ANTONIO C. GOQUIOLAY, ET AL., plaintiffs-appellants, vs.WASHINGTON Z. SYCIP, ET AL., defendants-appellees.

G.R. No. L-11840, December 10, 1963

FACTS:

In 1949 Kong Chai Pin, widow of the deceased managing partner Tan Sin An in her dual capacity as Administratrix of the husband’s estate and as partner in lieu of her husband, sold the the lands owned by the partnerships Goquilay and Tan Sin An, in favor of the buyers Washington Sycip and Betty Lee. The sale was not revoked by Goquilay. The trial court upheld the sale. To this decision, appellant filed a motion for reconsideration.

Appellant Goquiolay, in his motion for reconsideration, insist that, contrary to our holding, Kong Chai Pin, widow of the deceased partner Tan Sin An, never became more than a limited partner, incapacitated by law to manage the affairs of partnership. that the testimony of her witness Young and Lim belies that she took over the administration of the partnership property; and that, in any event, the sale should be set aside because it was executed with the intent to defraud appellant of his share in the properties sold.

ISSUE:

Whether or not the sale made by the widow valid?

HELD:

YES.

It is argued that the authority given by Goquiolay to the widow Kong Chai Pin was only to manage the property, and that it did not include the power to alienate, citing Article 1713 of the Civil Code of 1889. What this argument overlooks is that the widow was not a mere agent, because she had become a partner upon her husband's death, as expressly provided by the articles of copartnership. Even more, granting that by succession to her husband, Tan Sin An, the widow only became a limited partner, Goquiolay's authorization to manage the partnership property was proof that he considered and recognized her as general partner. The reason is plain: Under the law appellant could not empower the widow, if she were only a limited partner, to administer the properties of the firm, even as a mere agent:

Limited partners may not perform any act of administration with respect to the interests of the copartnership, not even in the capacity of agents of the managing partners.

By seeking authority to manage partnership property, Tan Sin An's widow showed that she desired to be considered a general partner. By authorizing the widow to manage partnership property (which a limited partner could not be authorized to do), Goquiolay recognized her as such partner, and is now in estoppel to deny her position as a general partner, with authority to administer and alienate partnership property.

It must never be overlooked that this case involved the rights acquired by strangers, and does not deal with the rights existing between partners Goquiolay and the widow of Tan Sin An. The issues between the partners inter se were expressly reserved in our main decision. Now, in determining what kind of partner the widow of partner Tan Sin An Had elected to become, strangers had to be guided by her conduct and actuations and those of appellant Goquiolay. Knowing that by law a limited partner is barred from managing the partnership business or property, third parties (like the purchasers) who found the widow possessing and managing the firm property with the acquiescence (or at least without apparent opposition) of the surviving partners were perfectly justified in assuming that she had become a general partner, and, therefore, in negotiating with her as such a partner, having authority to act for, and in behalf of the firm.

Separate Opinions

BAUTISTA ANGELO, J., dissenting: