Clemente vs.

Galvan
67 Phil. 565

FACTS:
Enrique Clemente and Dionisio Galvan organized a civil partnership which they named
Galvan y Compania to engage in the manufacture and sale of paper and other stationery. They
contributed equal amounts of money. Galvan was entrusted with management. In less than a year,
Clemente asked for the dissolution of the partnership which Galvan agreed, with a condition that
Clemente reimburse him for half the amount of a deficit incurred by the partnership which he had
covered with his own money.
Before final liquidation of its affairs, Clemente filed a petition asking the court to order the
delivery of certain machines to him and to charge their value against his portion in the partnership.
This was granted by the court. However, before Clemente could take actual possession of said
machines, and upon strong opposition of Galvan, the court suspended the effects of its previous
order. In the meantime, judgments for money- recovery cases against the partnership were
rendered. To avoid the attachment and subsequent sale of the machines by the sheriff for the
satisfaction of said judgments, Clemente mortgaged the machines with his nephew, the intervenor
(plaintiff in the herein case) When the terms in the mortgage expired, the intervenor commenced
a case to collect his mortgage credit.

ISSUE:
Whether or not the mortgage between Clemente and his nephew (intervenor, plaintiff in
the case) is valid

RULING:
No. The machines in contention originally belonged to the defendant and from him were
transferred to the partnership Galvan y Compania. This being the case, said machines belong to
the partnership and not to him, and shall belong to it until partition is effected according to the
result thereof after the liquidation. Also, Clemente did not have actual possession of the machines,
thus, he could not in any manner mortgage them.