[No. L-11648.

April 22, 1959]

THE DIRECTOR OF LANDS, petitioner, vs. LOPE ALBA, ET AL., claimants. ELIGIO
CATALAN, movant and appellee, vs. RAMON GATCHALIAN, oppositor and
appellant.
Appeal from the order of the Court of First Instance of Tacloban City.

It appears that Eligio Catalan and Ramon Gatchalian, as partners, mortgaged to Dr. Dionisio
Marave two lots in Tacloban City, including the improvements thereon, all belonging to the
partnership, to secure the payment of a loan. The partnership failed to pay the loan; the
mortgage was foreclosed and the properties were sold at public auction to Dr. Marave. Before
the expiration of the one year period of redemption, Catalan, on his own behalf, redeemed
the properties with his private funds. The Sheriff issued the corresponding certificate of
redemption in favor of Catalan. Upon Catalan's petition, the lower court ordered the
cancellation of the title in the name of the partnership and to issue in its stead another in
the name of Catalan. Held: The theory of Catalan, accepted by the trial court, that he became
the absolute owner of the properties in question upon making the redemption because he
was subrogated to the rights of Dr. Marave who made the purchase at public auction, is
untenable. Under general principles of law, a partner is an agent of the partnership. (Art.
1818, new Civil Code). Furthermore, every partner becomes a trustee for his copartner with
regard to any benefits or profits derived from his act as partner (Art. 1807, new Civil Code).
Consequently, when Catalan redeemed the properties in question, he became a trustee and
held the same in trust for his copartner Gatchalian, subject to his right to demand from the
latter his contribution to the amount of redemption. The principle of subrogation cannot be
applied because at the time Catalan redeemed the property, Dr. Marave, the purchaser at
public auction, had not yet become the absolute owner of said properties. He never received
the definite and formal certificate of sale constituting muniment of title, for the reason that
redemption was made. Consequently, there was no title to the properties which he could
convey to Catalan as redemptioner.

Judgment reversed. Montemayor, J., ponente.