by Gena Terre

COMPAÑIA AGRICOLA DE ULTRAMAR v. ANACLETO REYES ET AL., GR No. 1184, 1904-04-22

Facts:

the representative of the Compañia Agricola de Ultramar, a partnership legally organized in Madrid, Spain, domiciled in the city of Manila, presented a complaint in the justice's court of the town of Quingua,... Province of Bulacan, against Anacleto Reyes and others... that the defendants were tenants of the estate called Tabang, San Marcos, and Dampol, the property of the plaintiff company... without having paid the rent for the years 1899,1900, and 1901, notwithstanding the fact that said payment had been demanded several times at the end of each year.

the plaintiff company prayed... ordering them to vacate the lands occupied by them and to restore the possession thereof to the plaintiff... the justice of the peace,... a... commercial partnership, and subject to the provisions of the Code of Commerce, and had not registered in the commercial registry, denied the petition of the plaintiff... the Court of First Instance of Bulacan... rendered... judgment confirming the decision of the justice's court of Quingua, and declared the Compañia Agricola de Ultramar, a commercial partnership, and therefore that its registry in the commercial register was necessary in order to appear in an action... the plaintiff company, by petition, prayed that the decision before mentioned should be annulled

The judge... declared that the Compañia Agricola de Ultramar, was a civil partnership, to which are applicable the provisions of the Code of Commerce in conformity with article 1670 of the Civil Code, and that said partnership should be registered in the... commercial registry

The organizers of the Compañia Agricola de Ultramar, stated in the articles of incorporation that by the same they organized a special civil corporation for the purposes and ends expressed therein.

Issues:

the principal object is to obtain a judicial declaration that the plaintiff herein is a civil partnership,... and is not therefore under the obligation of registering in the commercial registry in order to have juridical personality with the power to appear in an action against the defendants.

Ruling:

in this present cause there is no evidence showing the character of the business of the plaintiff save... the articles of its association. We must therefore decide whether this plaintiff was a mercantile or a civil corporation by the purposes declared in its articles of association, and the law governing in such cases.

Mercantile associations, purely, are governed by the mercantile code. Civil associations are governed by the Civil Code.

Primarily we must determine whether an association is mercantile or civil simply by the form of its organization.

The Commercial Code

Article 116 defines a commercial association and provides that

"Articles of association by which two or more persons obligate themselves to place in a common fund any property, industry, or any of these things, in order to obtain profit, shall be commercial, no matter what its nature may be, provided it has been established in accordance... with the provisions of this code.

"After a commercial association has been established, it shall have the right to operate as a juristic person in all its acts and contracts."

Article 1665 defines a partnership as follows:

"Partnership is a contract by which two or more persons bind themselves to contribute money, property, or industry to a common fund, with the intention of dividing the profits among themselves.'

Article 1670 provides that civil partnerships, on account of the; objects to which they are devoted, may adopt all the forms recognized >y the Commercial Code. In such cases its (Commercial Code) provisions shall be applicable in so far as they do not conflict with the... provisions of this code.

It will be seen from this provision that whether or not partnerships shall adopt the forms provided for by the Civil or Commercial Codes is left entirely to their discretion. And furthermore, that such civil partnerships shall only be governed by the forms and provisions of... the Commercial Code when they expressly adopt them, and then only in so far as they (rules of the Commercial Code) do not conflict with the provisions of the Civil Code. In this provision the legislature expressly indicates that there may exist two classes, of commercial... associations, depending not upon the business in which they are engaged but upon the particular form adopted in their organization. The definition of the partnership found in article 1665 clearly includes associations organized for the purpose, of gain growing out of commercial... transactions.

If it is held that an association which adopts the. form for its organization provided for by the Civil Code is controlled by the rules requiring registration under the Commercial Code, then by which code shall the courts be governed in applying the rules of the liability of... their members and for the dissolution of the same?

It will be seen from these provisions of the codes that the Civil Code has expressly provided for the existence of commercial associations, giving them juristic personality and certain rights and privileges. In these provisions no reference is made to the provisions of the

Commercial Code. It is contended that notwithstanding this fact, such associations are nevertheless governed by the provisions of the latter code.

It is our opinion that associations organized under the different codes are governed by the provisions of the respective codes.

From the articles of association it will be seen that the plaintiff company was organized expressly under the provisions of the Civil Code... we are justified in reaching the following conclusions:

First. That the plaintiff company had statutory authority to organize under the Civil Code for the purposes indicated in its articles of association.

Second. That it did effect its organization under the Civil Code in force in these Islands.

Fourth. That the plaintiff company, having complied with the forms required for the organization of associations of its class under the Civil Code, is a juristic person recognized by law, and has capacity to maintain the present action

Principles: