NG YA v. SUGBU COMMERCIAL CO.

“The Poor Chinese Woman”

Court of Appeals, April 23, 1954

APPEAL from the judgment of CFI Cebu.

PENA, J.

Facts

* Ng Ya, a Chinese merchant based in Surigao, Surigao ordered from Sugbu Commercial (based in Cebu) 1,000 galvanized iron and aluminium sheets. It was agreed that the goods would be delivered in a week’s time, or on or before January 5, 1950. The amount of these goods is P5,400, which appears to have been paid by Ng Ya in full.

* However, the said goods were not delivered on the said date. And as Ng Ya kept on inquiring from Sugbu Commercial Co. about the status of the goods, the latter failed to deliver the same but kept promising that the said goods would be delivered at some future time.

* Sugbu Commercial later found out that Ng Ya is also in need of cigarettes that she will sell on resale in Surigao. The former then offered the latter cigarettes. Ng Ya was enticed by the offer and then entered into another contract of sale with Sugbu.

* She paid the amount of the cigarettes worth P4,000 with the help of Lana Bakery, with whom she had an understanding of splitting the profits she hoped to realize from the buy and sell of cigarettes.

* However, after a couple of months, in July, neither the cigarettes nor the galvanized iron and aluminium sheets reached Ng Ya. Consequently, Tan Chun Pia of Lana Bakery, from whom she obtained the P4,000 got angry with her and, for this reason, Ng Ya was forced to reimburse him of the amount.

* She then kept coming back to Sugbu to demand either the delivery of the goods she ordered or the payment of P 9,400. Unfortunately, every time she dropped there, poor Ng Ya was challenged by Shih Tiong Chu to file a complaint, and she had to seek the help of the Chinese Chamber of Commerce for the settlement of her claim.

* Ng Ya finally filed a complaint with the CFI Cebu.

* Sugbu Commercial then filed a 3rd-party complaint against Pow Sun Gee, alleging that the latter received the amounts of P5,400 and P4,000 in his capacity as manager of Sugbu Commercial when he was not authorized to issue official

receipts and that only his co-partner Shih Tiong Chu, who was most of the time in Manila, could do so. In this regard, Sugbu Commercial prayed that Pow Sun gee be ordered to indemnify Sugbu Commercial for whatever is adjudged against the latter in favor of plaintiff Ng Ya.

* TC decided in favor of Ng Ya and sentenced Sugbu to pay plaintiff the sum of P9,400 and condemning Pow Sun Gee to reimburse Sugbu Commercial Company.

* Sugbu Commercial appealed.

Issue

W/N Sugbu Commercial should not be held liable because Pow Sun Gee, as the one who received the payments and issued receipts to Ng Ya, is not authorized to do so.

Holding

No.

Ratio Decidendi

A manager of a partnership is presumed to have all the incidental powers to carry out the object of the partnership in the transaction of the business. There is of course an exception to the general rule: when the powers of a manager are specifically restricted, he could not exercise the powers expressly limited of him. But when the articles of association do not specify the powers of the manager, it is admitted on principle that a manager has the powers of a general agent, and even more. When the object of the company is determined, the manager has all the powers necessary for the attainment of such object.

Reasoning

Sugbu Commercial was not able to present articles of co-partnership that would show any limitation upon the powers of the manager – an indication that there was none. For this reason, we hold and declare that the minor power of issuing official receipt is included in the general powers of the manager.

Indeed, it would be quite queer that the manager of any juridical entity would not be authorized to issue official receipts for amounts delivered to that entity through said manager, and that only his co-partner Shih Tiong Chu, who was most of the time in Manila, could do so. This is not in keeping with the present day business dealings, for it is slow and inconvenient to those who transact with the company.

TEAGUE v. MARTIN

Supreme Court, September 12, 1929

Appeal from the judgment of CFI Manila.

JOHNS, J.

Facts

* Teague, Maddy and Martin formed a partnership between them for the operation of a fish business and similar other transactions.

* According to their “plans for formation of a limited partnership,” the partners have the following duties:

1) Maddy – navigation of motorship Barracuda; with a salary of P300 per month

2) Martin – charge of southern station, cold stores, commissary and procuring fish; with a salary of P300 per month.

3) Teague – selling fish in Manila, and purchasing supplies; with no salary until such time as the business is placed on a paying basis.

* Later, the business gone awry to the point that Teague asked for its dissolution from the trial court, which granted the same.

* The TC declared “that the barge Lapu-Lapu as well as a Ford truck and an adding machine belong exclusively to plaintiff Teague, but the said plaintiff must reimburse the partnership the sum P14,032.26 taken from its funds for the purchase and equipment of the said barge Lapu-Lapu; and also to return the sum of P1,230 and P228 used for buying the Ford truck and adding machine, respectively.”

* The plaintiff was not satisfied with the decision and appealed to the Supreme Court. He assigns the following errors, among others:

1) That the TC held that the Lapu-Lapu, the Ford truck and the adding machine do not form part of the assets of the partnership;

2) That the TC held that the plaintiff should reimburse the partnership for amounts it paid for the Lapu-Lapu, the Ford truck and the adding machine.

Issue

W/N the plaintiff should reimburse the partnership because the Lapu-Lapu, the Ford truck and the adding machine do not form part of the partnership.

Holding

Yes.

Ratio Decidendi

Where one party to a partnership, without any authority, takes and uses the money of the firm in the purchase of property which he acquired and had registered in his own name, in a suit for the dissolution of the partnership, he will be required to account to his partners for the money which he used in such purchase.

Reasoning

* It should be recalled that Teague’s duties are selling fish and purchasing supplies. The Lapu-Lapu, the Ford truck and the adding machine cannot be considered as supplies. Therefore, he did not have any authority in purchasing these.

* The same were purchased by him in his own name while using the funds of the partnership. Therefore, he is now stopped to claim or assert that they are not his property or that they are the property of the partnership.

Disposition

Affirmed.

SANTOS v. VILLANUEVA

Court of Appeals, September 7, 1953

Appeal from a judgment of CFI Manila

REYES, JBL, J.

Facts

* Gavino Santos, Luisito del Rosario, and Emiliano del Rosario formed a partnership for the operation of a tailoring shop under the business name, “Esquire.”

* Emiliano is the manager of the partnership.

* No dissolution nor liquidation of the partnership has been done until the filing of an action.

* Without the knowledge and consent of the other partners, Emiliano then sold the tailoring shop to defendant Cenon Villanueva and/or Corazon del Rosario. This

precipitated the filing of an action by Gavino Santos in CFI Manila for the rescission of the sale.

* The TC decided in favor of plaintiff and declared that the aforesaid sail null and void.

* Defendant appealed in this court, alleging that he was a purchaser in good faith.

Issue

W/N the sale of the tailoring shop was valid.

Holding

No. (SC also found out that Villanueva was a purchaser in bad faith).

Ratio Decidendi

Art. 143 of Code of Commerce: Partnership property cannot be validly sold or conveyed by anyone of the partners without the consent of all the other partners forming the partnership.

The vendor, not having the right nor the authority to dispose of the partnership business, or even his interest therein, without the consent of the other partners, the deed of sale is null and void and of no effect whatsoever.

Reasoning

The tailoring business is evidently a partnership property.