NGO TIAN and NGO HAY. vs PHILIPPINE EDUCATION CO., INC.

G.R. No. L-48113 April 7, 1947

Facts:Philippine Education Co., Inc., instituted in the Court of First Instance of Manila an action against
Vicente Tan alias Chan SY and the partnershipof Ngo Tian Tek and Ngo Hay, for the recovery of some
P16,070.14 unpaid cost of merchandise purchased by Lee Guan Box Factory from Philippine Education
Co., Inc.,and five other corporate entitles which had previously assigned their credits to latter.

The Modern Box Factory was established at 603 Magdalena St. Manila. It was at first owned by Ngo Hay,
who three years later was joined by Ngo Tien Tek as a junior partner. The modern Box Factory dealt in
pare and similar merchandise and purchased goods from the Philippines Education Co., Inc.,and its
assignors. Then about the year 1930, the Lee Guan Box Factory was established a few meters from the
Modern Box Factory, under the management of Vicente Ta. Lee Guan Bix Factory.Through Vicente Tan ,
sought credit with the plaintiff and its assignors. Ngo Hay, in conversations and interviews with their
officers and employees, represented that he was the principal owner of such factory, that Lee Guan Box
Factory was a subsidiary of the Modern Box Factory. There is evidence that many goods purchased in
the name of the Lee Guan Box Factory were delivered to the Modern Box Factory by the employees of
the Philippine Education Co., Inc., and its assignors upon the express direction of Vicente Tan. There is
also evidence that the collectors of the sellers were requested by Vicente Tan to collect from Modern
Box Factory the bills against the Lee Guan Box Factory. In the fact the record showsmany checks signed
ny Ngo Hay or Ngo Tian Tek in payment of accounts of the Lee Guan Box Factory.

Petitioner (Ngo Tian Tek and Ngo Hay) contend that the Court of Appeals erred In holding that Lee Guan
Box Factory was a subsidiary of the Modern Box Factory and in disregarding the fact that the contract
evidencing the debts in question were signed by Vicente Tan alias Chan Sy.without any indication that
tended to involve the Modern Box Factory or the petitioner.

Issue: Whether or not Ngo Tan Tek and Ngo Haycan be held liable for the credit contracted be Vicente
Tan?

Ruling: The plaintiff and the assignors have considered Ngo Hay, the Modern Box Factory and Ngo Hay
and Co. as one of the same, through the act of the partners themselves, and that the proof as to Ngo
Hay’s statements regarding the ownership of Lee Guan Box Factory must be taken in that view. The
circumstances that Vicente Tan alias Chan Sy acted in his own name cannot save the petitioner. In view
of said ownership, and because contracts entered into by a factor of a commercial establishment knoen
to belong to a well known enterprise or associations shall be understoodas made for the account of the
owner of such enterprise or association,even when the factor has not so stated at the time of execution,
provided that such contracts involve objects comprised in the line and business of the establishment.
(Article 286.Code of Commerce) The fact that Vicente Tan did not have any record power of attorney
executed by the petitioner will not operate to prejudice third persons, like the respondent Philippine
Education Co., Inc., and its assignors.