MAGDUSA VS. ALBARAN G.R. No. L-17526, June 30, 1962   TOPIC/DOCTRINE   FACTS Appeal from a decision of the Court of Appeals (G.R. No. 24248-R) reversing a judgment of the Court of First Instance of Bohol and ordering appellant Gregorio Magdusa to pay to appellees, by way of refund of their shares as partners, the following amounts: Gerundio Albaran, P8,979.10; Pascual Albaran, P5,394.78; Zosimo Albaran, P1,979.28; and Telesforo Bebero, P3,020.27; plus legal interests from the filing of the complaint, and costs. The Court of Appeals found that appellant and appellees, together with various other persons, had verbally formed a partnership  de facto , for the sale of general merchandise in Surigao, Surigao, to which appellant contributed P2,000 as capital, and the others contributed their labor, under the condition that out of the net profits of the business 25% would be added to the original capital, and the remaining 75% would be divided among the members in ...

ROJAS VS. MAGLANA, 192 SCRA 110, DECEMBER 10, 1990   TOPIC/DOCTRINE Withdrawing partner is liable for damages if the cause of withdrawal is not justified or no cause was given but in no case can he be compelled to be in the firm.   FACTS On January 14, 1955, Maglana and Rojas executed their Articles of Co-Partnership (Exhibit "A") called Eastcoast Development Enterprises (EDE) with only the two of them as partners. One of the purposes of the duly-registered partnership was to "apply or secure timber and/or minor forests products licenses and concessions over public and/or private forest lands and to operate, develop and promote such forests rights and concessions." During the period from January 14, 1955 to April 30, 1956, there was no operation of said partnership . Because of the difficulties encountered, Rojas and Maglana decided to avail of the services of Pahamotang as industrial partner. Later on, Maglana and Rojas shall purchase the interes...

EMNACE VS. COURT OF APPEALS, G.R. NO. 126334, NOVEMBER 23, 2001   TOPIC/DOCTRINE Prescription of the said right starts to run only upon the dissolution of the partnership when the final accounting is done.   FACTS Petitioner Emilio Emnace, Vicente Tabanao and Jacinto Divina-gracia were partners in a business concern known as Ma. Nelma Fishing Industry. Sometime in January of 1986, they decided to dissolve their partnership and executed an agreement of partition and distribution of the partnership properties among them, consequent to Jacinto Divinagracia’s withdrawal from the partnership. 1  Among the assets to be distributed were five (5) fishing boats, six (6) vehicles, two (2) parcels of land located at Sto. Niño and Talisay, Negros Occidental, and cash deposits in the local branches of the Bank of the Philippine Islands and Prudential Bank. Throughout the existence of the partnership, and even after Vicente Tabanao’s untimely demise in 1994, petitioner ...

BEARNEZA VS. DEQUILLA, 43 PHIL. 237, MARCH 24, 1992   TOPIC/DOCTRINE After the dissolution of a partnership by the death of one of its members, its legal status is that of a partnership in liquidation, and the only rights and interests transmitted to the legal successor or successors of the said deceased are those resulting in his favor from such liquidation.   FACTS In the year 1903, Balbino Dequilla, the herein defendant, and Perpetua Bearneza formed a partnership for the purpose of exploiting a fish pond situated in the barrio of Talisay, municipality of Barotac Nuevo, Province of Iloilo, Perpetua obligating herself to contribute to the payment of the expenses of the business, which obligation she made good, and both agreeing to divide the profits between themselves, which they had been doing until the death of the said Perpetua in the year 1912. The deceased left a will in one of the clauses of which she appointed Domingo Bearneza, the herein plaintiff, as her heir to succ...

BONNEVIE VS. HERNANDEZ, 95 PHIL. 175, MAY 31, 1954   TOPIC/DOCTRINE As a general rule, when a partner retires from the partnership, he is entitled to the payment of what may be due him after a liquidation. But no liquidation is necessary where there is already a settlement or an agreement as to what the retiring partner shall receive, and the latter was in fact reimbursed pursuant to the agreement.   FACTS Plaintiffs with other associates formed a syndicate or secret partnership for the purpose of acquiring the plants, franchises and other properties of the Manila Electric Co. — hereinafter called the Meralco. Using partnership funds, defendant was able to buy the Meralco properties. Although defendant was the one named vendee in the deed of sale, there is no question that the transaction was in penalty made for the partnership so that the latter assumed control of the business the day following the sale. About the latter half of the following month the member...

LICHAUCO VS. LICHAUCO, 33 PHIL. 350, JANUARY 31, 1916   TOPIC/DOCTRINE It would be absurd and unreasonable to hold that the partnership could never be dissolved and liquidated without the consent of two-thirds of its partners notwithstanding that it had lost all its capital, or had become bankrupt, or that the enterprise for which it had been organized had been concluded or utterly abandoned.   FACTS In October, 1901, a notarial instrument was executed in Manila, by the terms of which a partnership was duly organized for the purpose of carrying on a rice-cleaning business at Dagupan, and for the purchase and sale of "palay" and rice. The articles of association, which were not recorded in the mercantile registry, contain, among others, the following provisions: xxxx "3.The association cannot be dissolved except by the consent and agreement of two-thirds of its partners and in the event of the death of any of the latter, the heirs of the deceased, if the...

ORTEGA VS. COURT OF APPEALS, 245 SCRA 529   TOPIC/DOCTRINE A partnership that does not fix its term is a partnership at will. The birth and life of a partnership at will is predicated on the mutual desire and consent of the partners.   FACTS “On February 17, 1988, petitioner-appellant wrote the respon-dents-appellees a letter stating: “ ‘I am withdrawing and retiring from the firm of Bito, Misa and Lozada, effective at the end of this month.   “On 19 February 1988, petitioner-appellant wrote respondents-appellees another letter stating: “ ‘The partnership has ceased to be mutually satisfactory because of the working conditions of our employees including the assistant attorneys. All my efforts to ameliorate the below subsistence level of the pay scale of our employees have been thwarted by the other partners. Not only have they refused to give meaningful increases to the employees, even attorneys, are dressed down publicly in a loud voice in a manner ...

YU VS. NLRC, 224 SCRA 75, JUNE 30, 1993   TOPIC/DOCTRINE In  Singson, et al. v. Isabela Saw Mill, et al. ,   the Court held that under facts very similar to those in the case at bar, a withdrawing partner remains liable to a third party creditor of the old partnership.  The liability of the new partnership, upon the other hand, in the set of circumstances obtaining in the case at bar, is established in Article 1840 of the Civil Code . FACTS Petitioner Benjamin Yu was formerly the Assistant General Manager of the marble quarrying and export business operated by a registered partnership with the firm name of “Jade Mountain Products Company Limited” (“Jade Mountain”). The partnership was originally organized on 28 June 1984 with Lea Bendal and Rhodora Bendal as general partners and Chiu Shian Jeng, Chen Ho-Fu and Yu Chang, all citizens of the Republic of China (Taiwan), as limited partners. The partnership business consisted of exploiting a marble deposit found o...

GOQUIOLAY VS. SYCIP, 9 SCRA 663, DECEMBER 10, 1963   TOPIC/DOCTRINE A third person has the right to presume that a general partner dealing with partnership property has the requisite authority from his co-partners.   FACTS The matter now pending is the appellant’s motion for reconsideration of our main decision, wherein we have upheld the validity of the sale of the lands owned by the partnership Goquiolay & Tan Sin An, made in 1949 by the widow of the managing partner, Tan Sin An (executed in her dual capacity as Administratrix of the husband’s estate and as partner in lieu of the husband), in favor of buyers Washington Sycip and Betty Lee. Appellant Goquiolay, in his motion for reconsideration, insists that, contrary to our holding, Kong Chai Pin, widow of the deceased partner Tan Sin An, never became more than a limited partner, incapacitated by law to manage the affairs of the partnership; that the testimony of her witnesses Young and Lim beli...

JO CHUNG CANG V. PACIFIC COMMERCIAL CO., 45 PHIL 142, SEPTEMBER 6, 1923   TOPIC/DOCTRINE A limited partnership that does not comply with the registration requirements shall be treated as a general partnership in which all the members are liable for partnership debts.   FACTS Following the presentation of an application to be adjudged an insolvent by the "Sociedad Mercantil, Teck Seing & Co., Ltd.," the creditors, the Pacific Commercial Company, Piñol & Company, Riu Hermanos, and W. H. Anderson & Company, filed a motion in which the Court was prayed to enter an order: "(A) Declaring the individual partners as described in paragraph 5 parties to this proceeding; (B) to require each of said partners to file an inventory of his property in the manner required by section 51 of Act No. 1956; and (C) that each of said partners be adjudicated insolvent debtors in this proceeding." The trial judge first granted the motion, but, subsequently, on oppo...

PIONEER INSURANCE VS. COURT OF APPEALS, 175 SCRA 668, JULY 28, 1989   TOPIC/DOCTRINE Persons who attempt but fail to form a corporation and who carry on business under the corporate name occupy the position of partners inter se. Such a relation does not necessarily exist however for ordinarily persons cannot be made to assume the relation of partners as between themselves when their purpose is that no partnership shall exist.   FACTS In 1965, Jacob S. Lim (petitioner in  G.R. No. 84157 ) was engaged in the airline business as owner-operator of Southern Air Lines (SAL) a single proprietorship. On May 17, 1965, at Tokyo, Japan, Japan Domestic Airlines (JDA) and Lim entered into and executed a sales contract (Exhibit A) for the sale and purchase of two (2) DC-3A Type aircrafts and one (1) set of necessary spare parts for the total agreed price of US $109,000.00 to be paid in installments. On May 22, 1965, Pioneer Insurance and Surety Corporation (Pioneer, p...

COMPANIA MARITIMA VS. MUÑOZ, G.R. NO. L-3704, DECEMBER 12, 1907   TOPIC/DOCTRINE The stipulation that all the industrial partners and some of the capital partners would be exempted from liability in so far as third persons are concerned, is null and void. (Paras)   FACTS In 1905, Francisco Muñoz, Emilio Muñoz, and Rafael Naval formed an ordinary general mercantile partnership in accordance with the Code of Commerce. They named the partnership “Francisco Muñoz & Sons”. Francisco was the capitalist partner while the other two were industrial partners. In the articles of partnership, it was agreed upon by the three that for profits, Francisco shall have a 3/4th share while the other two would have 1/8th each. For losses, only Francisco shall bear it. Later, the partnership was sued by La Compañia Martitama for collection of sum of money amounting to P26,828.30. The partnership lost the case and was ordered to make said payment; that in case the partn...