G.R. No. L-4102
JOSE CARDELL, plaintiff-appellee, vs. RAMON MAÑERU, ET AL., defendants-appellants.
October 26, 1909

FACTS:
On June 25, 1906, Jose Cardell (plaintiff) sued Ramon Mañeru and others for breach of a three-year rent contract for a house, effective September 1, 1901. The contract was entered into by Ramon Mañeru as the legal representative of “Ayesa y Compañía,” a sociedad colectiva (general partnership) composed of Benjamin Ayesa, Luis Beliso (appellant), and Ramon Mañeru. The contract stipulated a rent of P500 per month, plus taxes, water, and electricity.

The plaintiff alleged that Ayesa y Compañía occupied the property until January 31, 1906, then vacated it and failed to pay rent, taxes, and water thereafter.

Luis Beliso, one of the defendants and the appellant in this case, presented a special defense:
1. Ayesa y Compañía was dissolved on July 26, 1904.
2. Subsequently, “Mañeru y Beliso” was established, and later reorganized into “El Aguila Real,” a joint stock company (sociedad anónima), which continued to operate the cigar factory and occupy the premises.
3. Beliso sold his interest in “El Aguila Real” (the joint stock company) on January 1, 1906.
4. The plaintiff was aware of these changes.
5. The rent was mutually reduced to P400 per month.

The lower court ruled against Ramon Mañeru, Benjamin Ayesa, and Luis Beliso for P1,371.71. Luis Beliso appealed, arguing, among others, that Ayesa y Compañía was no longer responsible, that the subsequent entities were the tenants, and that he was no longer bound. The court found that the plaintiff received rent from the new entities for several months and did not object when the property was vacated on January 31, 1906, after 30 days’ notice. The rent for January 1906 was paid, but taxes and water were not. The reduction of rent to P400 was temporary and conditional, and there was no proof the condition for reverting to P500 (improvement of business) was met.

ISSUE:
1. Does the dissolution of a sociedad colectiva (Ayesa y Compañía) or the subsequent occupation and rent payments by new entities (Mañeru y Beliso, El Aguila Real) automatically release the original partnership from its lease obligations?
2. Did the plaintiff’s consent to the disoccupation of the property terminate the lease contract and release the original tenant from further liability?
3. Is Luis Beliso, as a member of the original sociedad colectiva, personally liable for its obligations under the lease contract?
4. What is the extent of the defendants’ remaining liability, if any?

RULING:
1. No. The dissolution of a partnership (sociedad colectiva) does not, by itself, absolve it from contractual obligations. The partnership continues to be responsible until expressly released from liability by the plaintiff. The mere fact that the plaintiff accepted rent from new entities, without proof of the plaintiff’s express knowledge and acceptance of a substituted tenant, does not release the original partnership.
2. Yes. The plaintiff’s voluntary consent to the disoccupation of the property on January 31, 1906, without insisting upon the fulfillment of the contract, was equivalent to giving his consent to the termination of the contract of rent and a relinquishment of any further rights he had under said contract from that date onward. Thus, Ayesa y Compañía was responsible for the payment of rent, taxes, and water up to and including January 31, 1906.
3. Yes. As a member of a sociedad colectiva (general partnership), Luis Beliso is personally responsible for the obligations of the company arising under the contract of rent, pursuant to Article 127 of the Code of Commerce.
4. The Court found that:
The rent was paid up to and including January 31, 1906.
The temporary reduction of rent to P400 per month was valid, as there was no evidence that the business conditions improved to warrant a return to P500. Therefore, the plaintiff cannot claim the P100 difference for the months it was reduced.
* The taxes for January 1906 (P62.32) and water for January 1906 (P19.04) were not paid.

Therefore, the judgment of the lower court was modified. The defendants (including Luis Beliso) are held liable to pay the plaintiff the sum of P81.36 for the unpaid taxes and water for January 1906.