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    Island Sales v. United Pioneers

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    lucky javellana
    The defendants failed to appear in court for a case regarding an unpaid promissory note for a vehicle purchase. The trial court ruled in favor of the plaintiff. On appeal, one defendant argued his liability should be limited to one-fifth of the debt since there were five partners total. The Supreme Court agreed, finding that under the Civil Code, partners have pro rata liability for partnership debts based on the number of partners. Condoning the debt of one partner did not increase the liability of the remaining partners.

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    Island Sales v. United Pioneers

    Uploaded by

    lucky javellana
    219 views2 pages
    The defendants failed to appear in court for a case regarding an unpaid promissory note for a vehicle purchase. The trial court ruled in favor of the plaintiff. On appeal, one defendant argued his liability should be limited to one-fifth of the debt since there were five partners total. The Supreme Court agreed, finding that under the Civil Code, partners have pro rata liability for partnership debts based on the number of partners. Condoning the debt of one partner did not increase the liability of the remaining partners.

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    Island Sales v. United Pioneers

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    The defendants failed to appear in court for a case regarding an unpaid promissory note for a vehicle purchase. The trial court ruled in favor of the plaintiff. On appeal, one defendant argued his liability should be limited to one-fifth of the debt since there were five partners total. The Supreme Court agreed, finding that under the Civil Code, partners have pro rata liability for partnership debts based on the number of partners. Condoning the debt of one partner did not increase the liability of the remaining partners.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    219 views2 pages

    Island Sales v. United Pioneers

    Uploaded by

    lucky javellana
    The defendants failed to appear in court for a case regarding an unpaid promissory note for a vehicle purchase. The trial court ruled in favor of the plaintiff. On appeal, one defendant argued his liability should be limited to one-fifth of the debt since there were five partners total. The Supreme Court agreed, finding that under the Civil Code, partners have pro rata liability for partnership debts based on the number of partners. Condoning the debt of one partner did not increase the liability of the remaining partners.

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    Island Sales v.

    United 65 SCRA
    When the case was called for hearing, the
    554 defendants and their counsels failed to appear
    DOCTRINE:Condonation by creditor of share in notwithstanding the notices sent to them.
    partnership debt of one partner does not increase Consequently, the trial court authorized the plaintiff
    pro rata liability of other partners. to present its evidence ex-parte , after which the
    trial court rendered the decision appealed from.
    FACTS:
    The defendant company ( UNITED PIONEERS The defendants Benjamin C. Daco and Noel C. Sim
    GENERAL CONSTRUCTION COMPANY ET .AL ), a moved to reconsider the decision claiming that
    general partnership duly registered under the laws since there are five (5) general partners, the joint
    of the Philippines, purchased from theplaintiff ( and subsidiary liability of each partner should
    ISLAND SALES, INC) a motor vehicle on installment notexceed one-fifth (1/5) of the obligations of the
    basis and for this purpose executed apromissory defendant company. But the trial court denied the
    note for P9,440.00, payable in twelve (12) equal said motion notwithstanding the conformity of the
    monthly installments of P786.63, the first plaintiff to limit the liability of the defendants Daco
    installment payable on or before May 22, 1961 and and Sim to only one-fifth (1/5 ) of the obligations
    the subsequent installments on the 22nd day of of the defendant company.Hence, this appeal.
    every month thereafter, until fully paid, with the
    condition that failure to pay any of said installments ISSUE: Whether the condonation of a
    asthey fall due would render the whole unpaid partner’s share in the debts of the company
    balance immediately due and demandable. increases the remaining partners’ liability?

    Having failed to receive the installment due on July RULING:


    22, 1961, the plaintiff sued the defendant company No. In the instant case, there were five (5) general
    for the unpaid balance amounting to P7,119.07. partners when the promissory note in question was
    Benjamin C. Daco, Daniel A. Guizona, Noel C. Sim, executed for and in behalf of the partnership. Since
    Romulo B. Lumauig, and Augusto Palisoc were the liability of the partners is pro rata, the liability
    included as co-defendants in their capacity as of the appellant Benjamin C. Daco shall be limited
    general partners of the defendant company. to only one-fifth ( 1/ 5 ) of the obligations of the
    defendant company. The fact that the complaint
    Daniel A. Guizona failed to file an answer and was against the defendant Romulo B. Lumauig was
    consequently declared in default. Subsequently, on dismissed, upon motion of the plaintiff, does not
    motion of the plaintiff, the complaint was dismissed unmake the said Lumauig as a general partner in
    insofar as the defendant Romulo B. Lumauig is the defendant company. In so moving to dismiss
    concerned.
    the complaint, the plaintiff merely condoned
    Lumauig's individual liability to the plaintiff.

    RATIO: Article 1816 of the Civil Code provides:

    “All partners including industrial ones, shall


    be liable pro rata with all their property and
    after all the partnership assets have been
    exhausted, for the contracts which may be
    entered into in the name and for the account
    of thepartnership, under its signature and by
    a person authorized to act for
    thepartnership. However, any partner may
    enter into a separate obligation to perform”

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