Buenviaje v.

Salonga
Nature of the case: Petition for Review on Certiorari
Parties of the case:
Petitioner: Dr. Restituto Buenviaje
Respondent: Spouses Salonga, Jebson Holdings Corporation and Juat Banez

Facts:

Jebson, an entity engaged in the real estate business, through its Executive Vice
President, Bañez, entered into a Joint Venture Agreement with Sps. Salonga. Under the
Agreement, Sps. Salonga, who owned three (3) parcels of land agreed for Jebson to construct
thereon ten (10) high-end single detached residential units. They likewise assumed to
subdivide the property into individual titles upon which Jebson shall assume the liability to
pay their mortgage loan with the Metropolitan Bank and Trust Company
 Out of the ten (10) units, seven (7) units,  will belong to Jebson while the remaining
three (3) units,  will correspond to Sps. Salonga's share. Jebson was also allowed to sell its
allocated units under such terms as it may deem fit, subject to the condition that the price
agreed upon was with the conformity of Sps. Salonga.
Jebson entered into a Contract to Sell with Buenviaje over Unit without the
conformity of Sps. Salonga. And despite full payment of the contract price, Jebson was
unable to complete Unit in violation of its contractual stipulation to finish the same within
twelve (12) months from the date of issuance of the building permit Buenviaje formally
demanded the immediate completion and delivery of Unit.
Buenviaje filed before the HLURB Regional Field Office IV (HLURB-RIV) a
Complaint for Specific Performance with Damages and Attorney's Fees, against Jebson,
Bañez, and Sps. Salonga
Jebson and Bañez claimed that they were ready to comply with all their contractual
obligations but were not able to secure the necessary government permits because Sps.
Salonga stubbornly refused to cause the consolidation of the parcels of land
Sps. Salonga averred that they were not liable to the complainants since there was no
privity of contract between them, adding that the contracts to sell were unenforceable against
them as they were entered into by Jebson without their conformity, in violation of the JVA.
Rulings of the Lower Courts/ Bodies
1. HLURB-RIV
- Rescinded the respective contracts
- The HLURB-RIV found that respondents were not legally authorized to sell
Brentwoods as they have not secured the necessary Registration Certificate and
License to Sell. Furthermore, they failed to complete the construction of the units as
well as to deliver the units to the complainants on time, entitling the latter to the
refund of their payments, including interests. It further found Sps. Salonga solidarily
 liable with Jebson and Bañez as joint venture partners liable to the general buying
public.

2. HLURB-BOC
- reversed and set aside the HLURB-RIV's ruling, and (a) upheld the validity of the
respective contracts to sell of Jebson with Buenviaje.
- The HLURB-BOC held that there was no substantial breach but only a slight or casual
one, which did not justify a rescission of the contracts to sell, especially in view of the
fact that the residential units covered by the said contracts were already at their
finishing stages.
- It also found no basis to hold Sps. Salonga solidarily liable with Jebson and Bañez
under the subject CTS, considering that: (a) the JVA does not provide for solidarity
for any act or omission of either party and, in fact, expressly provides that Sps.
Salonga shall be free of any liability from any third party as regards non-compliance
with HLURB Rules and Regulations;

3. OP
- affirmed the ruling of the HLURB-BOC

4. Court of Appeals
- affirmed the OP ruling. It found that Jebson violated the terms of the JVA when it
failed to secure the pertinent government permits for the development of Brentwoods,
and sold its allocated units without the conformity of Sps. Salonga.

Issue:
Whether or not Sps. Salonga are not solidarily liable with Jebson and Banez to
Buenviaje for the completion of the construction and delivery of the unit

Held:
The Court held that Sps. Salonga were not parties to the above-mentioned contract.
Under Article 1311 of the Civil Code, it is a basic principle in civil law on relativity of
contracts, that contracts can only bind the parties who had entered into it and it cannot favor
or prejudice third persons. Contracts take effect only between the parties, their successors in
interest, heirs and assigns. Thus, absent any privity of contract as to them, there is no basis to
hold Sps. Salonga liable for any of the obligations stated under the said contract to sell.
 While Jebson, as developer, and Sps. Salonga, as land owner, entered into a joint
venture, which - based on case law may be considered as a form of partnership,[63] the fact
remains that their joint venture was never privy to any obligation with Buenviaje; hence,
liability cannot be imputed against the joint venture based on the same principle of relativity
as above mentioned. Besides, it should be pointed out that the JVA[64] between Jebson and
Sps. Salonga was limited to the construction of the residential units under the Brentwoods
Project and that Jebson had the sole hand in marketing the units allocated to it to third
persons, such as Buenviaje. In fact, under the express terms of the JVA, Jebson, as the
developer, had even stipulated to hold Sps. Salonga free from any liability to third parties for
non-compliance with HLURB rules and regulations. As things stand, only Jebson should be
held liable for its obligations to Buenviaje under the subject CTS.
Guy v. Gacott
Nature of the case: Petition for Review on Certiorari under Rule 45
Parties of the case:
Petitioner: Michael Guy
Respondent: Glenn Gacott

Facts:

Atty. Glenn Gacott purchased two brand new transreceivers from Quantech Systems
Corporation (QSC) in Manila through its employee Rey Medestomas . Due to major defects,
Gacott personally returned the transreceivers to QSC and requested that they be replaced.
Medestomas received the returned transreceivers and promised to send him the replacement
units within two (2) weeks.

Gacott did not receive the replacement units as promised. Despite several demands,
both oral and written, Gacott was never given a replacement or a refund.

Thus, Gacott filed a complaint for damages. Summons was served upon QSC and
Medestomas.

In a Decision by the RTC, it was found that the two (2) transreceivers were defective
and that QSC and Medestomas failed to replace the same or return Gacott's money. The
decision became final as QSC and Medestomas did not interpose an appeal. Gacott then
secured a Writ of Execution.

During the execution stage, Gacott learned that QSC was not a corporation, but was in
fact a general partnership registered with the Securities and Exchange Commission (SEC). In
the articles of partnership, Guy was appointed as General Manager of QSC.

Upon learning that Guy had vehicles registered in his name, Gacott instructed the
sheriff to proceed with the attachment of one of the motor vehicles of Guy. Sheriff Felizarte
attached Guy’s vehicle by virtue of the Notice of Attachment/Levy upon Personalty served
upon the record custodian of the DOTC-LTO of Mandaluyong City. A similar notice was
served to Guy through his housemaid at his residence.

Guy filed his Motion to Lift Attachment arguing that he was not a judgment debtor
and, therefore, his vehicle could not be attached.

Rulings of the Lower Court:

1. RTC:
- holds that the property of movant Michael Guy may be validly attached in
satisfaction of the liabilities adjudged by this Court against Quantech Co., the latter
being an ostensible Corporation and the movant being considered by this Court as a
general partner therein in accordance with the order of this court impressed in its
decision to this case imposing joint and several liability to the defendants.
 -The Motion to Lift Attachment Upon Personalty submitted by the movant is
therefore DENIED for lack of merit.
2. Court of Appeals
-The CA stressed that Guy, being a partner in QSC, was bound by the summons
served upon QSC based on Article 1821 of the Civil Code. The CA further opined
that the law did not require a partner to be actually involved in a suit in order for him
to be made liable. He remained “solidarily liable whether he participated or not,
whether he ratified it or not, or whether he had knowledge of the act or omission.”

Issue:
Whether or not Guy is solidarily liable with the partnership for damages arising from
the breach of contract of sale with Gacott.

Ruling:
No, Guy is not solidarily liable with the partnership.

A partner must be separately and distinctly impleaded before he can be bound by a

judgment. Although a partnership is based on delectus personae or mutual agency, whereby
any partner can generally represent the partnership in its business affairs, it is non
sequitur that a suit against the partnership is necessarily a suit impleading each and every
partner. It must be remembered that a partnership is a juridical entity that has a distinct and
separate personality from the persons composing it.28

Partners’ liability is subsidiary and generally joint; immediate levy upon the property
of a partner cannot be made. Art. 1816 clearly states that, first, the partners’ obligation with
respect to the partnership liabilities is subsidiary in nature. It provides that the partners shall
only be liable with their property after all the partnership assets have been exhausted. To say
that one’s liability is subsidiary means that it merely becomes secondary and only arises if the
one primarily liable fails to sufficiently satisfy the obligation. Resort to the properties of a
partner may be made only after efforts in exhausting partnership assets have failed or that
such partnership assets are insufficient to cover the entire obligation. The subsidiary nature of
the partners’ liability with the partnership is one of the valid defenses against a premature
execution of judgment directed to a partner.

In this case, had he been properly impleaded, Guy’s liability would only arise after the
properties of QSC would have been exhausted. The records, however, miserably failed to
show that the partnership’s properties were exhausted. The report 37 of the sheriff showed that
the latter went to the main office of the DOTC-LTO in Quezon City and verified whether
Medestomas, QSC and Guy had personal properties registered therein. Gacott then instructed
the sheriff to proceed with the attachment of one of the motor vehicles of Guy. 38 The sheriff
then served the Notice of Attachment/Levy upon Personalty to the record custodian of the
DOTC-LTO of Mandaluyong City. A similar notice was served to Guy through his
housemaid at his residence.

Second, Article 1816 provides that the partners’ obligation to third persons with
respect to the partnership liability is pro rata or joint.
 In essence, these provisions (Arts. 1822, 1823, & 1824) articulate that it is the act of a
partner which caused loss or injury to a third person that makes all other partners solidarily
liable with the partnership because of the words "any wrongful act or omission of any
partner  acting in the ordinary course of the business," "one partner acting within the scope
of his apparent authority" and "misapplied by any partner while it is in the custody of the
partnership." The obligation is solidary because the law protects the third person, who in
good faith relied upon the authority of a partner, whether such authority is real or apparent.40

In the case at bench, it was not shown that Guy or the other partners did a wrongful
act or misapplied the money or property he or the partnership received from Gacott. 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. 41 Gacott’s
claim stemmed from the alleged defective transreceivers he bought from QSC, through the
latter's employee, Medestomas. It was for a breach of warranty in a contractual obligation
entered into in the name and for the account of QSC, not due to the acts of any of the
partners. For said reason, it is the general rule under Article 1816 that governs the joint
liability of such breach, and not the exceptions under Articles 1822 to 1824. Thus, it was
improper to hold Guy solidarily liable for the obligation of the partnership.

Petition is granted. The decision of the CA is reversed.

GSIS Family Bank v. BPI Family Bank
Nature of the case: Petition for Review on Certiorari under Rule 45
Parties of the case:
Petitioner: GSIS Family Bank-Thrift Bank
Respondent: BPI Family Bank

FACTS: 

Petitioner, originally organized as Royal Savings Bank reopened and was renamed
Comsavings Bank, Inc. under the management of the Commercial Bank of Manila which was
then acquired by GSIS. petitioner from the Commercial Bank of Manila. Petitioner’s
management and control was thus transferred to GSIS. To improve its marketability to the
public, especially to the members of the GSIS, petitioner sought Securities and Exchange
Commission (SEC) approval to change its corporate name to “GSIS Family Bank, a Thrift
Bank.” Petitioner likewise applied with the Department of Trade and Industry (DTI) and
Bangko Sentral ng Pilipinas (BSP) for authority to use “GSIS Family Bank, a Thrift Bank” as
its business name, which was the approved by the said offices. .

Respondent BPI Family Bank was a product of the merger between the Family Bank and
Trust Company (FBTC) and the Bank of the Philippine Islands (BPI). The Gotianum family
registered with the SEC the corporate name “Family First Savings Bank,” which was
amended to “Family Savings Bank,” and then later to “Family Bank and Trust Company.”
Since its incorporation, the bank has been commonly known as “Family Bank.” In 1985,
Family Bank merged with BPI, and the latter acquired all the rights, privileges, properties,
and interests of Family Bank, including the right to use names, such as “Family First Savings
Bank,” “Family Bank,” and “Family Bank and Trust Company.” BPI Family Savings Bank
was registered with the SEC as a wholly-owned subsidiary of BPI. BPI Family Savings Bank
then registered with the Bureau of Domestic Trade the trade or business name “BPI Family
Bank,” and acquired a reputation and goodwill under the name.

Petitioner argues that the word “family” is a generic or descriptive name, which cannot be
appropriated exclusively by respondent. “Family,” as used in respondent’s corporate name, is
not generic

ISSUE: won the “GSIS family bank, a thrift bank” is registrable.

Ruling of Lower Courts/ Bodies

1. SEC: 

-The SEC CRMD declared that upon the merger of FBTC with the BPI in 1985, the latter
acquired the right to the use of the name of the absorbed corporation.

-Thus, BPI Family Bank has a prior right to the use of the name Family Bank in the banking
industry, arising from its long and extensive nationwide use, coupled with its registration
with the Intellectual Property Office (IPO) of the name “Family Bank” as its trade name.

-Applying the rule of “priority in registration” based on the legal maxim first in time, first in
right, the SEC CRMD concluded that BPI has the preferential right to the use of the name
“Family Bank.”.

-The SEC CRMD also held that there exists a confusing similarity between the corporate
names BPI Family Bank and GSIS Family Bank. It explained that although not identical, the
corporate names are indisputably similar, as to cause confusion in the public mind, even with
the exercise of reasonable care and observation, especially so since both corporations are
engaged in the banking business.

2. Court of Appeals

-The Court of Appeals ruled that the approvals by the BSP and by the DTI of petitioner’s
application to use the name “GSIS Family Bank” do not constitute authority for its lawful and
valid use.

-It said that the SEC has absolute jurisdiction, supervision and control over all corporations.
The Court of Appeals held that respondent was entitled to the exclusive use of the corporate
name because of its prior adoption of the name “Family Bank” since 1969.

- There is confusing similarity in the corporate names because “[c]onfusion as to the possible
association with GSIS might arise if we were to allow Comsavings Bank to add its parent
company’s acronym, ‘GSIS’ to ‘Family Bank.’ This is true especially considering both
companies belong to the banking industry. Proof of actual confusion need not be shown. It
suffices that confusion is probably or likely to occur.” The Court of Appeals also ruled out
forum shopping because not all the requirements of litis pendentia are present.

ISSUE: WON THE “GSIS FAMILY BANK, A THRIFT BANK” IS REGISTRABLE.

HELD: 
NO. In Philips Export B.V. v. Court of Appeals, this Court ruled that to fall within the
prohibition of the law on the right to the exclusive use of a corporate name, two requisites
must be proven, namely:
(1) that the complainant corporation acquired a prior right over the use of such corporate
name; and
(2) the proposed name is either
(a) identical or
(b) deceptive or confusingly similar to that of any existing corporation or to any other name
already protected by law; or
(c) patently deceptive, confusing or contrary to existing law
These two requisites are present in this case. In this case, respondent was incorporated in
1969 as Family Savings Bank and in 1985 as BPI Family Bank. Petitioner, on the other hand,
was incorporated as GSIS Family — Thrift Bank only in 2002, or at least seventeen (17)
years after respondent started using its name. Following the precedent in the IRCP case, we
rule that respondent has the prior right over the use of the corporate name.

The second requisite in the Philips Export case likewise obtains on two points: the proposed
name is (a) identical or (b) deceptive or confusingly similar to that of any existing
corporation or to any other name already protected by law.

On the second point (b), there is a deceptive and confusing similarity between petitioner’s
proposed name and respondent’s corporate name, as found by the SEC. In determining the
existence of confusing similarity in corporate names, the test is whether the similarity is such
as to mislead a person using ordinary care and discrimination. And even without such proof
of actual confusion between the two corporate names, it suffices that confusion is probable or
likely to occur.

Petitioner’s corporate name is “GSIS Family Bank — A Thrift Bank” and respondent’s
corporate name is “BPI Family Bank.” The only words that distinguish the two are “BPI,”
“GSIS,” and “Thrift.” The overriding consideration in determining whether a person, using
ordinary care and discrimination, might be misled is the circumstance that both petitioner and
respondent are engaged in the same business of banking.

Petitioner cannot argue that the word “family” is a generic or descriptive name, which cannot
be appropriated exclusively by respondent. “Family,” as used in respondent’s corporate
name, is not generic.