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Prof. Joselito Guianan Chan's The Labor Code of the Philippines, Annotated Labor Standards & Social Legislation Volume I of a 3-Volume Series 2019 Edition (3rd Revised Edition)
 

 
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UNITED STATES SUPREME COURT JURISPRUDENCE
 

 
PHILIPPINE SUPREME COURT JURISPRUDENCE
 

   
April-1939 Jurisprudence                 

  • G.R. No. 43850 April 3, 1939 - JOSE C. BUCOY v. JOHN R. MCFIE, ET AL.

    067 Phil 126

  • G.R. No. 45080 April 3, 1939 - FLORENCIA DUQUILLO v. PAZ BAYOT

    067 Phil 131

  • G.R. No. 45112 April 3, 1939 - APOLONIA GOMEZ v. LEVY HERMANOS, INC.

    067 Phil 134

  • G.R. No. 45144 April 3, 1939 - M. E. GREY v. INSULAR LUMBER COMPANY

    067 Phil 139

  • G.R. No. 45696 April 3, 1939 - PLACIDA PASCASIO, ET AL. v. BENITO GUIDO

    067 Phil 143

  • G.R. No. 45159 April 4, 1939 - GOVERNMENT OF THE PHIL. v. EMILIO MA. DE MORETA

    067 Phil 146

  • G.R. Nos. 46231-46235 April 4, 1939 - PEOPLE OF THE PHIL. v. PAULO B. GONZALEZ

    067 Phil 147

  • G.R. No. 46239 April 4, 1939 - SAN JUAN DE DIOS HOSPITAL v. ROSENDO MARCOS, ET AL.

    067 Phil 150

  • G.R. No. 46247 April 4, 1939 - SAN JUAN DE DIOS HOSPITAL v. MUNICIPAL COUNCIL OF SAN RAFAEL, ET AL.

    067 Phil 158

  • G.R. No. 45177 April 5, 1939 - JOSE MARTINEZ v. SANTOS B. PAMPOLINA

    067 Phil 167

  • G.R. No. 45193 April 6, 1939 - EMILIE ELMIRA RENEE BOUDARD, ET AL. v. STEWART EDDIE TAIT

    067 Phil 170

  • G.R. No. 46510 April 5, 1939 - ORIENT PROTECTIVE ASSURANCE ASSOCIATION v. ANTONIO RAMOS

    067 Phil 176

  • G.R. No. 45517 April 5, 1939 - TARCILA L. TRINIDAD v. ORIENT PROTECTIVE ASSURANCE ASSOCIATION

    067 Phil 181

  • G.R. No. 45738 April 6, 1939 - PEOPLE OF THE PHIL. v. MAXIMIANO CELORICO

    067 Phil 185

  • G.R. No. 45748 April 6, 1939 - PEOPLE OF THE PHIL. v. FRANCO VERA REYES

    067 Phil 187

  • G.R. No. 45955 April 5, 1939 - TEODORICA R. VIUDA DE JOSE v. JULIO VELOSO BARRUECO

    067 Phil 191

  • G.R. No. 46144 April 6, 1939 - PEOPLE OF THE PHIL. v. FRANCISCO CINCO, ET AL.

    067 Phil 196

  • G.R. No. 46409 April 5, 1939 - INSULAR MOTORS INCORPORATED v. CITY OF MANILA, ET AL.

    067 Phil 201

  • G.R. No. 46478 April 6, 1939 - PEOPLE OF THE PHIL. v. GO UG, ET AL.

    067 Phil 202

  • G.R. No. 43822 April 10, 1939 - PHILIPPINE TRUST CO. v. HONGKONG & SHANCHAI BANKING CORPORATION

    067 Phil 204

  • G.R. No. 45152 April 10, 1939 - HILARIA SIKAT v. JOHN CANSON

    067 Phil 207

  • G.R. No. 45170 April 10, 1939 - ARSENIO DE VERA, ET AL. v. CLEOTILDE GALAURAN

    067 Phil 213

  • G.R. No. 45171 April 10, 1939 - EUGENIO VERAGUTH, ET AL. v. ROSARIO MONTILLA, ET AL.

    067 Phil 215

  • G.R. No. 45192 April 10, 1939 - IN RE: VICENTE J. FRANCISCO

    067 Phil 222

  • G.R. No. 45200 April 10, 1939 - GOVERNMENT OF THE PHIL. v. APOLONIA S. ZAPANTA, ET AL.

    067 Phil 232

  • G.R. No. 45246 April 10, 1939 - CARLOS N. FRANCISCO v. PARSONS HARDWARE CO.

    067 Phil 234

  • G.R. No. 45273 April 10, 1939 - LUNETA MOTOR CO. v. FEDERICO ABAD

    067 Phil 236

  • G.R. No. 45295 April 10, 1939 - RUFO ARCENAS v. INOCENCIO DEL ROSARIO, ET AL.

    067 Phil 238

  • G.R. No. 45302 April 10, 1939 - GERVASIA ENCARNACION, ET AL. v. PROVINCIAL SHERIFF OF RIZAL, ET AL.

    067 Phil 245

  • G.R. No. 45337 April 10, 1939 - MANILA MOTOR CO. v. ANICETO MARAÑA

    067 Phil 247

  • G.R. No. 45381 April 10, 1939 - FELIX BENEDICTO v. PERFECTO ESPINO

    067 Phil 249

  • G.R. No. 45898 April 10, 1939 - JOVITA JOVEN v. MARCELO T. BONCAN, ET AL.

    067 Phil 252

  • G.R. No. 46530 April 10, 1939 - PEOPLE OF THE PHIL. v. CATALINO RABAO

    067 Phil 255

  • G.R. No. 45123 April 12, 1939 - AGRIPINO INFANTE v. MARCOS DULAY

    067 Phil 259

  • G.R. No. 45165 April 12, 1939 - GREGORIA JIMENEZ v. GEROMIMO JIMENEZ

    067 Phil 263

  • G.R. No. 45277 April 12, 1939 - TORIBIO TEODORO v. JUAN POSADAS

    067 Phil 267

  • G.R. No. 45306 April 12, 1939 - JOSUE SONCUYA v. LA URBANA

    067 Phil 271

  • G.R. No. 45365 April 12, 1939 - FULTON IRON WORKS CO. v. SIDNEY C. SCHWARZKOPF

    067 Phil 274

  • G.R. No. 45375 April 12, 1939 - COMMONWEALTH OF THE PHIL. v. GLORIA BALDELLO

    067 Phil 277

  • G.R. No. 45454 April 12, 1939 - EULALIO GARCIA v. SINFOROSA C. DAVID, ET AL.

    067 Phil 279

  • G.R. No. 45515 April 12, 1939 - TOLARAM MENGHRA v. BULCHAND ARACHAND, ET AL.

    067 Phil 286

  • G.R. No. 45742 April 12, 1939 - TIBURCIO MAMUYAC v. PEDRO ABENA

    067 Phil 289

  • G.R. No. 45752 April 12, 1939 - PEOPLE OF THE PHIL. v. JUAN PERALTA, ET AL.

    067 Phil 293

  • G.R. No. 45821 April 12, 1939 - SOCONY-VACUUM CORPORATION v. LEON C. MIRAFLORES

    067 Phil 304

  • G.R. No. 45899 April 12, 1939 - RAYMUNDO VARGAS v. NIEVES TANCIOCO,, ET AL.

    067 Phil 308

  • G.R. No. 45405 April 13, 1939 - IN RE: ANTONIO FRANCO

    067 Phil 312

  • G.R. No. 45529 April 13, 1939 - VENANCIO QUEBLAR v. LEONARDO GARDUÑO

    067 Phil 316

  • G.R. No. 46428 April 13, 1939 - PEOPLE OF THE PHIL. v. IRINEO TUMLOS

    067 Phil 320

  • G.R. No. 45253 April 14, 1939 - FIDELITY AND SURETY COMPANY OF THE PHIL. v. ISABELO G. SANCHEZ, ET AL.

    067 Phil 323

  • G.R. No. 45310 April 14, 1939 - MARCOS J. ROTEA v. FRANCISCA DELUPIO

    067 Phil 330

  • G.R. No. 45400 April 14, 1939 - MARCIANA LUNASCO v. VETERANS ADMINISTRATION

    067 Phil 333

  • G.R. No. 45536 April 14, 1939 - PEDRO AMANTE v. SERAFIN P. HILADO

    067 Phil 338

  • G.R. No. 45601 April 14, 1939 - TAVERA-LUNA v. MARIANO NABLE

    067 Phil 340

  • G.R. No. 45687 April 14, 1939 - CARIDAD ESTATE OF CAVITE, INC. v. VICENTE AVILA

    067 Phil 345

  • G.R. No. 45931 April 14, 1939 - URBANO SERRANO v. VICENTE DE LA CRUZ

    067 Phil 348

  • G.R. No. 45340 April 15, 1939 - MARCELA BALLESTEROS v. VETERANS ADMINISTRATION

    067 Phil 351

  • G.R. No. 45430 April 15, 1939 - TERESA GARCIA v. LUISA GARCIA, ET AL.

    067 Phil 353

  • G.R. No. 45643 April 16, 1939 - RAYMUNDO CORDERO v. COURT OF FIRST INSTANCE OF LAGUNA, Respondents.

    067 Phil 358

  • G.R. No. 45576 April 19, 1939 - MAXIMIANO FUENTES v. JUSTICE OF THE PEACE OF PILA, LAGUNA, ET AL.

    067 Phil 364

  • G.R. No. 45248 April 18, 1939 - VICENTE REYES VILLAVICENCIO v. SANTIAGO QUINIO

    067 Phil 367

  • G.R. No. 45418 April 18, 1939 - AMBROSIO RAMOS, ET AL. v. H. A. GIBBON, ET AL.

    067 Phil 371

  • G.R. No. 45701 April 18, 1939 - TIRSO GARCIA v. TY CAMCO SOBRINO

    067 Phil 384

  • G.R. No. 45721 April 18, 1939 - MELCHOR LAMPREA v. DIRECTOR OF LANDS, ET AL.

    067 Phil 388

  • G.R. No. 45803 April 18, 1939 - VICENTA C. VDA. DE GUIDOTE v. BANK OF THE PHILIPPINE ISLANDS

    067 Phil 391

  • G.R. No. 45923 Abril 18, 1939 - CHOA FUN v. EL SECRETARIO DEL TRABAJO

    067 Phil 394

  • G.R. No. 46015 April 18, 1939 - LIBERATO JIMENEZ v. INES DE CASTRO, ET AL.

    067 Phil 398

  • G.R. No. 46043 April 18, 1939 - TERESA LANDRITO, ET AL. v. RICARDO GONZALEZ, ET AL.

    067 Phil 401

  • G.R. No. 46134 April 18, 1939 - NICOLASA DE GUZMAN v. ANGELA LIMCOLIOC

    067 Phil 404

  • G.R. No. 46317 April 18, 1939 - JUSTO QUIMING v. MARIANO L. DE LA ROSA

    067 Phil 406

  • G.R. No. 45290 April 19, 1939 - GOVERNMENT OF THE PHIL. v. PAULA MERCADO

    067 Phil 409

  • G.R. No. 45126 April 19, 1939 - DIRECTOR OF LANDS v. ALBINO PANUNCIO

    067 Phil 414

  • G.R. No. 45166 April 19, 1939 - LEON C. VIARDO v. GALICANO GUTIERREZ

    067 Phil 416

  • G.R. No. 45190 April 19, 1939 - PEOPLE OF THE PHIL. v. ANTONIO APAREJADO, ET AL.

    067 Phil 418

  • G.R. No. 45531 April 19, 1939 - FRED OMNAS, ET AL. v. PABLO S. RIVERA

    067 Phil 419

  • G.R. No. 46002 April 19, 1939 - SALVACION RIOSA v. STILIANOPULOS, INC.

    067 Phil 422

  • G.R. No. 45715 April 20, 1939 - PEOPLE OF THE PHIL. v. REMIGIO OLIVERIA

    067 Phil 427

  • G.R. No. 45934 April 20, 1939 - FORTUNATO DIAZ v. PEOPLE OF THE PHIL.

    067 Phil 432

  • G.R. No. 45980 April 20, 1939 - MARIA MARTINEZ v. YEK TONG LIN FIRE & MARINE INSURANCE CO.

    067 Phil 436

  • G.R. No. 45493 April 21, 1939 - GERARDO GARCIA v. ANGEL SUAREZ

    067 Phil 441

  • G.R. No. 45595 April 21, 1939 - JUAN POSADAS, ET AL. v. GO HAP, ET AL.

    067 Phil 446

  • G.R. No. 46046 April 21, 1939 - PROCOPIO GAQUIT v. DOROTEO CONUI

    067 Phil 449

  • G.R. No. 46570 April 21, 1939 - JOSE D. VILLENA v. SECRETARY OF THE INTERIOR

    067 Phil 451

  • G.R. No. 45449 April 22, 1939 - TOMAS S. OCEJO v. CONSUL GENERAL OF SPAIN

    067 Phil 475

  • G.R. No. 46330 April 22, 1939 - IRENEO ABAD SANTOS, ET AL. v. PROVINCE OF TARLAC, ET AL.

    067 Phil 480

  • G.R. No. 45413 April 24, 1939 - LA YEBANA, CO., INC. v. JULIO L. VALENZUELA, ET AL.

    067 Phil 482

  • G.R. No. 45666 April 24, 1939 - ALFREDO VALENZUELA v. PEOPLE OF THE PHIL.

    067 Phil 490

  • G.R. No. 45978 April 24, 1939 - MIGUELA ELEAZAR v. EUSEBIO ELEAZAR

    067 Phil 497

  • G.R. No. 46029 April 24, 1939 - NATIONAL LOAN AND INVESTMENT BOARD v. LUIS MENESES

    067 Phil 498

  • G.R. No. 45369 April 25, 1939 - ISABELA SUGAR CO., INC. v. ALFFREDO L. YATCO

    067 Phil 500

  • G.R. No. 45544 April 25, 1939 - COLLECTOR OF INTERNAL REVENUE v. LORENZO ECHARRI

    067 Phil 502

  • G.R. No. 45624 April 25, 1939 - GEORGE LITTON v. HILL & CERON, ET AL.

    067 Phil 509

  • G.R. No. 45739 April 26, 1939 - PEOPLE OF THE PHIL. v. SOTERO PEJI BAUTISTA

    067 Phil 518

  • G.R. No. 45755 April 25, 1939 - ASUNCION ABAD v. AMANDO AQUINO

    067 Phil 526

  • G.R. No. 45964 April 26, 1939 - PEOPLE OF THE PHIL. v. RESTITURO FALLER

    067 Phil 529

  • G.R. No. 46035 April 25, 1939 - DIRECTOR OF LANDS v. PHILIPPINE NATIONAL BANK, ET AL.

    067 Phil 531

  • G.R. No. 46260 April 26, 1939 - PABLO TAMAYO v. FRANCISCO E. JOSE, ET AL.

    067 Phil 536

  • G.R. No. 46356 April 25, 1939 - FRUCTUOSA VELASCO VDA. DE TALAVERA v. CORRECTIONAL INSTITUTION FOR WOMEN

    067 Phil 538

  • G.R. No. 45403 April 26, 1939 - NATIONAL CITY BANK OF NEW YORK v. NEW YORK TONG LIN & MARINE INSURANCE COMPANY

    067 Phil 544

  • G.R. No. 45519 April 26, 1939 - RUFINA SALAO, ET AL. v. TEOFILO C. SANTOS, ET AL.

    067 Phil 547

  • G.R. No. 45521 April 26, 1939 - JOSE MORENO, ET AL. v. BONIFACIO SAN MATEO, ET AL.

    067 Phil 551

  • G.R. No. 45598 April 26, 1939 - TAN PHO v. HASSAMAL DALAMAL

    067 Phil 555

  • G.R. No. 45614 April 26, 1939 - NORBERTO FORDAN v. ANTONIO LUZON

    067 Phil 559

  • G.R. No. 45662 April 26, 1939 - ENRIQUE CLEMENTE v. DIONISIO GALVAN

    067 Phil 565

  • G.R. No. 46366 April 26, 1939 - PHILIPPINE NATIONAL BANK v. PARDO Y ROBLES HERMANOS, ET AI. .

    067 Phil 570

  • G.R. No. 46492 April 26, 1939 - RAMON SOTELO v. ARSENIO P. DIZON, ET AL.

    067 Phil 573

  • G.R. No. 45173 April 27, 1939 - RED LINE TRANSPORTATION CO., INC. v. BACHRACH MOTOR COMPANY, INC.

    067 Phil 577

  • G.R. No. 45359 April 27, 1939 - JACINTO M. DEL SAZ OROZCO, ET AL. v. SALVADOR ARANETA

    067 Phil 591

  • G.R. No. 45506 April 27, 1939 - FORTUNATO MANZANERO v. REMEDIOS BONGON

    067 Phil 595

  • G.R. No. 45508 April 27, 1939 - SEGUNDA DEVEZA v. ERIBERTO BALMEO, ET AL.

    067 Phil 603

  • G.R. No. 45534 April 27, 1939 - JOSEFA RIZAL MERCADO, ET AL. v. ALFREDO HIDALGO REAL

    067 Phil 608

  • G.R. No. 45694 April 27, 1939 - FRANCISCO YATCO v. EL HOGAR FILIPINO

    067 Phil 610

  • G.R. No. 45724 April 27, 1939 - IGNACIO DE GUZMAN, ET AL. v. TEODORO IBEA, ET AL.

    067 Phil 633

  • G.R. No. 45741 April 27, 1939 - F. Y A. GARCIA DIEGO v. GLORIA DE ANTONIO, ET AL.

    067 Phil 637

  • G.R. No. 45185 April 28, 1939 - GOVERNMENT OF THE PHIL. v. SALUD ALDEGUER VIUDA DE ROMERO SALAS

    067 Phil 643

  • G.R. No. 45464 April 28, 1939 - JOSUE SONCUYA v. CARMEN DE LUNA

    067 Phil 646

  • G.R. No. 45625 April 28, 1939 - MARGARITA VILLANUEVA v. JUAN SANTOS

    067 Phil 648

  • G.R. No. 45761 April 28, 1939 - JULIA DEL ROSARIO, ET AL. v. ANTONIO DEL ROSARIO, ET AL.

    067 Phil 652

  • G.R. No. 45266 April 29, 1939 - SIMEON RAEL v. PROVINCIAL GOVERNMENT OF RIZAL

    067 Phil 654

  • G.R. No. 45410 April 29, 1939 - MACONDRAY & CO., INC. v. JOSE BERNABE

    067 Phil 658

  • G.R. No. 45412 April 29, 1939 - COSME CARLOS, ET AL. v. COSME CARLOS

    067 Phil 662

  • G.R. No. 45425 April 29, 1939 - JOSE GATCHALIAN v. COLLECTOR OF INTERNAL REVENUE

    067 Phil 666

  • G.R. No. 45479 April 29, 1939 - FELIX ATACADOR v. HILARION SILAYAN

    067 Phil 674

  • G.R. No. 45597 April 29, 1939 - MACARIA PASCUAL v. LORENZA RAMIREZ, ET AL.

    067 Phil 678

  • G.R. No. 45965 April 29, 1939 - AMPARO GONZALEZ, ET AL. v. PRIMITIVO TRINIDAD, ET AL.

    067 Phil 682

  • G.R. No. 46003 April 29, 1939 - SIXTO DE LA COSTA, ET AL. v. BONIFACIO CLEOFAS

    067 Phil 686

  • G.R. No. 46026 April 29, 1939 - JESUSA PORTILLO-RIVERA v. STRACHAN, MACMURRAY & CO., LTD.

    067 Phil 694

  • G.R. No. 46604 April 29, 1939 - FRANCISCO MORFE, ET AL. v. JUSTICE OF THE PEACE OF CALOOCAN, ET AL.

    067 Phil 696

  •  





     
     

    G.R. No. 45624   April 25, 1939 - GEORGE LITTON v. HILL & CERON, ET AL. <br /><br />067 Phil 509

     
    PHILIPPINE SUPREME COURT DECISIONS

    EN BANC

    [G.R. No. 45624. April 25, 1939.]

    GEORGE LITTON, Petitioner-Appellant, v. HILL & CERON, ET AL., Respondents-Appellees.

    George E. Reich for Appellant.

    Roy & De Guzman for Appellees.

    Espeleta Quijano & Liwag for appellee Hill.

    SYLLABUS


    1. COMMERCIAL LAW; DISSOLUTION OF A COMMERCIAL ASSOCIATION; EFFECT UPON A THIRD PERSON. — Under article 226 of the Code of Commerce, the dissolution of a commercial association shall not cause any prejudice to third parties until it has been recorded in the commercial registry. The Supreme Court of Spain held that the dissolution of a partnership by the will of the partners which is not registered in the commercial registry, does not prejudice third persons.

    2. ID.; ID.; RIGHT OF THIRD PERSON TO PRESUME THAT PARTNER WITH WHOM HE CONTRACTS HAS CONSENT OF COPARTNER. — The stipulation in the articles of partnership that any of the two managing partners may contract and sign in the name of the partnership with the consent of the other, undoubtedly creates an obligation between the two partners, which consists in asking the other’s consent before contracting for the partnership. This obligation of course is not imposed upon a third person who contracts with the partnership. Neither is it necessary for the third person to ascertain if the managing partner with whom he contracts has previously obtained the consent of the other. A third person may and has a right to presume that the partner with whom he contracts has, in the ordinary and natural course of business, the consent of his copartner; for otherwise he would not enter into the contract. The third person would naturally not presume that the partner with whom he enters into the transaction is violating the articles of partnership but, on the contrary, is acting in accordance therewith. And this finds support in the legal presumption that the ordinary course of business has been followed (No. 18, section 334, Code of Civil Procedure), and that the law has been obeyed (No. 31, section 334). This last presumption is equally applicable to contracts which have the force of law between the parties. Unless the contrary is shown, namely, that one of the partners did not consent to his copartner entering into a contract with a third person, and that the latter with knowledge thereof entered into said contract, the aforesaid presumption with all its force and legal effects should be taken into account. There is nothing in the case at bar which destroys this presumption.

    3. ID.; PROHIBITION AGAINST BROKERS TO BUY AND SELL SHARES ON THEIR OWN ACCOUNT. — The order of the Bureau of Commerce of December 7, 1933, prohibits brokers from buying and selling shares on their own account. The second paragraph of the articles of partnership of Hill & Ceron reads in part: "Second: That the purpose or object for which this copartnership is organized is to engage in the business of brokerage in general, such as stock and bond brokers, real brokers, investment security brokers, shipping brokers, and other activities pertaining to the business of brokers in general." The kind of business in which the partnership Hill & Ceron is to engage being thus determined, none of the two partners, under article 130 of the Code of Commerce, may legally engage in the business of brokerage in general as stock brokers, security brokers and other activities pertaining to the business of the partnership. C. therefore, could not have entered into the contract of sale of shares with L as a private individual, but as a managing partner of Hill & Ceron.

    4. ID.; CONTRACT WITH THIRD PERSON IN GOOD FAITH AGAINST THE WILL OF ONE OF MANAGING PARTNERS. — Under article 130 of the Code of Commerce, when, not only without the consent but against the will of any of the managing partners, a contract is entered into with a third person who acts in good faith, and the transaction is of the kind of business in which the partnership is engaged, as in the present case, said contract shall not be annulled, without prejudice to the liability of the guilty partner. The reason or purpose behind these legal provisions is no other than to protect a third person who contracts with one of the managing partners of the partnership, thus avoiding fraud and deceit to which he may easily fall a victim without this protection which the Code of Commerce wisely provides.


    D E C I S I O N


    CONCEPCION, J.:


    This is a petition to review on certiorari the decision of the Court of Appeals in a case originating from the Court of First Instance of Manila wherein the herein petitioner George Litton was the plaintiff and the respondents Hill & Ceron, Robert Hill Carlos Ceron and Visayan Surety Insurance Corporation were defendants. The facts are as follows: On February 14, 1934, the plaintiff sold and delivered to Carlos Ceron, who is one of the managing partners of Hill & Ceron, a certain number of mining claims, and by virtue of said transaction, the defendant Carlos Ceron delivered to the plaintiff a document reading as follows:jgc:chanrobles.com.ph

    "Feb. 14, 1934

    "Received from Mr. George Litton share certificates Nos. 4428, 4429 and 6699 for 5,000, 5,000 and 7,000 shares respectively — total 17,000 shares of Big Wedge Mining Company, which we have sold at P0.11 (eleven centavos) per share or P1,870.00 less 1/2 per cent brokerage.

    "HILL & CERON

    "By: (Sgd.) CARLOS CERON"

    Ceron paid to the plaintiff the sum of P1,150 leaving an unpaid balance of P720, and unable to collect this sum either from Hill & Ceron or from its surety Visayan Surety & Insurance Corporation, Litton filed a complaint in the Court of First Instance of Manila against the said defendants for the recovery of the said balance. The court, after trial, ordered Carlos Ceron personally to pay the amount claimed and absolved the partnership Hill & Ceron, Robert Hill and the Visayan Surety & Insurance Corporation. On appeal to the Court of Appeals, the latter affirmed the decision of the court on May 29, 1937, having reached the conclusion that Ceron did not intend to represent and did not act for the firm Hill & Ceron in the transaction involved in this litigation.

    Accepting, as we cannot but accept, the conclusion arrived at by the Court of Appeals as to the question of fact just mentioned, namely, that Ceron individually entered into the transaction with the plaintiff, but in view, however, of certain undisputed facts and of certain regulations and provisions of the Code of Commerce, we reach the conclusion that the transaction made by Ceron with the plaintiff should be understood in law as effected by Hill & Ceron and binding upon it.

    In the first place, it is an admitted fact by Robert Hill when he testified at the trial that he and Ceron, during the partnership, bad the same power to buy and sell; that in said partnership Hill as well as Ceron made the transaction as partners in equal parts; that on the date of the transaction, February 14, 1934, the partnership between Hill and Ceron was in existence. After this date, or on February 19th, Hill & Ceron sold shares of the Big Wedge; and when the transaction was entered into with Litton, it was neither published in the newspapers nor stated in the commercial registry that the partnership Hill & Ceron had been dissolved.

    Hill testified that a few days before February 14th he had a conversation with the plaintiff in the course of which he-advised the latter not to deliver shares for sale or on commission to Ceron because the partnership was about to be dissolved; but what importance can be attached to said advice if the partnership was not in fact dissolved on February 14th, the date when the transaction with Ceron took place?

    Under article 226 of the Code of Commerce, the dissolution of a commercial association shall not cause any prejudice to third parties until it has been recorded in the commercial registry. (See also Cardell v. Mañeru, 14 Phil., 368.) The Supreme Court of Spain held that the dissolution of a partnership by the will of the partners which is not registered in the commercial registry, does not prejudice third persons. (Opinion of March 23,1885.)

    Aside from the aforecited legal provisions, the order of the Bureau of Commerce of December 7, 1933, prohibits brokers from buying and selling shares on their own account. Said order reads:jgc:chanrobles.com.ph

    "The stock and/or bond broker is, therefore, merely an agent or an intermediary, and as such, shall not be allowed . . .

    "(c) To buy or to sell shares of stock or bonds on his own account for purposes of speculation and/or for manipulating the market, irrespective of whether the purchase or sale is made from or to a private individual, broker or brokerage firm."cralaw virtua1aw library

    In its decision the Court of Appeals states:jgc:chanrobles.com.ph

    "But there is stronger objection to the plaintiff’s attempt to make the firm responsible to him. According to the articles of copartnership of Hill & Ceron,’ filed in the Bureau of Commerce:jgc:chanrobles.com.ph

    "‘Sixth. That the management of the business affairs of the copartnership shall be entrusted to both copartners who shall jointly administered the business affairs, transactions and activities of the copartnership, shall jointly open a current account or any other kind of account in any bank or banks, shall jointly sign all checks for the withdrawal of funds and shall jointly or singly sign, in the latter case, with the consent of the other partner. . ."cralaw virtua1aw library

    "Under this stipulation, a written contract of the firm can only be signed by one of the partners if the other partner consented. Without the consent of one partner, the other cannot bind the firm by a written contract. Now, assuming for the moment that Ceron attempted to represent the firm in this contract with the plaintiff (the plaintiff conceded that the firm name was not mentioned at that time), the latter has failed to prove that Hill had consented to such contract."cralaw virtua1aw library

    It follows from the sixth paragraph of the article of partnership of Hill & Ceron above quoted that the management of the business of the partnership has been entrusted to both partners thereof, but we dissent from the view of the Court of Appeals that for one of the partners to bind the partnership the consent of the other is necessary. Third persons, like the plaintiff, are not bound in entering into a contract with any of the two partners, to ascertain made has the consent of the partner. The public need to make inquiries as to the agreements had between the partners. Its knowledge is enough that it is contracting with the partnership which is represented by one of the managing partners.

    "There is a general presumption that each individual partner is an authorized agent for the firm and that he has authority to bind the firm in carrying on the partnership transactions." (Mills v. Riggle, 112 Pac., 617.)

    "The presumption is sufficient to permit third persons to hold the firm liable on transactions entered into by one of members of the firm acting apparently in its behalf and within the scope of his authority." (Le Roy v. Johnson, 7 U. S. [Law. ed. ], 391.)

    The second paragraph of the articles of partnership of Hill & Ceron reads in part:jgc:chanrobles.com.ph

    "Second: That the purpose or object for which this copartnership is organized is to engage in the business of brokerage in general, such as stock and bond brokers, real brokers, investment security brokers, shipping brokers, and other activities pertaining to the business of brokers in general."cralaw virtua1aw library

    The kind of business in which the partnership Hill & Ceron is to engage being thus determined, none of the two partners, under article 130 of the Code of Commerce, may legally engage in the business of broKerage in general as stock brokers, security brokers and other activities pertaining to the business of the partnership. Ceron, therefore, could not have entered into the contract of sale of shares with Litton as a private individual, but as a managing partner of Hill & Ceron.

    The respondent argues in its brief that even admitting that one of the partners could not, in his individual capacity, engage in a transaction similar to that in which the partnership is engaged without binding the latter, nevertheless there is no law which prohibits a partner in the stock brokerage business for engaging in other transactions different from those of the partnership, as it happens in the present case, because the transaction made by Ceron is a mere personal loan, and this argument, so it is said, is corroborated by the Court of Appeals. We do not find this alleged corroboration because the only finding of fact made by the Court of Appeals is to the effect that the transaction made by Ceron with the plaintiff was in his individual capacity.

    The appealed decision is reversed and the defendants are ordered to pay to the plaintiff, jointly and severally, the sum of P720, with legal interest, from the date of the filing of the complaint, minus the commission of one-half per cent (%) from the original price of P1,870, with the costs to the respondents. So ordered.

    Avanceña, C.J., Villa-Real, Imperial, Diaz, Laurel and Moran, JJ., concur.

    RESOLUTION

    July 13, 1939 - CONCEPCION, J.:


    A motion has been presented in this case by Robert Hill, one of the defendants sentenced in our decision to pay to the plaintiff the amount claimed in his complaint. It is asked that we reconsider our decision, the said defendant insisting that the appellant had not established that Carlos Ceron, another of the defendants, had the consent of his copartner, the movant, to enter with the appellant into the contract whose breach gave rise to the complaint. It is argued that, it being stipulated in the articles of partnership that Hill and Ceron, only partners of the firm Hill & Ceron, would, as managers, have the management of the business of the partnership, and that either may contract and sign for the partnership ,with the consent of the other; the articles of partnership having been, so it is said, recorded in the commercial registry, the appellant could not ignore the fact that the consent of the movant was necessary for the validity of the contract which he had with the other partner and defendant, Ceron, and there being no evidence that said consent had been obtained, the complaint to compel compliance with the said contract had to be, as it must be in fact, a procedural failure.

    Although this question has already been considered and settled in our decision, we nevertheless take cognizance of the motion in order to enlarge upon our views on the matter.

    The stipulation in the articles of partnership that any of the two managing partners may contract and sign in the name of the partnership with the consent of the other, undoubtedly creates an obligation between the two partners, which consists in asking the other’s consent before contracting for the partnership. This obligation of course is not imposed upon a third person who contracts with the partnership. Neither is it necessary for the third person to ascertain if the managing partner with whom he contracts has previously obtained the consent of the other. A third person may and has a right to presume that the partner with whom he contracts has, in the ordinary and natural course of business, the consent of his copartner; for otherwise he would not enter into the contract. The third person would naturally not presume that the partner with whom he enters into the transaction is violating the articles of partnership but, on the contrary, is acting in accordance therewith. And this finds support in the legal presumption that the ordinary course of business has been followed (No. 18, section 334, Code of Civil Procedure), and that the law has been obeyed (No. 31, section 334). This last presumption is equally applicable to contracts which have the force of law between the parties.

    Wherefore, unless the contrary is shown, namely, that one of the partners did not consent to his copartner entering into a contract with a third person, and that the latter with knowledge thereof entered into said contract, the aforesaid presumption with all its force and legal effects should be taken into account.

    There is nothing in the case at bar which destroys this presumption; the only thing appearing in the findings of fact of the Court of Appeals is that the plaintiff "has failed to prove that Hill had consented to such contract." According to this, it seems that the Court of Appeals is of the opinion that the two partners should give their consent to the contract and that the plaintiff should prove it. The clause of the articles of partnership should not be thus understood, for it means that one of the two partners should have the consent of the other to contract for the partnership, which is different; because it is possible that one of the partners may not see any prospect in a transaction, but he may nevertheless consent to the realization thereof by his copartner in reliance upon his skill and ability or otherwise. And here we have to hold once again that it is not the plaintiff who, under the articles of partnership, should obtain and prove the consent of Hill, but the latter’s partner, Ceron, should he file a complaint against the partnership for compliance with the contract; but in the present case, it is a third person, the plaintiff, who asks for it. While the said presumption stands, the plaintiff has nothing to prove.

    Passing now to another aspect of the case, had Ceron in any way stated to the appellant at the time of the execution of the contract, or if it could be inferred by his conduct, that he had the consent of Hill, and should it turn out later that he did not have such consent, this alone would not annul the contract judging from the provisions of article 130 of the Code of Commerce reading as follows:jgc:chanrobles.com.ph

    "No new obligation shall be contracted against the will of one of the managing partners, should he have expressly stated it; but if, however, it should be contracted it shall not be annulled for this reason, and shall have its effects without prejudice to the liability of the partner or partners who contracted it to reimburse the firm for any loss occasioned by reason thereof." (Emphasis ours.)

    Under the aforequoted provisions, when, not only without the consent but against the will of any of the managing partners, a contract is entered into with a third person who acts in good faith, and the transaction is of the kind of business in which the partnership is engaged, as in the present case, said contract shall not be annulled, without prejudice to the liability of the guilty partner.

    The reason or purpose behind these legal provisions is no other than to protect a third person who contracts with one of the managing partners of the partnership, thus avoiding fraud and deceit to which he may easily fall a victim without this protection which the Code of Commerce wisely provides.

    If we are to interpret the articles of partnership in question by holding that it is the obligation of the third person to inquire whether the managing copartner of the one with whom ’he contracts has given his consent to said contract, which is practically casting upon him the obligation to get such consent, this interpretation would, in similar cases, separate to hinder effectively the transactions, a thing not desirable and contrary to the nature of business which requires promptness and dispatch on the basis of good faith and honesty which are always presumed.

    In view of the foregoing, and sustaining the other views expressed in the decision, the motion is denied. So ordered.

    Avanceña, C.J., Villa-Real, Imperial, Diaz, Laurel and Moran, JJ., concur.

    G.R. No. 45624   April 25, 1939 - GEORGE LITTON v. HILL & CERON, ET AL. <br /><br />067 Phil 509


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