Business Organization Case Digest 2


GRN L-27343 February 28, 1979

Fernandez, J.:


Isabela Sawmill was formed by partners Saldajeno, Lon and Timoteo. S withdrew from the partnership and after dissolution, L and T continued the business still under the name Isabela Sawmill. The partnership is indebted to various creditors and that Sheriff sold the assets of Isabela Sawmill to S and was subsequently sold to a separate company.


Whether or not Isabela Sawmill ceased to be a partnership and that creditors could no longer demand payment.


On dissolution, the partnership is not terminated but continues until the winding up of the business. It does not appear that the withdrawal of S from the partnership was published in the newspapers. The appellee and the public had a right to expect that whatever credit they extended to L and T doing business in the name of Isabela Sawmill could be enforced against the properties of said partnership. The judicial foreclosure of the chattel mortgage executed in favor of S did not relieve her from liability to the creditors of the partnership.

It may be presumed that S acted in good faith, the appellees also acted in good faith in extending credit to the partnership. Where one of the 2 innocent persons must suffer, that person who gave occasion for the damages to be caused must bear the consequences.


GRN 127405 October 4, 2000 365 SCRA 463

Ynares-Santiago, J.:


Respondent met the petitioner through Belo. They entered into a joint venture for the local distribution of kitchen wares. Anay was made to receive commissions based on her performance, as verbally agreed upon by her and Belo, the latter acting as guarantor of Tocao. The business was named Geminisse Enterprises under the sole proprietorship of Tocao. In 1987, Beo signed a 37% commission to Anay for her business transactions but after 2 days, she discovered that she was no longer the head of marketing and have been barred form holding office.


Whether or not Anay was an employee or partner of the business and thus entitled for damages.


The RTC and CA found that partnership existed based on the facts presented. Where no immovable property is involved, an oral agreement will suffice to create a partnership. Thus an unjustified dissolution by a partner can subject him to action for damages because by the mutual agency that arises in a partnership, the doctrine or delectus personae allows the partners to have the power although not necessarily to dissolve the partnership.

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