Bachrach v La Protectora

Facts:
Nicolas Segundo, Antonio Adiarte, Ignacio Flores and Modesto Serrano (defendants)
formed a civil partnership called La Protectora for the purpose of engaging in the
business of .transporting passengers and freight at Laoag, Ilocos Norte. Marcelo Barba,
acting as manager, negotiated for the purchase of 2 automobile trucks from E. M.
Bachrach for P16,500. Barba paid P3,000 in cash and for the balance executed
promissory notes.

One of these promissory notes was signed in the following manner:

P.P La Protectora, By Marcelo Barba Marcelo Barba

The other 2 notes were signed in the same way but the word by was omitted. It was
obvious that in signing the notes, Barba intended to bind both the partnership and
himself.

The defendants executed a document in which they declared that they were members
of La Protectora and that they had granted to its president full authority to contract for
the purchase of the 2 automobiles. The document was delivered by Barba to Bachrach
at the time the vehicles were purchased.

Barba incurred a debt amounting to P2,617.57 and Bachrach foreclosed a chattel

mortgage on the trucks but there was still balance. To recover the balance, action was
instituted against the defendants. Judgment was rendered against the defendants.

Issue:
a. Whether or not the defendants are liable for the firm debts.
b. Whether or not Barba had authority to incur expenses for the partnership (relevant
issue)

Held:

a. Yes. Promissory notes constitute the obligation exclusively of La Protectora and

Barba. They do not constitute an obligation directly binding the defendants. Their
liability is based on the principles of partnership liability. A member is not liable in
solidum with his fellows for the entire indebtedness but is liable with them or his
aliquot part.

SC obiter: the document was intended merely as an authority to enable Barba to bind
the partnership and that the parties to the instrument did not intend to confer upon
Barba an authority to bind them personally.

b. Yes. Under Art 1804, every partner may associate another person with him in his
share. All partners are considered agents of the partnership. Barba must be
held to have authority to incur these expenses. He is shown to have been in fact
 the president/manager, and there can be no doubt that he had actual authority to
incur obligation.

Martinez v. Ong Pong Co

Facts:

Martinez delivered P1,500 to Ong Pong Co and Ong Lay to invest in a store
They agreed that the profits and losses would be equally shared by all of them
Martinez was demanding for the two Ongs to render an accounting or to refund
him the P1,500
Ong Pong Co alleged that Ong Lay, now deceased, was the one who managed
the business, and the capita of P1,500 resulted in a loss so that he should not be
made liable

Issue: WON Ong Pong Co is liable? YES What is the extent of his liability? joint

Held: The 2 partners (Ongs) were the administrators/managers and are obliged to
render accounting. Since neither of them rendered an account, nor proved the alleged
losses, they are obliged to return the capital to Martinez.

Where two partners receive from another a sum of money for the establishment of a
business, and agree to share with the latter the profits or losses that may result
therefrom, the said two persons, as the apparent administrators of the partnership,
acted as agents for the capitalist partner, and by virtue thereof are bound to fulfill the
contract which implies the management of the business.

Article 1796 is not applicable because no other money than that contributed as capital
was involved. The liability of the partners is joint. Ong Pong Co shall only pay P750 to
Martinez.