E. M. BACHRACH, plaintiff and appellee, vs. "LA PROTECTORA" ET AL., defendants and appellants.

FACTS:

Defendants Nicolas Segundo, Antonio Adiarte, Ignacio Flores and Modesto Serrano formed a civil
partnership called “La Protectora” for the purpose of engaging in the business of transporting
passengers and freight at Laoag, Ilocos Norte. In order to provide the enterprise with means of
transportation, Marcelo Barba, acting as manager, negotiated for the purchase of 2 automobile trucks
from E. M. Bachrach for P16,500. Barba paid P3,000 in cash and for the balance executed promissory
notes.

One of these promissory notes was signed in the following manner:

“P.P La Protectora, By Marcelo Barba Marcelo Barba”

The other 2 notes were signed in the same way but the word “by” was omitted. It was obvious that in
signing the notes, Barba intended to bind both the partnership and himself.

The defendants executed a document in which they declared that they were members of La Protectora
and that they had granted to its president full authority to contract for the purchase of the 2
automobiles. The document was delivered by Barba to Bachrach at the time the vehicles were
purchased.

From time to time after the first purchase was made, Marcelo Barba purchased of the plaintiff various
automobile effects and accessories to be used in the business of "La Protectora." The indebtedness
resulting from these additional purchases amounted to the sum of P2,916.57. Consequently, Bahrach
foreclosed a chattel mortgage on the trucks but there was still balance. To recover the balance, action
was instituted against “La protectora” and the 5 individuals Marcelo, Barba, Nicolas Segundo, Antonio
Adiarte, Ignacio Flores, and Modesto Serrano. Judgment was rendered against the defendants. The 4
other individual (who signed the document to which reference has been made, authorizing Barba to
purchase the two trucks appealed.

Issue:

1. Whether or not the defendants (individuals) are liable for the firm debts. - YES

2. Whether or not Barba had authority to incur expenses for the partnership - YES

Held:

1.Yes. Promissory notes constitute the obligation exclusively of La Protectora and Barba. They do not
constitute an obligation directly binding the defendants. Their liability is based on the principles of
partnership liability. A member is not liable in solidum with his fellows for the entire indebtedness but is
liable with them or his aliquot part.

SC obiter: the document was intended merely as an authority to enable Barba to bind the partnership
and that the parties to the instrument did not intend to confer upon Barba an authority to bind them
personally. From what has been said it results that the appellants are severally liable for their respective
shares of the entire indebtedness found to be due; and the Court of First Instance committed no error in
giving judgment against them. Partners are considered agents of the partnership. Barba must be
held to have authority to incur these expenses. He is shown to have been in fact the
president/manager, and there can be no doubt that he had actual authority to incur obligation.

The business conducted under the name of "La Protectora" was evidently that of a civil partnership; and
the liability of the partners to this association must be determined under the provisions of the Civil
Code. The authority of Marcelo Barba to bind the partnership, in the purchase of the trucks, is fully
established by the document executed by the four appellants upon June 12, 1913. The transaction by
which Barba secured these trucks was in conformity with the tenor of this document.

The promissory notes constitute the obligation exclusively of "La Protectora" and of Marcelo Barba; and
they do not in any sense constitute an obligation directly binding on the four appellants. Their liability is
based on the fact that they are members of the civil partnership and as such are liable for its debts.