G.R. No. L-6252 - Dietrich vs. Freeman

George O. Dietrich (plaintiff/appellee) brought an action to recover a balance due for services rendered.
The defendants were O.K. Freeman, James L. Pierce, and Burton Whitcomb, owners and operators of the Manila Steam Laundry.
The original complaint was directed against Freeman, Pierce, and Whitcomb, but the plea against Pierce was dismissed; only Burton Whitcomb appealed the trial verdict.

When the plaintiff began employment on January 9, 1907, the laundry was owned and managed jointly by Freeman and Pierce.
On January 18, 1907, Pierce transferred all of his rights, interests, and title to Whitcomb.
Subsequently, Whitcomb and Freeman became the operators of the laundry while the plaintiff continued his service.

The plaintiff rendered services between January 9, 1907, and December 31, 1908, for which he claimed compensation.
The trial court found that the plaintiff was owed a balance amounting to P752.
Judgment was rendered in favor of the plaintiff for P752, with interest computed at 6% per annum from August 27, 1909, along with costs of the cause.
In his appeal, Whitcomb contended that he should not be held jointly and severally liable for the entire sum, especially since he never directly managed or negotiated with the plaintiff.

Although an agreement existed regarding the operation of the laundry, there was no formal partnership agreement compliant with Articles 17 and 119 of the Code of Commerce.
The evidence established that while the public transacted with the Manila Steam Laundry as an entity, individual dealings with partners were not evidenced, particularly regarding Whitcomb’s direct involvement.
Pierce, after transferring his interest, continued to manage certain aspects by acting under Whitcomb’s authority, thereby complicating the direct link between Whitcomb and the plaintiff’s contract.

Whether the trial court erred in holding both Freeman and Whitcomb jointly and severally liable for the entire sum due to the plaintiff.
Whether it was appropriate to assign full responsibility to Whitcomb when he neither negotiated directly with the plaintiff nor personally knew him.

Whether the partnership between Freeman and Whitcomb should be governed by the provisions of the Code of Commerce or by the Civil Code.
Whether the failure to comply with mandatory formalities under Articles 17 and 119 of the Code of Commerce affects the determination of liability in this case.
The issue of whether a distinction must be made between a commercial partnership and a non-commercial or accidental partnership when assessing liability.