MacDonald vs.

National City Bank of New York

Facts:

Stasikinocey is a partnership formed by da Costa,Gorcey, Kusik and Gavino. It was

denied registration by the SEC due to a confusion between the partnership and Cardinal
Rattan.

Cardinal Rattan is the business name or style used by Stasikinocey. Da Costa and
Gorcey are the general partners of Cardinal Rattan. Moreover, Da Costa is the managing
partner of Cardinal Rattan.

Stasikinocey had an overdaft account with National City Bank, which was later
converted into an ordinary loan due the partnerships failure in paying its obligation.

The ordinary loan was secured

by a chattel mortgage over 3 vehicles.

During the subsistence of the loan, the vehicles were sold to MacDonald and later
on, MacDonald sold 2 of the 3 vehicles to Gonzales.

The bank brought an action for recovery of its credit and foreclosure of the chattel
mortgage upon learning of these transactions.
Issue:WON the partnership, Stasikinocey is estopped from asserting that it does not
have juridical personality since it is an unregistered commercial partnership
Held: Yes. While an unregistered commercial partnership has no juridical personality,
nevertheless, where two or more persons attempt to create a partnership failing to
comply with all thelegal formalities, the law considers them as partners and the
association is a partnership in so far as it is a favorable to third persons, by reason of the
equitable principle of estoppel. Where a partnership not duly organized has been
recognized as such in its dealings with certain persons, it shall be considered as
partnership by estoppel and the persons dealing with it are estopped from denying its
partnership existence.
(NOTE: Respondent and the Petitioners are all third persons as regards the partnership
Stasikinocey; and even assuming that the Petitioners are purchasers in good faith and
for value, the Respondent having transacted with Stasikinocey earlier than the
Petitioners, it should enjoy and be given priority.)