Goquiolay vs Sycip

FACTS:

Tan Sin An and Antonio C. Goquiolay, entered into a general commercial partnership, for the purpose in
dealing in real state. 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 P35,000. 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,
paid the remaining balance of the mortgage debt. 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
P37,000 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.

ISSUE:

Whether or not the consent of the other partners was necessary to perfect the sale of the partnership
properties to Sycip and Lee?

RULING:

No, consent of the other partners was not necessary to perfect the sale of the properties to Sycip and
Lee.

Strangers dealing with a partnership have the right to assume, in the absence of restrictive clauses in the
co-partnership agreement, that every general partner has power to bind the partnership, specially those
partners acting with ostensible authority. Article 129 of the Code of Commerce provides that If the
management of the general partnership has not been limited by special agreement to any of the
members, all shall have the power to take part in the direction and management of the common
business, and the members present shall come to an agreement for all contracts or obligations which
may concern the association.

Although the partnership under consideration is a commercial partnership and, therefore, to be

governed by the Code of Commerce, the provisions of the old Civil Code may give us some light on the
right of one partner to bind the partnership. Art. 1695 thereof states that:
Should no agreement have been made with respect to the form of management, the following rules
shall be observed:
1. All the partners shall be considered agents, and whatever any one of the may do individually shall
bind the partnership; but each one may oppose any act of the others before it has become legally
binding.

In this case, the records fail to disclose that appellant Goquiolay made any opposition to the sale of the
partnership realty to Washington Z. Sycip and Betty Lee; on the contrary, it appears that Goquiolay only
interposed his objections after the deed of conveyance was executed and approved by the probate
court, and, consequently, his opposition came too late to be effective.