ROGER V. NAVARRO vs. HON. JOSE L.
ESCOBIDO Issue: W/N the mortgage between Clemente and his nephew
FACTS: Respondent Karen T. Go filed two complaints before the RTC
for replevin and/or sum of money with damages against Navarro. In
these complaints, Karen Go prayed that the RTC issue writs of replevin
for the seizure of two (2) motor vehicles in Navarro’s possession. In his
Answers, Navarro alleged as a special affirmative defense that the two
complaints stated no cause of action, since Karen Go was not a party
to the Lease Agreements with Option to Purchase (collectively, the
lease agreements) — the actionable documents on which the
complaints were based. RTC dismissed the case but set aside the
dismissal on the presumption that Glenn Go’s (husband) leasing
business is a conjugal property and thus ordered Karen Go to file a
motion for the inclusion of Glenn Go as co-plaintiff as per Rule 4,
Section 3 of the Rules of Court. Navarro filed a petition for certiorari
with the CA. According to Navarro, a complaint which failed to state a
cause of action could not be converted into one with a cause of action
by mere amendment or supplemental pleading. CA denied petition.
ISSUE: Whether or not Karen Go is a real party in interest
HELD: YES. Karen Go is the registered owner of the business name
Kargo Enterprises, as the registered owner of Kargo Enterprises,
Karen Go is the party who will directly benefit from or be injured by a
judgment in this case. Thus, contrary to Navarro’s contention, Karen
Go is the real party-in-interest, and it is legally incorrect to say that her
Complaint does not state a cause of action because her name did not
appear in the Lease Agreement that her husband signed in behalf of
Kargo Enterprises.
Glenn and Karen Go are effectively co-owners of Kargo
Enterprises and the properties registered under this name; hence, both
have an equal right to seek possession of these properties. Therefore,
only one of the co-owners, namely the co-owner who filed the suit for
the recovery of the co-owned property, is an indispensable party
thereto. The other co-owners are not indispensable parties. They are
not even necessary parties, for a complete relief can be accorded in
the suit even without their participation, since the suit is presumed to
have been filed for the benefit of all co-owners.
We hold that since Glenn Go is not strictly an indispensable
party in the action to recover possession of the leased vehicles, he
only needs to be impleaded as a pro-forma party to the suit, based on
Section 4, Rule 4 of the Rules, which states:
Section 4.Spouses as parties. — Husband and wife shall sue or be
sued jointly, except as provided by law.
Even assuming that Glenn Go is an indispensable party to the action,
misjoinder or non-joinder of indispensable parties in a complaint is not
a ground for dismissal of action as per Rule 3, Section 11 of the Rules
of Court.
Clemente vs. Galvan
Facts:
 Plaintiff and defendant organized a civil partnership which
they named "Galvan y Compañia" to engage in the
manufacture and sale of paper and other stationery.
 Plaintiff ask for dissolution which the defendant confirm but
with a condition that having covered a deficit incurred by the
partnership amounting to P4,000 with his own money,
plaintiff reimburse him of one-half of said sum.
 Juan D. Mencarini, assigned as receiver and liquidator. Upon
acting on his duty, the court ordered him to deliver certain
machines which were then at Nos. 705-707 Ylaya Street.
 But before he could take actual possession of said
machines, upon the strong opposition of defendant, the
court, on motion of the latter, suspended the effects of its
order
 In the meantime the judgments rendered in cases Nos.
42794 and 43070 ordering Clemente to pay a sum of money.
 He mortgage the machines with his nephew, the intervenor
(plaintiff in the herein case.) For having expired the terms in
the mortgage the intervenor commenced case No. 49629 to
collect his mortgage credit.
(intervenor, plaintiff in the case) is valid?
Rule: No. The machines in contention originally belonged to the
defendant and from him were transferred to the partnership Galvan y
Compania. This being the case, said machines belong to the
partnership and not to him, and shall belong to it until partition is
effected according to the result thereof after the liquidation. Also,
Clemente did not have actual possession of the machines, he could
not in any manner mortgage them.
VILLAREAL V. RAMIREZ
Facts:
In 1984, Villareal, Carmelito Jose and Jesus Jose formed a
partnership with a capital of P750,000for the operation of a restaurant
and catering business. Respondent Ramirez joined as a partner in the
business with the capital contribution of P250,000. In 1987, Jesus Jose
withdrew from the partnership and within the same time, Villareal and
Carmelito Jose, petitioners closed the business without prior
knowledge of respondents In March 1987, respondents wrote a letter
to petitioners stating that they were no longer interested in continuing
the partnership and that they were accepting the latter’s offer to return
their capital contribution. This was left unheeded by the petitioners,
and by reason of which respondents filed a complaint in the RTC.RTC
ruled that the parties had voluntarily entered into a partnership, which
could be dissolved at any time, and this dissolution was showed by the
fact that petitioners stopped operating the restaurant. On appeal, CA
upheld RTC’s decision that the partnership was dissolved and it added
that respondents had no right to demand the return of their capital
contribution. However since petitioners did not give the proper
accounting for the liquidation of the partnership, the CA took it upon
itself to compute their liabilities and the amount that is proper to the
respondent. The computation of which was:(capital of the partnership –
outstanding obligation) / remaining partners =amount due to private
respondent
Issue: W/N petitioners are liable to respondents for the latter’s share in
the partnership?
Ruling:
No. Respondents have no right to demand from petitioner
the return of their equity share. As found by the court petitioners did not
personally hold its equity or assets. “The partnership has a juridical
personality separate and distinct from that of each of the partners.”
Since the capital was contributed to the partnership, not to petitioners,
it is the partnership that must refund the equity of the retiring partners.
However, before the partners can be paid their shares, the creditors of
the partnership must first be compensated. Therefore, the exact
amount of refund equivalent to respondents’ one-third share in the
partnership cannot be determined until all the partnership assets will
have been liquidated and all partnership creditors have been paid.
CA’s computation of the amount to be refunded to respondents as their
share was thus erroneous.
OSEFINA P. REALUBIT vs. PROSENCIO D. JASO and EDENG
JASO
G.R. No. 178782 September 21, 2011
FACTS
Petitioner Josefina Realubit entered into a Joint Venture
Agreement with Francis Eric Amaury Biondo, a French national, for the
operation of an ice manufacturing business. With Josefina as the
industrial partner and Biondo as the capitalist partner, the parties
agreed that they would each receive 40% of the net profit, with the
remaining 20% to be used for the payment of the ice making machine
which was purchased for the business. For and in consideration of the
sum of P500,000.00, however, Biondo subsequently executed a Deed
of Assignment transferring all his rights and interests in the business in
favor of respondent Eden Jaso, the wife of respondent Prosencio
Jaso. With Biondo’s eventual departure from the country, the Spouses
Jaso caused their lawyer to send Josefina a letter apprising her of their
acquisition of said Frenchmans share in the business and formally
demanding an accounting and inventory thereof as well as the
remittance of their portion of its profits.
Faulting Josefina with unjustified failure to heed their
demand, the Spouses Jaso commenced the instant suit for specific
performance, accounting, examination, audit and inventory of assets
and properties, dissolution of the joint venture, appointment of a
receiver and damages. The said complaint alleged that the Spouses
Realubit had no gainful occupation or business prior to their joint
venture with Biondo and that aside from appropriating for themselves
the income of the business, they have fraudulently concealed the funds
and assets thereof thru their relatives, associates or dummies. The
Spouses Realubit claimed that they have been engaged in the tube ice
trading business under a single proprietorship even before their
dealings with Biondo.
The RTC rendered its Decision discounting the existence of
sufficient evidence from which the income, assets and the supposed
dissolution of the joint venture can be adequately reckoned. Upon the
finding, however, that the Spouses Jaso had been nevertheless
subrogated to Biondos rights in the business in view of their valid
acquisition of the latters share as capitalist partner. On appeal before
the CA, the foregoing decision was set aside
upon the following findings that the Spouses Jaso validly acquired
Biondos share in the business which had been transferred to and
continued its operations and not dissolved as claimed by the Spouses
Realubit.
ISSUES
1. Whether there was a valid assignment or rights to the joint
venture
2. Whether the joint venture is a contract of partnership
3. Whether Jaso acquired the title of being a partner based on the
Deed of Assignment
RULING
1. Yes. As a public document, the Deed of Assignment Biondo
executed in favor of Eden not only enjoys a presumption of
regularitybut is also considered prima facie evidence of the facts
therein stated. A party assailing the authenticity and due execution of
a notarized document is, consequently, required to present evidence
that is clear, convincing and more than merely preponderant. In view of
the Spouses Realubits failure to discharge this onus, we find that both
the RTC and the CA correctly upheld the authenticity and validity of
said Deed of Assignment upon the combined strength of the above-
discussed disputable presumptions and the testimonies elicited from
Eden and Notary Public Rolando Diaz.
2. Yes. Generally understood to mean an organization formed for
some temporary purpose, a joint venture is likened to a particular
partnership or one which has for its object determinate things, their use
or fruits, or a specific undertaking, or the exercise of a profession or
vocation. The rule is settled that joint ventures are governed by the law
on partnerships which are, in turn, based on mutual agency
or delectus personae.
3. No. It is evident that the transfer by a partner of his partnership
interest does not make the assignee of such interest a partner of the
firm, nor entitle the assignee to interfere in the management of the
partnership business or to receive anything except the assignees
profits. The assignment does not purport to transfer an interest in the
partnership, but only a future contingent right to a portion of the
ultimate residue as the assignor may become entitled to receive by
virtue of his proportionate interest in the capital. Since a partner’s
interest in the partnership includes his share in the profits, we find that
the CA committed no reversible error in ruling that the Spouses Jaso
are entitled to Biondos share in the profits, despite Juanitas lack of
consent to the assignment of said Frenchmans interest in the joint
venture. Although Eden did not, moreover, become a partner as a
consequence of the assignment and/or acquire the right to require an
accounting of the partnership business, the CA correctly granted her
prayer for dissolution of the joint venture conformably with the right
granted to the purchaser of a partner’s interest under Article 1831 of
the Civil Code.
PETITION FOR AUTHORITY TO CONTINUE USE OF THE FIRM
NAME “SYCIP, SALAZAR, FELICIANO, HERNANDEZ &
CASTILLO.”
July 30, 1979
Facts:
Petitions were filed by the surviving partners of Atty.
Alexander Sycip, who died on May 5, 1975 and by the surviving
partners of Atty. Herminio Ozaeta, who died on February 14, 1976,
praying that they be allowed to continue using, in the names of their
firms, the names of partners who had passed away. Petitioners
contend that the continued use of the name of a deceased or former
partner when permissible by local custom, is not unethical but care
should be taken that no imposition or deception is practiced through
this use. They also contend that no local custom prohibits the
continued use of a deceased partner’s name in a professional firm’s
name; there is no custom or usage in the Philippines, or at least in the
Greater Manila Area, which recognizes that the name of a law firm
necessarily identifies the individual members of the firm.
Issue:
WON the surviving partners may be allowed by the court to
retain the name of the partners who already passed away in the name
of the firm? NO
Held:
In the case of Register of Deeds of Manila vs. China Banking
Corporation, the SC said: The Court believes that, in view of the
personal and confidential nature of the relations between attorney and
client, and the high standards demanded in the canons of professional
ethics, no practice should be allowed which even in a remote degree
could give rise to the possibility of deception. Said attorneys are
accordingly advised to drop the names of the deceased partners from
their firm name.
The public relations value of the use of an old firm name can
tend to create undue advantages and disadvantages in the practice of
the profession. An able lawyer without connections will have to make a
name for himself starting from scratch. Another able lawyer, who can
join an old firm, can initially ride on that old firm’s reputation
established by deceased partners.
The court also made the difference from the law firms and
business corporations: A partnership for the practice of law is not a
legal entity. It is a mere relationship or association for a particular
purpose. … It is not a partnership formed for the purpose of carrying
on trade or business or of holding property.” Thus, it has been stated
that “the use of a nom de plume, assumed or trade name in law
practice is improper.
We find such proof of the existence of a local custom, and of
the elements requisite to constitute the same, wanting herein. Merely
because something is done as a matter of practice does not mean that
Courts can rely on the same for purposes of adjudication as a juridical
custom.
Petition suffers legal and ethical impediment.
2 Jo Chung Cang v. Pacific Commercial Co.
FACTS
 In an insolvency proceedings of petitioner-establishment, “Sociedad
Mercantil, Teck Seing & Co., Ltd.”, creditors, Pacific Commercial and
others filed a motion with the Court to declare the individual partners
parties to the proceeding, for each to file an inventory, and for each
to be adjudicated as insolvent debtors.
 RTC granted the motion but subsequently denied it.
 Hence this appeal.
ISSUE
Whether the nature of the mercantile establishment, Teck Seing & Co.,
Ltd. is a limited partnership.
HELD
NO.
The contract of partnership established a general partnership.
By process of elimination, Teck Seing & Co., Ltd. Is not a corporation
nor an accidental partnership (joint account association).
To establish a limited partnership, there must be, at least, one general
partner and the name of at least one of the general partners must
appear in the firm name. This requirement has not been fulfilled. Those
who seek to avail themselves of the protection of laws permitting the
creation of limited partnerships must the show a substantially full
compliance with such laws. It must be noted that all the requirements
of the Code have been met w/ the sole exception of that relating to the
composition of the firm name.
The legal intention deducible from the acts of the parties controls in
determining the existence of a partnership. If they intend to do a thing
w/c in law constitutes a partnership, they are partners although their
very purpose was to avoid the creation of such relation. Here the
intention of the persons making up, Teck Seing & Co., Ltd. Was to
establish partnership w/c they erroneously denominated as a limited
partnership.
Order appealed from is reversed.
ISLAND SALES, INC., plaintiff-appellee,
vs.
UNITED PIONEERS GENERAL CONSTRUCTION COMPANY, ET. AL
defendants. BENJAMIN C. DACO, defendant-appellant.
CONCEPCION JR., J.:
This is an appeal interposed by the defendant Benjamin C. Daco from
the decision of the Court of First Instance of Manila, Branch XVI, in
Civil Case No. 50682, the dispositive portion of which reads:
WHEREFORE, the Court sentences defendant
United Pioneer General Construction Company to
pay plaintiff the sum of P7,119.07 with interest at
the rate of 12% per annum until it is fully paid, plus
attorney's fees which the Court fixes in the sum of
Eight Hundred Pesos (P800.00) and costs.
The defendants Benjamin C. Daco, Daniel A.
Guizona, Noel C. Sim and Augusto Palisoc are
sentenced to pay the plaintiff in this case with the
understanding that the judgment against these
individual defendants shall be enforced only if the
defendant company has no more leviable
properties with which to satisfy the judgment
against it. .
The individual defendants shall also pay the costs.
On April 22, 1961, the defendant company, a general partnership duly
registered under the laws of the Philippines, purchased from the
plaintiff a motor vehicle on the installment basis and for this purpose
executed a promissory note for P9,440.00, payable in twelve (12)
equal monthly installments of P786.63, the first installment payable on
or before May 22, 1961 and the subsequent installments on the 22nd
day of every month thereafter, until fully paid, with the condition that
failure to pay any of said installments as they fall due would render the
whole unpaid balance immediately due and demandable.
Having failed to receive the installment due on July 22, 1961, the
plaintiff sued the defendant company for the unpaid balance amounting
to P7,119.07. Benjamin C. Daco, Daniel A. Guizona, Noel C. Sim,
Romulo B. Lumauig, and Augusto Palisoc were included as co-
defendants in their capacity as general partners of the defendant
company.
Daniel A. Guizona failed to file an answer and was consequently
declared in default.1
Subsequently, on motion of the plaintiff, the complaint was dismissed
insofar as the defendant Romulo B. Lumauig is concerned.2
When the case was called for hearing, the defendants and their
counsels failed to appear notwithstanding the notices sent to them.
Consequently, the trial court authorized the plaintiff to present its
evidence ex-parte3 , after which the trial court rendered the decision
appealed from.
The defendants Benjamin C. Daco and Noel C. Sim moved to
reconsider the decision claiming that since there are five (5) general
partners, the joint and subsidiary liability of each partner should not
exceed one-fifth (1/5 ) of the obligations of the defendant company. But
the trial court denied the said motion notwithstanding the conformity of
the plaintiff to limit the liability of the defendants Daco and Sim to only
one-fifth (1/5 ) of the obligations of the defendant company. 4 Hence, this
appeal.
The only issue for resolution is whether or not the dismissal of the
complaint to favor one of the general partners of a partnership
increases the joint and subsidiary liability of each of the remaining
partners for the obligations of the partnership.
Article 1816 of the Civil Code provides:
Art. 1816. All partners including industrial ones,
shall be liable pro rata with all their property and
after all the partnership assets have been
exhausted, for the contracts which may be entered
into in the name and for the account of the
partnership, under its signature and by a person
authorized to act for the partnership. However, any
partner may enter into a separate obligation to
perform a partnership contract.
In the case of Co-Pitco vs. Yulo (8 Phil. 544) this Court held:
The partnership of Yulo and Palacios was
engaged in the operation of a sugar estate in
Negros. It was, therefore, a civil partnership as
distinguished from a mercantile partnership. Being
a civil partnership, by the express provisions of
articles l698 and 1137 of the Civil Code, the
partners are not liable each for the whole debt of
the partnership. The liability is pro rata and in this
case Pedro Yulo is responsible to plaintiff for only
one-half of the debt. The fact that the other
partner, Jaime Palacios, had left the country
cannot increase the liability of Pedro Yulo.
In the instant case, there were five (5) general partners when the
promissory note in question was executed for and in behalf of the
partnership. Since the liability of the partners is pro rata, the liability of
the appellant Benjamin C. Daco shall be limited to only one-fifth ( 1/5 ) of
the obligations of the defendant company. The fact that the complaint
against the defendant Romulo B. Lumauig was dismissed, upon
motion of the plaintiff, does not unmake the said Lumauig as a general
partner in the defendant company. In so moving to dismiss the
complaint, the plaintiff merely condoned Lumauig's individual liability to
the plaintiff.
WHEREFORE, the appealed decision as thus clarified is hereby
AFFIRMED, without pronouncement as to costs.
SO ORDERED.
ELMO MUÑASQUE, petitioner,
vs.
COURT OF APPEALS,CELESTINO GALAN TROPICAL
COMMERCIAL COMPANY and RAMON PONS, respondents.
Facts:
Munasque (petitioner) entered into a partnership with Galan under the
registered name “Galan and Associates” as Contractor. They entered
into a written contract with respondent Tropical for remodeling the
latter’s Cebu branch building. Under the contract, the project totaled
25,000 to be paid in installments; 7, 000 upon signing and 6, 000 every
15 working days.
Tropical made the first payment by check in the name of Munasque.
Munasque indorsed the check in favor of Galan to enable Galan to
deposit it in the bank and pay for the materials and labor used in the
project. However, Galan allegedly spent P6, 183.37 for his personal
use. When the second check came, Munasque refused to indorse it
again to Galan.
Galan informed Tropical of the misunderstanding between him and
Munasque as partners. Hence upon second payment, Tropical
changed the name of the payee on the second check from Munasque
to “Galan and Associates” which enabled Galan to encash the second
check.
Meanwhile, the construction was continued through Munasque’s sole
efforts by incurring debts from various suppliers. The construction work
was finished ahead of schedule with the total expenditure reaching P
34, 000 (note yung contract nila 25k lang).
Munasque filed a complaint for payment of sum of money and
damages against Galan, Tropical, and Tropical’s Cebu branch
manager Pons. Cebu Southern Hardware Company and Blue Diamond
Glass Palace intervened in the case for the credit which they extended
to the partnership of Munasque and Galan for the construction project.
Both trial court and Court of Appeals absolved respondents Tropical
and its Cebu manager, Pons, from any liability. TC held Galvan and
Munasque “jointly and severally” liable to its creditors which decision
was modified by CA and held them “jointly” liable.
Issues:
Whether the obligation of Munasque and Galan is joint or solidary?
Held:
Solidary.
While it is true that under Article 1816 of CC, “All partners, including
industrial ones, shall be liable pro rate with all their property and after
all the partnership assets have been exhausted, for the contracts
which may be entered into the name and for account of the
partnership, under its signature and by a person authorized to act for
the partnership. xxx”, this provision should be construed together with
Article 1824 which provides that: “All partners are liable solidarily with
the partnership for everything chargeable to the partnership under
Articles 1822 and 1823.” While the liability of the partners are merely
joint in transactions entered into by the partnership, a third person who
transacted with said partnership can hold the partners solidarily liable
for the whole obligation if the case of the third person falls under
Articles 1822 and 1823.
The obligation is solidary because the law protects him, who in good
faith relied upon the authority of a partner, whether such authority is
real or apparent.
Tropical had every reason to believe that a partnership existed
between Munasque and Galan and no fault or error can be imputed
against it for making payments to “Galan and Associates” because as
far as it was concerned, Galan was a true partner with real authority to
transact in behalf of the partnership it was dealing with (because in the
first place they entered into a duly registered partnership name and
secondly, Munasque endorsed the first check payment to Galan). This
is even more true in the cases of the intervenors who supplied
materials on credit to the partnership. Thus, it is but fair that the
consequences of any wrongful act committed by any of the partners
therein should be answered solidarily by all the partners and the
partnership as a whole.
However, as between Munasque and Galan, Galan must reimburse
Munasque for the payments made to the intervenors as it was
satisfactorily established that Galan acted in bad faith in his dealings
with Munasque as a partner.
Philippine National Bank vs Lo et al
In September 1916, Severo Eugenio Lo and Ling, together with Ping,
Hun, Lam and Peng formed a commercial partnership under the name
of “Tai Sing and Co.,” with a capital of P40,000 contributed by said
partners. The firm name was registered in the mercantile registrar in
the Province of Iloilo. Ping, in the articles of partnership, was assigned
as the general manager. However, in 1917, he executed a special
power of attorney in favor of Lam to act in his behalf as the manager of
the firm. Subsequently, Lam obtained a loan from PNB – the loan was
under the firm’s name. In the same year, Ping died in China. From
1918 to 1920, the firm, via GM Lam, incurred other loans from PNB.
The loans were not objected by any of the partners. Later, PNB sued
the firm for non-payment. Lo, in his defense, argued that he cannot be
liable as a partner because the partnership, according to him, is void;
that it is void because the firm’s name did not comply with the
requirement of the Code of Commerce that a firm name should contain
the “names of all of the partners, of several of them, or only one of
them”. Lo also argued that the acts of Lam after the death of Ping is
not binding upon the other partners because the special power of
attorney shall have already ceased.
ISSUE: Whether or not Lo is correct in both arguments.
HELD: No. The anomalous adoption of the firm name above noted
does not affect the liability of the general partners to third parties under
Article 127 of the Code of Commerce. The object of the Code of
Commerce in requiring a general partnership to transact business
under the name of all its members, of several of them, or of one only, is
to protect the public from imposition and fraud; it is for the protection of
the creditors rather than of the partners themselves. It is unenforceable
as between the partners and at the instance of the violating party, but
not in the sense of depriving innocent parties of their rights who may
have dealt with the offenders in ignorance of the latter having violated
the law; and that contracts entered into by a partnership firm
defectively organized are valid when voluntarily executed by the
parties, and the only question is whether or not they complied with the
agreement. Therefore, Lo cannot invoke in his defense the anomaly in
the firm name which they themselves adopted. Lo was not able to
prove his second argument. But even assuming arguendo, his second
contention does not deserve merit because (a) Lam, in acting as a GM,
is also a partner and his actions were never objected
MENDOZA V. ENGR. EDUARDO PAULE
G.R. No. 175885
Ynares-Santiago, J.
Facts
Engineer Eduardo M. Paule (PAULE) is the proprietor of
E.M. Paule Construction and Trading (EMPCT). On May 24, 1999,
PAULE executed a special power of attorney (SPA) authorizing
Zenaida G. Mendoza (MENDOZA) to participate in the pre-qualification
and bidding of a National Irrigation Administration (NIA) project and
represent him in all transactions related thereto. EMPCT, through
Mendoza, participated in the bidding of the NIA-Casecnan Multi-
Purpose Irrigation and Power Project (NIA -CMIPP) and was awarded
several packages. When Manuel Dela Cruz learned that Mendoza is in
need of heavy equipment for the NIA project, he met up with him in
Muñoz, Nueva Ecija, in an apartment where the latter was holding
office under an EMPCT signboard. On April 27, 2000, Paule revoked
the SPA he previously issued in favor of Mendoza; consequently, NIA
refused to make payment to Mendoza on her billings. Dela Cruz,
therefore, could not be paid for the rent of the equipment. Upon advice
of Mendoza, Dela Cruz addressed his demands for payment of lease
rentals directly to NIA but the latter refused to acknowledge the same
and informed him that it would be remitting payment only to EMPCT as
the winning contractor for the project. However, without resolving
Mendoza’s motion to declare Paule non-suited, and without granting
her opportunity to present their evidence ex parte, the trial court
rendered its decision holding Paule liable. Mendoza was duly
constituted as EMPCT’s agent for purposes of the NIA project and that
Mendoza validly contracted with Dela Cruz for the rental of heavy
equipment that was to be used therefore. It found unavailing Paule's
assertion that Mendoza merely borrowed and used his contractor's
license in exchange for a consideration of 3% of the aggregate amount
of the project. The trial court held that through the SPA she executed,
Paule clothed Mendoza with apparent authority and held her out to the
public as his agent; as principal, PAULE must comply with the
obligations which Mendoza contracted within the scope of her authority
and for his benefit. Furthermore, Paule knew of the transactions which
Mendoza entered into since at various times when she and Dela Cruz
met at the EMPCT office, Paule was present and offered no objections.
The trial court declared that it would be unfair to allow Paule to enrich
himself and disown his acts at the expense of Dela Cruz
Issue
Whether or not the revocation of Mendoza’s SPA valid
Held
The Supreme Court held that Records show that Paule and
Mendoza had entered into a partnership in regard to the NIA project.
Paule's contribution thereto is his contractor’s license and expertise,
while Mendoza would provide and secure the needed funds for labor,
materials and services; deal with the suppliers and sub-contractors;
and in general and together with Paule, oversee the effective
implementation of the project. For this, Paule would receive as his
share three per cent (3%) of the project cost while the rest of the profits
shall go to Mendoza. There was no valid reason for Paule to revoke
Mendoza’s Spa’s. Since Mendoza took care of the funding and
sourcing of labor, materials and equipment for the project, it is only
logical that she controls the finances, which means that the Spa’s
issued to her were necessary for the proper performance of her role in
the partnership, and to discharge the obligations she had already
contracted prior to revocation. Without the Spa’s, she could not collect
from NIA, because as far as it is concerned, EMPCT and not the
Paule-Mendoza partnership is the entity it had contracted with. Without
these payments from NIA, there would be no source of funds to
complete the project and to pay off obligations incurred. As Mendoza
correctly argues, an agency cannot be revoked if a bilateral contract
depends upon it, or if it is the means of fulfilling an obligation already
contracted, or if a partner is appointed manager of a partnership in the
contract of partnership and his removal from the management is
unjustifiable.
Antonio C. Goquilay, ET AL. vs. Washington Z. Sycip, ET AL. GR
NO. L-11840, December 10, 1963
FACTS:
Tan Sin An and Goquiolay entered into a general commercial
partnership under the partnership name “Tan Sin An and Antonio
Goquiolay” for the purpose of dealing in real estate. The agreement
lodged upon Tan Sin An the sole management of the partnership
affairs. The lifetime of the partnership was fixed at ten years and the
Articles of Co-partnership stipulated that in the event of death of any of
the partners before the expiration of the term, the partnership will not
be dissolved but will be continued by the heirs or assigns of the
deceased partner. But the partnership could be dissolved upon mutual
agreement in writing of the partners. Goquiolay executed a GPA in
favor of Tan Sin An. The plaintiff partnership purchased 3 parcels of
land which was mortgaged to “La Urbana” as payment of P25,000.
Another 46 parcels of land were purchased by Tan Sin An in his
individual capacity which he assumed payment of a mortgage debt for
P35K. A downpayment and the amortization were advanced by Yutivo
and Co. The two obligations were consolidated in an instrument
executed by the partnership and Tan Sin An, whereby the entire 49 lots
were mortgaged in favor of “Banco Hipotecario”Tan Sin An died leaving
his widow, Kong Chai Pin and four minor children. The widow
subsequently became the administratrix of the estate. Repeated
demands were made by Banco Hipotecario on the partnership and on
Tan Sin An. Defendant Sing Yee, upon request of defendant Yutivo
Sons , paid the remaining balance of the mortgage debt, the mortgage
was cancelled Yutivo Sons and Sing Yee filed their claim in the
intestate proceedings of Tan Sin An for advances, interest and taxes
paid in amortizing and discharging their obligations to “La Urbana” and
“Banco Hipotecario.” Kong Chai Pin filed a petition with the probate
court for authority to sell all the 49 parcels of land. She then sold it to
Sycip and Lee in consideration of P37K and of the vendees assuming
payment of the claims filed by Yutivo Sons and Sing Yee. Later, Sycip
and Lee executed in favor of Insular Development a deed of transfer
covering the 49 parcels of land.When Goquiolay learned about the sale
to Sycip and Lee, he filed a petition in the intestate proceedings to set
aside the order of the probate court approving the sale in so far as his
interest over the parcels of land sold was concerned. Probate court
annulled the sale executed by the administratrix w/ respect to the 60%
interest of Goquiolay over the properties Administratrix appealed.The
decision of probate court was set aside for failure to include the
indispensable parties. New pleadings were filed. The second amended
complaint prays for the annulment of the sale in favor of Sycip and Lee
and their subsequent conveyance to Insular Development. The
complaint was dismissed by the lower court hence this appeal.
ISSUE/S: Whether or not a widow or substitute become also a general
partner or only a limited partner. Whether or not the lower court err in
holding that the widow succeeded her husband Tan Sin An in the sole
management of the partnership upon Tan’s death Whether or not the
consent of the other partners was necessary to perfect the sale of the
partnership properties to Sycip and Lee?
HELD:
Kong Chai Pin became a mere general partner. By seeking authority to
manage partnership property, Tan Sin An’s widow showed that she
desired to be considered a general partner. By authorizing the widow
to manage partnership property (which a limited partner could not be
authorized to do), Goqulay recognized her as such partner, and is now
in estoppel to deny her position as a general partner, with authority to
administer and alienate partnership property. The articles did not
provide that the heirs of the deceased would be merely limited
partners; on the contrary, they expressly stipulated that in case of
death of either partner, “the co partnership will have to be continued”
with the heirs or assignees. It certainly could not be continued if it were
to be converted from a general partnership into a limited partnership
since the difference between the two kinds of associations is
fundamental, and specially because the conversion into a limited
association would leave the heirs of the deceased partner without a
share in the management. Hence, the contractual stipulation actually
contemplated that the heirs would become general partners rather than
limited ones.
SANTIAGO SYJUCO, INC. VS CASTRO
Facts:
The private respondents, Eugenio Lim, et al., borrowed from
petitioner Santiago Syjuco, Inc., the sum of P800,000.00. The loan was
given on the security of a first mortgage on property registered in the
names of said borrowers as owners in common under Transfer
Certificates of Title Numbered 75413 and 75415 of the Registry of
Deeds of Manila. Thereafter, additional loans on the same security
were obtained by the private respondents from Syjuco, so that as of
May 8, 1967, the aggregate of the loans stood at P2,460,000.00,
exclusive of interest, and the security had been augmented by bringing
into the mortgage other property, also registered as owned pro indiviso
by the private respondents under two titles: TCT Nos. 75416 and
75418 of the Manila Registry.
The private respondents failed to pay it despite demands
therefore; that Syjuco consequently caused extra-judicial proceedings
for the foreclosure of the mortgage to be commenced by the Sheriff of
Manila; and that the latter scheduled the auction sale of the mortgaged
property on December 27, 1968. The attempt to foreclose triggered off
a legal battle that has dragged on for more than twenty years now,
fought through five (5) cases in the trial courts, two (2) in the Court of
Appeals, and three (3) more in the Supreme Court.
One of the complaints filed by the private respondents was filed
not in their individual names, but in the name of a partnership of which
they themselves were the only partners: "Heirs of Hugo Lim." The
complaint advocated the theory that the mortgage which they, together
with their mother, had individually constituted (and thereafter amended
during the period from 1964 to 1967) over lands standing in their
names in the Property Registry as owners pro indiviso, in fact no
longer belonged to them at that time, having been earlier deeded over
by them to the partnership, "Heirs of Hugo Lim," more precisely, on
March 30, 1959, hence, said mortgage was void because executed by
them without authority from the partnership. Syjuco filed an instant
petition for certiorari, prohibition and mandamus. It prays in its petition
that the default judgment rendered against it by Judge Castro be
annulled on the ground of, among others, estoppel, res judicata, and
Article 1819 of the Civil Code.
Issue:
Whether or not the private respondents are estopped to avoid the
aforementioned mortgage.
Held:
Yes. The Supreme Court ruled that the respondent partnership was
inescapably chargeable with knowledge of the mortgage executed by
all the partners thereof, its silence and failure to impugn said mortgage
within a reasonable time, let alone a space of more than 17 years,
brought into play the doctrine of estoppel to preclude any attempt to
avoid the mortgage as allegedly unauthorized. Equally or even more
preclusive of the respondent partnership’s claim to the mortgaged
property is the last paragraph of Art. 1819 of the Civil Code, which
contemplates a situation similar to the case at bar. It states that ‘where
the title to real property is in the names of all the partners, a
conveyance executed by the entire partners pass all their rights in such
property. Consequently, those members' acts, declarations and
omissions cannot be deemed to be simply the individual acts of said
members, but in fact and in law, those of the partnership. Finally, the
Supreme Court emphasizes that the right of the private respondents to
assert the existence of the partnership could have been stressed at the
time they instituted their first action, considering that the actions
involved property supposedly belonging to it, and therefore, the
partnership was the real party in interest. What was done by them was
to split their cause of action in violation of the well-known rule that only
one suit may be instituted for a single cause of action.
TITLE OF THE CASE: MICHAEL C. GUY, Petitioner, vs. ATTY.
GLENN C. GACOTT, Respondent.
G.R. No. 206147
DATE OF PROMULGATION: (January 13, 2016)
PONENTE: Mendoza
NATURE OF THE CASE: Petition for Review on Certiorari under Rule
45
CASE BRIEF: Before this Court is a petition for review on certiorari
under Rule 45 of the Rules of Court filed by petitioner Michael C. Guy
(Guy), assailing the June 25, 2012 Decision1 and the March 5, 2013
Resolution of the Court of Appeals (CA) in CA-G.R. CV No. 94816,
which affirmed the June 28, 2009 and February 19, 2010 Orders of the
Regional Trial Court, Branch 52, Puerto Princesa City, Palawan (RTC),
in Civil Case No. 3108, a case for damages. The assailed RTC orders
denied Guy's Motion to Lift Attachment Upon Personalty on the ground
that he was not a judgment debtor.
ACTIONS IN THE LOWER COURTS:
SC: Reversed and set aside
CA: Affirmed the RTC’s denial of the order
RTC: Denied Guy's Motion to Lift Attachment Upon Personalty
DOCTRINE LAID DOWN (if any):
1. Notice to any partner operates as notice to or knowledge to the
partnership only. Evidently, it does not provide for the reverse
situation, or that notice to the partnership is notice to the
partners.
2. With regard to partnerships, ordinarily, the liability of the
partners is not solidary.
XPNs: Only in exceptional circumstances shall the partners’
liability be solidary in nature. Articles 1822, 1823 and 1824 of the
Civil Code provide for these exceptional conditions. It is the act of
a partner which caused loss or injury to a third person that makes
all other partners solidarily liable with the partnership
FACTS:
Gacott purchased two (2) brand new transreceivers from Quantech
Systems Corp (QSC) through its employee Rey Medestomas. Due to
major defects, Gacott returned the items to QSC and requested for
replacement. However, despite several demands, Gacott was never
given a replacement or a refund. Thus, Gacott filed a complaint for
damages. Summons was served upon QSC and Medestomas,
afterwhich they filed their Answer.
RTC’s decision ordered the defendants to jointly and severally pay
plaintiff. The decision became final as QSC and Medestomas did not
interpose an appeal. Gacott then secured a Writ of Execution. During
the execution stage, Gacott learned that QSC was not a corporation,
but was in fact a general partnership. In the articles of partnership, Guy
was appointed as General Manager of QSC. The sheriff attached
Guy’s vehicle. Guy filed his Motion to Lift Attachment Upon Personalty,
arguing that he was not a judgment debtor and, therefore, his vehicle
could not be attached. On June 28, 2009, the RTC issued an order
denying Guy’s motion and his subsequent motion for reconsideration.
RTC’s ratio: All partners are liable solidarily with the partnership for
everything chargeable to the partnership under Article 1822 and 1823.
Guy to seek relief before the CA. The CA dismissed Guy’s appeal for
the same reasons given by the trial court. Guy filed a motion for
reconsideration but it was denied by the CA.
Guy arguments:
1. That jurisdiction over the person of the partnership (QSC)
was not acquired because the summons was never served
upon it or through any of its authorized officer;
2. Article 1816 of the Civil Code which states that the liability of
the partners to the partnership is merely joint and subsidiary
in nature. And he is not solidarily liable with the partnership
because the solidary liability of the partners under Articles
1822, 1823 and 1824 of the Civil Code only applies when it
stemmed from the act of a partner. In this case, the alleged
lapses were not attributable to any of the partners.
ISSUE 1a: WON the service of summons to QSC was flawed.
HELD: YES, however, voluntary appearance cured the
defect.
SC RATIO:
Under Section 11, Rule 14 of the 1997 Revised
Rules of Civil Procedure, when the defendant is a
corporation, partnership or association organized
under the laws of the Philippines with a juridical
personality, the service of summons may be made
on the president, managing partner, general
manager, corporate secretary, treasurer, or in-
house counsel.
Jurisprudence is replete with pronouncements that
such provision provides an exclusive
enumeration of the persons authorized to receive
summons for juridical entities.
In this case, QSC was not served with the
summons through any of the enumerated
authorized persons to receive such, namely:
president, managing partner, general manager,
corporate secretary, treasurer or in-house counsel.
Service of summons upon persons other than
those officers enumerated in Section 11 is
invalid. Even substantial compliance is not
sufficient service of summons. Nevertheless, while
proper service of summons is necessary to vest
the court jurisdiction over the defendant, the same
is merely procedural in nature and the lack of or
defect in the service of summons may be cured by
the defendant’s subsequent voluntary submission
 to the court’s jurisdiction through his filing a
responsive pleading such as an answer. In this
case, it is not disputed that QSC filed its Answer
despite the defective summons. Thus, jurisdiction
over its person was acquired through voluntary
appearance.
ISSUE 1b: WON whether the trial court’s jurisdiction over QSC
extended to the person of Guy insofar as holding him solidarily liable
with the partnership.
HELD: NO.
SC RATIO:
Although a partnership is based on delectus personae or
mutual agency, whereby any partner can generally represent
the partnership in its business affairs, it is non sequitur that a
suit against the partnership is necessarily a suit impleading
each and every partner. It must be remembered that a
partnership is a juridical entity that has a distinct and
separate personality from the persons composing it.
A decision rendered on a complaint in a civil action or
proceeding does not bind or prejudice a person not
impleaded therein, for no person shall be adversely affected
by the outcome of a civil action or proceeding in which he is
not a party.
Here, Guy was never made a party to the case. He did not
have any participation in the entire proceeding until his
vehicle was levied upon and he suddenly became QSC’s
“co-defendant debtor” during the judgment execution stage.
It is a basic principle of law that money judgments are
enforceable only against the property incontrovertibly
belonging to the judgment debtor.
ISSUE 2a:
WON a partners’ liability is subsidiary and generally joint and
WON immediate levy upon the property of a partner can be
made.
HELD.
NO partner’s liability is not subsidiary and generally joint and
the partner’s property cannot be immediately levied.
SC RATIO:
Article 1816. All partners, including industrial ones, shall be
liable pro rata with all their property and after all the
partnership assets have been exhausted, for the
contracts which may be entered into in the name and for the
account of the partnership, under its signature and by a
person authorized to act for the partnership. However, any
partner may enter into a separate obligation to perform a
partnership contract.
This provision clearly states that, first, the partners’
obligation with respect to the partnership liabilities is
subsidiary in nature. To say that one’s liability is subsidiary
means that it merely becomes secondary and only arises if
the one primarily liable fails to sufficiently satisfy the
obligation.
In this case, Guy’s liability would only arise after the
properties of QSC would have been exhausted. The records,
however, miserably failed to show that the partnership’s
properties were exhausted. Clearly, no genuine efforts were
made to locate the properties of QSC that could have been
attached to satisfy the judgment − contrary to the clear
mandate of Article 1816.
Second, Article 1816 provides that the partners’ obligation to
third persons with respect to the partnership liability is pro
rata or joint. Liability is joint when a debtor is liable only for
the payment of only a proportionate part of the debt. In
contrast, a solidary liability makes a debtor liable for the
payment of the entire debt. In the same vein, Article 1207
does not presume solidary liability unless: 1) the obligation
expressly so states; or 2) the law or nature
requires solidarity. With regard to partnerships, ordinarily,
the liability of the partners is not solidary. The joint liability of
the partners is a defense that can be raised by a partner
impleaded in a complaint against the partnership.
In other words, only in exceptional circumstances shall the
partners’ liability be solidary in nature. Articles 1822, 1823
and 1824 of the Civil Code provide for these exceptional
conditions, to wit:
Article 1822. Where, by any wrongful act or
omission of any partner acting in the ordinary
course of the business of the partnership or with
the authority of his co-partners, loss or injury is
caused to any person, not being a partner in the
partnership, or any penalty is incurred, the
partnership is liable therefor to the same extent as
the partner so acting or omitting to act.
Article 1823. The partnership is bound to make
good the loss:
(1) Where one partner acting within the
scope of his apparent authority receives
money or property of a third person and
misapplies it; and
(2) Where the partnership in the course
of its business receives money or
property of a third person and the
money or property so received is
misapplied by any partner while it is in
the custody of the partnership.
Article 1824. All partners are liable solidarily with
the partnership for everything chargeable to the
partnership under Articles 1822 and 1823.
In essence, these provisions articulate that it is the act of a
partner which caused loss or injury to a third person that
makes all other partners solidarily liable with the partnership
because of the words "any wrongful act or omission of any
partner acting in the ordinary course of the business," "one
partner acting within the scope of his apparent
authority" and "misapplied by any partner while it is in the
custody of the partnership." The obligation is solidary
because the law protects the third person, who in good faith
relied upon the authority of a partner, whether such authority
is real or apparent.40
In the case at bench, it was not shown that Guy or the other
partners did a wrongful act or misapplied the money or
property he or the partnership received from Gacott. A third
person who transacted with said partnership can hold the
partners solidarily liable for the whole obligation if the case
of the third person falls under Articles 1822 or
1823.41 Gacott’s claim stemmed from the alleged defective
transreceivers he bought from QSC, through the latter's
employee, Medestomas. It was for a breach of warranty in a
contractual obligation entered into in the name and for the
account of QSC, not due to the acts of any of the partners.
For said reason, it is the general rule under Article 1816 that
governs the joint liability of such breach, and not the
exceptions under Articles 1822 to 1824. Thus, it was
improper to hold Guy solidarily liable for the obligation of the
partnership.
ISSUE 2b:
WON it is necessary to implead a partner in order to be
bound by the partnership liability.
 HELD: YES. It is necessary to implead a partner.
SC RATIO:
Under Article 1821, notice to any partner of any matter
relating to partnership affairs, and the knowledge of the
partner acting in the particular matter, acquired while a
partner or then present to his mind, and the knowledge of
any other partner who reasonably could and should have
communicated it to the acting partner, operate as notice to
or knowledge of the partnership, except in the case of
fraud on the partnership, committed by or with the consent of
that partner.
A careful reading of the provision shows that notice to any
partner operates as notice to or knowledge to the
partnership only. Evidently, it does not provide for the
reverse situation, or that notice to the partnership is notice to
the partners.
SUPREME COURT RULING: WHEREFORE, the petition
is GRANTED. The June 25, 2012 Decision and the March 5, 2013
Resolution of the Court of Appeals in CA-G.R. CV No. 94816 are
hereby REVERSED and SET ASIDE. Accordingly, the Regional Trial
Court, Branch 52, Puerto Princesa City, is ORDERED TO
RELEASE Michael C. Guy's Suzuki Grand Vitara subject of the Notice
of Levy/ Attachment upon Personalty.
Yu v. NLRC GR No. 97212, June 30, 1993
Facts:
Benjamin Yu used to be the Assistant General Manager of
Jade Mountain, a partnership engaged in marble quarrying and export
business. The majority of the founding partners sold their interests in
said partnership to Willy Co and Emmanuel Zapanta without Yu’s
knowledge. Said new partnership continued operating under the same
name and continued the business’s operations. However, it transferred
its main office from Makati to Mandaluyong. Said new partnership did
not anymore availed of the services of Yu. Thus, he filed a complaint
for illegal dismissal, recovery of unpaid wages and damages.
Ruling :
The legal effect of the changes in the membership of the
partnership was the dissolution of the old partnership which had hired
Yu in 1984 and the emergence of a new firm composed of Willy Co
and Emmanuel Zapanta in 1987. The new partnership simply took over
the business enterprise owned by the preceeding partnership, and
continued using the old name of Jade Mountain Products Company
Limited, without winding up the business affairs of the old partnership,
paying off its debts, liquidating and distributing its net assets, and then
re-assembling the said assets or most of them and opening a new
business enterprise. Not only the retiring partners but also the new
partnership itself which continued the business of the old, dissolved,
one, are liable for the debts of the preceding partnership.
Singsong v. Isabela Sawmill G.R. No. L-27343, February 28, 1979,
Fernandez, J.
Facts:
In 1951, defendants entered into a contract of partnership
under the firm name “Isabela Sawmill”. In 1956 the plaintiff sold to the
partnership a motor truck and two tractors. The partnership was not
able to pay their whole balance even after demand was made. One of
the partners withdrew from the partnership but instead of terminating
the said partnership it was continued by the two remaining partners
under the same firm name. Plaintiffs also seek the annulment of the
assignment of right with chattel mortgage entered into by the
withdrawing partner and the remaining partners. The appellants
contend that the chattel mortgage may no longer be nullified because it
had been judicially approved and said chattel mortgage had been
judicially foreclosed.
Issue: Whether the withdrawal of one of the partners dissolved the
partnership.
Ruling:
It does not appear that the withdrawal of the partner was not
published in the newspapers. The appellees and the public in general
had a right to expect that whatever, credit they extended to the
remaining partners could be enforced against the properties of the
partnership. The withdrawing partner cannot be relieved from her
liability to the creditor of the partnership due to her own fault by not
insisting on the liquidation of the partnership. Though she had acted in
good faith, the appellees also acted in good faith in extending credit to
the partnership. Where one of two innocent persons must suffer, that
person who gave occasion for the damages to be caused must bear
the consequences. Technically, the partnership was dissolved by the
withdrawal of one of the partners. Through her acts of entering into a
memorandum with the remaining partners misled the creditors that
they were doing business with the partnership. Hence, from the order
of the lower court ordering the withdrawing partner to pay the plaintiffs,
she is thus entitled for reimbursement from the remaining partners.
G.R. No. L-23232 June 17, 1970
VICENTE DIRA, plaintiff-appellant,
vs.
PABLO D. TAÑEGA, defendant-appellee.
Direct appeal by plaintiff-appellant Vicente Dira from a decision of the
Court of First Instance of Leyte, dated February 13, 1964, dismissing,
on the grounds of prescription and laches, the complaint in its Civil
Case No. 2886, an action for accounting of a share in an alleged
partnership, payment of salaries and other money claims, without
pronouncement as to costs.
The material facts as found by the trial judge are as follows:
That sometime in March 1946, plaintiff and
defendant together with Francisco Pagulayan
entered into a partnership for the purpose of
engaging in the printing business in the City of
Tacloban and that the terms of the said
partnership was for a period of five (5) years from
the organization thereof; that this fact was
admitted by the defendant in his answer; that, in
the articles of co-partnership, the plaintiff was
designated as President and his salary as such
was P150.00 a month, that, during his incumbency
as President until the expiration of the period, the
defendant who was the manager-treasurer of the
partnership never paid him his salary; that at the
time the plaintiff was also the editor of the Leyte-
Samar Tribune and in accordance with their
Articles of Partnership established the said
periodicals, the plaintiff as editor was to receive a
salary of P100.00 a month; that this salary and the
accrued amount therein was not also paid by the
defendant, who was the business manager of the
enterprise; that the capital of the said partnership
was P5,000.00 equally divided among the
partners; that this amount was used by the
partnership to purchase printing equipment from
the 64th Naval Construction Battalion, U.S.N. and
which printing equipment are in the possession of
the defendant up to now; that, before the purchase
by the three of them of the printing equipment, the
plaintiff obtained a personal loan from Francisco
Pagulayan in the amount of P1,100.00 and he
pledged his share in the said equipment to pay the
same; that upon the request of the plaintiff, the
defendant paid the said amount to Francisco
Pagulayan and this time plaintiff used his share in
the partnership as guarantee for the defendant's
payment; that on June 3, 1946, Francisco
Pagulayan sold his share of the partnership to the
defendant and who by virtue thereof became 2/3
owner of the business; that the defendant
presented Exhibit "5" which purports to be a letter
 of demand to plaintiff asking him to settle his
account, but due to his failure to do so, he
(defendant) assumed full ownership of the
business, he changed the name from the Leyte-
Samar Press to Tañega Press; that from the time
the partnership was organized and went into
business, the defendant as Manager-Treasurer
never rendered any accounting of the business
operations, or paid the share of the plaintiff in the
profits; and that the present action of partnership
accounting and sum of money was only filed in
Court by the plaintiff against the defendant on
February 10, 1961, that is after a lapse of 9 years,
10 months and 11 days after the expiration of the
contract of partnership, Exhibit 'A' on February 28,
1951. (Pp. 49-51, R. on A.)
xxx xxx xxx
It is undisputed that the defendant had been in the
exclusive possession of all the printing equipment
since 1946. Plaintiff himself admitted that the
defendant conducted himself as absolute owner of
the printing equipment. He testified that defendant
changed location of the printing press which place
he (Dira) did not know. According to defendant
himself, he believed in good faith and acted
accordingly since 1947 that he was the sole owner
of the printing press, after the refusal of the
plaintiff to pay his indebtedness of P1,100.00 to
him. From the above facts, it can be deduced that
defendant had acquired ownership of the printing
equipment and accessories in question as Article
1132 of the Civil Code provides that the ownership
of movables prescribes through uninterrupted
possession of eight years, without need of any
condition. Surely 1946 or 1947 to 1961, more than
four and/or eight years had elapsed.
Plaintiff stated that defendant ignored him and did
not give him any participation, since 1947, in the
business, yet he did not demand an immediate
accounting of the business. For his failure to
demand accounting five years before February 10,
1961, from the defendant, he had forfeited his right
by prescription. In support, Article 1153 of the Civil
Code, among other things, provides that the
period for prescription of actions to demand
accounting runs from the day the persons who
should render same cease in their functions, and
Article 1149 of the Civil Code provides that "all
other actions whose periods are not fixed in this
Code or in other laws within five years from the
time the right of action accrues."
It is an incontrovertible fact that the plaintiff had
filed this action against the defendant on February
10, 1961, nearly ten years after the expiration of
the contract of partnership between them on
March, 1951. ... (Pp, 56-57, R. on A.)
In his complaint, plaintiff-appellant prayed for payment of his salaries
not only as President of the partnership but also as editor of the Leyte-
Samar Tribune which admittedly he had not been paid from the start,
for accounting of the partnership affairs, for payment of his alleged
share in the rental value of the printing equipment and accessories
used by the partnership, of which he also claimed part-ownership
proportionally to his share in the partnership, and for damages,
attorney's fees and costs. The defendant-appellee admitted practically
all the material allegations of the complaint about the organization of
the partnership and the terms thereof as well as the non-payment of
the salaries claimed by appellant, but, in defense, he alleged that the
whole business of the partnership became his alone in 1947 after he
had acquired by purchase the share of Francisco Pagulayan and had
taken over the share of appellant, since the latter failed to pay the
P1,100 he had requested appellee to pay to Pagulayan, as security for
the payment of which, he had pledge his said share to appellee; that
since 1947, the place of the business was transferred by him, he had
its name changed to Tañega Press and he had always been operating
openly and publicly the said printing business from 1947 without any
intervention or participation of appellant and without said appellant
making any claim of any kind in connection therewith until the filing of
the complaint on February 10, 1961, hence, all the claims and causes
of action of the appellant had already prescribed.
Upon the facts found by His Honor quoted above, We agree with His
Honor in upholding appellee's defense of prescription. From any angle
that this case may be viewed, it is obvious that appellant's causes of
action barred by the statute of limitations.
Appellee took exclusive control of the partnership affairs since 1947,
publicly and openly and after having notified appellant that he would do
so should the latter fail to comply with his letter of demand, Exhibit "5",
dated April 19, 1947. Nowhere in the facts found by the trial judge does
it appear that appellant did anything about said demand or that he ever
contested the action of the appellee of transferring the place of
business and changing its name to Tañega Press. There is nothing to
show that he had taken any move for the payment to him of his unpaid
salaries both as President of the business and as editor of the Leyte-
Samar Tribune.
Under these circumstances, it would be giving premium to inaction and
indifference to still hold that appellant could sue appellee, almost
fourteen years after the latter, with prior notice to the former, had
openly and publicly taken over exclusive control of the partnership
business as if it were his own and only a little short of ten years after
the expiration of the stipulated term of partnership. His claims for
salaries accrued after each month they were unpaid. Whether we
assume that these claims lost basis in 1947 when appellee took over
the businesses of the printing press and the newspaper or in 1951,
upon the expiration of the term of the agreements, by all standards,
these claims had already prescribed when the present suit was filed.
On the other hand, under Article 1153 of the Civil Code, a demand for
"accounting runs from the day the persons who should render the
same ceases in their functions," which in this case as in 1947, when
the appellee began to operate the businesses as exclusively his own.
Again, inasmuch as the longest period in the chapter on prescription of
the Civil Code is ten years, it is evident that appellant's action for
accounting is already barred. The same is true with the claim for
rentals and recovery of proportional ownership of the printing
equipment and accessories, as to which, appellant's period to bring his
actions accrued also in 1947, fourteen years before this suit was filed.
As a matter of fact, appellant impliedly admits the correctness of this
position, since in this appeal his only contention is that both as his
partner and as pledgee of his share, the appellee became his trustee,
in legal contemplation, or that, in the eyes of the law, a relationship of
trusteeship arose between him and appellee, hence his actions against
him are imprescriptible. Appellant's pose is without merit. In bad faith or
in good faith, after eight years of actual adverse possession, appellee
acquired clear ownership of appellant's share by acquisitive
prescription. According to Art. 1132 of the Civil Code, "the ownership of
personal property also prescribes through uninterrupted possession for
eight years, without need of any other condition." So, appellee became
undisputed owner of appellant's share since 1955 or six years before
this action was filed and since said year the allegation of trusteeship
had already lost any basis whatsoever. Under Article 1140 of same
Code, "Actions to recover movables shall prescribe eight years from
the time the possession thereof is lost, unless the possessor has
acquired the ownership by prescription for a less period" or for an
equal period, in which latter case, the right to sue prescribes together
with the title.
Equally untenable is appellant's reliance on the theory that as a
member of the partnership, appellee continued as a trustee even after
1947, when said appellee took the business for himself and even after
1951, the expiry date of the agreements. The provisions of Article 1785
to the effect that: .
 When a partnership for a fixed term or particular
undertaking is continued after the termination of
such term or particular undertaking without any
express agreement, the rights and duties of the
partners remain the same as they were at such
termination, so far as is consistent with a
partnership at will.
A continuation of the business by the partners or
such of them as habitually acted therein during the
term, without any settlement or liquidation of the
partnership affairs, is prima facie evidence of a
continuation of the partnership.
and Article 1829 thus:
On dissolution the partnership is not terminated,
but continues until the winding up of partnership
affairs is completed.
are clearly inapplicable here, for the simple reason
that those articles are premised on a continuation
of the partnership as such, which is not our case,
because here appellee repudiated the partnership
as early as 1947 with either actual or presumed
knowledge of the appellant. By analogy, at least,
with the rule as to a co-ownership, which a
partnership essentially is, prescription does not
run in favor of any of the co-owners only as long
as the co-owner claiming against the others
"expressly or impliedly recognizes the co-
ownership," a circumstance irreconcilably
inconsistent with appellee's conduct of transferring
the place of business, changing its name and not
paying appellant any of the salaries agreed upon
in the articles of partnership.
What is more, this case may well be decided on the basis of laches as
was done by the trial judge. In other words, even if prescription were
not properly applicable, We could still hold that under the facts proven
in the record and found by the lower court, appellant has been guilty of
laches and his stale demands may not gain the ears of the court. We
note, however, that in his answer, the appellee limit his defense
specifically to prescription which is a separate defense from laches.
Not that such particularity of appellee's defense is fatal, because, after
all, it does not appear that the evidence proving laches were objected
to by appellant, (Section 5, Rule 10, Rules of Court) but We do not feel
that in this case We need to go beyond the specific defense expressly
invoked by the appellant. This is mentioned only, lest appellant may
still entertain any hope regarding this case.
WHEREFORE, the judgment of the lower court is affirmed, with costs
against appellant.
Lilibeth Sunga-Chan vs Lamberto Chua
In 1977, Chua and Jacinto Sunga verbally agreed to form a partnership
for the sale and distribution of Shellane LPGs. Their business was very
profitable but in 1989 Jacinto died. Upon Jacinto’s death, his daughter
Lilibeth took over the business as well as the business assets. Chua
then demanded for an accounting but Lilibeth kept on evading him. In
1992 however, Lilibeth gave Chua P200k. She said that the same
represents a partial payment; that the rest will come after she finally
made an accounting. She never made an accounting so in 1992, Chua
filed a complaint for “Winding Up of Partnership Affairs, Accounting,
Appraisal and Recovery of Shares and Damages with Writ of
Preliminary Attachment” against Lilibeth.
Lilibeth in her defense argued among others that Chua’s action has
prescribed.
ISSUE: Whether or not Chua’s claim is barred by prescription.
HELD: No. The action for accounting filed by Chua three (3) years
after Jacinto’s death was well within the prescribed period. The Civil
Code provides that an action to enforce an oral contract prescribes in
six (6) years while the right to demand an accounting for a partner’s
interest as against the person continuing the business accrues at the
date of dissolution, in the absence of any contrary agreement.
Considering that the death of a partner results in the dissolution of the
partnership, in this case, it was after Jacinto’s death that Chua as the
surviving partner had the right to an account of his interest as against
Lilibeth. It bears stressing that while Jacinto’s death dissolved the
partnership, the dissolution did not immediately terminate the
partnership. The Civil Code expressly provides that upon dissolution,
the partnership continues and its legal personality is retained until the
complete winding up of its business, culminating in its termination.
Lilibeth Sunga-Chan vs Lamberto Chua
In 1977, Chua and Jacinto Sunga verbally agreed to form a partnership
for the sale and distribution of Shellane LPGs. Their business was very
profitable but in 1989 Jacinto died. Upon Jacinto’s death, his daughter
Lilibeth took over the business as well as the business assets. Chua
then demanded for an accounting but Lilibeth kept on evading him. In
1992 however, Lilibeth gave Chua P200k. She said that the same
represents a partial payment; that the rest will come after she finally
made an accounting. She never made an accounting so in 1992, Chua
filed a complaint for “Winding Up of Partnership Affairs, Accounting,
Appraisal and Recovery of Shares and Damages with Writ of
Preliminary Attachment” against Lilibeth.
Lilibeth in her defense argued among others that Chua’s action has
prescribed.
ISSUE: Whether or not Chua’s claim is barred by prescription.
HELD: No. The action for accounting filed by Chua three (3) years
after Jacinto’s death was well within the prescribed period. The Civil
Code provides that an action to enforce an oral contract prescribes in
six (6) years while the right to demand an accounting for a partner’s
interest as against the person continuing the business accrues at the
date of dissolution, in the absence of any contrary agreement.
Considering that the death of a partner results in the dissolution of the
partnership, in this case, it was after Jacinto’s death that Chua as the
surviving partner had the right to an account of his interest as against
Lilibeth. It bears stressing that while Jacinto’s death dissolved the
partnership, the dissolution did not immediately terminate the
partnership. The Civil Code expressly provides that upon dissolution,
the partnership continues and its legal personality is retained until the
complete winding up of its business, culminating in its termination.
DAN FUE LEUNG, petitioner, vs. HON. INTERMEDIATE
APPELLATE COURT and LEUNG YIU, respondents.
G.R. No. 70926 January 31, 1989
FACTS:
The petitioner asks for the reversal of the decision of the then
Intermediate Appellate Court in AC-G.R. No. CV-00881 which affirmed
the decision of the then Court of First Instance of Manila, Branch II in
Civil Case No. 116725 declaring private respondent Leung Yiu a
partner of petitioner Dan Fue Leung in the business of Sun Wah
Panciteria and ordering the petitioner to pay to the private respondent
his share in the annual profits of the said restaurant.
This case originated from a complaint filed by respondent Leung Yiu
with the then Court of First Instance of Manila, Branch II to recover the
sum equivalent to twenty-two percent (22%) of the annual profits
derived from the operation of Sun Wah Panciteria since October, 1955
from petitioner Dan Fue Leung.
The Sun Wah Panciteria, a restaurant, located at Florentino Torres
Street, Sta. Cruz, Manila, was established sometime in October, 1955.
It was registered as a single proprietorship and its licenses and permits
were issued to and in favor of petitioner Dan Fue Leung as the sole
proprietor. Respondent Leung Yiu adduced evidence during the trial of
the case to show that Sun Wah Panciteria was actually a partnership Considering the facts of this case, the Court may decree a dissolution
and that he was one of the partners having contributed P4,000.00 to its of the partnership under Article 1831 of the Civil Code which, in part,
initial establishment. provides:

The private respondents evidence is summarized as follows: Art. 1831. On application by or for a partner the
court shall decree a dissolution whenever:
About the time the Sun Wah Panciteria started to become operational,
the private respondent gave P4,000.00 as his contribution to the xxx xxx xxx
partnership. This is evidenced by a receipt wherein the petitioner
acknowledged his acceptance of the P4,000.00 by affixing his
(3) A partner has been guilty of such conduct as
signature thereto. Furthermore, the private respondent received from
tends to affect prejudicially the carrying on of the
the petitioner the amount of P12,000.00 covered by the latter's
business;
Equitable Banking Corporation Check from the profits of the operation
of the restaurant for the year 1974
(4) A partner willfully or persistently commits a
breach of the partnership agreement, or otherwise
The petitioner denied having received from the private respondent the
so conducts himself in matters relating to the
amount of P4,000.00. He contested and impugned the genuineness of
partnership business that it is not reasonably
the receipt. His evidence is summarized as follows:
practicable to carry on the business in partnership
with him;
The petitioner did not receive any contribution at the time he started
the Sun Wah Panciteria. He used his savings from his salaries as an
xxx xxx xxx
employee at Camp Stotsenberg in Clark Field and later as waiter at the
Toho Restaurant amounting to a little more than P2,000.00 as capital in
establishing Sun Wah Panciteria. Petitioner presented various (6) Other circumstances render a dissolution
government licenses and permits showing the Sun Wah Panciteria was equitable.
and still is a single proprietorship solely owned and operated by
himself alone. Fue Leung also flatly denied having issued to the private
There shall be a liquidation and winding up of partnership affairs,
respondent the receipt (Exhibit G) and the Equitable Banking
return of capital, and other incidents of dissolution because the
Corporation's Check No. 13389470 B in the amount of P12,000.00
continuation of the partnership has become inequitable.
(Exhibit B).

DR. SIMEON S. CLARIDADES, plaintiff and appellant,

ISSUE: WON Private respondent is a partner of the petitioner in
Sun Wah Panciteria?
HELD:
The private respondent is a partner of the petitioner in Sun Wah
Panciteria. The requisites of a partnership which are — 1) two or more
persons bind themselves to contribute money, property, or industry to a
common fund; and 2) intention on the part of the partners to divide the
profits among themselves (Article 1767, Civil Code; Yulo v. Yang Chiao
Cheng, 106 Phil. 110)-have been established. As stated by the
respondent, a partner shares not only in profits but also in the losses of
the firm. If excellent relations exist among the partners at the start of
business and all the partners are more interested in seeing the firm
grow rather than get immediate returns, a deferment of sharing in the
profits is perfectly plausible. It would be incorrect to state that if a
partner does not assert his rights anytime within ten years from the
start of operations, such rights are irretrievably lost. The private
respondent's cause of action is premised upon the failure of the
petitioner to give him the agreed profits in the operation of Sun Wah
Panciteria. In effect the private respondent was asking for an
accounting of his interests in the partnership.
It is Article 1842 of the Civil Code in conjunction with Articles 1144 and
1155 which is applicable. Article 1842 states:
The right to an account of his interest shall accrue
to any partner, or his legal representative as
against the winding up partners or the surviving
partners or the person or partnership continuing
the business, at the date of dissolution, in the
absence or any agreement to the contrary.
Regarding the prescriptive period within which the private respondent
may demand an accounting, Articles 1806, 1807, and 1809 show that
the right to demand an accounting exists as long as the partnership
exists. Prescription begins to run only upon the dissolution of the
partnership when the final accounting is done.
vs.
VICENTE C. MERCADER and PERFECTO FERNANDEZ, defendants
and appellees,
GUILLERMO REYES, intervenor and appellant,
ARMANDO H. ASUNCION, intervenor and appellee,
ALFREDO J. ZULUETA and YAP LEDING, intervenors and appellees.
CONCEPCION, J.:
Appeal from an order of dismissal of the Court of First Instance of
Bulacan based upon the ground that venue had been improperly laid.
Petitioner, Dr. Simeon S. Claridades brought this action against
Vicente C. Mercader and Perfecto Fernandez for the dissolution of a
partnership allegedly existing between them and an accounting of the
operation of the partnership, particularly a fishpond located in Sta.
Cruz, Marinduque, which was the main asset of the partnership, from
September 1954, as well as to recover moral and exemplary damages,
in addition to attorney's fees and costs.
In their answer the defendants admitted the existence of the
partnership and alleged that its operation had been so far
unproductive. By way of special defense, they alleged, also, that there
is an impending auction sale of said fishpond due to delinquency in the
payment of taxes owing to lack of funds and plaintiff's failure to
contribute what is due from him. Defendants, likewise, set up a
counter-claim for damages, by reason of the institution of this action,
and for attorney's fees and costs.
Subsequently, Guillermo Reyes was allowed to intervene for the
purpose of recovering a sum of money allegedly due him for services
rendered as foreman of said fishpond, plus damages. Later, one
Armando Asuncion succeeded in intervening as the alleged assignee
of the interest of defendant. Mercader in said partnership and fishpond.
Thereafter, on plaintiff's motion, the lower court appointed a receiver of
the fishpond. Upon the other hand, Alfredo Zulueta and his wife Yap
Leding sought permission to intervene, still later, alleging that they are
the owners of said fishpond, having bought one-half (½)of it from
Benito Regencia, who, in turn, had acquired it from Asuncion, who had
purchased the fishpond from defendant Mercader, and the other half
having been assigned to him directly by Asuncion.
Despite plaintiff's opposition thereto, said permission was granted in an
order dated February 8, 1962, which, likewise gave the Zuluetas ten
(10) days within which to file such pleading as they may deem
necessary for the protection of their rights. Soon thereafter, or on
February 12, 1962, the Zuluetas filed a motion to dismiss upon the
ground that the complaint states no cause of action; that venue has
been improperly laid; and that plaintiff complaint is moot and academic.
Acting upon the motion, on March 2, 1962, the lower court granted the
same upon the ground of improper venue. A reconsideration of this
order having been denied, plaintiff and intervenor Reyes have
interposed the present appeal.
The only question for determination before us is whether or not this
action should have been instituted, not in the Court of First Instance of
Bulacan, but in that of Marinduque, where the aforementioned fishpond
is located. The lower court answered this question in the affirmative,
upon the ground that the subject matter of this case is the possessor of
said fishpond, because plaintiff prays in the complaint that the assets
of the partnership, including said fishpond be sold, that the proceeds of
the sale be applied to the payment of the debts of the partnership, and
that the residue be distributed equally among the partners; that, as
intervenor, Asuncion claims to have an interest in said fishpond; that
the same has been placed under a receivership; and that the Zuluetas
claim to be the exclusive owners of the fishpond aforementioned.
The conclusion drawn from these premises is erroneous. Plaintiff's
complaint merely seeks the liquidation of his partnership with
defendants Fernandez and Mercader. This is obviously a personal
action, which may be brought in the place of residence of either the
plaintiff or the defendants. Since plaintiff is a resident of Bulacan, he
had the right to bring the action in the court of first instance of that
province.1 What is more, although defendants Fernandez and
Mercader reside in Marinduque, they did not object to the venue. In
other words, they waived whatever rights they had, if any, to question
it.2
The fact that plaintiff prays for the sale of the assets of the partnership,
including the fishpond in question, did not change the nature or
character of action, such sale being merely a necessary incident of the
liquidation of the partnership, which should precede and/or is part of its
process of dissolution. Neither plaintiff's complaint nor the answer filed
by defendants Fernandez and Mercader questioned the title to said
property or the possession thereof.
Again, the situation was not changed materially by the Intervention
either of Asuncion or of the Zuluetas, for, as alleged successors to the
interest Mercader in the fishpond, they, at best, stepped into his shoes.
Again, the nature of an action is determined by the allegations of the
complaint.3 At any rate, since the venue was properly laid when the
complaint was filed, said venue cannot, subsequently, become
improper in consequence of issues later raised by any of the
intervenors. The court having legally acquired authority to hear and
decide the case, it can not be divested of that authority by said
intervenors. "An intervention cannot alter the nature of the action and
the issues joined by the original parties thereto."4
Wherefore, the order appealed from should be as it is hereby set aside
and the case remanded to the lower court for further proceedings, with
costs against intervenors appellees, Armando H. Asuncion and Mr. and
Mrs. Alfredo J. Zulueta. It is so ordered.
Ortega vs. CA
FACTS:
On December 19, 1980, respondent Misa associated himself
together, as senior partner with petitioners Ortega, del Castillo, Jr., and
Bacorro, as junior partners. On Feb. 17, 1988, respondent Misa wrote
a letter stating that he is withdrawing and retiring from the firm and
asking for a meeting with the petitioners to discuss the mechanics of
the liquidation. On June 30, 1988, petitioner filed a petition to the
Commision's Securities Investigation and Clearing Department for the
formal dissolution and liquidation of the partnership. On March 31,
1989, the hearing officer rendered a decision ruling that the withdrawal
of the petitioner has not dissolved the partnership. On appeal, the SEC
en banc reversed the decision and was affirmed by the Court of
Appeals. Hence, this petition.
ISSUE:
Whether or not the Court of Appeals has erred in holding that
the partnership is a partnership at will and whether or not the Court of
Appeals has erred in holding that the withdrawal of private respondent
dissolved the partnership regardless of his good or bad faith
HELD:
No. The SC upheld the ruling of the CA regarding the nature
of the partnership. The SC further stated that 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.
The right to choose with whom a person wishes to associate himself is
the very foundation and essence of that partnership. Its continued
existence is, in turn, dependent on the constancy of that mutual
resolve, along with each partner's capability to give it, and the absence
of a cause for dissolution provided by the law itself. Verily, any one of
the partners may, at his sole pleasure, dictate a dissolution of the
partnership at will. He must, however, act in good faith, not that the
attendance of bad faith can prevent the dissolution of the partnership
but that it can result in a liability for damages.
Primelink Properties and Development Corporation vs Ma. Clarita
Lazatin-Magat
Business Organization – Partnership, Agency, Trust – Dissolution and
Winding Up – Joint Venture Agreement – Rights of Innocent Party
In 1994, Primelink Properties and the Lazatin siblings entered into a
joint venture agreement whereby the Lazatins shall contribute a huge
parcel of land and Primelink shall develop the same into a subdivision.
For 4 years however, Primelink failed to develop the said land. So in
1998, the Lazatins filed a complaint to rescind the joint venture
agreement with prayer for preliminary injunction. In said case,
Primelink was declared in default or failing to file an answer and for
asking multiple motions for extension. The trial court eventually ruled in
favor of the Lazatins and it ordered Primelink to return the possession
of said land to the Lazatins as well as some improvements which
Primelink had so far over the property without the Lazatins paying for
said improvements. This decision was affirmed by the Court of
Appeals. Primelink is now assailing the order; that turning over
improvements to the Lazatins without reimbursement is unjust; that the
Lazatins did not ask the properties to be placed under their possession
but they merely asked for rescission.
ISSUE: Whether or not the improvements made by Primelink should
also be turned over under the possession of the Lazatins.
HELD: Yes. In the first place, even though the Lazatins did specifically
pray for possession the same (placing of improvements under their
possession) is incidental in the relief they prayed for. They are
therefore entitled possession over the parcel of land plus the
improvements made thereon made by Primelink.
In this jurisdiction, joint ventures are governed by the laws of
partnership. Under the laws of partnership, when a partnership is
dissolved, as in this case when the trial court rescinded the joint
venture agreement, the innocent party has the right to wind up the
partnership affairs.
With the rescission of the JVA on account of petitioners’ fraudulent
acts, all authority of any partner to act for the partnership is terminated
except so far as may be necessary to wind up the partnership affairs or
to complete transactions begun but not yet finished. On dissolution,
the partnership is not terminated but continues until the winding up of
partnership affairs is completed. Winding up means the administration
of the assets of the partnership for the purpose of terminating the
business and discharging the obligations of the partnership.
It must be stressed, too, that although the Lazatins acquired
possession of the lands and the improvements thereon, the said lands
and improvements remained partnership property, subject to the rights
and obligations of the parties, inter se, of the creditors and of third
parties and subject to the outcome of the settlement of the accounts
between the parties, absent any agreement of the parties in their JVA
to the contrary (here no agreement in the JVA as to winding up). Until
the partnership accounts are determined, it cannot be ascertained how
much any of the parties is entitled to, if at all.