Doctor, Joy Lynne E.

, PAT-B
08 January 2011
Partnership, Agency and Trusts
Assignment

I. Whether or not a creditor can sue the partner of another who actually
committed a wrongful act against a third person, under the ordinary course of
their business representing the partnership, for a collection of sum of money.

YES.
Article 1824 provides:

“All partners are liable solidarily with the partnership for everything chargeable to
the partnership under Articles 1822 and 1823.”

Article 1822 and Article 1823 provide:

“Art. 1822. Where, by any wrongful act or omission of any partner acting in the
ordinary course of the business of the partnership or with the authority of co-partners, loss
or injury is caused to any person, not being a partner in the partnership, or any penalty is
incurred, the partnership is liable therefor to the same extent as the partner so acting or
omitting to act. (n)

Art. 1823. The partnership is bound to make good the loss:

(1) Where one partner acting within the scope of his apparent authority receives money or
property of a third person and misapplies it; and

(2) Where the partnership in the course of its business receives money or property of a
third person and the money or property so received is misapplied by any partner while
it is in the custody of the partnership. (n)”

The Court held in Munasque v. Court of Appeal;

“While it is true that under Article 1816 of the Civil Code,"All partners, including
industrial ones, shall be liable prorate with all their property and after all the
partnership assets have been exhausted, for the contracts which may be entered
into the name and fm the account cd the partnership, under its signature and by a
person authorized to act for the partner-ship. ...". this provision should be
construed together with Article 1824 which provides that: "All partners are liable
solidarily with the partnership for everything chargeable to the partnership under
 Articles 1822 and 1823." In short, while the liability of the partners are merely
joint in transactions entered into by the partnership, a third person who
transacted with said partnership can hold the partners solidarily liable for the
whole obligation if the case of the third person falls under Articles 1822 or 1823.

The Court in Ph Credit Corporation vs. Court of Appeals defined solidary and joint
liability to wit;

“A solidary obligation is one in which each of the debtors is liable for the entire obligation, and
each of the creditors is entitled to demand the satisfaction of the whole obligation from any or all of the
debtors. On the other hand, a joint obligation is one in which each debtors is liable only for a proportionate
part of the debt, and the creditor is entitled to demand only a proportionate part of the credit from each
debtor.”

The partner being sued cannot in his defense say that he is not the one actually at fault
and that it was his partner who misappropriated the sum of money, since the complaint is not for
the allegation of misappropriation or estafa but just a simple collection of sum of money. It is
then becomes the responsibility of the partners to sort out their respective proportions of liability
and payment, and the need of reimbursement to a partner as the case may be.

The Court further said in Munasque v. Court of Appeals;

“The obligation is solidary, because the law protects him, who in good faith relied upon
the authority of a partner, whether such authority is real or apparent. That is why under
Article 1824 of the Civil Code all partners, whether innocent or guilty, as well as the
legal entity which is the partnership, are solidarily liable.”

However, Art. 1823 must be pointed out; hence, the most appropriate action of the
offended party is to file against the partnership first. But although that may be the case, there is
no express prohibition or mandate that an offended party must go after the partnership first
before going after the partners.