ROJAS VS. MAGLANA

FACTS: Maglana and Rojas executed their Articles of Co-partnership called “East coast Development Enterpises” which had an indefinite term of existence and was registered with the SEC and had a Timber License. One of the EDE’s purposes was to apply or secure timber and/or private forest lands and to operate, develop and promote such forests rights and concessions. M shall manage the business affairs while R shall be the logging superintendent. All profits and losses shall be divided share and share alike between them. Later on, the two availed the services of Pahamotang as industrial partner and executed another articles of co-partnership with the latter.

The purpose of this second partnership was to hold and secure renewal of timber license and the term of which was fixed to30 years. Still later on, the three executed a conditional sale of interest in the partnership wherein M and R shall purchase the interest, share and participation in the partnership of P. It was also agreed that after payment of such including amount of loan secured by P in favor of the partnership, the two shall become owners of all equipment contributed by P.

After this, the two continued the partnership without any written agreement or reconstitution of their articles of partnership. Subsequently, R entered into a management contract with CMS Estate Inc. M wrote him re: his contribution to the capital investments as well as his duties as logging superintendent. R replied that he will not be able to comply with both. M then told R that the latter’s share will just be 20% of the net profits. Such was the sharing from 1957 to 1959without complaint or dispute. R took funds from the partnership more than his contribution. M notified R that he dissolved the partnership. R filed an action against M for the recovery of properties and accounting of the partnership and damages.

CFI: the partnership of M and R is after P retired is one of de facto and at will; the sharing of profits and losses is on the basis of actual contributions; there is no evidence these properties were acquired by the partnership funds thus it should not belong to it; neither is entitled to damages; the letter of M in effect dissolved the partnership; sale of forest concession is valid and binding and should be considered as M’s contribution; R must pay or turnover to the partnership the profits he received from CMS and pay his personal account to the partnership; M must be paid 85kwhich he should’ve received but was not paid to him and must be considered as his contribution.

ISSUE: what is the nature of the partnership and legal relationship of M-R after P retired from the second partnership? May M unilaterally dissolve the partnership?

RULING: There was no intention to dissolve the first partnership upon the constitution of the second as

everything else was the same except for the fact that they took in an industrial partner: they pursued the same purposes, the capital contributions call for the same amounts, all subsequent renewals of Timber License were secured in favor of the first partnership, all businesses were carried out under the registered articles. M and R agreed to purchase the interest, share and participation of P and after, they became owners of the equipment contributed by P. Both considered themselves as partners as per their letters. It is not a partnership de facto or at will as it was existing and duly registered. The letter of M dissolving the partnership is in effect a notice of withdrawal and may be done by expressly withdrawing even before expiration of the period with or without justifiable cause. As to the liquidation of the partnership it shallbe divided “share and share alike” after an accounting has been made.

R is not entitled to any profits as he failed to give the amount he had undertaken to contribute thus, had become a debtor of the partnership. M cannot be liable for damages as R abandoned the partnership thru his acts and also took funds in an amount more than his contribution.

Bearneza vs. Dequilla

Facts:In the year 1903, Balbino Dequilla, the herein defendant, and Perpetua Bearneza formed a partnership for the purpose of exploiting a fish pond with Perpetua obligating herself to contributeto the payment of the expenses of the business, which obligation she made good, and both agreeing to divide the profits between themselves, which they had been doing until the death of the said Perpetua in the year 1912-Perpetua left a will in one of the clauses of which she appointed Domingo Bearnez as her heir to succeed to all her rights and interests in the fish pond in question-Domingo Bearnez then instituted an action to recover a part of the fish pond including ½ of the profits received by the defendant from the years 1913-1919

-The defendant alleges that "the formation of the supposed partnership between the plaintiff and the defendant for the exploitation of the aforesaid fish pond was not carried into effect, on account of the plaintiff having refused to defray the expenses of reconstruction and exploitation of said fishpond." and further averred that the right of the plaintiff had already prescribed

- Judgment was then rendered declaring the plaintiff owner of one-half of the fish pond but without may awarding him any damages-From this judgment the defendant appeal

ISSUE:-W/N the plaintiff has any right to maintain an action for recovery of the said one-half of the fishpond.

RULING: None.

-The partnership formed was a particular partnership, it having had for its subject-matter a specified thing, the exploitation of the aforementioned fish pond

-Although, as the trial court says in its decision, the defendant, in his letters to Perpetua or her husband, makes reference to the fish pond, calling it "our," or "your fish pond," this reference cannot be held to include the land on which the said fish pond was built

-It has not been proven that Bearneza participated in the ownership of the said land. Therefore, the land on which the fish pond was constructed did not constitute part of the subject-matter of the partnership

-This partnership was dissolved by the death of Perpetua Bearneza. There was no stipulation that it would continue.

-The partnership having been dissolved by the death of Perpetua Bearneza, thus its current status is partnership by liquidation. What accrues to Bearneza are the results of the liquidation only.

Lichaco vs. Lichauco

In 1901, F. Lichauco Hermanos partnership was formed. It was provided, among others, in the partnership agreement that Faustino Lichauco will be the managing partner; and that the firm cannot be dissolved except upon the 2/3 vote of all the partners. In 1904, the firm wasn’t performing well and was unprofitable and so its machineries were dismantled. In 1905, Eugenia and one other partner demanded Faustino to make an accounting of the firm’s assets but Faustino refused to do so. There was no accounting made until belatedly in 1912, Eugenia et al filed a civil suit against Faustino to compel the latter to perform ac accounting. Faustino, in his defense, argued that the firm was not dissolved pursuant to the partnership agreement there being no 2/3 vote from all the members (Faustino et al are only 1/5 of the firm).

ISSUE: Whether or not Eugenia et al can demand an accounting.

HELD: Yes. The firm was already dissolved in 1904 when its machineries were dismantled – this was a sign that the firm abandoned and concluded the purpose for it was formed (rice cleaning business). Upon said dissolution, it was the duty of Faustino to liquidate the assets and inform his partners. The provision which requires a 2/3 votes of all the partners to dissolve the firm cannot be given effect because the same denied the right of a less number of partners to effect the dissolution especially where the firm has already sustained huge losses. It would be absurd and unreasonable to hold that such an association could never

be dissolved and liquidated without the consent and agreement of two-thirds of its partners, notwithstanding that it had lost all its capital, or had become bankrupt, or that the enterprise for which it had been organized had been concluded or utterly abandoned.

Yu vs. NLRCFacts:

- June 28, 1984 - Jade Mountain ProductsCompany Limited is a registered partnership thatis engaged in marble quarrying and exportbusiness.It was originally organized with the followingcomposition:1.Lea Bendal as general partner2.Rhodora Bendal as general partner3.Chiu Shian Jeng as limited partner4.Yu Chang as limited partnersIt had its main office in Makati.

- Said partnership entered into aMemorandum Agreement with the SpousesRicardo and Guillermo Cruz since the partnershipexploited the marble deposit found on landowned by the Spouses Cruz.

- March 14, 1985 - by virtue of a PartnershipResolution, Benjamin Yu was hired as AssistantGeneral Manager of Jade Mountain with a P4,000monthly salary.According to Benjamin Yu, he only received half of the stipulated monthly salary since heapparently accepted the promise of the partnersthat the balance would be paid when the firmshall have secured additional operating fundsfrom abroad.

- Benjamin Yu performed the following functions:1. manage the operations and finances of the

business2. overall supervision of the workers atthe marble

quarry in Bulacan3. in charge of the preparation of papersrelating to

the exportation of the firm'sproducts

- Sometime in 1988 - without Benjamin Yu’s knowledge, the general partners Lea Bendaland Rhodora Bendal sold and transferred theirinterests in the partnership to private Willy Coand Emmanuel Zapanta. Yu Chang, a limitedpartner, also sold and transferred his interest inthe partnership to Willy Co. Thus, 82% of the oldpartnership is now owned by Co and Zapanta,with Co having acquired a great bulk of thepartnership.

- This new partnership continued to use the oldfirm name of Jade Mountain. However, theymoved the firm’s main office from Makati toMandaluyong. They also executed a Supplementto the Memorandum Agreement with theSpouses Cruz. The actual operations of thebusiness enterprise continued as before. All theemployees of the partnership continued

workingin the business, all, except Benjamin Yu as itturned out.

- November 16, 1987 - having learned of the transfer of the main office, Benjamin Yureported to the Mandaluyong office for work andthere he met Co for the 1St time. Yu was informedby Willy Co that the latter had bought thebusiness from the original partners and that itwas for him to decide whether or not he wasresponsible for the obligations of the oldpartnership, including Yu's unpaid salaries. Yuwas in fact not allowed to work anymore in the Jade Mountain business enterprise. His unpaidsalaries still remained unpaid.

- December 21, 1988 - Benjamin Yu fileda complaint for illegal dismissal and recovery of unpaid salaries accruing from November 1984 toOctober 1988, moral and exemplary damagesand attorney's fees, against Jade Mountain, Mr.Willy Co and the former partners of JadeMountain.

- The new Jade Mountain and Willy Co denied Yu’s charges contending that Yu was never hiredas an employee by the new partnership.

LA: ruled that Yu was illegally dismissed. Itdecreed his reinstatement and awarded him hisclaim for unpaid salaries, backwages and attorney’s fees

NLRC: reversed the LA’s decision & dismissed Yu’s complaint. It ruled that here was no lawrequiring the new partnership to absorb theemployees of the old partnership. Benjamin Yu's claim for unpaid wages should be asserted against the original members of the preceding partnership, but these though impleaded had, apparently, not been served with summons in the proceedings before the Labor Arbiter.Yu’s contention NLRC has overlooked the principle that a partnership has a juridical personality separate and distinct from that of each of its members. Such independent legal personality subsists notwithstanding changes in the identities of the partners.

ISSUE:1. WON the partnership which had hired Yu as Asst.

Gen. Manager had beenextinguished and replaced by a new partnership composed of Co and Zapanta;

2. if indeed anew partnership had come into existence, WON Yu could nonetheless assert his rights underhis employment contract with the old partnership as against the new partnership

RULING:1. Yes. Changes in the membership of the partnership resulted in the dissolution of the old partnership which had

hired Yu and the emergence of a new partnership composedof Co and Zapanta.Legal bases:

Art. 1828. The dissolution of a partnership is the change in the relation of thepartners caused by any partner ceasing to be associated in the carrying on asdistinguished from the winding up of the business.

Art. 1830. Dissolution is caused:(1) without violation of the agreement between the partners;(b) by the express will of any partner, who must act in good faith, when no definite termor particular undertaking is specified;(2) in contravention of the agreement between the partners, where the circumstances donot permit a dissolution under any other provision of this article, by the express will of any partner at any time;

No winding up of affairs in this case as contemplated in Art. 1829: on dissolution the partnership is not terminated, but continues until the winding up of partnership affairs is completed the new partnership simply took over the business enterprise owned by the old 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

2. Yes. The new partnership is liable for the debts of the old partnership Legal basis: Art. 1840 (see codal)Yu is entitled to enforce his claim for unpaid salaries, as well as other claims relating to his employment with the previous partnership, against the new partnership

But Yu is not entitled to reinstatement. Reason: new partnership was entitled to appoint and hire a new gen. or asst. gen. manager to run the affairs of the business enterprise take over. An asst. gen. manager belongs to the most senior ranks of management and a new partnership is entitled to appoint a top manager of its own choice and confidence. The non-retention of Yu did not constitute unlawful termination. The new partnership had its own new General Manager, Co, the principal new owner himself. Yu’s old position thus became superfluous or redundant.

Yu is entitled to separation pay at the rate of one month’s pay for each year of service that he had rendered to the old partnership, a fraction of at least 6 months being considered as a whole year.

Singsong vs. Isabela Sawmill

Facts: Petitioners filed in the Court of First Instance of Negros Occidental against Respondents a complaint praying for a writ of preliminary injunction restraining the Sheriff from proceeding with the sales at public auction, and to declare null and void the Chattel Mortgage executed by defendants in favor of defendant Saldajeno, being in fraud of creditors of the defendant partnership. Defendants Leon Garibay, Margarita G. Saldejeno, and Timoteo Tubungbanua had entered into a Contract of Partnership under the firm name "Isabela Sawmill”. Civil CaseNo. 4797 was filed by the spouses Cecilio Saldajeno and Margarita G. Saldajeno against the Isabela Sawmill, Leon Garibay, and Timoteo Tubungbanua. The same defendantsexecuted a document entitled "Assignment of Rights with Chattel Mortgage". Thereafter, the defendants Leon Garibay and Timoteo Tubungbanua did not divide the assets and properties of the "Isabela Sawmill" between them, despite the withdrawal of defendant Saldajeno, they continued the business of said partnership under the same firm name "Isabela Sawmill". Provincial Sheriff of Negros Occidental executed a Certificate of Sale in favor of the defendant Margarita G. Saldajeno, as a resulted the sale conducted for the enforcement of the judgment rendered in Civil Case No. 5223of the Court of First Instance of Negros Occidental. After trial, judgment was rendered in favor of the plaintiffs and against the defendants.

Thereafter, defendants appealed to the CA. CA certified the records of this case to the Supreme Court "considering that the resolution of this appeal involves purely questions or question of law.It is contended by the appellants thatthe Court of First Instance of Negros Occidental had no jurisdiction over Civil Case No. 5343 because the plaintiffs Oppen, Esteban, Inc., Agustin R. Tonsay, Jose L. Espinos and the Bacolod Southern Lumber Yard sought to collect sums of money, the biggest amount of which was less thanP2,000.00 and, therefore, within the jurisdiction of the municipal court.

Issue:Whether or not the Court of First Instance has jurisdiction over the case

Held:Court of First Instance of Negros Occidental did no err in exercising jurisdiction over Civil Case No. 5343Appellants’ contention is devoid of merit because all the plaintiffs also asked for the nullity of the assignment of right with chattel mortgage entered into by and between Margarita G. Saldajeno and her former partners Leon Garibay and Timoteo Tubungbanua.

This cause of action is not capable of pecuniary estimation and falls under the jurisdiction of the Court of First Instance.

Where the basic issue is something more than the right to recover a sum of money and where the money claim is purely incidental to or a consequence of the principal relief sought, the action is as a case where the subject of the litigation is not capable of pecuniary estimation and is cognizable exclusively by the Court of First Instance. The jurisdiction of all courts in the Philippines, in so far as the authority thereof depends upon the nature of litigation, is defined in the amended Judiciary Act,

Pursuant to which courts of firstinstance shall have exclusive original jurisdiction over any case the subject matter of which is not capable of pecuniary estimation.

An action for the annulment of a judgment and an order of a court of justice belongs to the category. In determining whether an action isone the subject matter of which is not capable of pecuniary estimation this Court has adopted the criterion of firstAscertaining the nature of the principal action or remedy sought. If it is primarily for the recovery of a sum of money, the claim is considered capable of pecuniary estimation, and whether jurisdiction is in the municipal courts o