Campos Rueda & Co, a limited partnership, owed over P1,000 to three creditors and failed to pay for over 30 days. The trial court denied the creditors' petition to declare Campos Rueda & Co insolvent, finding that the partners' individual insolvency was not proven. However, the Supreme Court held that as a separate juridical entity, a limited partnership can be declared insolvent based on its own acts, such as failing to pay debts, regardless of the partners' individual solvency. The Court therefore ruled that the creditors' petition to declare Campos Rueda & Co insolvent should have been granted.
Campos Rueda & Co, a limited partnership, owed over P1,000 to three creditors and failed to pay for over 30 days. The trial court denied the creditors' petition to declare Campos Rueda & Co insolvent, finding that the partners' individual insolvency was not proven. However, the Supreme Court held that as a separate juridical entity, a limited partnership can be declared insolvent based on its own acts, such as failing to pay debts, regardless of the partners' individual solvency. The Court therefore ruled that the creditors' petition to declare Campos Rueda & Co insolvent should have been granted.
Campos Rueda & Co, a limited partnership, owed over P1,000 to three creditors and failed to pay for over 30 days. The trial court denied the creditors' petition to declare Campos Rueda & Co insolvent, finding that the partners' individual insolvency was not proven. However, the Supreme Court held that as a separate juridical entity, a limited partnership can be declared insolvent based on its own acts, such as failing to pay debts, regardless of the partners' individual solvency. The Court therefore ruled that the creditors' petition to declare Campos Rueda & Co insolvent should have been granted.
Facts: Campos, Rueda & Co., a limited partnership, is indebted to the appellants: Pacific Commercial Co. , Asiatic Petroleum Co, and International Banking Corporation amounting to not less than P1,000.00 (which were not paid more than 30 days prior to the date of the filing by petitioners of the application for voluntary insolvency). The trial court denied their petition on the ground that it was not proven, nor alleged, that the members of the firm were insolvent at the time the application was filed. It also held that the partners are personally and solidarily liable for the consequences of the transactions of the partnership. Issue: Whether or not a limited partnership may be held to have committed an act of insolvency. Held: Yes. A limited partnerships juridical personality is different from the personality of its members. On general principle, the limited partnership must answer for and suffer the consequence of its acts. Under our Insolvency Law, one of the acts of bankruptcy upon w/c an adjudication of involuntary insolvency can be predicated is the failure to pay obligations. The failure of Campos, Rueda & Co., to pay its obligations constitutes an act w/c is specifically provided for in the Insolvency Law for declaration of involuntary insolvency. The petitioners have a right to a judicial decree declaring the involuntary insolvency of said partnership.