SANTIAGO SYJUCO, INC.

VS CASTRO
Facts
           The private respondents, Eugenio Lim, et al., borrowed from petitioner Santiago Syjuco, Inc., the sum of
P800,000.00. The loan was given on the security of a first mortgage on property registered in the names of
said borrowers as owners in common. Thereafter, additional loans on the same security were obtained by the
private respondents from Syjuco, so that the aggregate of the loans stood at P2,460,000.00, and the security
had been augmented by other property. The private respondents failed to pay it despite demands therefore;
that Syjuco consequently caused extra-judicial foreclosure of the mortgage. One of the complaints filed by the
private respondents was filed not in their individual names, but in the name of a partnership of which they
themselves were the only partners: "Heirs of Hugo Lim." The complaint advocated the theory that the
mortgage which they, together with their mother, had individually constituted over lands standing in their
names in the Property Registry as owners pro indiviso, in fact no longer belonged to them at that time, having
been earlier deeded over by them to the partnership, "Heirs of Hugo Lim," hence, said mortgage was void
because executed by them without authority from the partnership. Syjuco filed a petition for certiorari
praying that the default judgment rendered against it by the trial court Judge Castro be annulled on the
grounds of estoppel, res judicata, and Article 1819 of the Civil Code.

Issue
  Whether or not the private respondents are estopped to avoid the aforementioned mortgage.

Held
Yes. The Supreme Court ruled that the respondent partnership was inescapably chargeable with
knowledge of the mortgage executed by all the partners thereof, its silence and failure to impugn said
mortgage within a reasonable time, let alone a space of more than 17 years, brought into play the doctrine of
estoppel to preclude any attempt to avoid the mortgage as allegedly unauthorized. Equally or even more
preclusive of the respondent partnership’s claim to the mortgaged property is the last paragraph of Art. 1819
of the Civil Code, which contemplates a situation similar to the case at bar.  It states that ‘where the title to
real property is in the names of all the partners, a conveyance executed by the entire partners pass all their
rights in such property. Consequently, those members' acts, declarations and omissions cannot be deemed to
be simply the individual acts of said members, but in fact and in law, those of the partnership. Finally, the
Supreme Court emphasizes that the right of the private respondents to assert the existence of the partnership
could have been stressed at the time they instituted their first action, considering that the actions involved
property supposedly belonging to it, and therefore, the partnership was the real party in interest. What was
done by them was to split their cause of action in violation of the well-known rule that only one suit may be
instituted for a single cause of action. 
 G.R. No. 144214             July 14, 2003
LUZVIMINDA J. VILLAREAL, DIOGENES VILLAREAL and CARMELITO JOSE, petitioners,
vs.
DONALDO EFREN C. RAMIREZ and Spouses CESAR G. RAMIREZ JR. and CARMELITA C.
RAMIREZ, respondents.

A share in a partnership can be returned only after the completion of the latter's dissolution, liquidation and
winding up of the business.

FACTS:
Luzviminda J. Villareal, Carmelito Jose and Jesus Jose formed a partnership with a capital of P750,000
for the operation of a restaurant and catering business under the name "Aquarius Food House and Catering
Services."5 Villareal was appointed general manager and Carmelito Jose, operations manager. Respondent
Donaldo Efren C. Ramirez joined later as a partner in the business and his capital contribution of P250,000
was paid by his parents, Respondents Cesar and Carmelita Ramirez.After Jesus Jose withdrew from the
partnership, his capital contribution of P250,000 was refunded to him in cash by agreement of the partners.
In the same month, without prior knowledge of respondents, petitioners closed down the restaurant,
allegedly because of increased rental. The restaurant furniture and equipment were deposited in the
respondents' house for storage. Later, respondent spouses wrote petitioners, saying that they were no longer
interested in continuing their partnership as well as informing petitioners of the deterioration of the
restaurant furniture and equipment stored in their house. She also reiterated the request for the return of
their one-third share in the equity of the partnership. The repeated oral and written requests were, however,
left unheeded, hence, respondents subsequently filed a Complaint for the collection of a sum of money from
petitioners.

Issues
Whether petitioners are liable to respondents for the latter's share in the partnership.

Ruling
No. Both courts found that a partnership had indeed existed, and that it was dissolved on March 1,
1987. Respondents have no right to demand from petitioners the return of their equity share. Since the
capital was contributed to the partnership, not to petitioners, it is the partnership that must refund the equity
of the retiring partners. Since it is the partnership, as a separate and distinct entity, that must refund the
shares of the partners, the amount to be refunded is necessarily limited to its total resources. In other words,
it can only pay out what it has in its coffers, which consists of all its assets. However, before the partners can
be paid their shares, the creditors of the partnership must first be compensated. 25 After all the creditors have
been paid, whatever is left of the partnership assets becomes available for the payment of the partners'
shares. Evidently, in the present case, the exact amount of refund equivalent to respondents' one-third share
in the partnership cannot be determined until all the partnership assets will have been liquidated — in other
words, sold and converted to cash — and all partnership creditors, if any, paid.