G.R. No. L‑2718
December 4 1906

FACTS
1. On 6 July 1887 the heirs of the late Timotea Andrés organized the mixed copartnership “Guevara Hermanos,” contributing the real estate that formed the partnership’s capital (≈ ₱47,096).
2. The partnership agreement granted the manager authority to dispose of partnership property only with the advice and consent of the executor of Timotea Andrés’ estate.
3. The partnership was to last five years, and it was expressly provided that death of a partner would not dissolve it.
4. In June 1890 the partners resolved to liquidate the indebtedness of the business “La Industrial” to J.M. Tuason & Co. by (a) offering the estate’s real property to the creditor, or (b) selling it and applying proceeds to the debt.
5. On 3 July 1890 the partners appointed Laure Guevara as manager for the purpose of liquidation.
6. On 14 December 1891 Laure Guevara, as manager, executed a liquidation contract with Gonzalo Tuason (manager of J.M. Tuason & Co.) assigning all partnership real estate and the “La Industrial” establishment to the creditor as partial payment of a ₱54,055.66 debt; the balance was to be satisfied by sale proceeds.
7. The plaintiff, José Emeterio Guevara, contested the contract, arguing that (a) the manager acted without the executor’s consent, and (b) the partnership had ceased to exist (the term having begun on Timotea Andrés’ death) before the December 1891 assignment, thereby rendering the manager’s authority void.

ISSUE
Whether the liquidation contract dated 14 December 1891, executed by the manager Laure Guevara, is void because (1) it was made without the executor’s advice and consent required by the partnership agreement, and (2) the partnership had already expired under its five‑year term, leaving no valid manager to bind it.

RULING
The Court held that:

The partnership’s five‑year term had not yet terminated; the partnership remained in existence on 14 December 1891.
Even assuming the partnership had ceased, the manager’s authority to settle the debt and assign partnership assets persisted until the absolute disappearance of the capital, which occurred after the December 1891 liquidation (Art. 329, Code of Commerce, 1829).
* No substantive proof was presented that the manager acted without the executor’s required consent; the contract complied with the powers granted under clause 3 of the partnership agreement.

Consequently, no legal ground existed to annul the liquidation instrument. The Court affirmed the judgment of the lower court, ordering costs against the appellant and remanding for execution.