G.R. No. 109248 July 3, 1995 GREGORIO F. ORTEGA, TOMAS O. DEL CASTILLO, JR., and BENJAMIN T. BACORRO, petitioners, vs. HON. COURT OF APPEALS, SECURITIES AND EXCHANGE COMMISSION and JOAQUIN L. MISA, respondents.

FACTS: Ortega, then a senior partner in the law firm Bito, Misa, and Lozada withdrew from the said firm. He filed with SEC a petition for dissolution and liquidation of the partnership. The SEC en banc ruled that withdrawal of Misa from the firm had dissolved the partnership. Since it is partnership at will, the law firm could be dissolved by any partner at anytime, such as by withdrawal therefrom, regardless of good faith or bad faith, since no partner can be forced to continue in the partnership against his will.

ISSUE: 1. WON the partnership of Bito, Misa & Lozada (now Bito, Lozada, Ortega & Castillo)is a partnership at will 2. WON the withdrawal of Misa dissolved the partnership regardlessof his good or bad faith

HELD:

1. Yes. The partnership agreement of the firm provides that ”[t]he partnership shall continue so long as mutually satisfactory and upon the death or legal incapacity of one of the partners, shall be continued by the surviving partners.”

2. Yes. Any one of the partners may, at his sole pleasure, dictate a dissolution of the partnership at will (e.g. by way of withdrawal of a partner). He must, however, act in good faith, not that the attendance of bad faith can prevent the dissolution of the partnership but that it can result in a liability for damages

VILLAREAL VS. RAMIREZ

G.R. No. 144214

July 14, 2003

FACTS:  Villareal, C. Jose and J. Jose formed a partnership for the

operation of a restaurant and catering business under the name

“Aquarius Food House and Catering Services, each contributing

250K. Ramirez was later added, contributing 250K as well. After

some time, one of them (J. Jose) withdrew from the partnership; his

capital contribution was refunded to him in cash by agreement of

the partners.

Without prior knowledge of respondents, petitioners closed down

the restaurant, allegedly because of increased rental. On March 1,

1987, The respondent spouses wrote petitioners, saying that they

were no longer interested in continuing their partnership or in

reopening the restaurant, and that they were accepting the latter’s

offer to return their capital contribution. The repeated oral and

written requests were, however, left unheeded

 

Before the RTC, respondents subsequently filed a Complaintfor the

collection of a sum of money from petitioners. the RTC ruled in

favor of the respondents, ordering petitioners to pay damages and

AF and costs.

 

The CA sustained the lower court’s decision, and made a

computation on the petitioners’ liability to respondents:

 

Capital, at dissolution:                        **P1,000,000.00

Less: liability to creditors                                 240,658.00

Amount to be distributed to partners               759,342.00

Over: Number of partners                                              3

Each partner’s share at dissolution                 253,114.00

 

** which is erroneous, as this is the capital at the BEGINNING of

the partnership

 

Hence this petition.

 

ISSUE:  WON the CA computation was erroneous

HELD: We hold that respondents have no right to demand from

petitioners the return of their equity share.

YES

Generally, in the pursuit of a partnership business, its capital is

either increased by profits earned or decreased by losses sustained.

It does not remain static and unaffected by the changing fortunes of

the business. In the computation of the amount to be refunded to

respondents, The CA did not consider:

1. The omission of any provision for the depreciationof the furniture

and the equipment.

2. The amortization of the goodwill is not reflected

3. The capitalization amount paid by the partnership to J. Jose when

he withdrew from the partnership.

Because of the above-mentioned transactions, the partnership

capital was actually reduced.

But the disposition is without prejudice to proper proceedings for

the accounting, the liquidation and the distribution of the

remaining partnership assets, if any

Yu v. NLRC GR No. 97212, June 30, 1993 

Facts: 

Benjamin Yu used to be the Assistant General Manager of Jade Mountain, a partnership engaged in marble quarrying and export business. The majority of the founding partners sold their interests in said partnership to Willy Co and Emmanuel Zapanta without Yu’s knowledge. Said new partnership continued operating under the same name and continued the business’s operations. However, it transferred its main office from Makati to Mandaluyong. Said new partnership did not anymore availed of the services of Yu. Thus, he filed a complaint for illegal dismissal, recovery of unpaid wages and damages. 

Ruling : 

 The legal effect of the changes in the membership of the partnership was the dissolution of the old partnership which had hired Yu in 1984 and the emergence of a new firm composed of Willy Co and Emmanuel Zapanta in 1987. The new partnership simply took over the business enterprise owned by the preceeding partnership, and continued using the old name of Jade Mountain Products Company Limited, without winding up the business affairs of the old partnership, paying off its debts, liquidating and distributing its net assets, and then re-assembling the said assets or most of them and opening a new business enterprise. Not only the retiring partners but also the new partnership itself which continued the business of the old, dissolved, one, are liable for the debts of the preceding partnership.

G.R. No. 143340       August 15, 2001

LILIBETH SUNGA-CHAN and CECILIA SUNGA, petitioners, 

vs.

LAMBERTO T. CHUA, respondent.

FACTS            Lamberto Chua alleged that in 1977, he verbally entered into a partnership with Jacinto in the distribution of Shellane LPG.  For business convenience, Lamberto and Jacinto allegedly agreed to register the business name of their partnership, SHELLITE GAS APPLIANCE CENTER, under the name of Jacinto as a sole proprietorship.  Both Lamberto and Jacinto contributed P100,000.00 to the partnership, with the intention that the profits would be equally divided between them.            The partnership allegedly had Jacinto as manager, assisted by Josephine Sy, sister-in-law of Lamberto.  Upon Jacinto’s death in the later part of 1989, his daughter, Lilibeth took over the operations of Shellite without Lamberto’s consent.  Despite Lamberto’s repeated demands for accounting, she failed to comply.            On June 22m 1992, Lamberto filed a complaint against Lilibeth with the RTC.  RTC decided in favor of Lamberto.            Lilibeth questions the correctness of the finding that a partnership existed between Lamberto and Jacinto.  In the absence of any written document to show such partnership between Lamberto and Jacinto, Lilibeth argues that these courts were proscribed from hearing the testimonies of Lamberto and his witness, Josephine, to prove the alleged partnership three (3) years after Jacinto’s death.            To support the argument, Lilibeth invokes the “DEAD MAN’S STATUTE OR SURVIVORSHIP RULE” under Sec. 23, Rule 130.  Lilibeth thus implores this Court to rule that the testimonies of Lamberto and his alter ego, Josephine, should not have been admitted to prove certain claims against a deceased person (Jacinto).

ISSUE            Whether or not the “DEAD MAN’S STATUTE” applies to this case so as to render inadmissible Lamberto’s testimony and that if his witness, Josephine.

HELD

            No. The “Dead Man’s Statute” provides that if one party to the alleged transaction is precluded from testifying by death, insanity, or other mental disabilities, the surviving party is not entitled to the undue advantage of giving his own contradicted and unexplained account of the transaction.

Lilibeth filed a compulsory counterclaim against Lamberto in their answer before the RTC, and with the filing of their counterclaim, Lilibeth herself effectively removed this case from the ambit of the “Dead Man’s Statute”.  Well entrenched is the rule that when it is the executor or administrator or representatives of the estate that sets up the counterclaim, Lamberto, may testify to occurrences before the death of the deceased to defeat the counterclaim. Moreover, as defendant in the counterclaim, Lamberto is not disqualified from testifying as to matters of fact occurring before the death of the deceased, said action not having been bought against but by the estate or representatives of the deceased.

The testimony of Josephine is not covered by the “Dead Man’s Statute” for the simple reason that she is not “a party or assignor of a party to a case or persons in whose behalf a case is prosecuted”.  Lamberto offered the testimony of Josephine to establish the existence of the partnership between Lamberto and Jacinto.  Lilibeth’s insistence that Josephine is the alter ego of Lamberto does not make her an assignor because of the term “assignor” of a party means “assignor of a cause of action which has arisen, and not the assignor of a right assigned before any cause of action has arisen”.  Plainly then, Josephine is merely a witness of Lamberto, latter being the plaintiff.

Lilibeth’s reliance alone on the “Dead Man’s Statue” to defeat Lamberto’s claim cannot prevail over the factual findings that a partnership was established between Lamberto and Jacinto.  Based not only on the testimonial evidence, but the documentary evidence as well, they considered the evidence for Lamberto as sufficient to prove the formation of a partnership, albeit an informal one.

Emnace v. Court of Appeals and the Estate of Vicente Tabanao

G.R. No. 126334, November 23, 2001

Petitioners Emnace, Tabanao and Divigranacia were partners in a business

known as Ma. Nelma Fishing Industry. Sometime in January 1986, they

decided to dissolve their partnership and executed an agreement of

partition and distribution. Throughout the existence of the partnership, and

even after Tabanao’s death, petitioner failed to submit to Tabanao’s heirs

any financial statements. Petitioner also reneged on his promise to turn

over the 1/3 share in the total assets of the partnership to the heirs. Private

respondents filed an action for accounting, payment of shares, division of

assets and damages. Petitioner filed a motion to dismiss the complaint on

the grounds of improper venue, lack of jurisdiction and lack of capacity of

the estate of Tabanao to sue. The trial court denied the motion to dismiss.

The trial court held that the heirs of Tabanao had a right to sue in their own

names, in view of the provision of Art. 777 of the CC.

ISSUE: Whether the private respondents have the legal capacity to sue.

YES. petitioner asserts that the surviving spouse of Vicente Tabanao has no

legal capacity to sue since she was never appointed as administratrix or

executrix of his estate. Petitioner’s objection in this regard is misplaced.

The surviving spouse does not need to be appointed as executrix or

administratrix of the estate before she can file the action. She and her

children are complainants in their own right as successors of Vicente

Tabanao. From the very moment of Vicente Tabanao’s death, his

rights insofar as the partnership was concerned were transmitted to his

heirs, for rights to the succession are transmitted from the moment of death

of the decedent. Whatever claims and rights Vicente Tabanao had

against the partnership and petitioner were transmitted to respondents by

operation of law, more particularly by succession, which is a mode of

acquisition by virtue of which the property, rights and obligations to the

extent of the value of the inheritance of a person are transmitted. Moreover,

respondents became owners of their respective hereditary shares from the

moment Vicente Tabanao died. A prior settlement of the estate, or even the

appointment of Salvacion Tabanao as executrix or administratrix, is not

necessary for any of the heirs to acquire legal capacity to sue. As successors

who stepped into the shoes of their decedent upon his death, they can

commence any action originally pertaining to the decedent. From the

moment of his death, his rights as a partner and to demand fulfillment of

petitioner’s obligations as outlined in their dissolution agreement were

transmitted to respondents. They, therefore, had the capacity to sue and

seek the court’s intervention to compel petitioner to fulfill his obligations.