SHIP "ALTA", ET AL. that kind is therein anywhere made and nothing can be found therein which indicates that the industrial partners are not
liable for the debts of the partnership. (Fuzier-Herman, Repertoire de Droit Francais, vol. 34, pp. 256, 361, 510, and 512.)
008 Phil 355
Our conclusion is upon this branch of the case that neither on principle nor on authority can the industrial partner be
G.R. No. L-3456 August 14, 1907 - JOSEPH N. WOLFSON v. ELIAS relieved from liability to third persons for the debts of the partnership.
REYES, ET AL.
008 Phil 364 It is apparently claimed by the appellee in his brief that one action can not be maintained against the partnership and
the individual partners, this claim being based upon the provisions of article 237 of the Code of Commerce which
G.R. No. L-3529 August 14, 1907 - ESTEBAN GUILLERMO v. provides that the private property of the partners shall not be taken until the partnership property has been exhausted.
RAMON MATIENZO, ET AL. But this article furnishes to argument in support of the appellee’s claim. An action can be maintained against the
partnership and partners, but the judgment should recognize the rights of the individual partners which are secured by
008 Phil 368
said article 237.
G.R. No. L-2839 August 15, 1907 - CALDER & CO. v. UNITED
STATES The judgment of the court below is reversed and judgment is ordered against all of the defendants for the sum of
P26,828.30, with interest thereon at the rate of 8 per cent per annum since the 31st day of March, 1905, and for the cost
008 Phil 373 of this action. Execution of such judgment shall not issue against the private property of the defendants Francisco
Muñoz, Emilio Muñoz, or Rafael Naval until the property of the defendant Francisco Muñoz & Sons is exhausted. No
G.R. No. L-3562 August 15, 1907 - GUTIERREZ HERMANOS v.
ANTONIO VALLEJO costs will be allowed to their party in this court. So ordered.
G.R. No. L-3363 August 17, 1907 - UNITED STATES v. JOAQUIN Separate Opinions
CELIS
008 Phil 385 "All the members of the general copartnership, be they or be they not managing partners of the same, are personally
and in solidum liable with all their property for the results of the transactions made in the name and for the account of
G.R. No. L-3664 August 17, 1907 - UNITED STATES v. LEONA the partnership, under the signature of the latter, and by a person authorized to take use thereof."
CINCO, ET AL.
cralawvirtua1awlibrary
008 Phil 388 Now, do the words "all the members" found in this article include the industrial partners?
G.R. No. L-3200 August 19, 1907 - UNITED STATES v. TOMAS At first it would appear that they do. In order to complete such reasoning the following premise will be sufficient: That
COLOMBRO the industrial partners from the collective partnership; therefore the industrial partners are personally and jointly liable
with all their property for the results of the transactions made in the name and for account of the partnership.
008 Phil 391
G.R. No. L-3625 August 19, 1907 - UNITED STATES v. JOAQUIN But they form the collective partnership in the manner in which our laws allows the same to be formed — that is, by
CELIS contributing with their industry, not with property.
008 Phil 394 And the word all, in reference to property, which is common with the three classes of partnership defined by the code, to
wit, collective, limited copartnership (comanditaria), and corporation (anonima), gives the rule for such personal and
G.R. No. L-3432 August 20, 1907 - UNITED STATES v. ESTANISLAO
GASINGAN joint liability, which is the purpose of the provision in the above-quoted article.
008 Phil 397 The above three classes of partnership agree in that property must in each of them be contributed. "The articles of
general copartnership must state . . . the capital which each partner contributes in cash, credits, or property, stating the
G.R. No. L-3567 August 20, 1907 - KAY B. CHANG, ET AL. v. ROYAL value given the latter or the basis on which their appraisal is to be made." (Art. 125.) "The same statements shall be
EXCHANGE ASSURANCE CORPORATION OF LONDON
included in articles of limited copartnerships (compañias en comandita) which are required for those of general
008 Phil 399 copartnerships" — that is, among other things, the capital which each partner contributes. (Art. 145.) "The articles of
incorporation (of corporations) must include . . . the corporate capital, stating the value at which property, not cash,
G.R. No. L-3626 August 21, 1907 - UNITED STATES v. JOAQUIN contributed has been appraised, or the basis on which the appraisal is to be made; and the number of shares into which
CELIS the corporate capital is divided and represented." (Art. 151.)
008 Phil 408
Now, then, "The liability of the members of a corporation for the obligations and losses of the same shall be limited to
G.R. No. L-3460 August 22, 1907 - UNITED STATES v. LEON the funds they contributed or bound themselves to contribute to the corporate capital." (Art. 153.) "The liability of
NARVASA, ET AL. special partners for the obligations and losses of the copartnership shall be limited to the funds which they contributed
or bound themselves to contribute to the limited copartnership, with the exception of the sense mentioned in article
008 Phil 410 147" — that is, if any of them include his name or permit its conclusion in the firm name. (Art. 148, par. 3.) However, in a
G.R. No. L-3557 August 22, 1907 - VICTORIANO GARCIA, ET AL. v. collective partnership the liability is not limited to the funds or property contributed, but extends to all the property
which partners may own within or without the copartnership.
REMIGIO DIAMSON
In every mercantile copartnership it is the corporate capital that responds for the obligations of the same; this is
008 Phil 414
elemental. The members of a joint stock, a limited, or a collective company respond with their capital for the obligations
G.R. No. L-3173 August 23, 1907 - UNITED STATES v. MODESTO of the association; in the joint stock concerns, with their shares; in the limited class, with the amount contributed; in the
GARCIA collective, with their constituted capital. An industrial partner, with what principal sum, share, or quota in the corporate
capital does he or can he respond for the obligations of the collective partnership? Evidently with none whatever.
008 Phil 416
If the capital of the association is exhausted, the extreme case of losses incurred by the company arises, and third
G.R. No. L-3568 August 23, 1907 - ROMAN ESPAÑA v. LEONARDO
LUCIDO persons can not recover the amount of the obligations of the company from the corporate capital, because the latter is
sufficient to recover them. Shareholders in the case of a joint stock company, beyond the value of their stock, have no
008 Phil 419 longer to think of any ulterior subsidiary responsibility. Neither do the partners of a limited company. In either case the
partners are only liable to the extent of their corporate capital. Collective partners have to respond not only with their
G.R. No. L-3510 August 24, 1907 - HENRY O’CONNELL v. NARCISO corporate capital but also with the whole of their property outside of the association. And it is desired that the industrial
MAYUGA
partner who, in a collective copartnership, did not primarily respond with his corporate capital, because he had none,
008 Phil 422 shall subsidiary respond with such property as he may have outside of the company, and with which nobody, either
within or without the copartnership, had counted upon, since both inside and outside of the company his industry or
G.R. No. L-3573 August 24, 1907 - HENRY BRODEK v. S.G. LARSON work only had been reckoned with. Therefore, the word all, of article 127 cited above, simply denoted the extent of the
ulterior or subsidiary responsibility, and that which does not appear, which does not materially exist, can hardly be made
008 Phil 425
to apply.
G.R. No. L-3604 August 24, 1907 - INTERNATIONAL BANKING
CORP. v. FRANCISCO MARTINEZ An industrial partner can not engage in transactions of any class whatever, otherwise he would be subject to serious
consequences (art. 138), while a capitalist partner, as a rule, may so engage without extending profits or liabilities to the
008 Phil 427 company (arts. 134 and 136); an industrial partner, as regards profits, can only receive in the distribution the same
amount as the partner who contributed the smallest amount of capital (art. 140); in the case at bar, one-eighth goes to
G.R. No. L-3622 August 26, 1907 - H.W. PEABODY & CO., ET AL. v.
PACIFIC EXPORT & LUMBER CO. each of the two industrial partners, three-fourths being for the capitalist, and even at the expiration of the copartnership
they run the risk of having the one-eighth of the profits earned in former years absorbed by a total loss incurred during
008 Phil 429 the last year of the contract of copartnership; and it is claimed that such industrial partner, so much delayed with regard
to profits, who has not the same rights, shall be under the same obligations as regards obligations because he is a
G.R. No. L-3734 August 26, 1907 - JAMES J. PETERSON v. RAFAEL collective partner? This seems neither just nor logical.
AZADA
008 Phil 432 And it is not so. Article 141 reads: "Losses shall be charged in the same proportion among the partners who have
contributed capital, without including" the industrial partners (since they have not the same rights), and they should not
G.R. No. L-2871 August 29, 1907 - LA COMPAÑIA GENERAL DE be included therein nor in the corporation of the partner who contributed the smallest capital, simply for the reason that
TABACOS DE FILIPINAS v. UNITED STATES the industrial partner has nothing to lose, he not having contributed anything which the company may lose when the
losses of the copartnership are considered, either among the partners thereof or with regard to third persons.
008 Phil 438
G.R. No. L-3192 August 29, 1907 - LUISA ALVAREZ v. SHERIFF OF There need be no distinction made between obligations and losses. During the existence of a company the gains or the
ILOILO, ET AL. losses are set off the one against the other, and the difference is either in favor of or against the concern. As to the
industrial partner, in connection with the question submitted, it is not a matter of striking a balance from time to time,
008 Phil 441 but one of the final adjustment of assets and liabilities, because the matter under discussion refers only to his private
property, which has nothing to do with the company nor with losses in liquidating the same. Article 127 is affected by
G.R. No. L-3458 August 29, 1907 - UNITED STATES v. FIDEL
GONZALEZ article 237: "The private property of the general partners which is not included in the assets of the copartnership when it
is established can not be seized for the payment of the obligations contracted by the copartnership until after the
008 Phil 442 common assets have been attached." And such condition is stated in the majority decision. As long as there is property
belonging to the company, obligations in favor of third persons are covered by the primary and direct responsibility of
G.R. No. L-3526 August 29, 1907 - UNITED STATES v. SEVERINO the company; the question arises when the assets of the company are exhausted and it becomes necessary to appeal
MACAVINTA
to the ulterior or subsidiary liability of the private property of the partners; in this case such obligations constitute the
008 Phil 447 extreme losses in the liquidation of the company.
G.R. No. L-3636 August 29, 1907 - FREDERICK GARFIELD WAITE v. The case at bar could only thus be set forth: Should an industrial partner be responsible for such losses, for such
JAMES J. PETERSON, ET AL. obligations in favor of third persons? Article 141 expressly states that he shall not. In order to state the contrary it would
be necessary to appeal to discriminations in the wording of said article; and this is neither permitted where the law does
008 Phil 449
not make them nor would they lead to anything after all. In the aforesaid article 237 the corroboration of the word all of
G.R. No. L-3547 August 30, 1907 - LORENZA PAEZ v. JOSE article 127 may be found: "The private property of the general partners which is not included in the assets of the
BERENGUER copartnership," differing from such as were included, can not seized for the payment of obligations contracted by the
copartnership, until after the common assets have been attached; after such attachment all the assets, according to
008 Phil 454 article 127, such as were included, and those that were not included, in this order, shall be subject to the results of the
G.R. No. L-3628 August 30, 1907 - MANUEL COUTO SORIANO v.
transactions of the copartnership. An industrial partner has not contributed any property whatever; he therefore offers
BLAS CORTES no subject for the principal and direct seizure when the assets of the copartnership are attached. How is it possible to
conceive any ulterior, subsidiary, indirect responsibility over the property which it was not even thought to be included,
008 Phil 459 since he only contributed to the company his industry and work, not property of any class whatever? It seems very
anomalous that one who has not obligated himself in the least should be responsible or the greater part, that he who is
G.R. No. L-3416 August 31, 1907 - UNITED STATES v. PILAR
not comprehended within the explicit terms should be included by implication, and that he who pledge nothing should
JAVIER, ET AL.
be held to respond with his property.
008 Phil 462
As to the nature of the defendant company in this action, I take it to be: chanrob1es virtual 1awlibrary
G.R. No. L-3561 August 31, 1907 - RITA GARCIA, ET AL. v. SIMEON
BALANAO, ET AL. 1. That the defendant company is really a collective one such as is described in the Code of Commerce; the firm of "F.
008 Phil 465 Muñoz & Sons" and the terms of the articles of association prove it so beyond all doubt.
G.R. No. L-3630 August 31, 1907 - JOS. N. WOLFSON v. CAYETANO 2. That it is a regular collective company; the word regular means, as employed in the Code of Commerce, that the
CHINCHILLA collective company is the rule, the standard in all commercial associations, the one combining all the effects which are
consequent upon this form of convention; and the limited and the joint-stock companies are the exception.
008 Phil 467
G.R. No. L-3637 August 31, 1907 - PEDRO P. ROXAS, ET AL. v. 3. That it is not irrelevant in view of the manner in which the present Code of Commerce, like the former one of 1829,
ANASTASIO CUEVAS, ET AL. has defined the collective company, that such a distinguished professor of law as Doctor Lorenzo de Benito should
have established in his "Lessons on Mercantile Law" a difference between the regular collective associations and
008 Phil 469 irregular collective companies; "regular are those wherein, as article 122 reads, all the members in a collective name
and under a firm name bind themselves to participate in the proportion which they may establish with the same rights
G.R. No. L-3220 September 2, 1907 - MURPHY MORRIS & CO. v.
UNITED STATES
and obligations." "And irregular, those wherein one or more members who, though not contributing toward the company
with anything but their industry, participate in the profits in the manner agreed to in the articles of association or as
008 Phil 479 determined by law, and ordinarily do not share in the losses which the copartnership may sustain. Such members are
called industrial partners, and the collective copartnership having a member of said class is also sometimes called an
G.R. No. L-3396 September 2, 1907 - STRUCKMANN & CO. v. association of capital and industry.
UNITED STATES
008 Phil 483 "This is what the law says (he continues), but it has not been very fortunate in sketching the characters of a regular
collective partnership (since in conclusion it says nothing in reference to the irregular partnership), because precisely
G.R. No. L-2538 September 4, 1907 - MARIANO PAMINTUAN, ET the collective name and the corporate name are applicable to both the collective and the limited companies; and as to
AL. v. INSULAR GOVERNMENT the covenant entered into by the partners to participate in the proportion which they may establish with the same rights
and obligations, this is inherent to all partnerships without distinction as to class. What characterizes this partnership is
008 Phil 485
that all the members, "with the exception of the industrial partners," are jointly responsible and with all their property for
G.R. No. L-3648 September 5, 1907 - LUTZ & CO. v. COLLECTOR OF the corporate obligations."cralawvirtua1awlibrary
CUSTOMS
4. That the code in force, by means of three articles, 138, 140, and 141, among those which regulate collective
008 Phil 492 partnerships, has involved this association of capital and industry; whence irregularity necessarily arises; the irregularity
of such an irregular system is that in a collective partnership wherein, besides the element property, common or generic
G.R. No. L-3667 September 5, 1907 - NATALIA FABIAN, ET AL. v.
SMITH, BELL & CO. to the three aforesaid classes, there appears this one, to wit, industry, a special features only in collective partnerships,
according to the system of the code.
008 Phil 496
Had the system adopted by the codes of Portugal, Brazil, and the Argentine Republic been followed, a different
G.R. No. L-3326 September 7, 1907 - UNITED STATES v. LAURENTE classification would have been made of the association of capital and industry which, according to the last of the codes
REY
cited, is properly characterized by means of the following articles:jgc:chanrobles.com.ph
008 Phil 500 "435. Habilitacion or association of capital and industry is the name given to the partnership formed on the one part by
one or more persons who furnish funds for a general business, or for some particular commercial transaction, and on
G.R. No. L-3482 September 7, 1907 - UNITED STATES v.
BARTOLOME GRAY
the other part by one or more individuals who join the copartnership with their industry alone.
008 Phil 506 "438. The obligation of the partners who furnished capital is in solidum, and extends beyond the capital contributed by
them to the concern.
G.R. No. L-3489 September 7, 1907 - VICENTE NAVALES v.
EULOGIA RIAS, ET AL.
"439. The articles of association, besides the requirements contained in article 395, must specify the obligations of the
008 Phil 508 industrial partner or partners and the share in the profits to which they are entitled in the apportionment.
G.R. No. L-2526 September 10, 1907 - PEDRO PAMINTUAN, ET AL. "In the absence of such declaration, the industrial partner shall draw from the profits a share equal to those of the
v. INSULAR GOVERNMENT, ET AL. partner who furnished the smallest capital.
008 Phil 512
"440. An industrial partner can not contract on behalf of the partnership nor is he obligated with his own property
G.R. No. L-3301 September 10, 1907 - UNITED STATES v. EMIGDIO toward the creditors of the company.
NOBLEZA
"Nevertheless, if besides his industry he should contribute some capital toward the company either in money or thing of
008 Phil 515 value, the association shall then be considered as a collective one, and the industrial partner, whatever might have been
stipulated, shall respond in solidum."
G.R. No. L-3616 September 10, 1907 - CIRILO PURUGANAN v.
cralawvirtua1awlibrary
G.R. No. L-3383 September 13, 1907 - TAN LEONCO v. GO INQUI And it would not suffice to say that the above article of the code of the Argentine Republic, namely, "on collective
copartnership," involves no section which may refer to industrial partners, and that, therefore, there can be no question
008 Phil 531 as to the words "all the members;" it is because, by reason of the nature thereof, whether under one system or another,
the provisions and the principles being identical, the conclusions can not otherwise than identical. In a copartnership,
G.R. No. L-3546 September 13, 1907 - PIA DEL ROSARIO v. JUAN
LUCENA, ET AL. and as the result of the obligations thereunder, an industrial partner can not lose except what he has actually
contributed thereto for a limited or an unlimited purpose, subject ultimately to company or personal obligations; this is
008 Phil 535 all that law and logic may demand of him; anything else would not come under the law, but may be demanded of him by
reason of his express covenant, because he has consented to something beyond the character and the effects of the
G.R. No. L-3132 September 14, 1907 - MANUEL SOLER, ET AL. v. contract of partnership of capital and industry entered into by him, called collective; nothing else has been the subject
EMILIA ALZOUA, ET AL. of his consent and obligation.
008 Phil 539
Manuel Duran y Bas, a former professor of the University of Barcelona, in his addition to the work of Marti de Eixala,
G.R. No. L-3146 September 14, 1907 - NICOLAS CO-PITCO v. which is so generally and specially consulted in that eminently commercial and industrial city, has offered no remarks
PEDRO YULO to the original text of said work which establish as an elemental doctrine that "When the copartnership is purely a
collective one, each of its members is jointly obligated for the result of the transactions which should be charged to the
008 Phil 544
copartnership . . . From the general rule which we have just set up the industrial partners who contract no obligation to
G.R. No. L-3534 September 14, 1907 - TO GUIOC-CO v. LORENZO secure the liabilities of the company should be excepted, unless there be an express covenant to the contrary." (Art. 319
DEL ROSARIO of the code of 1829, identical with art. 141 of the code now in force.)
008 Phil 546 During almost half a century no obligation has been raised by the professors of law, the press, or the bar, to this
doctrine regarding the exemption, not merely with respect to losses but to company obligations of the industrial partner,
G.R. No. L-3395 September 16, 1907 - PEDRO ARENAL, ET AL. v.
CHARLES F. BARNES, ET AL. on the suppositions, which I do not admit, as already shown, that it may be possible to discriminate between losses and
obligations in connection with an industrial partner, for whom there are none but the final losses, such as absorb the
008 Phil 551 assets of the company, which can not be otherwise than outstanding obligations in favor of third parties inasmuch as,
so long as there are company assets, no recourse can be held to the private property of any partner.
G.R. No. L-3067 September 17, 1907 - RUBERT & GUAMIS v.
LUENGO & MARTINEZ, ET AL.
G.R. No. L-3584 September 30, 1907 - ARTADI & CO. v. CHU BACO
G.R. No. 3067 October 7, 1907 - RUBERT & GUAMIS v. LUENGO &
MARTINEZ, ET AL.
009 Phil 1
009 Phil 8
009 Phil 10
009 Phil 12
009 Phil 13
009 Phil 16
009 Phil 19
009 Phil 22
009 Phil 28
009 Phil 38
009 Phil 41
009 Phil 44
009 Phil 47
009 Phil 48
G.R. No. L-3224 October 17, 1907 - MUÑOZ & CO. v. STRUCKMANN
& CO., ET AL.
009 Phil 52
009 Phil 67
009 Phil 71
009 Phil 77
009 Phil 81
009 Phil 84
009 Phil 89
009 Phil 92
009 Phil 94
009 Phil 98
G.R. No. L-3662 November 19, 1907 - VICENTA ACUÑA v. THE CITY
OF MANILA
G.R. No. L-3556 July 13, 1907 - H.J. BLACK v. CARL T. NYGREN
G.R. No. L-2646 July 25, 1907 - MARIA ROURA, ET AL. v. INSULAR
GOVERNMENT
G.R. No. 3621 July 26, 1907 - UNITED STATES v. MACARIO SAKAY,
ET AL.
G.R. No. L-3431 July 27, 1907 - UNITED STATES v. CHU CHIO
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