Partnership of "Cuentas en Participaci ÓN. "-A Partnership Who Had An Interest in The Same, There Being No Mutual Agreement

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CORPORATION LAW WEEK 1

PARTNERSHIP OF "CUENTAS EN PARTICIPACIÓN."—A partnership


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, is exactly the accidental partnership
of cuentas en participación defined in article 239 of the Code of Commerce.

FRANK S. BOURNS, plaintiff and appellee, vs. D. M. CARMAN ET AL.,


defendants and appellants.

7 Phil 117 December 4, 1906

Nature of the case: APPEAL from a judgement of CFI of Manila

Ponente: Mapa, J.

FACTS: 

Frank S. Bourns, the plaintiff, seeks to recover the sum of $437.50


balance due on a contract for sawing of lumber for the lumber yard of Lo-
Chim-Lim. The contract relating to the said work was entered into by Lo-
Chim-Lim, acting as in his own name with Bourns. Lo-Chim-Lim personally
agreed to pay for the work himself. Bourns however brought the action
against Lo-Chim-Lim and co-defendants, jointly alleging that at the time the
contract was made, they were joint proprietors and operators of the
lumberyard and that they were the partners of Lo-Chim-Lim.

The CFI of Manila dismissed the action against D.M. Carman


and Fulgencio Tan-Tongco on the ground that they are not partners
og Lo-Chim-Lim and rendered judgemengt against other defendants.
Vicente Palanca and Go-Tauco moved for a nee trial and have brought the
case to this court by bill of exceptions.

Evidence of record shows the ff:


1. Lo-Chim-Lim had a lumber yard in Calle Lemery, City of Manila;
2. He was the manager of the same;
3. Ordered plaintiff to do work for him at his sawmill in Mnl;
4. Vicente Palanca was his partner and had interest therein;
5. Go-tauco received part of earnings;
6. Partnership formed by verbal agreement and not reduced in to
writing or recorded in public instrument;
7. Partnership had no corporate name

The plaintiff alleges in his complaint that the partnership engaged in


business under the name and style of LoChimLim only. On the other hand, it
does not appear that there was any mutual agreement between the parties,
and if there was, it has not been shown what that agreeement was.

Issue:

Whether appellants are partners of Lo-Chim-Lim and thus are liable to


Bourns

Held:

Under such circumstances, the Court finds nothing upon which to


consider the partnership as a partnership of cuentas en participacion. Those
who contracted with the person in whose name the business of a
partnership of cuentas en participación is conducted, shall have only the
right of action against such person and not against the other persons
interested, and the latter, on the other hand, shall have no right of action
against the third person who contracted with the manager unless such
manager formally transferred his right to them.

Plaintiff has no right to demand from appellants as LoChimLim was the


only one who contracted with him. Judgment appealed from is reversed
and appellants are absolved.

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