Elmo Muasque vs CA Facts:xx Elmo Muasque, in behalf of Galan and Muasque partnership as Contractor, entered into a written contract

with ropical Commercial Co!, throu"h its branch mana"er #amon $ons, for remodellin" of ropical%s buildin" in Cebu! he consideration for the entire ser&ices is $'(,))) to be paid: *)+ upon si"nin" of contract, and balance on * equal instalments of $,,))) e&er.(wor/in" da-s! First pa-ment of chec/ worth $0,))) was pa-able to Muasque, who indorsed it to Galan for purposes of depositin" the amount and pa-in" the materials alread- used! 1ut since Galan alle"edl- misappropriated $,,.2*!*0 of the chec/ for personal use, Muasque refused to indorse the second chec/ worth $,,)))! Galan then informed ropical of the misunderstandin" between him and Muasque and this prompted ropical to chan"e the pa-ee of the second chec/ from Muasque to Galan and 3ssociates 4the dul- re"istered name of Galan and Muasque partnership5! 6espite the misappropriation, Muasque alone was able to finish the pro7ect! he two remainin" chec/s were properl- issued to Muasque! Muasque filed a complaint for pa-ment of sum of mone- plus dama"es a"ainst Galan, ropical and $ons for the amount co&ered b- the first and second chec/s! Cebu 8outhern 9ardware Co and 1lue 6iamond Glass $alace were allowed as inter&enors ha&in" le"al interest claimin" a"ainst Muasue and Galan for materials used! C: : Muasque and $ons 7ointl- and se&erall- liable to inter&enors : ropical and $ons absol&ed C3 affirmed with modification: : Muasque and $ons 7ointl- liable to inter&enors ;ssue: .! <=> Muasque and Galan are partners? '! <=> pa-ment made b- ropical to Galan was "ood pa-ment? *! <=> Galan should shoulder exclusi&el- the amounts pa-able to the inter&enors 4"rantin" he misappropriated the amount from the two chec/s5? 9eld: -es:-es:no@ .! AE8! ropical had e&er- ri"ht to presume the existence of the partnership: a! Contract states that a"reement was entered into b- Galan and Muasque b! he first chec/ issue in the name of Muasque was indorsed to Galan he relationship was made to appear as a partnership! '! AE8! Muasque and Galan were partners when the debts to the inter&enors were incurred, hence, the- are also liable to third persons who extended credit to their partnership! here is a "eneral presumption that each indi&idual partner is an authoriBed a"ent for the firm and that he has authorit- to bind the firm in carr-in" on the partnership transactions! he presumption is sufficient to permit third persons to hold the firm liable

on transactions entered into b- one of the members of the firm actin" apparentl- in its behalf and within the scope of his authorit*! >C! 3rticle .2., 1D construed to"ether with 3rticle .2'E! 3rt! .2.,! 3ll partners, includin" industrial ones, shall be liable pro rata x x x for the contracts which ma- be entered into the name and for the account of the partnership, under its si"nature and b- a person authoriBed x x x 3rt! .2'E! 3ll partners are liable solidaril- with the partnership for e&er-thin" char"eable to the partnership under 3rticles .2'' and .2'* 3rt! .2''! <here, b- an- wron"ful act or omission of an- partner actin" in the ordinarcourse of the business x x x or with the authorit- of his co:partners, loss or in7ur- is caused to an- person x x x 3rt! .2'*! he partnership is bound to ma/e "ood the loss: 4.5 <here one partner actin" within the scope of his apparent authorit- recei&es mone- or propert- of a third person and misapplies it, and 4'5 <here the partnership in the course of its business recei&es mone- or propert- of a third person x x x is misapplied b- an- partner while it is in the custod- of the partnership! G#: ;n transactions entered into b- the partnership, the liabilit- of the partners is merel7oint Exception: ;n transactions in&ol&in" third persons fallin" under 3rticles .2'' and .2'*, such third person ma- hold an- partner solidaril- liable for the whole obli"ation with the partnership! #eason for exception: the law protects him, who in "ood faith relied upon the authorit- if a partner, whether real or apparent! 9owe&er, as between Muasque and Galan, 7ustice also dictates reimbursement in fa&our of Muasque as Galan was pro&en to be in bad faith in his dealin"s with his partner!