ESTATE OF MOTA VS.
SERRA Case Digest Afterwards, on January 8, 1921, Venancio
ESTATE OF MOTA VS. SERRA
47 PHIL. 464
FACTS: On February 1, 1919, plaintiffs and
defendant entered into a contract of
partner
ship, for the construction and exploitation of a
railroad line from the "San Isidro" and "Palma"
centrals to the place known as "Nandong." The
original capital stipulated was P150, 000. It was
covenanted that the parties should pay this
amount in equal parts and the plaintiffs were
entrusted with the administration of the
partnership. The agreed capital of P150,000,
however, did not prove sufficient, as the
expenses up to May 15, 1920, had reached the
amount of P226,092.92, presented by the
administrator and O.K.'d by the defendant.
January 29, 1920, the defendant entered into a
contract of sale with Venancio Concepcion, Phil.
C. Whitaker, and Eusebio R. de Luzuriaga,
whereby he sold to the latter the estate and
central known as "Palma" with its running
business, as well as all the improvements,
machineries and buildings, real and personal
properties, rights, choices in action and interests,
including the sugar plantation of the harvest year
of 1920 to 1921, covering all the property of the
vendor. This contract was executed before a
notary public of Iloilo.
Before the delivery to the purchasers of the
hacienda thus sold, Eusebio R. de Luzuriaga
renounced all his rights under the contract of
January 29, 1920, in favor of Messrs. Venancio
Concepcion and Phil. C. Whitaker. This gave rise
to the fact that on July 17, 1920, Venancio
Concepcion and Phil. C. Whitaker and the herein
defendant executed before Mr. Antonio Sanz, a
notary public in and for the City of Manila, another
deed of absolute sale of the said "Palma" Estate
for the amount of P1,695,961.90, of which the
vendor received at the time of executing the deed
the amount of P945,861.90, and the balance was
payable by installments in the form and manner
stipulated in the contract. The purchasers
guaranteed the unpaid balance of the purchase
price by a first and special mortgage in favor of
the vendor upon the hacienda and the central
with all the improvements, buildings,
machineries, and appurtenances then existing on
the said hacienda.
Concepcion and Phil. C. Whitaker bought from
the plaintiffs the one-half of the railroad line
pertaining to the latter, executing therefore the
document. The price of this sale was
P237,722.15, excluding any amount which the
defendant might be owing to the plaintiffs. Of the
purchase price, Venancio Concepcion and Phil.
C. Whitaker paid the sum of P47,544.43 only. In
the Deed, the plaintiffs and Concepcion and
Whitaker agreed, among other things, that the
partnership "Palma" and "San Isidro," formed by
the agreement of February 1, 1919, between
Serra, Lazaro Mota, now deceased, and Juan J.
Vidaurrazaga for himself and in behalf of his
brother, Felix and Dionisio Vidaurrazaga, should
be dissolved upon the execution of this contract,
and that the said partnership agreement should
be totally cancelled and of no force and effect
whatever.
Since the defendant Salvador Serra failed to pay
one-half of the amount expended by the plaintiffs
upon the construction of the railroad line, that is,
P113,046.46, as well as Phil. C. Whitaker and
Venancio Concepcion, the plaintiffs instituted the
present action praying: 1) that the deed of
February 1, 1919, be declared valid and binding;
2) that after the execution of the said document
the defendant improved economically so as to be
able to pay the plaintiffs the amount owed, but
that he refused to pay either in part or in whole
the said amount notwithstanding the several
demands made on him for the purpose; and 3)
that the defendant be sentenced to pay plaintiffs
the aforesaid sum of
P113, 046.46, with the stipulated interest at 10
per cent per annum beginning June 4, 1920, until
full payment thereof, with the costs of the present
action.
Defendant set up three special defenses: 1) the
novation of the contract by the substitution of the
debtor with the conformity of the creditors; 2) the
confusion of the rights of the creditor and debtor;
and 3) the extinguishment of the contract.
The court a quo in its decision held that there was
a novation of the contract by the substitution of
the debtor, and therefore absolved the defendant
from the complaint with costs against the
plaintiffs. With regard to the prayer that the said
contract be declared valid and binding, the court
held that there was no way of reviving the
contract which the parties themselves in interest
had spontaneously and voluntarily extinguished.
ISSUES:
1. Whether or not there was a novation of
the contract by the substitution of the debtor with
the consent of the creditor, as required by Article
1205 of the Civil Code; and
2. Whether or not there was a merger of
rights of debtor and creditor under Article 1192 of
the Civil Code.
RULING:
1. NO, there was no novation of the contract. It
should be noted that in order to give novation its
legal effect, the law requires that the creditor
should consent to the substitution of a new
debtor. This consent must be given expressly for
the reason that, since novation extinguishes the
personality of the first debtor who is to be
substituted by new one, it implies on the part of
the creditor a waiver of the right that he had
before the novation which waiver must be
express under the principle that renuntiatio non
praesumitur, recognized by the law in declaring
that a waiver of right may not be performed
unless the will to waive is indisputably shown by
him who holds the right. The fact that Phil. C.
Whitaker and Venancio Concepcion were willing
to assume the defendant's obligation to the
plaintiffs is of no avail, if the latter have not
expressly consented to the substitution of the first
debtor. As has been said, in all contracts of
novation consisting in the change of the debtor,
the consent of the creditor is indispensable,
pursuant to Article 1205 of the Civil Code which
reads as follows: Novation which consists in the
substitution of a new debtor in the place of the
original one may be made without the knowledge
of the latter, but not without the consent of the
creditor.
2. NO, there was no merger of Rights. Another
defense urged by the defendant is the merger of
the rights of debtor and creditor, whereby under
Article 1192 of the Civil Code, the obligation, the
fulfillment of which is demanded in the complaint,
became extinguished. It is maintained in
appellee's brief that the debt of the defendant was
transferred to Phil. C. Whitaker and Venancio
Concepcion by the document. These in turn
acquired the credit of the plaintiffs by virtue of the
debt; thus, the rights of the debtor and creditor
were merged in one person. The argument would
at first seem to be incontrovertible, but if we bear
in mind that the rights and titles which the
plaintiffs sold to Phil. C. Whitaker and Venancio
Concepcion refer only to one-half of the railroad
line in question, it will be seen that the credit
which they had against the defendant for the
amount of one-half of the cost of construction of
the said line was not included in the sale. That the
plaintiffs sold their rights and titles over one-half
of the line. The purchasers, Phil. C. Whitaker and
Venancio Concepcion, to secure the payment of
the price, executed a mortgage in favor of the
plaintiffs on the same rights and titles that they
had bought and also upon what they had
purchased from Mr. Salvador Serra. In other
words, Phil. C. Whitaker and Venancio
Concepcion mortgaged unto the plaintiffs what
they had bought from the plaintiffs and also what
they had bought from Salvador Serra. If Messrs.
Phil. C. Whitaker and Venancio Concepcion had
purchased something from Mr. Salvador Serra,
the herein defendant, regarding the railroad line,
it was undoubtedly the one-half thereof pertaining
to Mr. Salvador Serra. This clearly shows that the
rights and titles transferred by the plaintiffs to Phil.
C. Whitaker and Venancio Concepcion were only
those they had over the other half of the railroad
line. Therefore, as already stated, since there
was no novation of the contract between the
plaintiffs and the defendant, as regards the
obligation of the latter to pay the former one-half
of the cost of the construction of the said railroad
line, and since the plaintiffs did not include in the
sale, the credit that they had against the
defendant, the allegation that the obligation of the
defendant became extinguished by the merger of
the rights of creditor and debtor by the purchase
of Messrs. Phil. C. Whitaker and Venancio
Concepcion is wholly untenable.
***************************************
Antonio C. Goquilay vs. Washington Z. Sycip,
ET AL.
FACTS:
Tan Sin An and Goquiolay entered into a general
commercial partnership under the partnership
name "Tan Sin An and Antonio Goquiolay" for the
purpose of dealing in real estate.
The agreement lodged upon Tan Sin An the sole
management of the partnership affairs.
The lifetime of the partnership was fixed at ten
years and the Articles of Co-partnership
stipulated that in the event of death of any of the
partners before the expiration of the term, the
partnership will not be dissolved but will be
continued by the heirs or assigns of the deceased
partner. But the partnership could be dissolved
upon mutual agreement in writing of the partners.
Goquiolay executed a GPA in favor of Tan Sin
An.
The plaintiff partnership purchased 3 parcels of
land which was mortgaged to "La Urbana" as
payment of P25,000. Another 46 parcels of land
were purchased by Tan Sin An in his individual
capacity which he assumed payment of a
mortgage debt for P35K. A downpayment and the
amortization were advanced by Yutivo and Co.
The two obligations were consolidated in an
instrument executed by the partnership and Tan
Sin An, whereby the entire 49 lots were
mortgaged in favor of "Banco Hipotecario"?Tan
Sin An died leaving his widow, Kong Chai Pin and
four minor children. The widow subsequently
became the administratrix of the estate.
Repeated demands were made by Banco
Hipotecario on the partnership and on Tan Sin
An. ?Defendant Sing Yee, upon request of
defendant Yutivo Sons , paid the remaining
balance of the mortgage debt, the mortgage was
cancelled
Yutivo Sons and Sing Yee filed their claim in the
intestate proceedings of Tan Sin An for
advances, interest and taxes paid in amortizing
and discharging their obligations to "La Urbana"
and "Banco Hipotecario"
Kong Chai Pin filed a petition with the probate
court for authority to sell all the 49 parcels of land.
She then sold it to Sycip and Lee in consideration
of P37K and of the vendees assuming payment
of the claims filed by Yutivo Sons and Sing Yee.
Later, Sycip and Lee executed in favor of Insular
Development a deed of transfer covering the 49
parcels of land.?When Goquiolay learned about
the sale to Sycip and Lee, he filed a petition in the
intestate proceedings to set aside the order of the
probate court approving the sale in so far as his
interest over the parcels of land sold was
concerned.
Probate court annulled the sale executed by the
administratrix w/ respect to the 60% interest of
Goquiolay over the properties Administratrix
appealed.?The decision of probate court was set
aside for failure to include the indispensable
parties. New pleadings were filed
The second amended complaint prays for the
annulment of the sale in favor of Sycip and Lee
and their subsequent conveyance to Insular
Development.
The complaint was dismissed by the lower court
hence this appeal.
PLAINTIFF'S ARGUMENTS: The plaintiffs in
their complaint challenged the authority of Kong
Chai Pin to sell the partnership properties on the
ground that she had no authority to sell because
even granting that she became a partner upon
the death of Tan Sin An the power of attorney
granted in favor of the latter expired after his
death.
DEFENDANT'S ARGUMENTS: The defendant's
defended the validity of the sale on the theory that
she succeeded to all the rights and prerogatives
of Tan Sin An as managing partner.
DECISIONS OF --
LOWER COURT: The trial court sustained the
validity of the sale on the ground that under the
provisions of the articles of partnership allowing
the heirs of the deceased partner to represent
him in the partnership after his death Kong Chai
Pin became a managing partner, this being the
capacity held by Tan Sin An when he died.
CA:
ISSUE/S:
Whether or not a widow or substitute become
also a general partner or only a limited partner.
Whether or not the lower court err in holding that
the widow succeeded her husband Tan Sin An in
the sole management of the partnership upon
Tan's death
Whether or not the consent of the other partners
was necessary to perfect the sale of the
partnership properties to Sycip and Lee?
HELD:
Kong Chai Pin became a mere general partner.
By seeking authority to manage partnership
property, Tan Sin An's widow showed that she
desired to be considered a general partner. By
authorizing the widow to manage partnership
property (which a limited partner could not be
authorized to do), Goqulay recognized her as
such partner, and is now in estoppel to deny her
position as a general partner, with authority to
administer and alienate partnership property.
The articles did not provide that the heirs of the
deceased would be merely limited partners; on
the contrary, they expressly stipulated that in
case of death of either partner, "the co
partnership will have to be continued" with the
heirs or assignees. It certainly could not be
continued if it were to be converted from a
general partnership into a limited partnership
since the difference between the two kinds of
associations is fundamental, and specially
because the conversion into a limited association
would leave the heirs of the deceased partner
without a share in the management. Hence, the
contractual stipulation actually contemplated that
the heirs would become general partners rather
than limited ones.
Separate Opinion: Justice Angelo Bautista
The court affirmed the decision but on different
grounds, among which are: (1) there is no
sufficient factual basis to conclude that Kong Chai
Pin executed acts of management to give her the
character of general manager of the partnership,
or to serve as basis for estoppel that may benefit
the purchasers of the partnership properties; (2)
the alleged acts of management, even if proven,
could not give Kong Chai Pin the character of
general manager for the same is contrary to law
and well- known authorities; (3) even if Kong Chai
Pin acted as general manager she has no
authority to sell the partnership properties as to
make it legal and valid; and (4) Kong Chai Pin had
no necessity to sell the properties to pay the
obligation of the partnership and if she did so it
was merely to favor the purchasers who were
close relatives to the prejudice of Goquiolay.
The sale of the partnership properties by Kong
Chai Pin cannot be upheld on the ground of
estoppel, first, because the alleged acts of
management have not been clearly proven.
Moreover, mere acceptance of the inheritance
does not make the heir of a general partner a
general partner himself. He emphasized that heir
must declare that he is entering the partnership
as a general partner unless the deceased partner
has made it an express condition in his will that
the heir accepts the condition of entering the
partnership as a prerequisite of inheritance, in
which case acceptance of the inheritance is
enough. But here Tan Sin An died intestate.
Kong Chai Pin cannot be deemed to have
declared her intention to become a general
partner by exercising acts of management
because as a general rule the heirs of a deceased
partner succeed as limited partners only by
operation of law, it is obvious that the heir, upon
entering the partnership, must make a declaration
of his character, otherwise he should be deemed
as having succeeded as limited partner by the
mere acceptance of the inheritance. And here
Kong Chai Pin did not make such declaration.
Being then a limited partner upon the death of
Tan Sin An by operation of law, the peremptory
prohibition contained in Article 148 of the Code of
Commerce became binding upon her and as a
result she could not change her status by
violating its provisions not only under the general
principle that prohibited acts cannot produce any
legal effect, but also because under the
provisions of Article 147 of the same Code she
was precluded from acquiring more rights than
those pertaining to her as a limited partner. The
alleged acts of management, therefore, did not
give Kong Chai Pin the character of general
manager to authorize her to bind the partnership.
Kong Chain Pin could not sell the partnership
properties without authority from the other
partners. the relationship between a managing
partner and the partnership is substantially the
same as that of the agent and his principal, the
extent of the power of Kong Chai Pin must,
therefore, be determined under the general
principles governing agency. And, on this point,
the law says that an agency created in general
terms includes only acts of administration, but
with regard to the power to compromise, sell
mortgage, and other acts of strict ownership, an
express power of attorney is required. Here Kong
Chai Pin did not have such power when she told
the properties of the partnership.
Since Kong Chai Pin sold the partnership
properties not in line with the business of the
partnership but to pay its obligation without first
obtaining the consent of the other partners the
sale is invalid being in excess of her authority.
Upon the strength of the foregoing
considerations, the court grant the motion for
reconsideration.
*******************************************************
Singsong v. Isabela Sawmill
G.R. No. L-27343. February 28, 1979
Facts:
Petitioners filed in the Court of First
Instance of Negros Occidental against
Respondents a complaint praying for a writ of
preliminary injunction restraining the Sheriff from
proceeding with the sales at public auction, and
to declare null and void the Chattel Mortgage
executed by defendants in favor of defendant
Saldajeno, being in fraud of creditors of the
defendant partnership.
Defendants Leon Garibay, Margarita G.
Saldejeno, and Timoteo Tubungbanua had
entered into a Contract of Partnership under the
firm name "Isabela Sawmill. Civil Case No. 4797
was filed by the spouses Cecilio Saldajeno and
Margarita G. Saldajeno against the Isabela
Sawmill, Leon Garibay, and Timoteo
Tubungbanua. The same defendants executed a
document entitled "Assignment of Rights with
Chattel Mortgage". Thereafter, the defendants
Leon Garibay and Timoteo Tubungbanua did not
divide the assets and properties of the "Isabela
Sawmill" between them, despite the withdrawal of
defendant Saldajeno, they continued the
business of said partnership under the same firm
name "Isabela Sawmill".
Provincial Sheriff of Negros Occidental
executed a Certificate of Sale in favor of the
defendant Margarita G. Saldajeno, as a result of
the sale conducted for the enforcement of the
judgment rendered in Civil Case No. 5223 of the
Court of First Instance of Negros Occidental.
After trial, judgment was rendered in
favor of the plaintiffs and against the defendants.
Thereafter, defendants appealed to the CA. CA
certified the records of this case to the Supreme
Court "considering that the resolution of this
appeal involves purely questions or question of
law.
It is contended by the appellants that the
Court of First Instance of Negros Occidental had
no jurisdiction over Civil Case No. 5343 because
the plaintiffs Oppen, Esteban, Inc., Agustin R.
Tonsay, Jose L. Espinos and the Bacolod
Southern Lumber Yard sought to collect sums of
moeny, the biggest amount of which was less
than P2,000.00 and, therefore, within the
jurisdiction of the municipal court.
Issue:
Whether or not the Court of First Instance has
jurisdiction over the case
Held:
Court of First Instance of Negros
Occidental did no err in exercising jurisidction
over Civil Case No. 5343
Appellants contention is devoid of merit
because all the plaintiffs also asked for the nullity
of the assignment of right with chattel mortgage
entered into by and between Margarita G.
Saldajeno and her former partners Leon Garibay
and Timoteo Tubungbanua. This cause of
action is not capable of pecuniary estimation
and falls under the jurisdiction of the Court of
First Instance. Where the basic issue is
something more than the right to recover a sum
of money and where the money claim is purely
incidental to or a consequence of the principal
relief sought, the action is as a case where the
subject of the litigation is not capable of pecuniary
estimation and is cognizable exclusively by the
Court of First Instance.
The jurisdiction of all courts in the
Philippines, in so far as the authority thereof
depends upon the nature of litigation, is defined
in the amended Judiciary Act, pursuant to which
courts of first instance shall have exclusive
original jurisdiction over any case the subject
matter of which is not capable of pecuniary
estimation. An action for the annulment of a
judgment and an order of a court of justice
belongs to the category.
In determining whether an action is one
the subject matter of which is not capable of
pecuniary estimation this Court has adopted the
criterion of first ascertaining the nature of the
principal action or remedy sought. If it is
primarily for the recovery of a sum of money,
the claim is considered capable of pecuniary
estimation, and whether jurisdiction is in the
municipal courts or in the courts of first
instance would depend on the amount of the
claim. However, where the basic issue is
something other than the right to recover a sum
of money, where the money claim is purely
incidental to, or a consequence of, the principal
relief sought, this Court has considered such
actions as cases where the subject of the
litigation may not be estimated in terms of money,
and are cognizable exclusively by courts of first
instance.
*******************************************************
Lim Tanhu vs. Ramolete
66 SCRA 425
FACTS:
Private respondent Tan Put alleged that she is
the widow of Tee Hoon Lim Po Chuan, who was
a partner and practically the owner who has
controlling interest of Glory Commercial
Company and a Chinese Citizen until his death.
Defendant Antonio Lim Tanhu and Alfonso
Leonardo Ng Sua were partners in name but they
were mere employees of Po Chuan and were
naturalized Filipino Citizens. Tan Put filed
complaint against spouses-petitoner Lim Tanhu
and Dy Ochay including their son Tech Chuan
and the other spouses-petitoner Ng Sua and Co
Oyo including also their son Eng Chong
Leonardo, that through fraud and machination
took actual and active management of the
partnership and that she alleged entitlement to
share not only in the capital and profits of the
partnership but also in the other assets, both real
and personal, acquired by the partnership with
funds of the latter during its lifetime."
According to the petitioners, Ang Siok Tin is the
legitimate wife, still living, and with whom Tee
Hoon had four legitimate children, a twin born in
1942, and two others born in 1949 and 1965, all
presently residing in Hong Kong. Tee Hoon died
in 1966 and as a result of which the partnership
was dissolved and what corresponded to him
were all given to his legitimate wife and children.
Tan Put prior of her alleged marriage with Tee
Hoon on 1949, was engaged in the drugstore
business; that not long after her marriage, upon
the suggestion of the latter sold her drugstore for
P125,000.00 which amount she gave to her
husband as investment in Glory Commercial Co.
sometime in 1950; that after the investment of the
above-stated amount in the partnership its
business flourished and it embarked in the import
business and also engaged in the wholesale and
retail trade of cement and GI sheets and under
huge profits.
Defendants interpose that Tan Put knew and was
are that she was merely the common-law wife of
Tee Hoon. Tan Put and Tee Hoon were childless
but the former had a foster child, Antonio Nunez.
ISSUE: Whether Tan Put, as she alleged being
married with Tee Hoon, can claim from the
company of the latters share.
HELD:
Under Article 55 of the Civil Code, the
declaration of the contracting parties that they
take each other as husband and wife "shall be set
forth in an instrument" signed by the parties as
well as by their witnesses and the person
solemnizing the marriage. Accordingly, the
primary evidence of a marriage must be an
authentic copy of the marriage contract. While a
marriage may also be proved by other competent
evidence, the absence of the contract must first
be satisfactorily explained. Surely, the
certification of the person who allegedly
solemnized a marriage is not admissible
evidence of such marriage unless proof of loss of
the contract or of any other satisfactory reason for
its non-production is first presented to the court.
In the case at bar, the purported certification
issued by a Mons. Jose M. Recoleto, Bishop,
Philippine Independent Church, Cebu City, is not,
therefore, competent evidence, there being
absolutely no showing as to unavailability of the
marriage contract and, indeed, as to the
authenticity of the signature of said certifier, the
jurat allegedly signed by a second assistant
provincial fiscal not being authorized by law,
since it is not part of the functions of his office.
Besides, inasmuch as the bishop did not testify,
the same is hearsay.
An agreement with Tee Hoon was shown and
signed by Tan Put that she received P40,000 for
her subsistence when they terminated their
relationship of common-law marriage and
promised not to interfere with each others affairs
since they are incompatible and not in the
position to keep living together permanently.
Hence, this document not only proves that her
relation was that of a common-law wife but had
also settled property interests in the payment of
P40,000.
IN VIEW OF ALL THE FOREGOING, the petition
is granted. All proceedings held in respondent
court in its Civil Case No. 12328 subsequent to
the order of dismissal of October 21, 1974 are
hereby annulled and set aside, particularly the ex-
parte proceedings against petitioners and the
decision on December 20, 1974. Respondent
court is hereby ordered to enter an order
extending the effects of its order of dismissal of
the action dated October 21, 1974 to herein
petitioners Antonio Lim Tanhu, Dy Ochay,
Alfonso Leonardo Ng Sua and Co Oyo. And
respondent court is hereby permanently enjoined
from taking any further action in said civil case
gave and except as herein indicated. Costs
against private respondent.