1. GREGORIO F. ORTEGA, TOMAS O. DEL CASTILLO, JR., and BENJAMIN T. BACORRO, vs. HON. COURT OF APPEALS, SECURITIES AND EXCHANGE COMMISSION and JOAQUIN L. MISAFacts:The law firm of ROSS, LAWRENCE, SELPH and CARRASCOSO was duly registered in the Mercantile Registry and reconstituted with the Securities and Exchange Commission. The SEC records show that there were several subsequent amendments to the articles of partnership to change the firm name which eventually became BITO, MISA & LOZADA. Appellees Joaquin L. Misa, Jesus B. Bito and Mariano M. Lozada associated themselves together, as senior partners with respondents-appellees Gregorio F. Ortega, Tomas O. del Castillo, Jr., and Benjamin Bacorro, as junior partners.Petitioner-appellant wrote the respondents-appellees a letter stating that he is withdrawing and retiring from the firm of Bito, Misa and Lozada. He also states that the partnership has ceased to be mutually satisfactory because of the working conditions of our employees including the assistant attorneys. 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 that deprived them of their self-respect.Petitioner filed with this Commission's Securities Investigation and Clearing Department (SICD) a petition for dissolution and liquidation of partnership. The hearing officer rendered a decision ruling that petitioner's withdrawal from the law firm Bito, Misa & Lozada did not dissolve the said law partnership.On appeal, the SEC en banc reversed the decision of the Hearing Officer and held that the withdrawal of Attorney Joaquin L. Misa had dissolved the partnership of "Bito, Misa & Lozada." The Commission ruled that, being a partnership at will, the law firm could be dissolved by any partner at anytime, such as by his withdrawal therefrom, regardless of good faith or bad faith, since no partner can be forced to continue in the partnership against his will.During the pendency of the case with the Court of Appeals, Attorney Jesus Bito and Attorney Mariano Lozada both died on, respectively, 05 September 1991 and 21 December 1991. The death of the two partners, as well as the admission of new partners, in the law firm prompted Attorney Misa to renew his application for receivership (in CA G.R. SP No. 24648). He expressed concern over the need to preserve and care for the partnership assets. The other partners opposed the prayer.The Court of Appeals, finding no reversible error on the part of respondent Commission, AFFIRMED in toto the SEC decision and order appealed from.Issue:Whether or not the partnership of Bito, Misa & Lozada (now Bito, Lozada, Ortega & Castillo) is a partnership at willHeld:Yes.A partnership that does not fix its term is a partnership at will. That the law firm "Bito, Misa & Lozada," and now "Bito, Lozada, Ortega and Castillo," is indeed such a partnership.The hearing officer however opined that the partnership is one for a specific undertaking and hence not a partnership at will, citing paragraph 2 of the Amended Articles of Partnership (19 August 1948):"2. Purpose. The purpose for which the partnership is formed, is to act as legal adviser and representative of any individual, firm and corporation engaged in commercial, industrial or other lawful businesses and occupations; to counsel and advise such persons and entities with respect to their legal and other affairs; and to appear for and represent their principals and client in all courts of justice and government departments and offices in the Philippines, and elsewhere when legally authorized to do so."The "purpose" of the partnership is not the specific undertaking referred to in the law. Otherwise, all partnerships, which necessarily must have a purpose, would all be considered as partnerships for a definite undertaking. There would therefore be no need to provide for articles on partnership at will as none would so exist. Apparently what the law contemplates, is a specific undertaking or "project" which has a definite or definable period of completion.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 partnershipAttorney Misa did not act in bad faith. Public respondents viewed his withdrawal to have been spurred by "interpersonal conflict" among the partners.Decision appealed is affirmed.

2. ISABELO MORAN, JR., vs. THE HON. COURT OF APPEALS and MARIANO E. PECSONFacts:Pecson and Moran entered into an agreement whereby both would contribute P15,000 each for the purpose of printing 95,000 posters (featuring the delegates to the 1971 Constitutional Convention), with Moran actually supervising the work; that Pecson would receive a commission of P l,000 a month starting on April 15, 1971 up to December 15, 1971; that on December 15, 1971, a liquidation of the accounts in the distribution and printing of the 95,000 posters would be made, that Pecson gave Moran P10,000 for which the latter issued a receipt; that only a few posters were printed; that on or about May 28, 1971, Moran executed in favor of Pecson a promissory note in the amount of P20,000 payable in two equal installments (P10,000 payable on or before June 15, 1971 and P10,000 payable on or before June 30, 1971), the whole sum becoming due upon default in the payment of the first installment on the date due, complete with the costs of collection.Private respondent Pecson filed with the Court of First Instance of Manila an action for the recovery of a sum of money.The CFI held that the plaintiff did contribute P10,000.00, and another sum of P7,000.00 for the Voice of the Veteran or Delegate Magazine. Of the expected 95,000 copies of the posters, the defendant was able to print 2,000 copies only authorized of which, however, were sold at P5.00 each. Nothing more was done after this and it can be said that the venture did not really get off the ground. On the other hand, the plaintiff failed to give his full contribution of P15,000.00. Thus, each party is entitled to rescind the contract.The CFI renders judgment ordering defendant Isabelo C. Moran, Jr. to return to plaintiff Mariano E. Pecson the sum of P17,000.00, with interest.On appeal the CA ordered defendant-appellant Isabelo C. Moran, Jr. to pay plaintiff- appellant Mariano E. Pecson: Forty-seven thousand five hundred (P47,500) (the amount that could have accrued to Pecson under their agreement)The petitioner contends that the award is highly speculative.Issue:WON Moran is obliged to give Pecson the amount of expected profits from their partnershipHeld:No.We agree with the petitioner that the award of speculative damages has no basis in fact and law.There is no dispute over the nature of the agreement between the petitioner and the private respondent. It is a contract of partnership. The latter in his complaint alleged that he was induced by the petitioner to enter into a partnership with him under the following terms and conditions: 1. That the partnership will print colored posters of the delegates to the Constitutional Convention;2. That they will invest the amount of Fifteen Thousand Pesos (P15,000.00) each;3. That they will print Ninety Five Thousand (95,000) copies of the said posters;4. That plaintiff will receive a commission of One Thousand Pesos (P1,000.00) a month starting April 15, 1971 up to December 15, 1971;5. That upon the termination of the partnership on December 15, 1971, a liquidation of the account pertaining to the distribution and printing of the said 95,000 posters shall be made.When a partner who has undertaken to contribute a sum of money fails to do so, he becomes a debtor of the partnership for whatever he may have promised to contribute (Art. 1786, Civil Code) and for interests and damages from the time he should have complied with his obligation (Art. 1788, Civil Code).Article 1797 of the Civil Code provides: The losses and profits shall be distributed in conformity with the agreement. If only the share of each partner in the profits has been agreed upon, the share of each in the losses shall be in the same proportion.Being a contract of partnership, each partner must share in the profits and losses of the venture. That is the essence of a partnership. And even with an assurance made by one of the partners that they would earn a huge amount of profits, in the absence of fraud, the other partner cannot claim a right to recover the highly speculative profits. It is a rare business venture guaranteed to give 100% profits. In this case, on an investment of P15,000.00, the respondent was supposed to earn a guaranteed P1,000.00 a month for eight months and around P142,500.00 on 95,000 posters costing P2.00 each but 2,000 of which were sold at P5.00 each. The fantastic nature of expected profits is obvious. We have to take various factors into account. The failure of the Commission on Elections to proclaim all the 320 candidates of the Constitutional Convention on time was a major factor. The petitioner undesirable his best business judgment and felt that it would be a losing venture to go on with the printing of the agreed 95,000 copies of the posters. Hidden risks in any business venture have to be considered.However, as it was shown that Pecson gave money to Moran (P10k) which the latter used to print the first batch of posters, and since these posters were sold and profits were realized from such sale, Pecson is entitled to recover his share of such profitsThe SC agrees with the petitioner that the award of P8,000.00 as Pecson's supposed commission has no justifiable basis in law. The partnership agreement stipulated that the petitioner would give the private respondent a monthly commission. he agreement does not state the basis of the commission. The payment of the commission could only have been predicated on relatively extravagant profits. The parties could not have intended the giving of a commission inspite of loss or failure of the venture. Since the venture was a failure, the private respondent is not entitled to the P8,000.00 commission.The petition is GRANTED. The Court of Appeals decision is hereby SET ASIDE and a new one is rendered ordering the petitioner Isabelo Moran, Jr., to pay private respondent Mariano Pecson SIX THOUSAND (P6,000.00) PESOS representing the amount of the private respondent's contribution to the partnership but which remained unused; and THREE THOUSAND (P3,000.00) PESOS representing one half (1/2) of the net profits gained by the partnership.

3. MAURO LOZANA vs. SERAFIN DEPAKAKIBOFacts:Plaintiff Mauro Lozana entered into a contract with defendant Serafin Depakakibo wherein they established a partnership capitalized at the sum of P30,000, plaintiff furnishing 60% thereof and the defendant, 40%, for the purpose of maintaining, operating and distributing electric light and power in the Municipality of Dumangas, Province of Iloilo, under a franchise issued to Mrs. Piadosa Buenaflor. However, the franchise or certificate of public necessity and convenience in favor of the said Mrs. Piadosa Buenaflor was cancelled and revoked by the Public Service Commission. A temporary certificate of public convenience was issued in the name of Olimpia D. Decolongon. Evidently because of the cancellation of the franchise in the name of Mrs. Piadosa Buenaflor, plaintiff herein Mauro Lozana sold a generator, Buda (diesel), to the new grantee Olimpia D. Decolongon. Defendant Serafin Depakakibo, on the other hand, sold one Crossly Diesel Engine, 25 h. p., Serial No. 141758, to the spouses Felix Jimenea and Felina Harder, by a deed.laintiff Mauro Lozana brought an action against the defendant, alleging that he is the owner of the Generator Buda (Diesel). Plaintiff prayed that said properties be delivered back to him. Defendant filed an answer, denying that the generator and the equipment mentioned in the complaint belong to the plaintiff and alleging that the same had been contributed by the plaintiff to the partnership entered into between them in the same manner that defendant had contributed equipments also, and therefore that he is not unlawfully detaining them. He, therefore, prayed that the complaint against him be dismissed.Issue:Whether or not the Buda Diesel Engine belonged to the partnershipHeld:Yes.It is not stated therein that there bas been a liquidation of the partnership assets at the time plaintiff sold the Buda Diesel Engine on October 15, 1955, and since the court below had found that the plaintiff had actually contributed one engine and 70 posts to the partnership, it necessarily follows that the Buda diesel engine contributed by the plaintiff had become the property of the partnership. As properties of the partnership, the same could not be disposed of by the party contributing the same without the consent or approval of the partnership or of the other partner.It also follows that the claim of the defendant in his counterclaim that the partnership be dissolved and its assets liquidated is the proper remedy, not for each contributing partner to claim back what he had contributed.

4. MAXIMILIANO SANCHO vs. SEVERIANO LIZARRAGAFacts:The plaintiff brought an action for the rescission of a partnership contract between himself and the defendant, entered into on October 15, 1920, the reimbursement by the latter of his 50,000 peso investment therein.The defendant denies generally and specifically all the allegations of the complaint which are incompatible with his special defenses, cross-complaint and counterclaim, setting up the latter and asking for the dissolution of the partnership.The Court of First Instance of Manila, having heard the cause, and finding it duly proved that the defendant had not contributed all the capital he had bound himself to invest, and that the plaintiff had demanded that the defendant liquidate the partnership, declared it dissolved on account of the expiration of the period for which it was constituted, and ordered the defendant, as managing partner, to proceed without delay to liquidate it hence, this appeal.Issue:WON plaintiff acquired the right to demand rescission of the partnership contract according to article 1124 of the Civil Code.Held:No.Until the accounts have been rendered as ordered by the trial court, and until they have been either approved or disapproved, the litigation involved in this action cannot be considered as completely decided; and, as it was held in said case of Natividad vs .Villarica, also with reference to an appeal taken from a decision ordering the rendition of accounts following the dissolution of partnership, the appeal in the instant case must be deemed premature.Owing to the defendant's failure to pay to the partnership the whole amount which he bound himself to pay, he became indebted to it for the remainder, with interest and any damages occasioned thereby, but the plaintiff did not thereby acquire the right to demand rescission of the partnership contract according to article 1124 of the Code. This article cannot be applied to the case in question, because it refers to the resolution of obligations in general, whereas article 1681 and 1682 specifically refer to the contract of partnership in particular. And it is a well known principle that special provisions prevail over general provisions.

5. WILLIAM UY vs. BARTOLOME PUZON, substituted by FRANCO PUZONFacts:Defendant Bartolome Puzon had a contract with the Republic of the Philippines for the construction of the Ganyangan Bato Section of the Pagadian Zamboanga City Road, province of Zamboanga del Sur 1 and of five (5) bridges in the Malangas-Ganyangan Road. 2 Finding difficulty in accomplishing both projects, Bartolome Puzon sought the financial assistance of the plaintiff, William Uy. As an inducement, Puzon proposed the creation of a partnership between them which would be the sub-contractor of the projects and the profits to be divided equally between them. William Uy inspected the projects in question and, expecting to derive considerable profits therefrom, agreed to the proposition, thus resulting in the formation of the "U.P. Construction Company" 3 which was subsequently engaged as subcontractor of the construction projects.The partners agreed that the capital of the partnership would be P100,000.00 of which each partner shall contribute the amount of P50,000.00 in cash. 5 But, as heretofore stated, Puzon was short of cash and he promised to contribute his share in the partnership capital as soon as his application for a loan with the Philippine National Bank in the amount of P150,000.00 shall have been approved. However, before his loan application could be acted upon, he had to clear his collaterals of its incumbrances first. For this purpose, on October 24, 1956, Wilham Uy gave Bartolome Puzon the amount of P10,000.00 as advance contribution of his share in the partnership to be organized between them under the firm name U.P. CONSTRUCTION COMPANY which amount mentioned above will be used by Puzon to pay his obligations with the Philippine National Bank to effect the release of his mortgages with the said Bank. 6 On October 29, 1956, William Uy again gave Puzon the amount of P30,000.00 as his partial contribution to the proposed partnership and which the said Puzon was to use in payment of his obligation to the Rehabilitation Finance Corporation. 7 Puzon promised William Uy that the amount of P150,000.00 would be given to the partnership to be applied thusly: P40,000.00, as reimbursement of the capital contribution of William Uy which the said Uy had advanced to clear the title of Puzon's property; P50,000.00, as Puzon's contribution to the partnership; and the balance of P60,000.00 as Puzon's personal loan to the partnership.Since Puzon was busy with his other projects, William Uy was entrusted with the management of the projects and whatever expense the latter might incur, would be considered as part of his contribution.The loan of Puzon was approved by the Philippine National Bank in November, 1956 and he gave to William Uy the amount of P60,000.00. Of this amount, P40,000.00 was for the reimbursement of Uy's contribution to the partnership which was used to clear the title to Puzon's property, and the P20,000.00 as Puzon's contribution to the partnership capital.To guarantee the repayment of the above-mentioned loan, Bartolome Puzon, without the knowledge and consent of William Uy, 14 assigned to the Philippine National Bank all the payments to be received on account of the contracts with the Bureau of Public Highways for the construction of the afore-mentioned projects. By virtue of said assignment, the Bureau of Public Highways paid the money due on the partial accomplishments on the government projects in question to the Philippine National Bank which, in turn, applied portions of it in payment of Puzon's loan. Of the amount of P1,047,181.07, released by the Bureau of Public Highways in payment of the partial work completed by the partnership on the projects, the amount of P332,539.60 was applied in payment of Puzon's loan and only the amount of P27,820.80 was deposited in the partnership funds, 16 which, for all practical purposes, was also under Puzon's account since Puzon was the custodian of the common funds.Failing to reach an agreement with William Uy, Bartolome Puzon, as prime contractor of the construction projects, wrote the subcontractor, U.P. Construction Company, on November 20, 1957, advising the partnership, of which he is also a partner, that unless they presented an immediate solution and capacity to prosecute the work effectively, he would be constrained to consider the sub-contract terminated and, thereafter, to assume all responsibilities in the construction of the projects in accordance with his original contract with the Bureau of Public Highways.Thereafter, William Uy was not allowed to hold office in the U.P. Construction Company and his authority to deal with the Bureau of Public Highways in behalf of the partnership was revoked by Bartolome Puzon who continued with the construction projects alone. 22On May 20, 1958, William Uy, claiming that Bartolome Puzon had violated the terms of their partnership agreement, instituted an action in court, seeking, inter alia, the dissolution of the partnership and payment of damages.Answering, Bartolome Puzon denied that he violated the terms of their agreement claiming that it was the plaintiff, William Uy, who violated the terms thereof. He, likewise, prayed for the dissolution of the partnership and for the payment by the plaintiff of his, share in the losses suffered by the partnership.After appropriate proceedings, the trial court found that the defendant, contrary to the terms of their partnership agreement, failed to contribute his share in the capital of the partnership applied partnership funds to his personal use; ousted the plaintiff from the management of the firm, and caused the failure of the partnership to realize the expected profits of at least P400,000.00. As a consequence, the trial court dismissed the defendant's counterclaim and ordered the dissolution of the partnership. The trial court further ordered the defendant to pay the plaintiff the sum of P320,103.13. Hence, the instant appeal by the defendant Bartolome Puzon.Issue:WON defendant Puzon failed to contribute his share in the capital of the partnership and is liable to plaintiff for what the latter investedHeld;Yes.The findings of the trial court that the appellant failed to contribute his share in the capital of the partnership is clear incontrovertible. The record shows that after the appellant's loan the amount of P150,000.00 was approved by the Philippine National Bank in November, 1956, he gave the amount P60,000.00 to the appellee who was then managing the construction projects. Of this amount, P40,000.00 was to be applied a reimbursement of the appellee's contribution to the partnership which was used to clear the title to the appellant's property, and the balance of P20,000.00, as Puzon's contribution to the partnership. Thereafter, the appellant failed to make any further contributions the partnership funds as shown in his letters to the appellee wherein he confessed his inability to put in additional capital to continue with the projects.Parenthetically, the claim of the appellant that the appellee is equally guilty of not contributing his share in the partnership capital inasmuch as the amount of P40,000.00, allegedly given to him in October, 1956 as partial contribution of the appellee is merely a personal loan of the appellant which he had paid to the appellee, is plainly untenable. The terms of the receipts signed by the appellant are clear and unequivocal that the sums of money given by the appellee are appellee's partial contributions to the partnership capital.The findings of the trial court that the appellant misapplied partnership funds is, likewise, sustained by competent evidence. It is of record that the appellant assigned to the Philippine National Bank all the payments to be received on account of the contracts with the Bureau of Public Highways for the construction of the aforementioned projects to guarantee the repayment of the bank. The appellee categorically stated that the assignment to the Philippine National Bank was made without his prior knowledge and consent.That the assignment to the Philippine National Bank prejudicial to the partnership cannot be denied. The record show that during the period from March, 1957 to September, 1959, the appellant Bartolome Puzon received from the Bureau of Public highways, in payment of the work accomplished on the construction projects, the amount of P1,047,181.01, which amount rightfully and legally belongs to the partnership by virtue of the subcontract agreements between the appellant and the U.P. Construction Company. In view of the assignemt made by Puzon to the Philippine National Bank, the latter withheld and applied the amount of P332,539,60 in payment of the appellant's personal loan with the said bank. The balance was deposited in Puzon's current account and only the amount of P27,820.80 was deposited in the current account of the partnership.Under Article 2200 of the Civil Code, indemnification for damages shall comprehend not only the value of the loss suffered, but also that of the profits which the obligee failed to obtain.Since the defendant-appellant was at fault, the trial court properly ordered him to reimburse the plaintiff-appellee whatever amount latter had invested in or spent for the partnership on account of construction projects.Costs against the appellant, it being understood that the liability mentioned herein shall be home by the estate of the deceased Bartolome Puzon.

6. EVANGELISTA & CO., DOMINGO C. EVANGELISTA, JR., CONCHITA B. NAVARRO and LEONARDA ATIENZA ABAD SABTOS vs. ESTRELLA ABAD SANTOS,Facts:A co-partnership was formed under the name of "Evangelista & Co. The Articles of Co-partnership was amended as to include herein respondent, Estrella Abad Santos, as industrial partner, with herein petitioners Domingo C. Evangelista, Jr., Leonardo Atienza Abad Santos and Conchita P. Navarro, the original capitalist partners, remaining in that capacity, with a contribution of P17,500 each. The amended Articles provided, inter alia, that "the contribution of Estrella Abad Santos consists of her industry being an industrial partner", and that the profits and losses "shall be divided and distributed among the partners ... in the proportion of 70% for the first three partners, Domingo C. Evangelista, Jr., Conchita P. Navarro and Leonardo Atienza Abad Santos to be divided among them equally; and 30% for the fourth partner Estrella Abad Santos."Respondent filed suit against the three other partners in the Court of First Instance of Manila, alleging that the partnership, which was also made a party-defendant, had been paying dividends to the partners except to her.The defendants, in their answer, denied ever having declared dividends or distributed profits of the partnership. That her share of 30% was to be based on the profits which might be realized by the partnership only until full payment of the loan which it had obtained in December, 1955 from the Rehabilitation Finance Corporation in the sum of P30,000, for which the plaintiff had signed a promisory note as co-maker and mortgaged her property as security.The Court of First Instance found for the plaintiff and rendered judgement "declaring her an industrial partner of Evangelista & Co.; ordering the defendants to render an accounting of the business operations of the (said) partnership. The CA affirmed the decision.Issue:Whether or not the plaintiff-appellee (respondent here) is an industrial partnerHeld:Yes.Even if appellee was and still is a Judge of the City Court of Manila, she has rendered services for appellants without which they would not have had the wherewithal to operate the business for which appellant company was organized. Art 1767 does not specify the kind of industry that a partner may thus contribute, hence the said services may legitimately be considered as appellee's contribution to the common fund.Art 1789 of the NCC also relied upon by appellants reads:'ART. 1789. An industrial partner cannot engage in business for himself, unless the partnership expressly permits him to do so; and if he should do so, the capitalist partners may either exclude him from the firm or avail themselves of the benefits which he may have obtained in violation of this provision, with a right to damages in either case.'It is not disputed that the provision against the industrial partner engaging in business for himself seeks to prevent any conflict of interest between the industrial partner and the partnership, and to insure faithful compliance by said partner with this prestation. There is no pretense, however, even on the part of the appellee is engaged in any business antagonistic to that of appellant company, since being a Judge of one of the branches of the City Court of Manila can hardly be characterized as a business.That appellee has faithfully complied with her prestation with respect to appellants is clearly shown by the fact that it was only after filing of the complaint in this case and the answer thereto appellants exercised their right of exclusion under the codal art just mentioned by alleging in their Supplemental Answer dated June 29, 1964 or after around nine (9) years from June 7, 1955 subsequent to the filing of defendants' answer to the complaint, defendants reached an agreement whereby the herein plaintiff been excluded from, and deprived of, her alleged share, interests or participation, as an alleged industrial partner, in the defendant partnership and/or in its net profits or income, on the ground plaintiff has never contributed her industry to the partnership, instead she has been and still is a judge of the City Court (formerly Municipal Court) of the City of Manila, devoting her time to performance of her duties as such judge and enjoying the privilege and emoluments appertaining to the said office, aside from teaching in law school in Manila, without the express consent of the herein defendants'

7. JOSUE SONCUYA vs. CARMEN DE LUNAFacts:Plaintiff Josue Soncuya filed with the Court of First Instance of Manila and amended complaint against Carmen de Luna in her own name and as co-administratrix of the intestate estate, of Librada Avelino, in which, upon the facts therein alleged, he prayed that defendant be sentenced to pay him the sum of P700,432 as damages and costs.To the aforesaid amended complaint defendant Carmen de Luna interposed a demurrer based on the following grounds: (1) That the complaint does not contain facts sufficient to constitute a cause of action; and (2) that the complaint is ambiguous, unintelligible and vague.Trial on the demurrer having been held and the parties heard, the court found the same well-founded and sustained it, ordering the plaintiff to amend his complaint within a period of ten days from receipt of notice of the order.Plaintiff having manifested that he would prefer not to amend his amended complaint, the attorney for the defendant, Carmen de Luna, filed a motion praying that the amended complaint be dismissed with costs against the plaintiff. Said motion was granted by The Court of First Instance of Manila which ordered the dismissal of the aforesaid amended complaint, with costs against the plaintiff.From this order of dismissal, the appellant took an appeal, assigning twenty alleged errors committed by the lower court in its order referred to.The demurrer interposed by defendant to the amended complaint filed by plaintiff having been sustained on the grounds that the facts alleged in said complaint are not sufficient to constitute a cause of action and that the complaint is ambiguous, unintelligible and vague, the only questions which may be raised and considered in the present appeal are those which refer to said grounds.Issue:Whether or not he facts alleged in the complaint are sufficient to constitute a cause of action on the part of plaintiffHeld:No.In the amended complaint it is prayed that defendant Carmen de Luna be sentenced to pay plaintiff damages in the sum of P700,432 as a result of the administration, said to be fraudulent, of he partnership, "Centro Escolar de Seoritas", of which plaintiff, defendant and the deceased Librada Avelino were members. For the purpose of adjudicating to plaintiff damages which he alleges to have suffered as a partner by reason of the supposed fraudulent management of the partnership referred to, it is first necessary that a liquidation of the business thereof be made to the end that the profits and losses may be known and the causes of the latter and the responsibility of the defendant as well as the damages which each partner may have suffered, may be determined. It is not alleged in the complaint that such a liquidation has been effected nor is it prayed that it be made. Consequently, there is no reason or cause for plaintiff to institute the action for damages which he claims from the managing partner Carmen de Luna.For a partner to be able to claim from another partner who manages the general copartnership, damages allegedly suffered by him by reason of the fraudulent administration of the latter, a previous liquidation of said partnership is necessary.

8. PO YENG CHEO vs. LIM KA YAMFacts:The plaintiff, Po Yeng Cheo, is the sole heir of one Po Gui Yao, deceased, and as such Po Yeng Cheo inherited the interest left by Po Gui Yao in a business conducted in Manila under the style of Kwong Cheong Tay. This business had been in existence in Manila for many years prior to 1903, as a mercantile partnership, engaged in the import and export trade; and after the death of Po Gui Yao the following seven persons were interested therein as partners in the amounts set opposite their respective names, to wit: Po Yeng Cheo, Chua Chi Yek, Lim Ka Yam, Lee Kom Chuen, Ley Wing Kwong, Chan Liong Chao, Lee Ho Yuen. The manager of Kwong Cheong Tay, for many years prior of its complete cessation from business in 1910, was Lim Ka Yam, the original defendant herein.Among the properties pertaining to Kwong Cheong Tay and consisting part of its assets were ten shares of a total par value of P10,000 in an enterprise conducted under the name of Yut Siong Chyip Konski and certain shares to the among of P1,000 in the Manila Electric Railroad and Light Company, of Manila.In the year 1910 Kwong Cheong Tay ceased to do business, owing principally to the fact that the plaintiff ceased at that time to transmit merchandise from Hongkong, where he then resided. Lim Ka Yam appears at no time to have submitted to the partners any formal liquidation of the business, though The trial judge rendered judgment in favor of the plaintiff, Po Yeng Cheo, to recover of the defendant Lim Yock Tock, as administrator of Lim Ka Yam, the sum of sixty thousand pesos (P60,000), constituting the interest of the plaintiff in the capital of Kwong Cheong Tay, plus the plaintiff's proportional interest in shares of the Yut Siong Chyip Konski and Manila Electric Railroad and Light Company, estimated at P11,000, together with the costs. From this judgment the defendant appealed.Issue:Whether or not the award given to Po Yeng Cheo constituting his interest to the extent of his share of the capital of Kwong Cheong Tay was proper.Held:No.It was erroneous in any event to give judgment in favor of the plaintiff to the extent of his share of the capital of Kwong Cheong Tay. The managing partner of a mercantile enterprise is not a debtor to the shareholders for the capital embarked by them in the business; and he can only be made liable for the capital when, upon liquidation of the business, there are found to be assets in his hands applicable to capital account.The only property pertaining to Kwong Cheong Tay at the time this action was brought consisted of shares in the two concerns already mentioned of the total par value of P11,000. Of course, if these shares had been sold and converted into money, the proceeds, if not needed to pay debts, would have been distributable among the various persons in interest, that is, among the various shareholders, in their respective proportions. But under the circumstances revealed in this case, it was erroneous to give judgment in favor of the plaintiff for his aliquot part of the par value of said shares. It is elementary that one partner, suing alone, cannot recover of the managing partner the value of such partner's individual interest; and a liquidation of the business is an essential prerequisite.Moreover, after the death of the original defendant, Lim Ka Yam, the trial court allowed the action to proceed against Lim Yock Tock, as his administrator, and entered judgment for a sum of money against said administrator as the accounting party. This is an error because it is well settled that when a member of a mercantile partnership dies, the duty of liquidating its affair devolves upon the surviving member, or members, of the firm, not upon the legal representative of the deceased partner.The judgment must be reversed, and the defendant will be absolved from the complaint.

9. Matela vs Chua SintekThe managing partner has authority to dismiss an employee, particularly, when there is a justiable cause for dismissal as when the employee hurled at the manager abusive and unsavory remarks in the presence of the customers of the rm.Matela, a pharmacy clerk in a drug store operated by a partnership, was suspected of having misappropriated P300 worth of anti-tetanus serum; whereupon, while being investigated by the police, he hurled abusive and unsavory language against the manager, in the presence customers of the firm. The manager then dismissed him, which the CA held to be highly justified.

10. TAI TONG CHUACHE & CO. vs. THE INSURANCE COMMISSION and TRAVELLERS MULTI-INDEMNITY CORPORATIONFacts:Complainants acquired from a certain Rolando Gonzales a parcel of land and a building located at San Rafael Village, Davao City. Complainants assumed the mortgage of the building in favor of S.S.S., which building was insured with respondent S.S.S. Accredited Group of Insurers for P25,000.00.On April 19, 1975, Azucena Palomo obtained a loan from Tai Tong Chuache Inc. in the amount of P100,000.00. To secure the payment of the loan, a mortgage was executed over the land and the building in favor of Tai Tong Chuache & Co. On April 25, 1975, Arsenio Chua, representative of Thai Tong Chuache & Co. insured the latter's interest with Travellers Multi-Indemnity Corporation for P100,000.00 On June 11, 1975, Pedro Palomo secured a Fire Insurance Policy No. F- 02500, covering the building for P50,000.00 with respondent Zenith Insurance Corporation. On July 16, 1975, another Fire Insurance Policy No. 8459 was procured from respondent Philippine British Assurance Company, covering the same building for P50,000.00 and the contents thereof for P70,000.00.On July 31, 1975, the building and the contents were totally razed by fire.Based on the computation of the loss, including the Travellers Multi- Indemnity, respondents, Zenith Insurance, Phil. British Assurance and S.S.S. Accredited Group of Insurers, paid their corresponding shares of the loss. Demand was made from respondent Travellers Multi-Indemnity for its share in the loss but the same was refused. Hence, complainants demanded from the other three (3) respondents the balance of each share in the loss based on the computation of the Adjustment Standards Report excluding Travellers Multi-Indemnity but the same was refused, hence, this action.On May 31, 1977, Tai Tong Chuache & Co. filed a complaint in intervention claiming the proceeds of the fire Insurance Policy No. F-559 DV, issued by respondent Travellers Multi-Indemnity.Travellers Insurance, in answer to the complaint in intervention, alleged that the Intervenor is not entitled to indemnity under its Fire Insurance Policy for lack of insurable interest before the loss of the insured premises and that the complainants, spouses Pedro and Azucena Palomo, had already paid in full their mortgage indebtedness to the intervenorAs adverted to above respondent Insurance Commission dismissed spouses Palomos' complaint on the ground that the insurance policy subject of the complaint was taken out by Tai Tong Chuache & Company, petitioner herein, for its own interest only as mortgagee of the insured property and thus complainant as mortgagors of the insured property have no right of action against herein respondent. It likewise dismissed petitioner's complaint in intervention.Issue:Whether or not the action was brought in the name of the real party in interest.Held:Yes.Respondent Insurance Commission absolved respondent insurance company from liability on the basis of the certification issued by the then Court of First Instance of Davao, Branch II, that in a certain civil action against the Palomos, Arsenio Lopez Chua stands as the complainant and not Tai Tong Chuache. From said evidence respondent commission inferred that the credit extended by herein petitioner to the Palomos secured by the insured property must have been paid. Such is a glaring error which this Court cannot sanction. Respondent Commission's findings are based upon a mere inference.Public respondent argues that if the civil case really stemmed from the loan granted to Azucena Palomo by petitioner the same should have been brought by Tai Tong Chuache or by its representative in its own behalf. From the above premise respondent concluded that the obligation secured by the insured property must have been paid.The premise is correct but the conclusion is wrong. Citing Rule 3, Sec. 2 10 respondent pointed out that the action must be brought in the name of the real party in interest. We agree. However, it should be borne in mind that petitioner being a partnership may sue and be sued in its name or by its duly authorized representative. The fact that Arsenio Lopez Chua is the representative of petitioner is not questioned. Petitioner's declaration that Arsenio Lopez Chua acts as the managing partner of the partnership was corroborated by respondent insurance company. Thus Chua as the managing partner of the partnership may execute all acts of administration including the right to sue debtors of the partnership in case of their failure to pay their obligations when it became due and demandable. Or at the very least, Chua being a partner of petitioner Tai Tong Chuache & Company is an agent of the partnership. Being an agent, it is understood that he acted for and in behalf of the firm. Public respondent's allegation that the civil case filed by Arsenio Chua was in his capacity as personal creditor of spouses Palomo has no basis.The respondent insurance company having issued a policy in favor of herein petitioner which policy was of legal force and effect at the time of the fire, it is bound by its terms and conditions. Upon its failure to prove the allegation of lack of insurable interest on the part of the petitioner, respondent insurance company is and must be held liable.11. THE GREAT COUNCIL OF THE UNITED STATES OF THE IMPROVED ORDER OF RED MEN vs. THE VETERAN ARMY OF THE PHILIPPINESFacts:The Constitution of the Veteran Army of the Philippines provides for the organization of posts. Among the posts thus organized is the General Henry W. Lawton Post, No. 1. On the 1st day of March, 1903, a contract of lease of parts of a certain buildings in the city of Manila was signed by W.W. Lewis, E.C. Stovall, and V.O., Hayes, as trustees of the Apache Tribe, No. 1, Improved Order of Red Men, as lessors, and Albert E. McCabe, citing for and on behalf of Lawton Post, Veteran Army of the Philippines as lessee. The lease was for the term of two years commencing February 1, 903, and ending February 28, 1905. The Lawton Post occupied the premises in controversy for thirteen months, and paid the rent for that time. It then abandoned them and this action was commenced to recover the rent for the unexpired term. Judgment was rendered in the court below on favor of the defendant McCabe, acquitting him of the complaint. Judgment was rendered also against the Veteran Army of the Philippines for P1,738.50, and the costs. From this judgment, the last named defendant has appealed. The plaintiff did not appeal from the judgment acquitting defendant McCabe of the complaint.It is claimed by the appellant that the action cannot be maintained by the plaintiff, The Great Council of the United States of the Improved Order of Red Men, as this organization did not make the contract of lease. It is also claimed that the action cannot be maintained against the Veteran Army of the Philippines because it never contradicted, either with the plaintiff or with Apach Tribe, No. 1, and never authorized anyone to so contract in its name.Issue:Whether or not the contract in question was executed by some authorized to so by the Veteran Army of the Philippines.Held:No.The view most favorable to the appellee is the one that makes the appellant a civil partnership.Article 1695 of the Civil Code provides as follows:Should no agreement have been made with regard to the form of management, the following rules shall be observed:

1 All the partners shall be considered as agents, and whatever any one of them may do by himself shall bind the partnership; but each one may oppose the act of the others before they may have produced any legal effect.One partner, therefore, is empowered to contract in the name of the partnership only when the articles of partnership make no provision for the management of the partnership business. In the case at bar we think that the articles of the Veteran Army of the Philippines do so provide.It is true that an express disposition to that effect is not found therein, but we think one may be fairly deduced from the contents of those articles. They declare what the duties of the several officers are. In these various provisions there is nothing said about the power of making contracts, and that faculty is not expressly given to any officer. We think that it was, therefore, reserved to the department as a whole; that is, that in any case not covered expressly by the rules prescribing the duties of the officers, the department were present.We therefore, hold, that no contract, such as the one in question, is binding on the Veteran Army of the Philippines unless it was authorized at a meeting of the department.The Veteran Army of the Philippines is acquitted.

12. SI-BOCO vs. YAP TENGFacts:For a period of three years, more or less, the plaintiff had been furnishing to the defendant native cloth for the latter's store in the city of Manila. The goods were at first furnished on credit, but the business relations of the parties caused entirely in 1904. The defendant had a partner by the name of Yapsuan, who was the manager of the business. The defendant introduced him to the plaintiff as such manager, and told him that Yapsuan had authority from him to receive the cloth, and that the value thereof should be charged to his, the defendant's account, and in fact the cloth was, as a rule, received by Yapsuan from the plaintiff. It became necessary for Yapsuan to return to China in 1902 on account of ill health and a liquidation of the accounts between the plaintiff and the defendant was made in December of the said year, showing a balance of P1,444.95 in favor of the plaintiff, which the defendant expressly undertook to pay. After the liquidation was made the defendant continued to buy the goods from the plaintiff for cash until the year 1904, when, as already stated, the business relations between the parties ceased.The defendant has failed to show that he had paid the aforesaid balance of P1,444.95 or any part thereof.Issue:Whether or not this action should have been brought against the partnership itself, or against the defendant onlyHeld:Defendant only.The appellant contends that the goods having been furnished to and received by the partnership between himself and Yapsuan, and the accounts of the same not having been liquidated, this action should have been brought against the partnership itself, or against the partners jointly, and not against the defendant only. However that may be, the fact remains that the defendant in this case was the only one who contradicted with the plaintiff in his own name, as appears from the latter's testimony. When the defendant told the plaintiff that he had authorized Yapsuan to receive the goods, he instructed the plaintiff to charge them to him (the defendant) personally. The defendant, moreover, undertook personally to pay the balance due the plaintiff, after the liquidation made in December, 1902, such as being the sum sought to be recovered in this case, as appears from the testimony of the plaintiff and that of the two witnesses who took part in the said liquidation. Consequently the court below properly allowed the plaintiff to maintain this action against the defendant.

13. ANTONIO PARDO vs. THE HERCULES LUMBER CO., INC., and IGNACIO FERRERFacts:Petitioner is a stockholder in the Hercules Lumber Company, Inc., and that the respondent, Ignacio Ferrer, as acting secretary of the said company, has refused to permit the petitioner or his agent to inspect the records and business transactions of the said Hercules Lumber Company, Inc., at times desired by the petitioner.The main ground upon which the defense appears to be rested has reference to the time, or times, within which the right of inspection may be exercised. In this connection the answer asserts that in article 10 of the By-laws of the respondent corporation it is declared that "Every shareholder may examine the books of the company and other documents pertaining to the same upon the days which the board of directors shall annually fix."The board also resolved to call the usual general (meeting of shareholders) for March 30 of the present year, with notice to the shareholders that the books of the company are at their disposition from the 15th to 25th of the same month for examination, in appropriate hours. The contention for the respondent is that this resolution of the board constitutes a lawful restriction on the right conferred by statute; and it is insisted that as the petitioner has not availed himself of the permission to inspect the books and transactions of the company within the ten days thus defined, his right to inspection and examination is lost, at least for this year.Petitioner now seeks to obtain a writ of mandamus to compel the respondents to permit the plaintiff and his duly authorized agent and representative to examine the records and business transactions of said companyIssue:WON the board resolution constitutes a lawful restriction on the right conferred by statute.Held:No.In the case of Philpotts vs. Philippine Manufacturing Co., and Berry it was held that the right of examination there conceded to the stockholder may be exercised either by a stockholder in person or by any duly authorized agent or representative.It may be admitted that the officials in charge of a corporation may deny inspection when sought at unusual hours or under other improper conditions; but neither the executive officers nor the board of directors have the power to deprive a stockholder of the right altogether. A by-law unduly restricting the right of inspection is undoubtedly invalid.It will be noted that our statute declares that the right of inspection can be exercised "at reasonable hours." This means at reasonable hours on business days throughout the year, and not merely during some arbitrary period of a few days chosen by the directors.In addition, the motive of the shareholder exercising the right is immaterial.The writ of mandamus will lie.

14. JOSE GARRIDO vs. AGUSTIN ASENCIOFacts:Plaintiff and defendant were members of a partnership doing business under the firm name of Asencio y Cia. The business of the partnership did not prosper and it was dissolved by mutual agreement of the members. The plaintiff brings this action to recover from the defendant, who appears to have been left in charge of the books and the funds of the firm, the amount of the capital which he had invested in the business. The defendant, alleging that there had been considerable losses in the conduct of the business of the partnership, denied that there was anything due the plaintiff as claimed, and filed a cross complaint wherein he prayed for a judgment against the plaintiff for a certain amount which he alleged to be due by the plaintiff under the articles of partnership on account of plaintiff's share of these losses.The trial court found that the evidence substantially sustains the claim of the defendant as to the alleged losses in the business of the partnership and gave judgment in his favor.Issue:Whether or not there is existence of losses in the business of the said partnership Held:Yes.It appears from the record that by mutual agreement the defendant had general charge and supervision of the books and funds of the firm, but it appears that these books were at all times open to the inspection of the plaintiff, and there is evidence which tends to show that the plaintiff himself made entries in these books touching particular transactions in which he happened to be interested; so that while it is clear that the defendant was more especially burdened with the care of the books and accounts of the partnership, it would appear that the plaintiff had equal rights with the defendant in this regard, and that during the existence of the partnership they were equally responsible for the mode in which the books were kept and that the entries made by one had the same effect as if they had been made by the other.As to the trial the principal question at issue was the amount of the profits or losses of the business of the partnership during the period of its operation. The plaintiff made no allegation as to profits, but denied defendant's allegation as to the losses. The defendant in support of his allegations offered in evidence the estado de cuentas (general statement of accounts) of the partnership, supported by a number of vouchers, and by his own testimony under oath as to the accuracy and correctness of the items set out therein.It appears from the record that the statement of account, the vouchers, and the books of the company were placed at the disposition of the plaintiff for more than six weeks prior to the trial, and that during the trial he was given every opportunity to indicate any erroneous or fraudulent items appearing in the account, yet he was unable, or in any event he declined to specify such items, contenting himself with a general statement to the effect that there must be some mistake, as he did not and could not believe that the business had been conducted at a loss.Costs against appellant.

15. ADRIANO BUENAVENTURA Y DEZOLLIER vs. ANTONIO DAVID y ABELIDOFacts:A partnership was formed by Antonio David y Abelido and Adriano Buenaventura y Dezollier for the conduct of the business of real estate brokers in the city of Manila, under the firm name "Abelido and Co." The former was the capitalist member of the firm and its manager, while the latter was the industrial member and bookkeeper. The firm maintained a feeble external existence for a few months, during which period the capitalist associate placed P209.86 in the enterprise. This was consumed in office rent and other incidental expenses. Only two profitable transactions were ever accomplished by the firm of Abelido and Co. during its existence. These produced a total income of P42, which sum was noted on the credit side of the company's ledger.It was agreed in writing that the partnership should not be liquidated until the sale of a piece of real estate in which the firm had become interested should be effected with profit. The property to which reference was thus made consisted of a farm in the municipality of Murcia, in the Province of Tarlac, known as the "Hacienda de Guitan."This farm had been formerly owned by the spouses Loni Diangco and Epifania Torres; and long before the firm of Abelido and Co. had come into existence Antonio David y Abelido had been their creditor by reason of certain sums of money from time to time loaned them. Upon July 10, 1906, Epifania agreed to convey the Hacienda de Guitan to Abelido and Buenaventura for a consideration stated at P2,050. The purpose of the transaction was to settle the debt of several thousand pesos owing by her and her son to Antonio David y Abelido. The grantee named in the deed was Antonio David y Abelido; and no reference was made in this instrument to the firm of Abelido and Co., or to Buenaventura as a partner therein. Buenaventura was present at the time of the execution of this deed and signed as a subscribing witness. It further appears that Antonio David y Abelido proceeded to procure the registration of the hacienda in his own name and a Torrens title was in due course issued to him.From the date of the conveyance above mentioned David exercised all the rights of an owner over the property. Upon one occasion he mortgaged it for the sum of P5,000 and Buenaventura was paid P300 for assisting in the securing of this loan. At another time David mortgaged the property for the sum of P15,000 and applied the money thus secured to his own use.More than seven years after the day upon which the deed to the property had been executed to David, Buenaventura filed the complaint in this action. In this proceeding he seeks relief which includes features among others: a dissolution of the partnership of Abelido and Co and a transfer of the title of the Hacienda de Guitan to Abelido and Co.At the hearing the court entered a judgment declaring that the partnership of Abelido and Co. was dissolved and denying all other relief sought in the complaint. From this judgment the plaintiff Buenaventura has appealed.Issue:Whether or not plaintiff, through the partnership of the firm of Abelido and Co., can still claim his relief sought on the hacienda and other investmentsHeld:No.Buenaventura had no resources, and it was evidently quite beyond his power to raise the funds necessary to participate in a business transaction of the size of that in question. His pretension that he supplied P1,025 or half of the consideration named in the original contract (Exhibit C) was rightly rejected by the court. Furthermore it appears that the firm of Abelido and Co., as distinguished from the individual David Abelido, never in fact advanced a single peso in the transaction. David, who supplied all the funds, has obtained the legal title in his own individual name. This was accomplished with knowledge on the part of Buenaventura. Furthermore he has registered his title by means of legal proceedings which were probably known to Buenaventura. Still later, the latter is seen acting as broker for David in securing a loan on the hacienda and receives a fee for his services. Meanwhile the original partnership enterprise is abandoned. Finally more than seven years after the day when Buenaventura stood by and signed as a witness the deed conveying the property to David, he comes into court and seeks to reach this property through the ghost of the firm of Abelido and Co. and bring the defendant to account for the profits which he has obtained from the investments of its proceeds in various enterprises.No such relief can be granted, upon purely equitable grounds, against a party who has himself paid the entire purchase price in favor of one who advanced nothing.Furthermore, it is evident that the plaintiff's case is adversely affected by his long delay in bringing this action. Undue delay in the enforcement of a right is strongly persuasive of a lack of merit in the claim.Costs against appellant.

16. PANG LIM and BENITO GALVEZ vs. LO SENGFacts:Lo Seng and Pang Lim, Chinese residents of the City of Manila, were partners, under the firm name of Lo Seng and Co., in the business of running a distillery, known as "El Progreso," in the Municipality of Paombong, in the Province of Bulacan. The land on which said distillery is located as well as the buildings and improvements originally used in the business were, at the time to which reference is now made, the property of another Chinaman, who resides in Hongkong, named Lo Yao, who, in September, 1911, leased the same to the firm of Lo Seng and Co. for the term of three years.Upon the expiration of this lease a new written contract, in the making of which Lo Yao was represented by one Lo Shui as attorney in fact, became effective whereby the lease was extended for fifteen years.Neither the original contract of lease nor the agreement extending the same was inscribed in the property registry, for the reason that the estate which is the subject of the lease has never at any time been so inscribed.Pang Lim sold all his interest in the distillery to his partner Lo Seng, thus placing the latter in the position of sole owner; and on June 28, 1918, Lo Shui, again acting as attorney in fact of Lo Yao, executed and acknowledged before a notary public a deed purporting to convey to Pang Lim and another Chinaman named Benito Galvez, the entire distillery plant including the land used in connection therewith. As in case of the lease this document also was never recorded in the registry of property. Thereafter Pang Lim and Benito Galvez demanded possession from Lo Seng, but the latter refused to yield; and the present action of unlawful detainer was thereupon initiated by Pang Lim and Benito Galvez in the court of the justice of the peace of Paombong to recover possession of the premises. From the decision of the justice of the peace the case was appealed to the Court of First Instance, where judgment was rendered for the plaintiffs; and the defendant thereupon appealed to the Supreme Court.Issue:Whether or not Pang Lim be permitted being one of the lessees before and now as one of the purchasers seeking to terminate the lease.Held;No.The plaintiff Pang Lim has occupied a double role in the transactions which gave rise to this litigation, namely, first, as one of the lessees; and secondly, as one of the purchasers now seeking to terminate the lease. These two positions are essentially antagonistic and incompatible. Every competent person is by law bond to maintain in all good faith the integrity of his own obligations; and no less certainly is he bound to respect the rights of any person whom he has placed in his own shoes as regards any contract previously entered into by himself.While yet a partner in the firm of Lo Seng and Co., Pang Lim participated in the creation of this lease, and when he sold out his interest in that firm to Lo Seng this operated as a transfer to Lo Seng of Pang Lim's interest in the firm assets, including the lease; and Pang Lim cannot now be permitted, in the guise of a purchaser of the estate, to destroy an interest derived from himself, and for which he has received full value.It is therefore accepted as fundamental in equity jurisprudence that one partner cannot, to the detriment of another, apply exclusively to his own benefit the results of the knowledge and information gained in the character of partner. Thus, it has been held that if one partner obtains in his own name and for his own benefit the renewal of a lease on property used by the firm, to commence at a date subsequent to the expiration of the firm's lease, the partner obtaining the renewal is held to be a constructive trustee of the firm as to such lease. And this rule has even been applied to a renewal taken in the name of one partner after the dissolution of the firm and pending its liquidationDefendant will be absolved from the complaint

17. R. Y. HANLON vs. JOHN W. HAUSSERMANN and A. W. BEAM, defendants-appellants. GEORGE C. SELLNER, intervenerFacts:Haussermann and Beam, officers of the Benguet Consolidated Mining Company, entered into an agreement with Sellner and Hanlon whereby in consideration of P50,000 to be raised by the latter two to rehabilitate certain essential machineries within a six-month period, the two would receive certain shares in the company. Because the P50,000 was not raised within the proper period, Haussermann and Beam had to look for other sources of capital. Fortunately, they were able to do so, and the shares in the company rose 10 times their original value. Sellner and Hanlon now desire to participate in said profits on the ground that the four of them had jointly agreed to improve the company, and it is but fair that they should share in the profits.Issue:Whether or not Sellner and Hanlon are entitled to the profitsHeld:No.In the first place, Sellner and Hanlon are not partners. Second, granting that they were originally joint ventures, still the fiduciary relations between them ceased when Sellner and Hanlon were unable to raise the needed P50,000. It is true that the defendants had obliged themselves to seek financial assistance from the plaintiff but only for the period of sex months, not indefinitely afterwards. Moreover, after termination of an agency, partnership, or joint venture, each of the parties is free to act in his own interest, provided he has done nothing during the continuance of the relation to lay a foundation for an undue advantage to himself.

18. ANTONIO LIM TANHU, DY OCHAY, ALFONSO LEONARDO NG SUA and CO OYO vs. HON. JOSE R. RAMOLETE as Presiding Judge, Branch III, CFI, Cebu and TAN PUTFacts:Tan Put filed a complaint against spouses Lim Tanhu and Dy Ochay. She later amended her complaint and included some other people as defendantsTan Put alleges that she is the widow of Tee Hoon Lim Po Chuan, who was a partner of defendants in the commercial partnership Glory Commercial Co.Tan Put alleges, among others, that Tanhu et. al., through fraud and machinations, took actual and active management of the partnership, and that although her deceased husband was the manager of Glory,Tanhu et.al managed to use the funds of the partnership to purchase lands and buildings in different cities in Visayas.Further, she also alleges that after the death of Tee Hoon Lim Po Chuan,Tanhu et. al. continued the business without liquidation by organizing a corporationshe alleges that the assets of the corporation are actually the assets of the defunct partnership.In the CFI level, Tan Put prayed for an accounting of the real and personal properties of the Glory Commercial Co., and to subsequently deliver to her 1/3 of the total value of the properties.Defendants defense: That Tan Put was not the legitimate wife of the deceased; that the assets of the partnership has already been properly liquidated, and that it was the legitimate wife Ang Siok Tin who had received Tee Hoons share.Issue:Whether Tan Put, as she alleged being married with Tee Hoon, can claim from the company of the latters share.Held:Yes.Indeed, not only does this document prove that plaintiff's relation to the deceased was that of a common-law wife but that they had settled their property interests with the payment to her of P40,000.In the light of all these circumstances, We find no alternative but to hold that plaintiff Tan Put's allegation that she is the widow of Tee Hoon Lim Po Chuan has not been satisfactorily established and that, on the contrary, the evidence on record convincingly shows that her relation with said deceased was that of a common-law wife and furthermore, that all her claims against the company and its surviving partners as well as those against the estate of the deceased have already been settled and paid. We take judicial notice of the fact that the respective counsel who assisted the parties in the quitclaim, Attys. H. Hermosisima and Natalio Castillo, are members in good standing of the Philippine Bar, with the particularity that the latter has been a member of the Cabinet and of the House of Representatives of the Philippines, hence, absent any credible proof that they had allowed themselves to be parties to a fraudulent document His Honor did right in recognizing its existence, albeit erring in not giving due legal significance to its contents.Of course, the existence of the partnership has not been denied, it is actually admitted impliedly in defendants' affirmative defense that Po Chuan's share had already been duly settled with and paid to both the plaintiff and his legitimate family. But the evidence as to the actual participation of the defendants Lim Tanhu and Ng Sua in the operation of the business that could have enabled them to make the extractions of funds alleged by plaintiff is at best confusing and at certain points manifestly inconsistent.If Po Chuan was in control of the affairs and the running of the partnership, how could the defendants have defrauded him of such huge amounts as plaintiff had made his Honor believe? Upon the other hand, since Po Chuan was in control of the affairs of the partnership, the more logical inference is that if defendants had obtained any portion of the funds of the partnership for themselves, it must have been with the knowledge and consent of Po Chuan, for which reason no accounting could be demanded from them therefor, considering that Article 1807 of the Civil Code refers only to what is taken by a partner without the consent of the other partner or partners. Incidentally again, this theory about Po Chuan having been actively managing the partnership up to his death is a substantial deviation from the allegation in the amended complaint to the effect that "defendants Antonio Lim Tanhu, Alfonso Leonardo Ng Sua, Lim Teck Chuan and Eng Chong Leonardo, through fraud and machination, took actual and active management of the partnership and although Tee Hoon Lim Po Chuan was the manager of Glory Commercial Co., defendants managed to use the funds of the partnership to purchase lands and buildings etc. and should not have been permitted to be proven by the hearing officer, who naturally did not know any better.Moreover, it is very significant that according to the very tax declarations and land titles listed in the decision, most if not all of the properties supposed to have been acquired by the defendants Lim Tanhu and Ng Sua with funds of the partnership appear to have been transferred to their names only in 1969 or later, that is, long after the partnership had been automatically dissolved as a result of the death of Po Chuan. Accordingly, defendants have no obligation to account to anyone for such acquisitions in the absence of clear proof that they had violated the trust of Po Chuan during the existence of the partnership.Besides, assuming there has not yet been any liquidation of the partnership, contrary to the allegation of the defendants, then Glory Commercial Co. would have the status of a partnership in liquidation and the only right plaintiff could have would be to what might result after such liquidation to belong to the deceased partner, and before this is finished, it is impossible to determine, what rights or interests, if any, the deceased had. In other words, no specific amounts or properties may be adjudicated to the heir or legal representative of the deceased partner without the liquidation being first terminated.Petition is granted.

19. DAN FUE LEUNG vs.HON. INTERMEDIATE APPELLATE COURT and LEUNG YIUFacts:The Sun Wah Panciteria 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 and that he was one of the partners having contributed P4,000.00 to its initial establishment.Furthermore, the private respondent received from the petitioner the amount of P12,000.00 covered by the latter's Equitable Banking Corporation Check from the profits of the operation of the restaurant.The petitioner denied having received from the private respondent the amount of P4,000.00. He contested and impugned the genuineness of the receiptLower court ruled in favor of the private respondent. Petitioner appealed the trial court's amended decision. However, the questioned decision was further modified and affirmed by the appellate court. Both the trial court and the appellate court declared that the private petitioner is a partner and is entitled to a share of the annual profits of the restaurant. Hence, an appeal to the SC. The petitioner argues that private respondent extended 'financial assistance' to herein petitioner at the time of the establishment of the Sun Wah Panciteria, in return of which private respondent allegedly will receive a share in the profits of the restaurant. It was, therefore, error for the Appellate Court to interpretor construe 'financial assistance' to mean the contribution of capital by a partner to a partnership.Issue:WON the private respondent is a partner of the petitioner in the establishment of Sun Wah Panciteria.Held:Yes.In essence, the private respondent alleged that when Sun Wah Panciteria was established, he gave P4,000.00 to the petitioner with the understanding that he would be entitled to twenty-two percent (22%) of the annual profit derived from the operation of the said panciteria. These allegations, which were proved, make the private respondent and the petitioner partners in the establishment of Sun Wah Panciteria because Article 1767 of the Civil Code provides that "By the contract of partnership two or more persons bind themselves to contribute money, property or industry to a common fund, with the intention of dividing the profits among themselves".The complaint explicitly stated that "as a return for such financial assistance, plaintiff (private respondent) would be entitled to twenty-two percentum (22%) of the annual profit derived from the operation of the said panciteria.The petitioner raises the issue of prescription and asserted that the complaint was only filed 22 years after. This argument is not well taken.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. 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.SC affirmed appellate courts decision and ordered the dissolution of the partnership.20. EMILIO EMNACE vs. COURT OF APPEALSFacts:Petitioner Emilio Emnace, Vicente Tabanao and Jacinto Divinagracia 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 Divinagracias 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 and cash deposits.Throughout the existence of the partnership, and even after Vicente Tabanaos untimely demise in 1994, petitioner failed to submit to Tabanaos heirs any statement of assets and liabilities of the partnership, and to render an accounting of the partnerships finances. Petitioner also reneged on his promise to turn over to Tabanaos heirs the deceaseds 1/3 share in the total assets of the partnership, despite formal demand for payment thereof.Consequently, Tabanaos heirs, respondents herein, filed against petitioner an action for accounting, payment of shares, division of assets and damages.Petitioner also raised prescription as one of the grounds warranting the outright dismissal of the complaint.The trial court issued an Order, denying the motion to dismiss. The Court of Appeals rendered the assailed decision, dismissing the petition for certiorari of petitioner. Hence, this appeal.Issue:Whether or not thecourt should have dismissed the complaint on the ground of prescriptionHeld:No.Petitioner contends that the trial court should have dismissed the complaint on the ground of prescription, arguing that respondents action prescribed four (4) years after it accrued in 1986. The trial court and the Court of Appeals gave scant consideration to petitioners hollow arguments, and rightly so.The three (3) final stages of a partnership are: (1) dissolution; (2) winding-up; and (3) termination. The partnership, although dissolved, continues to exist and its legal personality is retained, at which time it completes the winding up of its affairs, including the partitioning and distribution of the net partnership assets to the partners. For as long as the partnership exists, any of the partners may demand an accounting of the partnerships business. Prescription of the said right starts to run only upon the dissolution of the partnership when the final accounting is done.Contrary to petitioners protestations that respondents right to inquire into the business affairs of the partnership accrued in 1986, prescribing four (4) years thereafter, prescription had not even begun to run in the absence of a final accounting.When a final accounting is made, it is only then that prescription begins to run. In the case at bar, no final accounting has been made, and that is precisely what respondents are seeking in their action before the trial court, since petitioner has failed or refused to render an accounting of the partnerships business and assets. Hence, the said action is not barred by prescription.Petition denied.