Facts:

Under the business name "Isabela Sawmill," Garibay, Saldejeno, and Tubungbanua
entered into a Contract of Partnership.
Saldejeno withdrew, but the other partners didn't dissolve the partnership. Instead, they
carried on business under the same name and came to an understanding that the
withdrawing partner would not be responsible for any of the partnership's debts to
creditors or other parties. Saldejeno's exit from the partnership was not reported in the
newspaper.
"Assignment of Rights with Chattel Mortgage" is the name of the chattel mortgage that
Garibay and Tubungbanua created on the partnership's assets to guarantee the
fulfillment of their commitments to Saldejeno.
Saldejeno launched a civil complaint after not being paid. There was a public auction
arranged to carry out the ruling. Saldajeno received a Certificate of Sale. Then, the
latter sold Pan Oriental Lumber Company the trucks, tractors, machinery, and office
supplies.

Issue:
The partnership's assets, which were mortgaged to WON the Saldajeno and which she
acquired at the public auction, are subject to her liability to the plaintiffs.

Held:
The partnership does not end with dissolution; rather, it lasts until the company is closed
down. It doesn't seem like Saldajeno's departure from the partnership was reported in
the media. The Apellees and the general public had a right to anticipate that any credit
provided to the surviving partners conducting business under the partnership's name
may be used to hold those partners accountable.
Saldajeno was nonetheless liable to the partnership's creditors despite the chattel
mortgage being legally foreclosed in her favor. Saldajeno's actions can be assumed to
have been in good faith, and the Apellees' decision to offer credit to the partnership was
similarly made in good faith. If one of the two innocent parties must suffer, then that
party must also suffer, and the one who inflicted the harm must also incur the
consequences.