G.R. No. 1875. September 09, 1905

This action was brought by the plaintiff on the 4th of March, 1902,
upon a contract made between the parties in December, 1900, and the
question is, Who was the real defendant in the case? Was it the
partnership of Donaldson Sim & Co., or was it James C. Donaldson
Sim, an individual? In the complaint in the case the defendant is
designated as Donaldson Sim & Co., and it is alleged., in the
complaint that the defendant is a juridical person and a collective
partnership duly organized in accordance with the provisions of the
Code of Commerce, and duly inscribed in the mercantile registry of the
city of Manila.

When the summons was served upon the defendant it failed to answer,
and a judgment by default was entered against it. Upon the motion of
the defendant this judgment was vacated, and the defendant allowed to
answer. Instead of answering, the defendant presented a demurrer to the
complaint, which was sustained by the court below, The plaintiff
appealed from the resulting judgment to this court which reversed it.
(Wahl, Jr., et. al., partners, etc., vs.. Donaldson Sim & Co.,^[1]
1 Off. Gaz., 441.) The case was remanded to the court below, and was
received in the clerk’s office thereof on the 1st of June, 1903. The
defendant again failed to answer, and on the 30th of July the plaintiff
moved for judgment by default. The defendant appeared and asked
permission to answer. A hearing was had upon both of these motions on
the 6th day of August, and the application of defendant for leave to
answer was denied, and the application of the plaintiff for judgment by
default was granted and the 8th day of August was assigned for the
taking of evidence. On that day the defendant again appeared and
presented another motion, asking that the default be set aside, and it
be allowed to answer, and present a counterclaim. It accompanied this
motion with a copy of its proposed answer and a large amount of
documentary evidence in support of its proposed counterclaim. The
hearing of the motion was continued from time to time until the 25th
day of August, 1903, when the court made an order denying the
application of the defendant for leave to answer and present a
counterclaim, and assigned the 5th day of September for the taking of
evidence in support of the plaintiffs’ claim. On that day Mr. J. W.
Haussermann appeared as attorney for Rita Donaldson Sim, as the
administratrix of James C. Donaldson Sim, and stated that the latter
had died on the 28th day of August, 1903. Further hearing of the case
was postponed until the 2d day of October, 1903, when the
administratrix again appeared and presented a motion asking that the
case be dismissed on the ground that the only defendant in it was James
C. Donaldson Sim as an individual, and that his death had terminated
the proceeding, and it was the duty of the plaintiff to present his
claim before the commissioners appointed in his estate in accordance
with the provisions of section 686 of the Code of Civil Procedure.

It was stated in the motion that James C. Donaldson Sim and Henry
Edwards Higginbotham, on the 1st of October, 1897, entered into a
collective partnership for the period of one year, which was afterwards
extended to the 1st day of October, 1903; that in October, 1900,
Higginbotham retired from the company, and transferred all of his
interests therein to James C. Donaldson Sim, and that after that day
Donaldson Sim was the sole owner of all of the property of the company,
and since that time he had been carrying on business under the
fictitious name of Donaldson Sim & Co. This motion or statement was
not sworn to by anyone, and no proof whatever was offered to show that
the statements made therein were true, and they can not, therefore, be
taken as facts in the case. This motion was denied by the court on the
9th of October, 1903, and the 15th day of October was assigned for the
receiving of evidence and proof of damages, and on the last-named day
the court below entered judgment against the defend- and for the sum of
19,554.13 pesos. From this judgment Rita Donaldson Sim has appealed.

The facts stated in the motion of Rita Donaldson Sim not having been
proved, there is no evidence in the case to show that the defendant was
not such a partnership as is stated in the complaint. On the contrary,
the whole record shows that Donaldson Sim himself, and his lawyers,
always considered that the defendant was a partnership.

It will have been noticed that the contract between the plaintiff
and the defendant was made in December, 1900, after the alleged
dissolution of the partnership. Notwithstanding this, the attorneys for
the defendant who made the first motion in August, 1903, for leave to
answer, refer to the defendant as the defendant partnership. Donaldson
Sim, in his affidavit which accompanied one of the motions, stated that
he was the principal member of the partnership of Donaldson Sim &
Co. The proposed answer which Donaldson Sim caused to be presented in
connection with the second application made in August for leave to
answer, contains the following clause:

“Que la demandada es actualmente, y lo ha sido en todas las fechas
aqui mas adelante mencionadas una sociedad colectiva, debidamente
organizada y en existencia bajo y en virtud de las leyes de las Islas
Filipinas, y debidamente registrada para dedicarse el comercio en el
Registro Mercantil de la ciudad de Manila, Islas Filipinas.”

We hold that the record shows that the defendant in this case was a
collective partnership, organized under the provisions of the Code of
Commerce, and was therefore a juridical person, under article 116 of
the Code of Commerce and under article 35 of the Civil Code. According
to the latter article it had a personality distinct from that of each
one of the partners. To such persons section 110 of the Code of Civil
Procedure has no application; the death of Donaldson Sim dissolved the
partnership but the liquidation of its affairs is by law (art. 229 of
the Code of Commerce) intrusted, not to the executors of the deceased
partner, but to the surviving partners or to liquidators appointed by
them. This may be inferred also from the provisions of sections 664 and
665 of the Code of Civil Procedure.

Appellant claims also that the court below erred in refusing to set
aside the default and allowing the answer to be made. There is nothing
in the case to show that the court committed such error. The defendant
had already been once in default, and had been allowed to answer,
notwithstanding its default.

It is claimed by the appellee that Rita Donaldson Sim, as
administratrix, had no standing in the court below to take an appeal.
We have not considered this question, but without deciding it have
assumed that she had such right.

For the reasons above stated the judgment of the court below is
affirmed, with the costs of this instance against the appellant. After
the expiration of twenty days judgment will be entered in conformity
herewith, and the cause will be returned to the lower court for
execution.

Arellano, C. J., Torres, Mapa, Johnson, and Carson, JJ., concur.

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^[1] 2 Phil. Rep., 301.