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    II D 05.dietrich v. Freeman - Cuevas

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    The document discusses a case where a plaintiff sued partners in a business called Manila Steam Laundry to collect a debt. The trial court found the partners jointly and severally liable. However, the Court of Appeals determined that the business was a partnership of cuentas en participacion, meaning the partners' liability was proportional to their ownership stakes in the business, not joint.

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    II D 05.dietrich v. Freeman - Cuevas

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    LeyCodes LeyCodes
    14 views1 page
    The document discusses a case where a plaintiff sued partners in a business called Manila Steam Laundry to collect a debt. The trial court found the partners jointly and severally liable. However, the Court of Appeals determined that the business was a partnership of cuentas en participacion, meaning the partners' liability was proportional to their ownership stakes in the business, not joint.

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    II D 05.Dietrich v. Freeman.cuevas

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    II D 05.Dietrich v. Freeman.cuevas

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    The document discusses a case where a plaintiff sued partners in a business called Manila Steam Laundry to collect a debt. The trial court found the partners jointly and severally liable. However, the Court of Appeals determined that the business was a partnership of cuentas en participacion, meaning the partners' liability was proportional to their ownership stakes in the business, not joint.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    14 views1 page

    II D 05.dietrich v. Freeman - Cuevas

    Uploaded by

    LeyCodes LeyCodes
    The document discusses a case where a plaintiff sued partners in a business called Manila Steam Laundry to collect a debt. The trial court found the partners jointly and severally liable. However, the Court of Appeals determined that the business was a partnership of cuentas en participacion, meaning the partners' liability was proportional to their ownership stakes in the business, not joint.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 1

    Topic: Obligations of the Partners to Third Persons

    Case Title:
    GEORGE O. DIETRICH, Plaintiff-Appellee,
    vs.
    O.K. FREEMAN, JAMES L. PIERCE, and BURTON
    WHITCOMB, defendants.
    BURTON WHITCOMB, Appellant.
    GR No.: L-6252
    Date: January 28, 1911
    Ponente: TRENT, J.
    Quick Facts:
    Plaintiff sued to collect from the partners of Manila
    Steam Laundry. The trial court held the defendants
    jointly and severally liable. The Court reversed holding
    that the business was a partnership of cuentas en
    participacion and the liability of the partners is prorata based on their interest in the business.

    Facts:
    Plaintiff Dietrich was employed by defendants Freeman, and
    Whitcomb as owners and operators of Manila Steam Laundry
    (Whitcomb obtained his interest in the business from Pierce
    who sold his interests to him). He filed the action to collect
    from defendants the balance due to him for the services he
    performed.
    The trial court held Freeman and Whitcomb jointly and
    severally liable to Dietrich.
    Whitcomb appealed the decision insisting that he should not
    be held jointly and severally liable with Freeman. (Note:
    Freeman was the managing partner of the laundry and
    Whitcomb barely had a hand on the operations of the
    business).
    To avoid liability it appears that the theory of Whitcomb here
    is two layered. First, that the partnership was a commercial
    partnership. Second that it is a partnership of cuentas en
    participacion.
    Issue:
    WON Whitcomb is liable to Freeman.YES
    What is the nature of liability? Pro rata based on his interest in
    the business.

    Ratio:
    In determining the liability of Freeman, the Court first
    identified the nature of the business.
    Art 17 and 119 of the Code of Commerce then applicable,
    provide the requirements for the constitution of a commercial
    partnership (i.e. recording of the business agreements in the
    commercial registry.) The requirements were not complied
    with. The Court therefore held that no formal partnership was
    entered into between Freeman and Whitcomb. As such, the
    Civil Code and not the Code of Commerce must govern in
    determining the liability of the partners.
    Insisting that he is not liable, Whitcomb posits that the
    association was one of cuentas en participation. A partnership
    of cuentas en participacion is constituted in such a manner that
    its existence was only known to those who had an interest in
    the same, there being no mutual agreement between the
    partners, and without a corporate name indicating to the public
    in some way that there were other people besides the one who
    ostensibly managed and conducted the business. under the
    provisions of article 242 of the Code of Commerce, those who
    contract with the person in whose name the business of such a
    partnership was conducted shall have only the right of action
    against such person and not against other persons interested
    However, a partnership of cuentas en participacion does not
    have a corporate name. Here, the business is known as Manila
    Steam Laundry and Dietrich was employed by Manila steam
    Laundry and not Freeman alone.
    Since the artners were doing business under this name, and
    since it is not a commercial partnership, Articles 1698 and
    1137 of the Civil Code should govern and the partners are not
    liable individually for the entire amount due the plaintiff. The
    liability is pro rata and in this case the appellant is responsible
    to the plaintiff for only one-half of the debt.
    DISPOSITIVE:
    Judgment modified. Whitcomb liable only to half the balance
    due plaintiff.

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