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FACTS: Two separate Petitions were filed before

the Court 1) by the surviving partners of Atty.
Alexander Sycip, who died on May 5, 1975, and 2)
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.
ISSUE: Whether or not the name of a deceased
partner may still be continued to be used by a
partnership engaged in a legal profession. (Note:
This ruling is focused only in law firms as
distinguished from other professional partnerships
such as those engaged in accounting/auditing and
engineering professions.)
A. Inasmuch as "Sycip, Salazar, Feliciano,
Hernandez and Castillo" and "Ozaeta, Romulo, De
Leon, Mabanta and Reyes" are partnerships, the
use in their partnership names of the names of
deceased partners will run counter to Article 1815
of the Civil Code which provides:
Art. 1815. Every partnership shall operate under a
firm name, which may or may not include the name
of one or more of the partners.
Those who, not being members of the partnership,
include their names in the firm name, shall be
subject to the liability, of a partner.
It is clearly tacit in the above provision
that names in a firm name of a partnership must
either be those of living partners and. in the case of
non-partners, should be living persons who can be
subjected to liability. In fact, Article 1825 of the
Civil Code prohibits a third person from including
his name in the firm name under pain of assuming
the liability of a partner. The heirs of a deceased
partner in a law firm cannot be held liable as the
old members to the creditors of a firm particularly
where they are non-lawyers.
Prescinding the law, there could be
practical objections to allowing the use by law
firms of the names of deceased partners. 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

B. In regards to the last paragraph of Article 1840

of the Civil Code cited by petitioners, the first
factor to consider is that it is within Chapter 3 of
Title IX of the Code entitled "Dissolution and
Winding Up." The Article primarily deals with the
exemption from liability in cases of a dissolved
partnership, of the individual property of the
deceased partner for debts contracted by the person
or partnership which continues the business using
the partnership name or the name of the deceased
partner as part thereof. What the law contemplates
therein is a hold-over situation preparatory to
formal reorganization.
Secondly, Article 1840 treats more of a commercial
partnership with a good will to protect rather than
of a professional partnership, with no saleable good
will but whose reputation depends on the personal
qualifications of its individual members. Thus, it
has been held that a saleable goodwill can exist
only in a commercial partnership and cannot arise
in a professional partnership consisting of lawyers.
As a general rule, upon the dissolution of
a commercial partnership the succeeding partners
or parties have the right to carry on the business
under the old name, in the absence of a
stipulation forbidding it, (s)ince the name of a
commercial partnership is a partnership asset
inseparable from the good will of the firm. On the
other hand, a professional partnership the
reputation of which depends or; the individual
skill of the members, such as partnerships of
attorneys or physicians, has no good win to be
distributed as a firm asset on its dissolution,
however intrinsically valuable such skill and
reputation may be, especially where there is no
provision in the partnership agreement relating to
good will as an asset.
C. A partnership for the practice of law cannot be
likened to partnerships formed by other
professionals or for business. For one thing, the law
on accountancy specifically allows the use of a
trade name in connection with the practice of
accountancy. 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.
The usual reason given for different standards of
conduct being applicable to the practice of law
from those pertaining to business is that the law is a
Primary characteristics which distinguish the legal
profession from business are:

1. A duty of public service, of which the

emolument is a byproduct, and in which one may
attain the highest eminence without making much
2. A relation as an "officer of court" to the
administration of justice involving thorough
sincerity, integrity, and reliability.
3. A relation to clients in the highest degree
4. A relation to colleagues at the bar characterized
by candor, fairness, and unwillingness to resort to
current business methods of advertising and
encroachment on their practice, or dealing directly
with their clients.
"The right to practice law is not a natural or
constitutional right but is in the nature of a
privilege or franchise. It is limited to persons of
good moral character with special qualifications
duly ascertained and certified. The right does not
only presuppose in its possessor integrity, legal
standing and attainment, but also the exercise of a
special privilege, highly personal and partaking of
the nature of a public trust."

Florencio Yulo and Jaime Palacios were partners in
the operation of a sugar estate in Negros. As
partners, they had commercial dealings with a
china man named Dy-Sianco. On February 1903,
the father of Florencio, Pedro Yulo, took charge of
his interests in the partnership, and he eventually
became a general partner of Palacios. This
partnership continued until the end of 1904.
For the collection of a debt amounting to P1,638.80
from one of their dealings, Dy-Sianco filed a case
in court. However, at that time, Palacios was no
longer in the Philippines. So, the whole amount
was demanded of Yulo alone. Yulo refused to pay
for the whole amount, thus this petition.
WON Pedro Yulo is liable for the entire amount of
the debt incurred by the partnership.
The partnership of Yulo and Palacios is a Civil
Partnership. As distinguished from a Mercantile
Partnership, in a civil partnership, by express
provision of Articles 1698 and 1137 of the Civil
Code, partners are not liable each for the whole

amount of the debts incurred by the partnership, but

only in pro rata.
Therefore, in this case, Yulo is only responsible for
one half (1/2) of the debt, notwithstanding the fact
that Palacios can no longer be found in the

Petitioner Carmen Liwanag (liwanag) and a
certain Thelma Tabligan went to the house of
complainant Isidora Rosales (rosales) and asked
her to join them in the business of buying and
selling cigarettes. Rosales would give the money
needed to buy the cigarettes while Liwanag and
Tabligan would act as her agents, with a
corresponding 40% commission to her if the goods
are sold; otherwise the money would be returned to
Rosales. Consequently, Rosales gave several cash
advances to Liwanag and Tabligan amounting
to P633,650.00.
During the first two months, Liwanag and
Tabligan made periodic visits to Rosales to report
on the progress of the transactions. The visits,
however, suddenly stopped, and all efforts by
Rosales to obtain information regarding their
business proved futile.
Alarmed by this development and believing
that the amounts she advanced were being
misappropriated, Rosales filed a case of estafa
against Liwanag.
Liwanag advances the theory that the intention of
the parties was to enter into a contract of
partnership, wherein rosales would contribute the
funds while she would buy and sell the cigarettes,
and later divide the profits between them.[1] she
also argues that the transaction can also be
interpreted as a simple loan, with rosales lending to
her the amount stated on an installment basis.
Respondent appellate court gravely erred in
affirming the conviction of the accused-petitioner
for the crime of estafa, when clearly the contract
that exist (sic) between the accused-petitioner and

complainant is either that of a simple loan or that of

a partnership or joint venture hence the non return
of the money of the complainant is purely civil in
nature and not criminal.
There is no contract of partnership. The receipt of
the money was for a specific purpose.
The receipt signed by Liwanag states thus:
May 19, 1988 Quezon City
Received from Mrs. Isidora P. Rosales the sum of
(P526,650.00) Philippine Currency, to purchase
cigarrets (sic) (Philip & Marlboro) to be sold to
customers. In the event the said cigarrets (sic) are
not sold, the proceeds of the sale or the said
products (shall) be returned to said Mrs. Isidora P.
Rosales the said amount of P526,650.00 or the said
items on or before August 30, 1988.

Neither can the transaction be considered a

loan, since in a contract of loan once the money is
received by the debtor, ownership over the same is
transferred.[8] Being the owner, the borrower can
dispose of it for whatever purpose he may deem
In the instant petition, however, it is evident
that Liwanag could not dispose of the money as she
pleased because it was only delivered to her for a
single purpose, namely, for the purchase of
cigarettes, and if this was not possible then to
return the money to Rosales. Since in this case
there was no transfer of ownership of the money
delivered, Liwanag is liable for conversion under
Art. 315, par. 1(b) of the Revised Penal Code.


(SGD & Thumbedmarked) (sic)
26 H. Kaliraya St.
Quezon City
Signed in the presence of:
(Sgd) Illegible (Sgd) Doming Z. Baligad
The language of the receipt could not be any
clearer. It indicates that the money delivered to
Liwanag was for a specific purpose, that is, for the
purchase of cigarettes, and in the event the
cigarettes cannot be sold, the money must be
returned to Rosales.
Thus, even assuming that a contract of
partnership was indeed entered into by and between
the parties, we have ruled that when money or
property have been received by a partner for a
specific purpose (such as that obtaining in the
instant case) and he later misappropriated it, such
partner is guilty of estafa.[7]

On 28 December 1995 petitioner entered into
a Joint Venture Agreement (JVA) with Primetown
Property Group, Inc. (PPGI) for the development of
a residential condominium project to be known
as The Meditel on the formers 9,502 square meter
along Samat
Hills, Mandaluyong City.
contributing the same property to the joint venture
and PPGI undertaking to develop the
condominium, the JVA provided, among other
terms and conditions, that the developed units shall
be shared by the former and the latter at a ratio of
17%-83%, respectively. While both parties were
allowed, at their own individual responsibility, to
pre-sell the units pertaining to them, PPGI further
undertook to use all proceeds from the pre-selling
of its saleable units for the completion of the
Condominium Project.
On 17 June 1996, the Housing and Land Use
Regulatory Board (HLURB) issued License to Sell
in favor of petitioner and PPGI as project
owners. By virtue of said license, PPGI
executed Contract to Sell with Spouses Benjamin
and Eleanor Ang on 5 February 1997, over the
35.45-square meter condominium unit for the
agreed contract price of P52,597.88 per square
meter or a total P2,077,334.25. On the same date
PPGI and respondents also executed Contract to

Sell No. over the 12.50 square meter parking space

identified as Parking Slot No. 0405, for the
stipulated consideration of P26,400.00 square
meters or a total ofP313,500.00.
On 21 July 1999, respondents(Ang) filed against
petitioner (Tiosejo) and PPGI the complaint for
the rescission of the aforesaid Contracts to Sell
docketed before the HLURB as HLURB Case No.
REM 072199-10567. Contending that they were
assured by petitioner and PPGI that the subject
condominium unit and parking space would be
available for turn-over and occupancy in
December 1998. Respondents averred, among
other matters, that in view of the non-completion
of the project according to said representation,
respondents instructed petitioner and PPGI to
stop depositing the post-dated checks they
issued and to cancel said Contracts to Sell; and,
that despite several demands, petitioner and
PPGI have failed and refused to refund
the P611,519.52 they already paid under the
circumstances. Together with the refund of said
amount and interests thereon at the rate of 12% per
annum, respondents prayed for the grant of their
claims for moral and exemplary damages as well as
attorneys fees and the costs.

executed by PPGI and respondents, it did not

receive any portion of the payments made by the
latter; and, that without any contributory fault and
negligence on its part, PPGI breached its
undertakings under the JVA by failing to complete
the condominium project. In addition to the
dismissal of the complaint and the grant of its
counterclaims for exemplary damages, attorneys
fees, litigation expenses and the costs, petitioner
interposed a cross-claim against PPGI for full
reimbursement of any sum it may be adjudged
liable to pay respondents.
Housing and Land Use (HLU) Arbiter Dunstan T.
San Vicente went on to render the decision
declaring the subject Contracts to Sell cancelled
and rescinded on account of the non-completion of
the condominium project. On the ground that the
JVA created a partnership liability on their part,
petitioner and PPGI, as co-owners of the
condominium project, were ordered to pay: (a)
respondents claim for refund of the P611,519.52
they paid, with interest at the rate of 12% per
annum from 5 February 1997; (b) damages in the
sum of P75,000.00; (c) attorneys fees in the sum
of P30,000.00; (d) the costs;

Specifically denying the material allegations of the

foregoing complaint, PPGI filed its answer alleging
that the delay in the completion of the project was
attributable to the economic crisis which affected
the country at the time; that the unexpected and
unforeseen inflation as well as increase in interest
rates and cost of building materials constitute force
majeure and were beyond its control; that aware of
its responsibilities, it offered several alternatives to
its buyers like respondents for a transfer of their
investment to its other feasible projects and for the
amounts they already paid to be considered as
partial payment for the replacement unit/s; and, that
the complaint was prematurely filed in view of the
on-going negotiations it is undertaking with its
partners. Aside from the dismissal of the
complaint, PPGI sought the readjustment of the
contract price and the grant of its counterclaims for
attorneys fees and litigation expenses.
Petitioner also specifically denied the material
allegations of the complaint in separate
answer dated 5 February 2002, which it amended
on 20 May 2002. Calling attention to the fact that
its prestation under the JVA consisted in
contributing the property on which The
Meditel was to be constructed, petitioner
asseverated that, by the terms of the JVA, each
party was individually responsible for the
marketing and sale of the units pertaining to its
share; that not being privy to the Contracts to Sell


We find the petition bereft of merit.
Even prescinding from the foregoing procedural
considerations, we also find that the HLURB
Arbiter and Board correctly held petitioner liable
alongside PPGI for respondents claims. By the
express terms of the JVA, it appears that petitioner
not only retained ownership of the property
pending completion of the condominium
project but had also bound itself to answer
liabilities proceeding from contracts entered into by
PPGI with third parties.
Article VIII, Section 1 of the JVA distinctly provides
as follows:

Developer shall furnish the

Owner with a copy of its
contracts with the said buyers on
a month-to-month basis. Finally,
in case the Owner would be
constrained to assume the
obligations of the Developer to
its own buyers, the Developer
shall lose its right to ask for
indemnity for whatever it may
have spent in the Development of
the Project.

Sec. 1. Rescission and

damages. Non-performance by
either party of its obligations
under this Agreement shall be
excused when the same is due to
Force Majeure. In such cases,
the defaulting party must
exercise due diligence to
minimize the breach and to
remedy the same at the soonest
possible time. In the event that
either party defaults or breaches
any of the provisions of this
Agreement other than by reason
of Force Majeure, the other party
shall have the right to terminate
this Agreement by giving notice
to the defaulting party, without
prejudice to the filing of a civil
case for damages arising from
the breach of the defaulting
In the event that the
Developer shall be rendered
Condominium Project, and such
failure is directly and solely
attributable to the Developer, the
Owner shall send written notice
to the Developer to cause the
completion of the Condominium
Project. If the developer fails to
comply within One Hundred
Eighty (180) days from such
notice or, within such time,
indicates its incapacity to
complete the Project, the Owner
shall have the right to take over
the construction and cause the
completion thereof. If the Owner
exercises its right to complete the
Condominium Project under
Agreement shall be automatically
rescinded upon written notice to
the Developer and the latter shall
hold the former free and
harmless from any and all
liabilities to third persons arising
from such rescission. In any
case, the Owner shall respect
and strictly comply with any
covenant entered into by the
Developer and third parties with
respect to any of its units in the
Condominium Project. To enable
the owner to comply with this

Nevertheless, with respect

to the buyers of the Developer
for the First Phase, the area
intended for the Second Phase
shall not be bound and/or
subjected to the said covenants
and/or any other liability
incurred by the Developer in
connection with the development
(Underscoring supplied)
Viewed in the light of the foregoing provision of
the JVA, petitioner cannot avoid liability by
claiming that it was not in any way privy to the
Contracts to Sell executed by PPGI and
respondents. As correctly argued by the latter,
moreover, a joint venture is considered in this
jurisdiction as a form of partnership and is,
accordingly, governed
partnerships. Under Article 1824 of the Civil Code
of the Philippines, all partners are solidarily liable
with the partnership for everything chargeable to
the partnership, including loss or injury caused to a
third person or penalties incurred due to any
wrongful act or omission of any partner acting in
the ordinary course of the business of the
partnership or with the authority of his copartners. Whether innocent or guilty, all the
partners are solidarily liable with the partnership




Sociedad Mercantil, Teck Seing & Co, Ltd., filed
an application to be adjudged insolvent. The

creditor (Pacific Commercial Company, Piol &

Company, Riu Hermanos, and W. H. Anderson &
Company) filed a motion to declare the individual
partners as parties to the proceeding, requiring each
of the said partners to file an inventory of his
property and that each of the said partners be
adjudicated insolvent debtors in this proceeding.
The trial judge first granted the motion, but
1. W/N Teck Seing & Co, Ltd. is a general
2. W/N the fact that the firm name Teck Seing &
Co., Ltd. does not contain the name of all or any
of the partners, as prescribed by the Code of
Commerce, prevented the creation of a general
1. YES. It is a general partnership. To establish a
limited partnership, there must be at least 1 general
partner and the name of at least 1 of the general
partners must appear in the firm name. But neither
of these requirements have been fulfilled. The
general rule is, 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. A limited partnership
that has not complied with the law of its creation is
not considered a limited partnership at all, but a
general partnership in which all the members are
Article 125 of the Code of Commerce provides that
the articles of general co-partnership must state the
names, surnames, and domiciles of the partners; the
firm name; the names and surnames of the partners
to whom the management of the firm and the use of
its signature is entrusted; the capital which each
partner contributes in cash, credits, or property,
stating the value given the latter or the basis on
which their appraisement is to be made; the
duration of the co-partnership; and the amounts
which, in a proper case, are to be given to each
managing partner annually for his private expenses.
Succeeding articles of the Code provide that the
general co-partnership must transact business under
the name of all its members, of several of them, or
Referring to the documents provided (all stated in
Spanish), it will be noted that all of the
requirements of the Code have been met, with the
sole exception of that relating to the composition of

2. NO. The Supreme Court quoted Professor Jose

My opinion is that such a fact alone cannot and will
not be a sufficient cause of preventing the
formation of a general partnership, especially if the
other requisites are present and the requisite
regarding registration of the articles of association
in the Commercial Registry has been complied
with, as in the present case. I do not believe that the
adoption of a wrong name is a material fact to be
taken into consideration in this case; first, because
the mere fact that a person uses a name not his own
does not prevent him from being bound in a
contract or an obligation he voluntarily entered
into; second, because such a requirement of the law
is merely a formal and not necessarily an essential
one to the existence of the partnership, and as long
as the name adopted sufficiently identity the firm or
partnership intended to use it, the acts and contracts
done and entered into under such a name bind the
firm to third persons; and third, because the failure
of the partners herein to adopt the correct name
prescribed by law cannot shield them from their
personal liabilities, as neither law nor equity will
permit them to utilize their own mistake in order to
put the blame on third persons, and much less, on
the firm creditors in order to avoid their personal
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 which in
law constitutes a partnership, they are partners,
although their purpose was to avoid the creation of
such relation. Here, the intention of the persons
making up Teck Seing & co., Ltd. was to establish
a partnership which they erroneously denominated
a limited partnership. If this was their purpose, all
subterfuges resorted to in order to evade liability
for possible losses, while assuming their enjoyment
of the advantages to be derived from the relation,
must be disregarded. The partners who have
disguised their identity under a designation distinct
from that of any of the members of the firm should
be penalized, and not the creditors who presumably
have dealt with the partnership in good faith.
Articles 127 and 237 of the Code of Commerce
make all the members of the general co-partnership
liable personally and in solidum with all their
property for the results of the transactions made in
the name and for the account of the partnership.
Section 51 of the Insolvency Law, likewise, makes
all the property of the partnership and also all the
separate property of each of the partners liable. If a
firm be insolvent, but one or more partners thereof
are solvent, the creditors may proceed both against
the firm and against the solvent partner or partners,

first exhausting the assets of the firm before seizing

the property of the partners.
Severo Eugenio Lo and Ng Khey Ling, together
with J. A. Say Lian Ping, Ko Tiao Hun, On Yem Ke
Lam and Co Sieng Peng formed a commercial
partnership under the name of "Tai Sing and Co.,"
with a capital of P40, 000 contributed by said
partners. J. A. Say Lian Ping was appointed
general manager of the partnership, with powers
specified in the partnerships articles of
Subsequently, Lian Ping executed a power of
attorney in favor of A. Y. Kelam, authorizing him
to act in his stead as manager and administrator of
"Tai Sing & Co., The latter then obtained a loan of
P8, 000 in current account from PNB. As security
for said loan, he mortgaged certain personal
property of "Tai Sing & Co. Such credit was
renewed several times.
Yap Seng, Severo Eugenio Lo, A. Y. Kelam and Ng
Khey Ling, the latter represented by M. Pineda
Tayenko, then executed a power of attorney in
favor of Sy Tit by virtue of which Sy Tit,
representing "Tai Sing & Co., obtained a credit of
P20, 000 from PNB, executing a chattel mortgage
on certain personal property belonging to "Tai Sing
& Co.
PNB now claims a total amount of P20, 239.00,
together with interest on the P16, 518.74 debt, at 9
per cent per annum from January 1, 1925 until fully
paid, with the costs of the trial.
Respondent Eugenio Lo sets up, as a general
defense, that "Tai Sing & Co. was not a general
partnership, and that the commercial credit in
current account which "Tai Sing & Co. obtained
from the petitioner had not been authorized by the
board of directors of the company, nor was the
person who subscribed said contract authorized to
make the same, under the article of copartnership.
The other defendants, Yap Sing and Ng Khey Ling,
answered the complaint denying each and every
one of the allegations contained therein.
Respondents now faulted the court when it held
that the death of J. A. Say Lian Ping cannot
extinguish the defendants' obligation to the plaintiff
bank, because the last debt incurred by the
commercial partnership "Tai Sing & Co., was that

signed by Sy Tit as attorney-in-fact of the members

of "Tai Sing & Co.
Issue: WON the partnership can be held liable for
the said obligation? Yes.
Art. 1815 of the NCC provides: Every partnership
shall operate under a firm name, which may or
may not include the name of one or more of the
partners. Those who, not being members of the
partnership, include their names in the firm name,
shall be subject to the liability of a partner.
The association formed by the defendants is a
general partnership, as defined in article 126 of the
Code Commerce. This partnership was registered
in the mercantile register of the Province of Iloilo.
The only anomaly noted in its organization is that
instead of adopting for their firm name the names
of all of the partners, of several of them, or only
one of them, to be followed in the last two cases,
by the words "and to be followed in the last two
cases, by the words "and company" the partners
agreed upon "Tai Sing & Co." as
the firm name.
As to the alleged death of the manager of the
company, Say Lian Ping, before the attorney-infact Ou Yong Kelam made the loans, the trial court
did not find this fact proven at the hearing. But
even supposing that the court had erred, such an
error would not justify the reversal of the judgment,
for two reasons at least: (1) Because Ou Yong
Kelam was a partner who contracted in the name of
the partnership, without any objection of the other
partners; and (2) because it appears in the record
that the appellant-partners appointed Sy Tit as
manager, and the latter obtained from PNB the
credit in current account, the debit balance of
which is sought to be recovered in this action.
Defendants also assign error to the action of the
trial court in ordering them to pay plaintiff, jointly
and severally, the sums claimed with 9 per cent
interest on P16, 518.74, owing from them. Such
judgment against the appellants is in accordance
with article 127 of the Code of Commerce which
provides that all 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.