DELA CRUZ, EILEEN EIKA M.

3B

ARTICLE 1834 LIQUIDATION AND WINDING UP

G.R. No. L-27343 February 28, 1979

MANUEL G. SINGSONG, JOSE BELZUNCE, AGUSTIN E. TONSAY,
JOSE L. ESPINOS, BACOLOD SOUTHERN LUMBER YARD, and
OPPEN, ESTEBAN, INC., plaintiffs-appellees,
vs.
ISABELA SAWMILL, MARGARITA G. SALDAJENO and her husband
CECILIO SALDAJENO LEON GARIBAY, TIMOTEO TUBUNGBANUA,
and THE PROVINCIAL SHERIFF OF NEGROS OCCIDENTAL,
defendants, MARGARITA G. SALDAJENO and her husband
CECILIO SALDAJENO, defendants-appellants.

Facts:
In 1951, defendants entered into a contract of partnership under
the firm name Isabela Sawmill. In 1956 the plaintiff sold to the
partnership a motor truck and two tractors. The partnership was not able
to pay their whole balance even after demand was made. One of the
partners withdrew from the partnership but instead of terminating the
said partnership it was continued by the two remaining partners under
the same firm name.
Plaintiffs also seek the annulment of the assignment of right with
chattel mortgage entered into by the withdrawing partner and the
remaining partners.
The appellants contend that the chattel mortgage may no longer
be nullified because it had been judicially approved and said chattel
mortgage had been judicially foreclosed.

Issue: Whether the withdrawal of one of the partners dissolved the

partnership.

Ruling:
It does not appear that the withdrawal of the partner was not
published in the newspapers. The appellees and the public in general had
a right to expect that whatever, credit they extended to the remaining
partners could be enforced against the properties of the partnership.
The withdrawing partner cannot be relieved from her liability to
DELA CRUZ, EILEEN EIKA M.

3B

the creditor of the partnership due to her own fault by not insisting on
the liquidation of the partnership. Though she had acted in good faith,
the appellees also acted in good faith in extending credit to the
partnership.
Where one of two innocent persons must suffer, that person who
gave occasion for the damages to be caused must bear the consequences.
Technically, the partnership was dissolved by the withdrawal of
one of the partners. Through her acts of entering into a memorandum
with the remaining partners misled the creditors that they were doing
business with the partnership. Hence, from the order of the lower court
ordering the withdrawing partner to pay the plaintiffs, she is thus
entitled for reimbursement from the remaining partners.