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FACTS: Lim requested Yao and Chua to engage in commercial fishing with him.

- 3 agreed to purchase two fishing / do not have the money they borrowed from one Jesus Lim

-. Subsequently, they again borrowed money for the purchase of fishing nets and other fishing

-Yao and Chua represented themselves as acting in behalf of “Ocean Quest Fishing Corporation” (OQFC)
and they contracted with Philippine Fishing Gear

Industries (PFGI) for the purchase of fishing nets amounting to more than P500k. However, they were
unable to pay PFGI and hence were sued in their own names as Ocean Quest Fishing Corporation is a
non-existent corporation.

ISSUE: Whether Lim Tong Lim is liable as a partner?

HELD: Yes. Compromise Agreement had revealed their intention to pay the loan with the proceeds of
the sale and to divide equally among them the excess or loss.

The boats and equipment used for their business entails their common fund. The contribution to such
fund need not be cash or fixed assets; it could be an intangible like credit or industry.

The principle of corporation by estoppel cannot apply in the case as Lim Tong Lim also benefited from
the use of the nets in the boat, which was an asset of the partnership. Under the law on estoppel, those
acting in behalf of a corporation and those benefited by it, knowing it to be without valid existence are
held liable as general partners.

Hence, the question as to whether such was legally formed for unknown reasons is immaterial to the