E. M.

BACHRACH, plaintiff-appellee,
Versus
"LA PROTECTORA", ET AL., defendants-appellants,Vicente Foz
for appellants. A. J. Burke for appellee.

G. R. No. L-11624 January 21, 1918

Facts:
During the year of 1913, a civil partnership was formed by
individuals named as “La Protectora” for the purpose of engaging in the
business relating to transportation of passengers and freight at Laoag, Ilocos
Norte. Marcelo Barba, acting as manager came to Manila to provide the
enterprise the means of transportation, and upon June 23, 1913, negotiated
the purchase of two automobile trucks form the plaintiff, E. M. Bachrach
with the agreed price amounted to P16, 500. Then, paid the sum of P 3,000
and issued the balance with supporting promissory notes representing
deferred payments. Provided that from June 23, 1913 the payment of interest
was at the rate of 10 per cent per annum. The executed promissory notes
certainly showed that Marcelo Barba intended to bind both the partnership
and him.
The document was executed in accordance with the requirements of
subsection 2 of the Article 1697 of the Civil Code, for evidencing the
authority of Marcelo Barbato bind the partnership by the purchase. At the
time of purchase, the document in question was delivered by him to
Bachrach.
 After purchasing various automobile effects and accessories to be
used in the business, the indebtedness resulted from these additional
purchases amounted to the sum of P 2, 916.57 dated May 21, 1914.

In May, 1914, a chattel mortgage which the plaintiff foreclosed had

retained in order to secure the purchase price. May 29, 1914 the instance was
instituted in the Court of First Instance against “La Protectora” and the five
individuals; Marcelo Barba, Nicolas Segundo, Antonio Adiarte, Ignacio
Flores and Modesto Seranno to recover the balance (P 1,000) together with
the sum due. No question was brought up as to “La Protectora” were a legal
entity.

Issue:
Whether or not partners of “La Protectora” a civil partnership was
held liable for the firm debts and if so to what extent

Decision:
Yes. The business conducted under the name of “La Protectora” was
evidently that of a civil partnership and which the liability of the partners in
this association is hereby determined under the provisions of the Civil Code.
The authority of Marcelo Barba was fully established by the document
executed by the four appellants in June 12, 1913. The security made was in
conformity with the tenor of this document. The promissory notes does not
in any sense directly constitute the obligation to La Protectora and Mercelo
Barba; and also not constitute an obligation directly binding on the four
appellants. Their liability is based on the fact that they are members of the
civil partnership and such are liable for its incurred debts. Article 1698 of
the Civil Code provides that a member of civil partnership is not liable in
solidum (solidariamente) with his fellows for its entire indebtedness; but it
results from this article, in connection with Article 1137 of the Civil Code,
that each is liable with the others (mancomunadamente) for his aliquot part
of such indebtedness.

Declared in Article 1695 of the Civil Code that partners are

considered agents of the partnership, and also provided with the fact that
Barba as the president or manager, which leaves no doubt that he had
actually the authority to incur such obligations.

It resulted that the appellants are severally liable for their respective
shares of the entire indebtedness found to be due and the Court of First
Instance executed no error giving judgment against them. However, it
should be noted that any property pertaining to "La Protectora" should first
be applied to this indebtedness pursuant to the judgment already entered in
this case in the court below; and each of the four appellants shall be liable
only for the one-fifth part of the remainder unpaid.