G.R. No. 39 : May 19, 1903
TUASON & SAN PEDRO, plaintiffs-appellees, vs. GAVINA ZAMORA & SONS, defendants-appellants.

FACTS:
Don Mariano Tuason and Don Manuel Garcia San Pedro were partners in a mercantile partnership en comandita with Luis Vives under the firm name “Luis Vives & Co.” Upon the death of Luis Vives, the partnership was dissolved and subsequently reorganized on December 31, 1898, under the name “Tuason & San Pedro,” composed solely of the surviving partners. This new firm assumed the business of the former partnership, with liability made retroactive to July 11, 1897. In February 1898, Don Mariano Tuason, in his own name and without indicating he was acting for the firm, entered into a contract with Don Juan Feliciano for the construction of a house. Later, in a protest dated June 23, 1898, Don Manuel San Pedro acted on behalf of the firm “Tuason & San Pedro” regarding the delivery of the house, stating that the managing partner, Don Mariano Tuason, had made the contract. On August 25, 1900, the partnership “Tuason & San Pedro” filed an action to recover the contract price for the constructed house. The defendants contested the partnership’s capacity to sue upon a contract entered into by a partner in his individual name.

ISSUE:
Whether a partnership can maintain an action in its own name to enforce a contract entered into by one of its partners in his own name, thereby binding the third party who contracted with that partner.

RULING:
Yes. The Supreme Court held that the partnership “Tuason & San Pedro” could properly bring the action. The Court found that the partnership claimed ownership of the credit, was in possession of the evidentiary documents, and was represented by an attorney holding a power of attorney executed by Tuason as managing partner. The action was deemed solidary, meaning the result would be the same whether brought by the partnership or by Tuason individually. The obligation was constituted in favor of the creditor, and under Article 1162 of the Civil Code, payment should be made to the person in whose favor the obligation is constituted or to an authorized person. The partnership, having assumed the business and responsibilities of the original contracting party, stood as the actual and sole creditor. Although Tuason contracted in his own name, he did not use his private funds, and the contract was communicated to and assumed by the partnership, making the firm responsible under Article 134 of the Code of Commerce. The partnership’s liability encompassed the personal liability of the partner. Therefore, payment to the partnership under these circumstances was legal. The appealed judgment was affirmed with a modification to one conclusion of law, clarifying that the defendants’ obligation to pay arose because the house burned after the work was completed and after the defendants were already in default for failing to receive it. Costs were adjudged against the appellants.