G.R. No. 3064

PARTIES:
Arthur W. Prautch and James H. Scholes, Plaintiffs-Appellees
vs.
Henry M. Jones, Defendant-Appellant

FACTS:
This case involves an action by Arthur W. Prautch and James H. Scholes to recover the unpaid balance of 1,453.47 pesos, Mexican currency, for lumber delivered to the defendant, Henry M. Jones. The lumber was sold by Prautch, Scholes and Company. The defendant contended that the partnership was not a juridical entity as it was unregistered, that there were other unjoined partners, and that the co-plaintiff Scholes had not authorized the suit. The defendant also denied receiving the full amount of lumber alleged by the plaintiffs, claiming a shortage from the contract price. The plaintiffs testified that they were the sole partners at the time of the contract, that Scholes later ratified the suit, and that the defendant accepted the lumber based on bills of lading totaling 77,153 board feet, with no mention of a shortage until this action was filed. The trial judge favored the plaintiff’s testimony.

ISSUE:
1. Whether the unregistered partnership, Prautch, Scholes and Company, could maintain an action in the names of its individual partners.
2. Whether the alleged lack of authorization from Co-plaintiff Scholes at the institution of the suit was a valid ground for reversal.
3. Whether the defendant accepted the lumber as delivered according to the bills of lading, thus being liable for the full contract price, despite alleging a shortage.

RULING:
The Supreme Court affirmed the lower court’s judgment.

1. The Court reiterated its established doctrine that while unregistered partnerships lack juridical personality and cannot sue in their firm name, their individual members may sue jointly. Persons dealing with such partnerships cannot deny their right to do so.
2. The Court held that any lack of formal authority from Scholes at the institution of the suit was cured by his subsequent ratification during the trial, which did not prejudice the defendant’s “real rights.”
3. The Court found that the defendant had accepted the lumber in accordance with the face of the bills of lading. This finding was based on the testimony of Prautch, which the trial judge found credible, and the lack of satisfactory evidence from the defendant to support his claim of a shortage. The court found it improbable that the defendant would not have raised the issue of a shortage during numerous prior interactions if it had truly existed. Therefore, the defendant was deemed bound for the payment of the full contract price.