E. M. BACHRACH, plaintiff-appellee, vs.

"LA PROTECTORA", ET AL., defendants-appellants,Vicente Foz

for appellants. A. J. Burke for appellee.

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

FACTS:
“La Protectora”, a civil partnership was formed by individuals
named as defendants in this action during the year of 1913. Engaging in the
business relating to transportation of passengers and freight at Laoag, Ilocos
Norte was their purpose of conformation. As an acting manager, Marcelo
Barba 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 P 16,
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 payment of 25 per cent of the amount due, if there is a need that the
notes will be placed in the hands of attorney’s collection. The executed
promissory notes certainly showed that Marcelo Barba intended to bind both
the partnership and himself.

The defendants Nicolas Segundo, Antomio Adiarte, Ignacio Flores

and Modesto Serrano on June 12, 1913, executed in due form a document in
which they declared that they were members of the firm “La Protectora” and
this was dated preliminary to the purchase of the trucks. Along with the
purchase was the fully granted authority “in the name and representation of
the said partnership to contract for purchase of two mobiles”. 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.
ISSUES:
Whether or not these individuals are liable for the firm debts and if so
to what extent.
DECISION:
YES. La Protectora a business conducted was evidently that of a civil
partnership and which the liability of the partners 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. Sum of P 7,037
added by the (1) interest at 10 percent per annum from July 23, 1913 – (P 4,
121); (2) interest at 6 per cent per annum from July 21, 1915 – (P 2,961); (3)
further sum of P 1,030.25 (attorney’s fees) were calculated which the
judgment should be entered. 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.