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    ABC Singson Vs Isabela Sawmill

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    zombie214
    A withdrew from a partnership called Isabela Sawmill composed of A, B, and C. B and C continued the business using partnership properties without publishing A's withdrawal. B and C took out a loan secured by partnership properties. X extended credit to the partnership. The Court held A was still liable to X for the partnership properties, even though A had been issued a certificate of sale over them, because X extended credit in good faith to the ongoing partnership business.

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    ABC Singson Vs Isabela Sawmill

    Uploaded by

    zombie214
    283 views1 page
    A withdrew from a partnership called Isabela Sawmill composed of A, B, and C. B and C continued the business using partnership properties without publishing A's withdrawal. B and C took out a loan secured by partnership properties. X extended credit to the partnership. The Court held A was still liable to X for the partnership properties, even though A had been issued a certificate of sale over them, because X extended credit in good faith to the ongoing partnership business.

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    ABC Singson vs Isabela Sawmill

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    A withdrew from a partnership called Isabela Sawmill composed of A, B, and C. B and C continued the business using partnership properties without publishing A's withdrawal. B and C took out a loan secured by partnership properties. X extended credit to the partnership. The Court held A was still liable to X for the partnership properties, even though A had been issued a certificate of sale over them, because X extended credit in good faith to the ongoing partnership business.

    Copyright:

    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    283 views1 page

    ABC Singson Vs Isabela Sawmill

    Uploaded by

    zombie214
    A withdrew from a partnership called Isabela Sawmill composed of A, B, and C. B and C continued the business using partnership properties without publishing A's withdrawal. B and C took out a loan secured by partnership properties. X extended credit to the partnership. The Court held A was still liable to X for the partnership properties, even though A had been issued a certificate of sale over them, because X extended credit in good faith to the ongoing partnership business.

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    © All Rights Reserved
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    Singson vs. Isabela Sawmill, 88 SCRA 623 [1979].

    ILLUSTRATIVE CASE: A third person, without notice, extended credit to a partnership


    after withdrawal of a partner and its continuation by the other partners.
    Facts: A withdrew from the partnership Isabela Sawmill composed of A, B, and C. It
    does not appear that the withdrawal of A from the partnership was published in the
    newspapers. There was no liquidation of the partnership assets. On the contrary, it was
    expressly stipulated in a memorandum- agreement among A, B, and C that the
    remaining partners, B and C, had constituted themselves as the partnership entity, the
    Isabela Sawmill. B and C continued the business, using the properties of the
    partnership. To secure the obligations of B and C to A, B and C executed a chattel
    mortgage over certain properties of the partnership in favor of A who was issued a certi
    cate of sale over the same as a result of the judicial foreclosure of the mortgage. In the
    meantime, X, etc. extended credit to the partnership.
    Issue: Is A liable to X, etc. for the properties of the partnership which were mortgaged to
    her and which she purchased at public auction?
    Held: Yes. The judicial foreclosure of the chattel mortgage executed in favor of A did
    not relieve her from liability to the creditors of the partnership. X, etc. and the public in
    general had a right to expect that whatever credit they extended to B and C doing the
    business in the name of the partnership could be enforced against the properties of the
    partnership. Although A acted in good faith, X, etc. also acted in good faith in extending
    credit to the rm. Where one of two innocent persons must suffer, the person who gave
    occasion for the damages to be caused must bear the consequences.

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