G.R. No.

L-37331

March 18, 1933

FRED M. HARDEN, J.D. HIGHSMITH, and JOHN C. HART, in their own behalf and in that all other
stockholders of the Balatoc Mining Company, etc., plaintiffs-appellants,
vs.
BENGUET CONSOLIDATED MINING COMPANY, BALATOC MINING COMPANY, H. E. RENZ, JOHN
W. JAUSSERMANN, and A. W. BEAM, defendants-appellees.
Gibbs and McDonough and Roman Ozaeta for appellants.
DeWitt, Perkins and Brady for appellees.
Ross, Lawrence and Selph for appellee Balatoc Mining Company.
STREET, J.:
This action was originally instituted in the Court of First Instance of the City of Manila by F. M. Harden,
acting in his own behalf and that of all other stockholders of the Balatoc Mining Co. who might join in the
action and contribute to the expense of the suit. With the plaintiff Harden two others, J. D. Highsmith and
John C. Hart, subsequently associated themselves. The defendants are the Benguet Consolidated Mining
Co., the Balatoc Mining Co., H. E. Renz, John W. Haussermann, and A. W. Beam. The principal purpose
of the original action was to annul a certificate covering 600,000 shares of the stock of the Balatoc Mining
Co., which have been issued to the Benguet Consolidated Mining Co., and to secure to the Balatoc
Mining Co., the restoration of a large sum of money alleged to have been unlawfully collected by the
Benguet Consolidated Mining Co., with legal interest, after deduction therefrom of the amount expended
by the latter company under a contract between the two companies, bearing date of March 9, 1927. The
complaint was afterwards amended so as to include a prayer for the annulment of this contract. Shortly
prior to the institution of this lawsuit, the Benguet Consolidated Mining Co., transferred to H. E. Renz, as
trustee, the certificate for 600,000 shares of the Balatoc Mining Co. which constitute the principal subject
matter of the action. This was done apparently to facilitate the splitting up to the shares in the course of
the sale or distribution. To prevent this the plaintiffs, upon filing their original complaint, procured a
preliminary injunction restraining the defendants, their agents and servants, from selling, assigning or
transferring the 600,000 shares of the Balatoc Mining Co., or any part thereof, and from removing said
shares from the Philippine Islands. This explains the connection of Renz with the case. The other
individual defendants are made merely as officials of the Benguet Consolidated Mining Co. Upon hearing
the cause the trial court dismissed the complaint and dissolved the preliminary injunction, with costs
against the plaintiffs. From this judgment the plaintiffs appealed.
The facts which have given rise this lawsuit are simple, as the financial interests involve are immense.
Briefly told these facts are as follows: The Benguet Consolidated Mining Co. was organized in June,
1903, as a sociedad anonima in conformity with the provisions of Spanish law; while the Balatoc Mining
Co. was organized in December 1925, as a corporation, in conformity with the provisions of the
Corporation Law (Act No. 1459). Both entities were organized for the purpose of engaging in the mining of
gold in the Philippine Islands, and their respective properties are located only a few miles apart in the
subprovince of Benguet. The capital stock of the Balatoc Mining Co. consists of one million shares of the
par value of one peso (P1) each.
When the Balatoc Mining Co. was first organized the properties acquired by it were largely undeveloped;
and the original stockholders were unable to supply the means needed for profitable operation. For this
reason, the board of directors of the corporation ordered a suspension of all work, effective July 31, 1926.
In November of the same year a general meeting of the company's stockholders appointed a committee
for the purpose of interesting outside capital in the mine. Under the authority of this resolution the
committee approached A. W. Beam, then president and general manager of the Benguet Company, to
secure the capital necessary to the development of the Balatoc property. As a result of the negotiations
thus begun, a contract, formally authorized by the management of both companies, was executed on
March 9, 1927, the principal features of which were that the Benguet Company was to proceed with the
development and construct a milling plant for the Balatoc mine, of a capacity of 100 tons of ore per day,

and with an extraction of at least 85 per cent of the gold content. The Benguet Company also agreed to
erect an appropriate power plant, with the aerial tramlines and such other surface buildings as might be
needed to operate the mine. In return for this it was agreed that the Benguet Company should receive
from the treasurer of the Balatoc Company shares of a par value of P600,000, in payment for the first
P600,000 be thus advanced to it by the Benguet Company.
The performance of this contract was speedily begun, and by May 31, 1929, the Benguet Company had
spent upon the development the sum of P1,417,952.15. In compensation for this work a certificate for six
hundred thousand shares of the stock of the Balatoc Company has been delivered to the Benguet
Company, and the excess value of the work in the amount of P817,952.15 has been returned to the
Benguet Company in cash. Meanwhile dividends of the Balatoc Company have been enriching its
stockholders, and at the time of the filing of the complaint the value of its shares had increased in the
market from a nominal valuation to more than eleven pesos per share. While the Benguet Company was
pouring its million and a half into the Balatoc property, the arrangements made between the two
companies appear to have been viewed by the plaintiff Harden with complacency, he being the owner of
many thousands of the shares of the Balatoc Company. But as soon as the success of the development
had become apparent, he began this litigation in which he has been joined by two others of the eighty
shareholders of the Balatoc Company.
Briefly, the legal point upon which the action is planted is that it is unlawful for the Benguet Company to
hold any interest in a mining corporation and that the contract by which the interest here in question was
acquired must be annulled, with the consequent obliteration of the certificate issued to the Benguet
Company and the corresponding enrichment of the shareholders of the Balatoc Company.
When the Philippine Islands passed to the sovereignty of the United States, in the attention of the
Philippine Commission was early drawn to the fact that there is no entity in Spanish law exactly
corresponding to the notion of the corporation in English and American law; and in the Philippine Bill,
approved July 1, 1902, the Congress of the United States inserted certain provisions, under the head of
Franchises, which were intended to control the lawmaking power in the Philippine Islands in the matter of
granting of franchises, privileges and concessions. These provisions are found in section 74 and 75 of the
Act. The provisions of section 74 have been superseded by section 28 of the Act of Congress of August
29, 1916, but in section 75 there is a provision referring to mining corporations, which still remains the
law, as amended. This provisions, in its original form, reads as follows: "... it shall be unlawful for any
member of a corporation engaged in agriculture or mining and for any corporation organized for any
purpose except irrigation to be in any wise interested in any other corporation engaged in agriculture or in
mining."
Under the guidance of this and certain other provisions thus enacted by Congress, the Philippine
Commission entered upon the enactment of a general law authorizing the creation of corporations in the
Philippine Islands. This rather elaborate piece of legislation is embodied in what is called our Corporation
Law (Act No. 1459 of the Philippine Commission). The evident purpose of the commission was to
introduce the American corporation into the Philippine Islands as the standard commercial entity and to
hasten the day when the sociedad anonima of the Spanish law would be obsolete. That statute is a sort of
codification of American corporate law.
For the purposes general description only, it may be stated that the sociedad anonima is something very
much like the English joint stock company, with features resembling those of both the partnership is
shown in the fact that sociedad, the generic component of its name in Spanish, is the same word that is
used in that language to designate other forms of partnership, and in its organization it is constructed
along the same general lines as the ordinary partnership. It is therefore not surprising that for purposes of
loose translation the expression sociedad anonima has not infrequently the other hand, the affinity of this
entity to the American corporation has not escaped notice, and the expression sociedad anonima is now
generally translated by the word corporation. But when the word corporation is used in the sense
of sociedad anonima and close discrimination is necessary, it should be associated with the Spanish

expression sociedad anonima either in a parenthesis or connected by the word "or". This latter device
was adopted in sections 75 and 191 of the Corporation Law.
In drafting the Corporation Law the Philippine Commission inserted bodily, in subsection (5) of section 13
of that Act (No. 1459) the words which we have already quoted from section 75 of the Act of Congress of
July 1, 1902 (Philippine Bill); and it is of course obvious that whatever meaning originally attached to this
provision in the Act of Congress, the same significance should be attached to it in section 13 of our
Corporation Law.
As it was the intention of our lawmakers to stimulate the introduction of the American Corporation into
Philippine law in the place of the sociedad anonima, it was necessary to make certain adjustments
resulting from the continued co-existence, for a time, of the two forms of commercial entities. Accordingly,
in section 75 of the Corporation Law, a provision is found making the sociedad anonima subject to the
provisions of the Corporation Law "so far as such provisions may be applicable", and giving to
the sociedades anonimas previously created in the Islands the option to continue business as such or to
reform and organize under the provisions of the Corporation Law. Again, in section 191 of the Corporation
Law, the Code of Commerce is repealed in so far as it relates to sociedades anonimas. The purpose of
the commission in repealing this part of the Code of Commerce was to compel commercial entities
thereafter organized to incorporate under the Corporation Law, unless they should prefer to adopt some
form or other of the partnership. To this provision was added another to the effect that existing sociedades
anonimas, which elected to continue their business as such, instead of reforming and reorganizing under
the Corporation Law, should continue to be governed by the laws that were in force prior to the passage
of this Act "in relation to their organization and method of transacting business and to the rights of
members thereof as between themselves, but their relations to the public and public officials shall be
governed by the provisions of this Act."
As already observed, the provision above quoted from section 75 of the Act Congress of July 1, 1902
(Philippine Bill), generally prohibiting corporations engaged in mining and members of such from being
interested in any other corporation engaged in mining, was amended by section 7 of Act No. 3518 of the
Philippine Legislature, approved by Congress March 1, 1929. The change in the law effected by this
amendment was in the direction of liberalization. Thus, the inhibition contained in the original provision
against members of a corporation engaged in agriculture or mining from being interested in other
corporations engaged in agriculture or in mining was so modified as merely to prohibit any such member
from holding more than fifteen per centum of the outstanding capital stock of another such corporation.
Moreover, the explicit prohibition against the holding by any corporation (except for irrigation) of an
interest in any other corporation engaged in agriculture or in mining was so modified as to limit the
restriction to corporations organized for the purpose of engaging in agriculture or in mining.
As originally drawn, our Corporation Law (Act No. 1459) did not contain any appropriate clause directly
penalizing the act of a corporation, a member of a corporation , in acquiring an interest contrary to
paragraph (5) of section 13 of the Act. The Philippine Legislature undertook to remedy this situation in
section 3 of Act No. 2792 of the Philippine Legislature, approved on February 18, 1919, but this provision
was declared invalid by this court in Government of the Philippine Islands vs. El Hogar Filipino (50 Phil.,
399), for lack of an adequate title to the Act. Subsequently the Legislature reenacted substantially the
same penal provision in section 21 of Act No. 3518, under a title sufficiently broad to comprehend the
subject matter. This part of Act No. 3518 became effective upon approval by the Governor-General, on
December 3, 1928, and it was therefore in full force when the contract now in question was made.
This provision was inserted as a new section in the Corporation Law, forming section 1990 (A) of said Act
as it now stands. Omitting the proviso, which seems not to be pertinent to the present controversy, said
provision reads as follows:
SEC. 190 (A). Penalties. The violation of any of the provisions of this Act and its amendments
not otherwise penalized therein, shall be punished by a fine of not more than five thousand pesos
and by imprisonment for not more than five years, in the discretion of the court. If the violation is

committed by a corporation, the same shall, upon such violation being proved, be dissolved
by quo warranto proceedings instituted by the Attorney-General or by any provincial fiscal by
order of said Attorney-General: . . . .
Upon a survey of the facts sketched above it is obvious that there are two fundamental questions involved
in this controversy. The first is whether the plaintiffs can maintain an action based upon the violation of
law supposedly committed by the Benguet Company in this case. The second is whether, assuming the
first question to be answered in the affirmative, the Benguet Company, which was organized as
a sociedad anonima, is a corporation within the meaning of the language used by the Congress of the
United States, and later by the Philippine Legislature, prohibiting a mining corporation from becoming
interested in another mining corporation. It is obvious that, if the first question be answered in the
negative, it will be unnecessary to consider the second question in this lawsuit.
Upon the first point it is at once obvious that the provision referred to was adopted by the lawmakers with
a sole view to the public policy that should control in the granting of mining rights. Furthermore, the
penalties imposed in what is now section 190 (A) of the Corporation Law for the violation of the prohibition
in question are of such nature that they can be enforced only by a criminal prosecution or by an action
of quo warranto. But these proceedings can be maintained only by the Attorney-General in representation
of the Government.
What room then is left for the private action which the plaintiffs seek to assert in this case? The defendant
Benguet Company has committed no civil wrong against the plaintiffs, and if a public wrong has been
committed, the directors of the Balatoc Company, and the plaintiff Harden himself, were the active
inducers of the commission of that wrong. The contract, supposing it to have been unlawful in fact, has
been performed on both sides, by the building of the Balatoc plant by the Benguet Company and the
delivery to the latter of the certificate of 600,000 shares of the Balatoc Company. There is no possibility of
really undoing what has been done. Nobody would suggest the demolition of the mill. The Balatoc
Company is secure in the possession of that improvement, and talk about putting the parties in status quo
ante by restoring the consideration with interest, while the Balatoc Company remains in possession of
what it obtained by the use of that money, does not quite meet the case. Also, to mulct the Benguet
Company in many millions of dollars in favor of individuals who have not the slightest equitable right to
that money in a proposition to which no court can give a ready assent.
The most plausible presentation of the case of the plaintiffs proceeds on the assumption that only one of
the contracting parties has been guilty of a misdemeanor, namely, the Benguet Company, and that the
other party, the Balatoc Company, is wholly innocent to participation in that wrong. The plaintiffs would
then have us apply the second paragraph of article 1305 of the Civil Code which declares that an
innocent party to an illegal contract may recover anything he may have given, while he is not bound to
fulfill any promise he may have made. But, supposing that the first hurdle can be safely vaulted, the
general remedy supplied in article 1305 of the Civil Code cannot be invoked where an adequate special
remedy is supplied in a special law. It has been so held by this court in Go Chioco vs. Martinez (45 Phil.,
256, 280), where we refused to apply that article to a case of nullity arising upon a usurious loan. The
reason given for the decision on this point was that the Usury Act, as amended, contains all the provisions
necessary for the effectuation of its purposes, with the result that the remedy given in article 1305 of the
Civil Code is unnecessary. Much more is that idea applicable to the situation now before us, where the
special provisions give ample remedies for the enforcement of the law by action in the name of the
Government, and where no civil wrong has been done to the party here seeking redress.
The view of the case presented above rest upon considerations arising upon our own statutes; and it
would seem to be unnecessary to ransack the American decisions for analogies pertinent to the case. We
may observe, however, that the situation involved is not unlike that which has frequently arisen in the
United States under provisions of the National Bank Act prohibiting banks organized under that law from
holding real property. It has been uniformly held that a trust deed or mortgaged conveying property of this
kind to a bank, by way of security, is valid until the transaction is assailed in a direct proceeding instituted
by the Government against the bank, and the illegality of such tenure supplies no basis for an action by

the former private owner, or his creditor, to annul the conveyance. (National Bank vs. Matthews, 98 U. S.,
621; Kerfootvs. Farmers & M. Bank, 218 U. S., 281.) Other analogies point in the same direction. (South
& Ala. R. Ginniss vs. B. & M. Consol. etc. Mining Co., 29 Mont., 428; Holmes & Griggs Mfg. Co. vs.
Holmes & Wessell Metal Co., 127 N. Y., 252; Oelbermann vs. N. Y. & N. R. Co., 77 Hun., 332.)
Most suggestive perhaps of all the cases in Compaia Azucarera de Carolina vs. Registrar (19 Porto
Rico, 143), for the reason that this case arose under a provision of the Foraker Act, a law analogous to
our Philippine Bill. It appears that the registrar had refused to register two deeds in favor of the Compaia
Azucarera on the ground that the land thereby conveyed was in excess of the area permitted by law to
the company. The Porto Rican court reversed the ruling of the registrar and ordered the registration of the
deeds, saying:
Thus it may be seen that a corporation limited by the law or by its charter has until the State acts
every power and capacity that any other individual capable of acquiring lands, possesses. The
corporation may exercise every act of ownership over such lands; it may sue in ejectment or
unlawful detainer and it may demand specific performance. It has an absolute title against all the
world except the State after a proper proceeding is begun in a court of law. ... The Attorney
General is the exclusive officer in whom is confided the right to initiate proceedings for escheat or
attack the right of a corporation to hold land.
Having shown that the plaintiffs in this case have no right of action against the Benguet Company for the
infraction of law supposed to have been committed, we forego cny discussion of the further question
whether a sociedad anonima created under Spanish law, such as the Benguet Company, is a corporation
within the meaning of the prohibitory provision already so many times mentioned. That important question
should, in our opinion, be left until it is raised in an action brought by the Government.
The judgment which is the subject of his appeal will therefore be affirmed, and it is so ordered, with costs
against the appellants.
Avancea, C.J., Villamor, Ostrand, Villa-Real, Abad Santos, Hull, Vickers, Imperial and Butte, JJ., concur.

S.A. (and variants) designates a type of corporation in countries that mostly

employ civil law. Depending on language, it means anonymous
company,anonymous partnership, or share company, roughly equivalent
to public limited company in common law jurisdictions. It is different
from partnershipsand private limited companies.
Originally, shareholders could be literally anonymous and collect dividends by
surrendering coupons attached to their share certificates. Dividends were
therefore paid to whomever held the certificate. Share certificates could be
transferred privately, and therefore the management of the company would not
necessarily know who owned its shares. The shareholders were anonymous.

Like bearer bonds, anonymous, unregistered share ownership and dividend

collection enabled money laundering, tax evasion, and concealed business
transactions in general, so governments passed laws to eradicate the practice.
Nowadays, shareholders of S.A.s are not anonymous, though shares can still be
held by holding companies, in order to obscure the beneficial owner.

S.C.S. (Sociedad en Comandita Simple): limited partnership

S.C.p.A. (Sociedad en Comandita por Acciones): limited partnership with

shares

A limited partnership is a form of partnership similar to a general partnership,

except that where a general partnership must have at least twogeneral
partners (GPs), a limited partnership must have at least one GP and at least
one limited partner.[1]
The GPs are, in all major respects, in the same legal position as partners in a
conventional firm, i.e. they have management control, share the right to use
partnership property, share the profits of the firm in predefined proportions, and
have joint and several liability for the debts of the partnership.
As in a general partnership, the GPs have actual authority, as agents of the firm,
to bind the partnership in contracts with third parties that are in the ordinary
course of the partnership's business. As with a general partnership, "an act of a
general partner which is not apparently for carrying on in the ordinary course the
limited partnership's activities or activities of the kind carried on by the limited
partnership binds the limited partnership only if the act was actually authorized by
all the other partners."[2]

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-4765

January 20, 1909

ANG SENG QUEN, ET AL., plaintiffs-appellees,

vs.
JUAN TE CHICO, ET AL., defendants-appellants.
Kincaid and Hurd, for appellants.
C.W. O'Brien, Maalac, Gabriel and Diaz, Frederick Garfield Waite, and Claro Reyes
Panlilio, for appellees.
WILLARD, J.:
A former appeal in this case is reported in 7 Phil. Rep., 541. The judgment there
appealed from was affirmed as to the defendant Uy Su Liong but was reversed and a
new trial ordered as to the defendants Juan Te Chico and Cu Ung Jeng. In the opinion
upon that appeal the court said (p. 544):
There was evidence in the court below tending to prove the allegations of the
complaint against some at least of the defendants, which evidence made out
a prima facie case in favor of the plaintiffs.
Upon the second trial the plaintiffs introduced the same evidence that was introduced at
the first trial and there appeared, moreover, a letter written by the then manager of the
business at Iloilo, Ong Bun Po, to the manager at Manila, in which he said:
The debts we owed Hoc Jua Bee you must ask for an extension of time to pay
him until our business becomes better. If not, we are hard in getting money to
pay in cash.
The additional evidence introduced by the defendants at the second trial did not in any
way destroy the prima facie case made by the plaintiffs. The court below entered
judgment for the amount claimed in favor of the plaintiffs and against the defendants
Juan Te Chico, Trinidad Jurado Te Quim Jua, Cu Ung Jeng, Ang Ban Gui, and Ang Ban
Bi. From this judgment Juan Te Chico and Cu Ung Jeng have appealed. The others
have not appealed.
The additional evidence introduced by the defendants not having affected the force of
the plaintiff's testimony, the latter were entitled to judgment against some of the
defendants. The question is, whether they are entitled to judgment against the two
appellants.

That the plaintiffs as individuals can maintain this action, although their partnership
articles were not recorded in the registry, has been settled by the decisions of this court.
(Prautch vs. Jones, 8 Phil. Rep., 1.) The defendant partnership was devoted entirely to
commercial transactions, to the buying and selling of personal property with a view to
profit. It was, therefore, a commercial partnership and the liability of the members
thereof must be determined by the Code of Commerce. (Hung-Man-Yoc vs. KiengChiong-Seng, 6 Phil. Rep., 498.)
Considerable evidence was presented in the court below to show the custom among
Chinese merchants in the Philippines relating to the organization of commercial
partnerships, such evidence tending to show that in such organizations they
disregarded entirely the provisions of the Code of Commerce, and it is apparently
claimed that custom has the effect of law and that the rights of Chinese merchants and
persons dealing with them must be determined not by the law in force in the Islands
relating to commercial partnerships, but by such customs as they may see fit to follow,
which customs are directly contrary to the provisions of the Code of Commerce. No
argument is necessary to show that there is nothing whatever in this contention.
We will first consider the liability of Cu Ung Jeng.
The contract between the defendants was evidenced by the notarial document made on
the 22nd of December, 1902, by the terms of which Juan Te Chico, Cu Ung Jeng, and
Ang Ban Gui formed a special partnership (sociedad en comandita), the general partner
being Juan Te Chico and the special partners being Cu Ung Jeng and Ang Ban Gui.
Each of the partners contributed 4,000 pesos as capital, the name of the partnership
was declared to be Te Chico, sociedad en comandita, and the entire management of the
business was entrusted to Juan Te Chico. The articles of partnership were never
recorded in the mercantile registry. The partnership, therefore, never acquired any
juridical personality. Article 24 of the Code of Commerce is as follows:
Articles constituting associations not recorded shall be binding between the
members who execute the same; but they shall not prejudice third persons, who,
however, may make use thereof in so far as advantageous.
But this article does not aid the plaintiffs so far as Cu Ung Jeng is concerned because
his liability is, by the terms thereof, limited to the amount of money which he invested
and under the provisions of the Code of Commerce relating to special partnerships
(sociedades en comandita) no personal liability can be imposed upon a special partner
who has actually contributed to the capital of the partnership the amount which he
agreed to contribute. If, however, that document be eliminated from the case and it be
considered that the contract between the parties was the entry made in the books of the
company when it was first organized in 1899, the case would then fall directly within the
decision of Hung-Man-Yoc vs. Kieng-Chiong-Seng (6 Phil. Rep., 498) above cited. In
that case it is said (p. 500):

The agent Yu-Yec-Pin himself and some of his so-called partners have merely
noted in the books of the partnership, which by the way, were not introduced in
evidence, the capital which each had contributed.
In that case it was held that one of the partners, Chua Che Co, who had contributed a
part of the capital but who had taken no part in the management of the business, who
had made no contract with the plaintiffs, and whose name did not appear in the
partnership title, was not responsible for the debts of the concern. Those facts all
appear in the case at bar.
The name under which the defendant partnership or business was operated prior to
1902 was Sam Jap Jim & Co. Although the name indicated in the articles of partnership
of 1902 was Te Chico, sociedad en comandita, yet it seems that the business was still
carried on in the name of Sam Jap Jim & Co. The name of Cu Ung Jeng does not
appear in either one of these designations. He took no part whatever in the
management of the business of the company, either in Iloilo or Manila. He never made
any contract with the plaintiffs in connection with the business of the defendant
company. He, therefore, can not be held liable for its debts.
Mere participation in the profits of a commercial partnerships by a person does not
necessarily make such person liable for the debts of the partnership.
(Bourns vs. Carman, 7 Phil. Rep., 117; Fortis vs. Gutierrez Hermanos, 6 Phil. Rep.,
100.)
As to Juan Te Chico, it is apparent that the judgment must be affirmed. He was the sole
manager of the business and carried it on, either personally or through his agents, and
in accordance with the provisions of article 120 of the Code of Commerce is personally
responsible for the debts of the partnership.
The judgment of the court below so far as it relates to Juan Te Chico is affirmed, with
the costs of this instance against him. So far as it relates to Cu Ung Jeng, it is reversed
and he is acquitted of the complaint, with the costs of the first instance against the
plaintiffs. No costs will be allowed to him in this court.
Arellano, C.J., Torres, Mapa, and Tracey, JJ., concur.
Johnson and Carson, JJ., reverse their votes.

Who is a partner by estoppel?

One who, by words or conduct does any of the following:

1. Directly represents himself to anyone as a partner in an existing partnership or in a non- existing

partnership
2. Indirectly represents himself by consenting to another representing him as a partner in an existing
partnership or in a non-existing partnership

What are the liabilities in case of

estoppel?
When Partnership is Liable. If all actual partners consented to the representation, then the liability
of the person who represented himself to be a partner or who consented to such representation and
the actual partner is considered a partnership liability.

When Liability is PRO RATA. When there is no existing partnership and all those represented as
partners consented to the representation, then the liability of the person who represented himself to
be a partner and all who made and consented to such representation, is joint or pro-rata.

When Liability is SEPARATE. When there is no existing partnership and not all but only some of
those represented as partners consented to the representation, or none of the partnership in an
existing partnership consented to such representation, then the liability will be separate.