TECK SEING and CO, SANTIAGO JO CHUNG v.
PACIFIC o Other requisites are present (this
COMMERCIAL COMPANY
FACTS:
• Presentation to be adjudged insolvent
• CR of PCC and other companies filed a motion with
the court, praying for the ff.
o Declare the individual partners as parties
to the proceeding
o Require each partner to file inventory of
property in the manner as prescribed by
the relevant law
o Each of said partners be adjudicated
insolvent debtors in the proceeding
• The judge initially granted the motion, but upon
opposition, it was subsequently denied. Thus, the
appeal.
ISSUE: WON the nature of the establishment is that of a
limited partnership
RULING: NO.
• The court first said that by process of elimination,
it is not a corporation, and not an accidental
denominated partnership. It is also not a true joint
stock company.
• The document stated that they purported to form
a limited partnership, and the accuracy or
correctness of this is the matter in contention.
• For there to be a limited partnership, there must
be at least one GP and the name of at least one of
the GPs must appear in the firm name. These
requirements were not fulfilled. The general rule
is, that those who seek to avail themselves of the
protection of laws permitting the creation of
limited partnerships must show a substantially full
compliance with such laws. A limited partnership
that has not complied with the law of its creation
is not considered a limited partnership at all, but a
general partnership in which all the members are
reliable.
• The court held that Teck Seing appeared to have
fulfilled the requirements stated in Article 119 of
the Code of Commerce which requires every
commercial association before beginning its
business to state its articles, agreements, and
conditions in a public instrument, which shall be
presented for record in the mercantile registry.
• That the partnership name does not contain all the
names of the partners is not a reason to preclude
the creation of a general partnership
according to Prof. Espiritu, amicus curiae)
▪ Using a name not your own does
not prevent one from being
bound in the contract
▪ Merely formal requirement, not
essential to existence of GP as
long as name adopted is sufficient
to identify the firm
▪ Failure to adopt the same cannot
shield them from personal
liabilities; neither law nor equity
will allow them to use their own
mistake to put the blame on third
persons
• The legal intention deductible from the acts of the
parties controls in determining the existence of a
partnership. If they intend to do a thing which in
law represents a partnership, they are partners,
although their purpose was to avoid the creation of
such relation. Here, the intention of the persons
making up Teck Seing & co., Ltd. was to establish a
partnership which they erroneously denominated
a limited partnership. If this was their purpose, all
subterfuges resorted to in order to evade liability
for possible losses, while assuming their
enjoyment of the advantages to be derived from
the relation, must be disregarded. The partners
who have disguised their identity under a
designation distinct from that of any of the
members of the firm should be penalized.
• The provisions of the Code of Commerce as to
general partnerships provide that if a firm is
insolvent but one or more of the partners are
solvent, the creditors may proceed both against
the firm and against the solvent partner or
partners, exhausting the assets of the firm before
seizing the property of the partners.
• The Court in this case, had ruled that the object of
article 126 of the Code of Commerce in requiring a
general partnership to transact business under the
name of all its members, of several of them, or of
one only, is to protect the public from imposition
and fraud; and that the provision of said article 126
is for the protection of the creditors rather than of
the partners themselves.