G.R. No. L-39780, 11 November 1985
FACTS:
Muñasque in behalf of the partnership of “Galan and Muñasque” as Contractor entered into a written contract with Tropical for remodelling a building. A total amount of P25,000.00 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 in the name of the petitioner. Petitioner indorsed the check in favor of Galan to enable the latter to deposit it in the bank and pay for the materials and labor used in the project.
Petitioner alleged that Galan spent P6,183.37 for his personal use so that when the second check in the amount of P6,000.00 came and Galan asked the petitioner to indorse it again, the petitioner refused.
The check was withheld from the petitioner. Since Galan informed the Cebu branch of Tropical that there was a “misunderstanding” between him and petitioner, Tropical changed the name of the payee in the second check from Muñasque to “Galan and Associates” which was the duly registered name of the partnership between Galan and petitioner and under which name a permit to do construction business was issued by the mayor of Cebu City. This enabled Galan to encash the second check.
ISSUE:
Whether the appellate court erred in holding that a partnership existed between petitioner and respondent Galan.
RULING:
There is nothing in the records to indicate that the partnership organized by the two men was not a genuine one. If there was a falling out or misunderstanding between the partners, such does not convert the partnership into a sham organization.
While it is true that under Article 1816 of the Civil Code, “All partners, including industrial ones, shall be liable pro rata with all their property and after all the partnership assets have been exhausted, for the contracts which may be entered into the name and for the account of the partnership, under its signature and by a person authorized to act for the partnership. x xx”, this provision 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.” In short, while the liability of the partnership merely joint in transactions entered into by the partnership, a third person who transacted with said partnership can hold the partners solidarily liable for the whole obligation if the case of the third person falls under Articles 1822 or 1823.
In the case at bar the Tropical had every reason to believe that a partnership existed between the petitioner and Galan and no fault or error can be imputed against it for making payments to “Galan and Associates” and delivering the same to Galan because as far as it was concerned, Galan was a true partner with real authority to transact on behalf of the partnership with which it was dealing.
*Case digest by Teonilo M. Bagalanon Jr., JD-IV, Andres Bonifacio Law School, SY 2019-2020