MAURO LOZANA vs.

SERAFIN DEPAKAKIBO

G.R. No. L-13680 April 27, 1960

Mauro Lozana entered into a partnership with Serafin Depakakibo for the
purpose of operating, distributing and maintaining of electric lights and
power in the Municipality of Dumangas, Iloilo under the franchise issued by
Piadosa Buenaflor. Lozana contributed in the partnership an amount of
18,000 pesos which is 60% of the capital and the remaing 40% is to be
shouldered by Depakakibo. However, the franchise in favor of
Buenaflor was cancelled and Lozana thereafter, without liquidation,
sold his contribution to the partnership, a Generator Buda to one
Decolongon. On the other hand, Depakakibo also sold his contribution to
the partnership, one Crossly Diesel Engine to Spouses Jimenea and
Harder. Lozana brought an action against Depakakibo alleging him that he
wrongfully detained the Generator Buda and wooden posts to which
Lozana is entitled to the possession of it. Lozana prayed for the delivery of
the said items back to him. Court of First Instance ruled in favor of Lozana.
Depakakibo appealed the decision to the Supreme Court.

Issue:

1. Whether or not the partnership is void because it lacked the approval

of the Public Service Commission.

2. Whether or not the disposal of the contribution of the parties is allowed.

Ruling:

1. The partnership is valid even in the absence of the approval of the Public
Service Commission. The absence of the previous approval of the Public
Service Commission does not, per se, make the contract of partnership
null and void from the beginning and render the partnership entered
into by the parties for purpose void and non-existent.

2. "Properties of the partnership, the same could not be disposed of by the

party contributing the same without the consent or approval of the
partnership or of the other partner. (Clemente vs. Galvan, 67 Phil., 565). It
is evident that Lozano contributed to the partnership an amount of 18,000
pesos and there has been no liquidation prior to the sale of the Buda Diesel
Engine and 70 posts. It should be considered that the Buda Diesel Engine
contributed by Lozana had become property of the partnership