LA COMPAÑIA MARITIMA v. MUÑOZ

LA COMPAÑIA MARITIMA v. MUÑOZ

G.R. No. L-3704; December 12, 1907

Ponente: J. Willard

FACTS:

         

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.

In the articles of partnership, 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 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.

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

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.

ISSUE:

          Whether Muñoz is liable to third person even if he is an industrial partner

HELD:

          Yes, Muñoz is liable to third persons even if he is an industrial partner.

The Supreme Court held that in limited partnership, the Code of Commerce recognizes a difference between general and special partners, but in a 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 partners.

         

Our construction of the article is that it relates exclusively to the settlement of the partnership affairs among the partners themselves and has nothing to do with the liability of the partners to third persons; that each one of the industrial partners is liable to third persons for the debts of the firm; that if he has paid such debts out of his private property during the life of the partnership, when its affairs are settled he is entitled to credit for the amount so paid, and if it results that there is not enough property in the partnership to pay him, then the capitalist partners must pay him.

Our conclusion is upon this branch of the case that neither on principle nor on authority can the industrial partner be relieved from liability to third persons for the debts of the partnership