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Clemente vs.

Plaintiff and defendant organized a civil
partnership which they named "Galvan y
Compaia" to engage in the manufacture
and sale of paper and other stationery.
Plaintiff ask for dissolution which the
defendant confirm but with a condition
that having covered a deficit incurred by
the partnership amounting to P4,000 with
his own money, plaintiff reimburse him of
one-half of said sum.
Juan D. Mencarini, assigned as receiver
and liquidator. Upon acting on his duty,
the court ordered him to deliver certain
machines which were then at Nos. 705-
707 Ylaya Street.
But before he could take actual
possession of said machines, upon the
strong opposition of defendant, the court,
on motion of the latter, suspended the
effects of its order
In the meantime the judgments rendered
in cases Nos. 42794 and 43070 ordering
Clemente to pay a sum of money.
He mortgage the machines with his
nephew, the intervenor (plaintiff in the
herein case.) For having expired the
terms in the mortgage the intervenor
commenced case No. 49629 to collect his
mortgage credit.
Issue: W/N the mortgage between Clemente and
his nephew (intervenor, plaintiff in the case) is

Rule: 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, he
could not in any manner mortgage them.

Leyte-Samar-Sales and K. Tomassi vs. Cea and
O. Castrilla
Thisis a suit for damages by the Leyte-
Samar Sales Co. (hereinafter called
LESSCO) and Raymond Tomassi against
the Far Eastern Lumber & Commercial Co.
(unregistered commercial partnership
hereinafter called FELCO), Arnold Hall,
Fred Brown and Jean Roxas, judgment
against defendants jointly and severally
for the amount of P31,589.14 plus costs.
The decision having become final, the
sheriff sold at auction on June 9, 1951 to
Robert Dorfe and Pepito Asturias "all the
rights, interests, titles and participation"
of the defendants in certain buildings and
properties described in the certificate
on June 4, 1951 Olegario Lastrilla filed in
the case a motion, wherein he claimed to
be the owner by purchase on September
29, 1949, of all the "shares and interests"
of defendant Fred Brown
June 13, 1951, granted Lastrilla's motion.
On August 14, 1951, modified its order of
delivery and merely declared that
Lastrilla was entitled to 17 per cent of the
properties sold.
the petitioners seek relief by certiorari,
their position being the such orders were
null and void for lack of jurisdiction.
Issue: W/N the court acted with excess of its
Rule: Yes. The parties were not notified, and
obviously took no part in the proceedings on the
motion. A valid judgment cannot be rendered
where there is a want of necessary parties, and a
court cannot properly adjudicate matters involved
in a suit when necessary and indispensable parties
to the proceedings are not before it. (49 C.J.S., 67.).
All the defendants would have reasonable motives
to object to the delivery of 17 per cent of the
proceeds to Lustrial, because it is so much money
deducted, and for which the plaintiffs might as
another levy on their other holdings or resources.
(NOTE: If Lastrilla was a partner, his remedy is
to claim "the property", not the proceeds of the
sale, which the sheriff is directed by section 14,
Rule 39 to deliver unto the judgment creditors.
In other words, the owner of property
wrongfully sold may not voluntarily come to
court, and insist, "I approve the sale, therefore
give me the proceeds because I am the owner".
The reason is that the sale was made for the
judgment creditor (who paid for the fees and
notices), and not for anybody else.)
Us v. Clarin
Pedro Larin delivered to Pedro Tarug
P172, in order that the latter, in company
with Eusebio Clarin and Carlos de
Guzman, might buy and sell mangoes. The
profits were to be divided equally
between him and them.
Pedro Tarug, Eusebio Clarin, and Carlos
de Guzman did in fact trade in mangoes
and obtained P203 from the business, but
did not comply with the terms of the
contract by delivering to Larin his half of
the profits; neither did they render him
any account of the capital.
Larin charged them with the crime
of estafa, but the provincial fiscal filed an
information only against Eusebio Clarin
First Instance of Pampanga, sentenced the
defendant, Eusebio Clarin, to six
months'arresto mayor. The defendant
Issue: W/N the conviction is correct.

Rule: No. The P172.00 having been received by
the partnership, the business commenced and
profits accrued, the action that lies with the
partner who furnished the capital for the recovery
of his money is not a criminal action for estafa, but
a civil one arising from the partnership contract
for a liquidation of the partnership and a levy on
its assets if there should be any.

(NOTE: The then Penal Code provides that
those who are guilty of estafa are those who,
to the prejudice of another, shall appropriate
or misapply any money, goods, or any kind of
personal property which they may have
received as a deposit on commission for
administration or in any other producing the
obligation to deliver or return the same, (as,
for example, in commodatum, precarium, and
other unilateral contracts which require the
return of the same thing received) does not
include money received for a partnership;
otherwise the result would be that, if the
partnership, instead of obtaining profits,
suffered losses, as it could not be held liable
civilly for the share of the capitalist partner
who reserved the ownership of the money
brought in by him, it would have to answer to
the charge of estafa, for which it would be
sufficient to argue that the partnership had
received the money under obligation to return