You are on page 1of 15

Aldecoa & Co. v. Warner, Barnes & Co.

16 Phil 423
Facts: In other paragraphs of the complaint, from the fourth to the twelfth, the plaintiff set forth that,
prior to December 1, 1898, Warner, Barnes and Co. was conducting a business in Albay, the principal
object of which was the purchase of hemp in the pueblos of Legaspi and Tobacco for the purpose of
bringing it to Manila, here to sell if for exportation, and that on the said date of December 1, 1898, the
plaintiff company became interested in the said business of Warner, Barnes and Co., in Albay and
formed therewith a joint-account partnership whereby Aldecoa and Co., were to share equally in the
gains and losses of the business in Albay; that the defendant is the successor to all the rights and
obligations of Warner, Barnes and Co., among which is that of being manager of the said joint-account
partnership with Aldecoa and Co.; It is a recognized fact, and one admitted by both parties that the
partnership herein concerned concluded its transactions on December 31, 1903; wherefore the firm of
Warner, Barnes & Co. Ltd., the manager of the partnership, in declaring the latter's transactions
concluded and in rendering duly verified accounts of its results, owes the duty to include therein the
property and effects belonging to the partnership in common.
Issue: This litigation concerns the rendering of accounts pertaining to the management of the business
of a joint-account partnership formed between the two litigants companies.
Held: It is a rule of law generally observed that he who takes charge of the management of another's
property is bound immediately thereafter to render accounts covering his transactions; and that it is
always to be understood that all accounts rendered must be duly substantiated by vouchers. It is one of
the duties of the manager of a joint-account partnership, to liquidate the assets that form the common
property, and to state the result obtained therefrom in the final rendering of the accounts which he is to
present at the conclusion of the partnership.
ALDECOA & CO. vs. WARNER, BARNES & CO., LTD.
TORRES, J.:
By a complaint filed on September 26, 1907, the legal representative of Aldecoa and Co., in liquidation,
filed suit in the Court of First Instance of Manila against Warner, Barnes and Co., Ltd., alleging in the
first three paragraphs of their complaint, as a cause of action, that the plaintiff is a regular collective
mercantile association organized in accordance with the laws of these islands, duly registered in the
mercantile registry, and at present in liquidation; that the defendant is a joint stock mercantile firm
organized in accordance with the laws of England, registered in the mercantile registry of Manila, and
has done and is still doing business in these Islands under the name of Warner, Barnes and Co., Ltd.,
which required the business that was conducted in these Islands by Warner, Barnes and Co., the assets,
liabilities, and all the obligations of which were assumed by the defendant.
In other paragraphs of the complaint, from the fourth to the twelfth, the plaintiff set forth that, prior to
December 1, 1898, Warner, Barnes and Co. was conducting a business in Albay, the principal object of
which was the purchase of hemp in the pueblos of Legaspi and Tobacco for the purpose of bringing it to
Manila, here to sell if for exportation, and that on the said date of December 1, 1898, the plaintiff
company became interested in the said business of Warner, Barnes and Co., in Albay and formed
therewith a joint-account partnership whereby Aldecoa and Co., were to share equally in the gains and
losses of the business in Albay; that the defendant is the successor to all the rights and obligations of
Warner, Barnes and Co., among which is that of being manager of the said joint-account partnership
with Aldecoa and Co.; that the defendant acted, and continues to act as such manager, and is obliged
to render accounts supported by proofs, and to liquidate the business, which defendant not only has not
done, in spite of the demand made upon it, but it has expressly denied the right of plaintiff to examine
the vouchers, contenting itself with forwarding copies of the entries in its books, which entries contain
errors and omissions that hereinafter will be mentioned.
Said entries moreover, whereas its operations should have commenced and did commence on
December 1, 1898, on which date the joint-account partnership commenced; that, with respect to the
liquidation of the business, the operations having been closed on December 31, 1903, Warner, Barnes
and Co., Ltd., the defendant, has not realized upon the assets of the firm by selling the property which
constitutes its capital; that the persons who were the managers and general partners of Warner, Barnes

Classified - Confidential

and Co., Ltd., and are the managers and directors of that firm in the Philippine Islands and are the ones
who, under the previous firm name of Warner, Barnes and Co., admitted Aldecoa and Co. as a
participant in one-half of the said business, on the 1st day of December, 1898; that the said directors of
the defendant company, unlawfully, maliciously, and criminally conspired with the persons who were
managing the commercial firm of Aldecoa and Co. during the years 1899, 1900, 1901, 1902, and 1903,
to defraud the latter of its interest in the said joint-account partnership, buying the silence of the said
managers with respect to the operations of the joint-account partnership during the time comprised
between the 1st of December, 1898, and the 30th of June, 1899, and also with respect to the errors
and omission in the accounts relating to the second semester of 1899, and those relating to 1900,
1901, 1902, and 1903.
That the said fraudulent acts were not known to the partners of the plaintiff firm until the managers, in
collusion with the managers of the defendant firm to defraud and injure the plaintiff firm, had ceased to
hold their positions, to wit, until after the 31st of December, 1906, and that by reason of this conspiracy
to defraud the plaintiffs, the defendants have been benefited; that the errors and omissions found in the
entries of the books kept by the defendant firm as manager of the joint-account partnership are those
expressed in details here below:
(a) It appears that between the 10th of July and the 26th of December, 1899, 43,934 piculs of hemp
arrived in Manila for the joint-account partnership, which were purchased in Legaspi and Tobacco at 13
pesos per picul, and, after charging against this hemp excessive expenses for collection, storage,
freight, fire, marine, and war insurance, personnel, etc., the defendants, Warner, Barnes and Co., as
managers of the joint-account partnership and commission agents of their joint-account partners, claim
that they purchased the said hemp for themselves, but do not give the price received from the sale
thereof and merely credit it at 13 pesos a picul, when the average market price at that time was 16.50
pesos a picul; said defendants thereby injuring plaintiffs to the amount of P76,884.50.
(b) Striking a balance from the amount of hemp debited and that credited, there results a difference of
4,332.96 piculs not credited which, at 24 pesos a picul, the market price at the time, represents an
injury to plaintiffs to the extent of P51,995.52, the said deficit, with respect to the hemp, pertaining to
the period beginning with December 31, 1899, in the manner shown by the following table:
Invoices & Cr. Dr.
Piculs Piculs
1899 Dec. 31 ....................................... 86,534.18 43,934
1900 Apr. 30 ...................................... 13,069.97 50,261.78
1900 Dec. 31 ...................................... 67,892.56 71,277
1901 Dec. 31 ...................................... 101,253.31 100,342
1902 Dec. 31 ...................................... 98,074.52 94,279.20
1903 Dec. 31 ...................................... 66,482.49 68,880.09 433,307.03
428,974.07 4,332.96 Lacking .............................................. 433,307.03
433,307.03
(c) In 1900, on April 30, Messrs. Warner, Barnes and Co. Ltd., give credit for 5,485 piculs of hemp, at
16 pesos a picul, when the market price at that time, according to themselves, was P23.78; thereby
injuring plaintiffs in the sum of P21,350.36.
(d) In 1901, on the date of January 31, Messrs. Warner, Barnes and Co., Ltd give credit for 4,600 piculs
of hemp, at 8.93 pesos a picul, when, according to themselves, the market price at that time was 11.50
pesos a picul; thereby injuring plaintiffs in the sum of P5,911.

Classified - Confidential

(e) One of the sources of profit of the joint-account partnership between Aldecoa and Co. and Warner,
Barnes and Co., Ltd., was from the pressing of hemp, which profit is to be credited to the partnership
joint-accounts, when the hemp is realized in Manila, and from this source there are due to the plaintiffs
P149,084.12, in which sum they have been injured by the defendants. The said credit for pressing is
omitted from the books of Warner, Barnes and Co., Ltd., and should be entered as follows:
1899 ............................................. 21,968 bales, at P1.25 ................................. P27,460 1900 to
April 30 ......................... 25,130 bales, at P1.25 ................................. 31,412.50 1900 May 10 to
Dec. 31 ............ 35,639 bales, at P1.25 ................................. 44,548.75
1901.............................................. 50,151 bales, at P1.25 ................................. 62,688.75 1902
to July 31 ........................... 26,825 bales, at P1.25 ................................. 33,531.25
Aug. 1 to Dec. 31 ............. 20,314 bales, at P1.75 ................................. 35,549.50 1903
............................................. 34,440 bales, at P1.75 ................................. 60,270
214,467 bales ................................................. 295,460.75 2,166 bales, lacking,
at P1.25 2,707.50
216,633 bales .................................................. 298,168.25 20 loose.

216,653 bales.
(f) Another error found in the books of Warner, Barnes, and Co., Ltd., is in connection with the
outstanding accounts, which are debited in the sum of P52,510.36, while only P2,769.24 are credited in
the manner set out in the following statement:
DR.
1899 July 31. W.B. and Co., Tobacco, transferred to net
account their account sale 92.25 piculs hides
by Kongsee ............................................................................. P1,149.46
1899 Dec. 31. For transfer account to cover business this
semester without statement .................................................. 16,100.57
1900 Feb. 28. As transferred account items noted page
114 day-book .......................................................................... 18,635.08
1900 Feb. 28. To cover war insurance, January ................................................. 4,000
1900 Feb. 28. To cover outstanding accounts ................................................... 2,625.25
52,510.36
CR.
1900 Feb. 28. As transferred account items noted page
113 day-book .......................................................................... 2,769.24
There remain, therefore ......................................................... 49,741.12 of which onehalf, that is ...................................................... 24,870.56 belongs to the plaintiffs.
(g) In 1900, there is unduly included an item of net account which should be stricken out, as it does not
pertain to this business. This item is the following:

Classified - Confidential

1900
June 30. To Miguel Estela. For transfer made to his account
of 5 per cent commission on his hemp, which should
not be paid according to agreement ..................................... P870.75
Half of this sum, P435.37, must be credited to the plaintiffs.
(h) On the date of December 26, 1899, Messrs. Warner, Barnes and Co., Ltd., deduct from the profits
which they show as belonging to Aldecoa and Co., the sum of P7,400, under the appearance of the
insurance premium, and they delivered that sum to the plaintiffs' managers with whom they conspired,
for the purposes of the collusion alleged in Paragraph VII of the complaint, in the manner failing to
observe the truth in their statement of the facts. Aldecoa and Co., therefore, claim for themselves this
amount, P7,400.
(i) On December 31, 1903, on a capital of P50,000 brought in by Aldecoa and Co., and to whom it
should bear 5 per cent interest from the 8th of June, 1900, the interest is unduly credited to the jointaccount, thereby injuring the plaintiffs in the sum of P8,750.
(j) On December 31, 1902, Aldecoa and Co. are charged with six months' interest, amounting to
P736.46, on a balance debited against them for alleged losses, and on June 30, 1903, they are charged
with P1,818.58 for a like reason. These two items should be stricken out, because the accounts when
correctly made to show no losses, but profits. By such debits the plaintiffs have been injured in the sum
of P1,277.52.
(k) In the entries corresponding to the years 1902 and 1903, Warner, Barnes and Co., Ltd., give the
price of "corriente buena" (currect good), to the grade which, according to the mark, was classified as
"abaca superior" (superior hemp); the price of "corriente ordinario" (current ordinary), to the hemp
marked under the classification of "corriente buena" (current good); the price of "segunda superior"
(second superior), to what is "corriente" or "current," and so on successively; whence results a
difference of price to the value of P233,102.18, in 1902, and P74,274.90, in 1903, one-half of which
differences should be credited to Aldecoa and Co., that is P153,688.54.
(l) The value of the properties brought in by Warner, Barnes and Co., Ltd., to the joint-account, instead
of cash capital, is omitted from the accounts. These properties are the following:
Those purchased from Mariano Roisa, consisting of one galvanized-iron-roofed warehouse, with hemp
press; one house of strong materials and the lot on which it stands, in Tobacco, P12,000.
That purchased from Juana Roisa, which is one small warehouse of strong materials, in Tobacco, worth
about P2,500.
Those purchased from D. Manuel Zalvidea situated in Tobacco, which are: One warehouse of strong
materials, with press; another warehouse of strong materials; and two houses of strong materials,
together with the lots on which they are built, P22,000.
Those purchased from D. Marcos Zubeldia, in Legaspi, which are: Four warehouses with three hemp
presses, and one house of strong materials, with their corresponding lots, P50,000.
Total cost, P86,500.
The complaint further sets forth that if the entries made by the defendant in its books show in
themselves the foregoing errors and omissions, the plaintiff has good grounds for believing that, if the
vouchers were examined, still greater errors would be found, as to which the plaintiff can not formulate
its claims with exactness until the defendant renders it an account, accompanied by vouchers; that the

Classified - Confidential

defendant, as manager of the joint-account partnership with Alcodea & Co., neglected to comply with
what is especially prescribed in article 243 of the Code of Commerce, as a duty to inherent to its
position as manager of the joint-account partnership, which is that of rendering an account with
vouchers, and that of liquidating the said business, for it refuses to furnish the plaintiff the documents
required for their examination and verification, and also refuses to realize the firm assets by selling the
warehouses, houses, and other property which constitute the capital; that, as the defendant refuses to
do the things above related, the plaintiff has no other easy, expeditious and suitable remedy than to
petition the court for a writ of mandamus, wherefore it prays the court to protect it in its rights and to
issue the said mandamus against the defendant, ordering it, within a date set for this purpose, to
render to the court an account, accompanied by invoices, receipts, and vouchers of the Albay business,
beginning the said account as of December 1, 1898, the date on which the partnership was formed, and
correcting in it errors and omissions related in paragraph 9 of this complaint; that the defendant credit
and pay to the plaintiff the sums alleged in that paragraph to be due to the plaintiff, with interest at the
legal rate upon the sums of omitted for the difference between the amounts incorrectly debited and
credited, from the respective dates on which they should appear, if correctly entered; that after the said
accounts have been rendered and discussed, judgment be entered for any balance which may appear in
favor of the plaintiff, including the sums claimed, and legal interest thereon. The plaintiff also prays that
the writ of mandamus fix a term within which the defendant is to liquidate the business, selling the
properties aforementioned and distributing the proceeds between both the litigants, and that the
defendant be adjudged liable for costs of suit, and plaintiff be granted such other and further relief as
may be found just and equitable.
On November 11, 1907, the defendant filed a written answer an counterclaim against the defendant,
and, notwithstanding the overruling of the demurrer filed by the latter to the counterclaim, the court by
writ of December 4, 1907, ordered that the defendant should, within a period of five days, make its
allegations more specific with respect to certain particulars mentioned in the order of the court, and
both parties being notified thereof, the defendant, on January 24, 1908 prayed the court to authorize it
to file the attached amended answer instead of the original one.
In the said amended answer the firm of Warner, Barnes & Co. Ltd., the defendant, states that it denies
each and every one of the allegations of the complaint, with the exception of those which are expressly
admitted in its answer, and admit the allegations of paragraphs 1, 2, and 3 of the complaint. In answer
to the allegations of paragraphs 4 to 12 of the complaint, it admits that on June 30, 1899, a jointaccount partnership was formed between the plaintiff and the defendant transactions of which were the
purchase of hemp in Legaspi and Tobacco, of which business one-half of the results, whether losses or
gains, appertained to the plaintiff. Defendant also admits that the said business continued under the
management of the defendant company, as manager of the said joint-account partnership, until
December 31, 1903; but it denies all the other allegations contained in the said paragraphs. For its first
special defense, the defendant alleges that during the period that the said joint-account partnership
existed, the manager thereof, the defendant, rendered to the plaintiff just and true accounts of its
transaction as manager of the said partnership, which accounts have been approved by the plaintiff,
with the exception of those relating to the year 1903, and as to the latter, that the same were objected
to by plaintiff firm solely upon the grounds mentioned in clause (k) of paragraph 9 of the complaint,
which objections are wholly unfounded. As its second special defense, the defendant alleges that more
than four years have expired between the time the alleged right of action accrued to the plaintiff and
the date of the filing of the complaint. For all the reasons set forth in this amended answer, the
defendant prayed that it be absolved from the complaint, with the costs against the plaintiff.
On the subsequent to the 14th of August, 1908, the trial of this cause was held and oral evidence was
introduced by the plaintiff, but no witnesses were offered by the defendant, which finally moved for a
dismissal of the case, and the court, on December 26 of the same year, 1908, rendered judgment,
dismissing the complaint with respect to the petition for the rendering of an account, verified by
invoices, receipts and vouchers, of the said Albay business, pertaining to the period comprised from the
beginning of the business to the 31st of December, 1902, inclusive, assessing the costs against the
plaintiff, and opening the second period of the trial with respect to the account for the whole year 1903,
in accordance with the ruling of the court made at the commencement of the hearing. The plaintiff on
being notified of this judgment filed a written exception thereto and announced his intention to forward
through regular channels a bill of exceptions, and by another writing moved for a new trial on the

Classified - Confidential

ground that the evidence did not justify the judgment rendered, which it alleged it was openly and
manifestly contrary to the weight of the evidence and to law. This motion being denied, to which
exception was taken by the plaintiff, the latter duly filed a proper bill of exceptions which was certified
to and forwarded to this court, together with all the documentary and oral evidence produced at the
trial.
This litigation concerns the rendering of accounts pertaining to the management of the business of a
joint-account partnership formed between the two litigants companies.
Both the plaintiff and the defendant are in accord that, through verbal agreement, the said partnership
was established, whereby they should share equally the profits and losses of the business of gathering
and storing hemp in Albay and selling it in Manila for exportation, and that the commercial firm of
Warner, Barnes and Co., Ltd., was the manager of the said joint-account partnership.
The disagreement between the parties consists in the following points: First, as to the date when the
partnership was formed and began business in the province mentioned; second, whether the managing
firm did render accounts, duly verified by vouchers, of its management from the date of the
organization of the partnership; third, whether errors and omission, prejudicial to the plaintiff, Aldecoa
and Co., exist in the partnership books and in its accounts, and whether, in the management of the said
business, fraudulent acts were committed also to the plaintiff's injury; and, fourth, whether the
partnership property should be included in the liquidation of the said business and in the accounts
appertaining to the year 1903, when the existence of the partnership came to an end.
With respect to the date on which the said partnership began, the plaintiff, Aldecoa and Co., submitted
evidence unrebutted by that of the defendant, Warner, Barnes and Co., Ltd., and although the latter
averred that the joint-account partnership began on June 30, 1899, denying that it was commenced, or
was formed, on December 1, 1898, as the plaintiff says that it was, it is certain that the defendant has
not proved its averment; and if, on the opening of this case de novo it shall not have done so within
such period as the court may see fit to determine, it will be proper to find in accordance with the value
of the evidence adduced by the plaintiff and to advise the defendant to render, within a fixed period,
accounts, verified by vouchers, of the management of the partnership business and pertaining to the
seven months from December 1, 1898, to June 29, 1899; and, in view of the evidence adduced by the
plaintiff in proof of the aforesaid first point, if the defendant does not produce other evidence in
rebuttal, they must, for some reason, be expressly rejected in the judgment, if they are not to be taken
into account in reaching the conclusions or in considering the case upon the merits.
As regards the second point, we agree with the opinion expressed by the lower court and find that the
firm of Warner, Barnes and Co., Ltd., did render accounts from June 30, 1899, to December 31, 1902,
inasmuch as the very evidence introduced by the plaintiff showed that the said accounts had been
rendered and were approved by it, according to the context of its own letters of the dates of July 27,
1907, and February 19, 1903. Therefore, the plaintiff is in nowise entitled, and has no right of action to
compel the defendant to render the accounts pertaining to that period, they having already been
rendered and duly approved.
It is a rule of law generally observed that he who takes charge of the management of another's
property is bound immediately thereafter to render accounts covering his transactions; and that it is
always to be understood that all accounts rendered must be duly substantiated by vouchers.
It is a fact admitted by both litigating parties that Warner, Barnes and Co., Ltd., was the manager of
the business of the joint-account partnership formed between it and Aldecoa and Co., it is
unquestionable that it was and is the defendant's duty to render accounts of the management of the
business, as it partially has done. Although the defendant has not proved, as it should have done, that
it complied with its duty of rendering accounts of its management, since the letters themselves
exhibited by the plaintiff, and duly authenticated as being written by the latter, prove that the
defendant did render accounts from June 30, 1899, to December 31, 1902, no legal reason whatever
exists for not accepting the finding of the lower court which decided that it had been proved that
accounts were rendered pertaining to the period mentioned and that the said accounts were approved
by the plaintiff.

Classified - Confidential

The procedure of the plaintiff is truly inexplicable in accepting and approving accounts that were
rendered to it, and which only begin with June 30, 1899, inasmuch as such approval would appear to
indicate that it agreed to the claim made by the defendant that the partnership commenced on the said
date; but even so, once that it is proved that the actual date on which the partnership was formed was
December 1, 1898, and that it is not shown that the defendant has rendered accounts corresponding to
the seven months subsequent to the said date of December 1, the acceptation and approval of accounts
rendered since the 30th of June 1899, does not excuse nor release the manager of the partnership, the
defendant, from complying with its unquestionable duty of rendering accounts covering the aforesaid
seven months. The presumption must be sustained until proof to the contrary is presented.
Moreover, the approval of accounts corresponding to the years from June 30, 1899, to December 31,
1902, does not imply that the said approved accounts comprise those pertaining that the seven months
mentioned, December 1, 1899, to June 29, 1899, because the defendant, the accountant, denied that
the partnership commenced on the aforesaid date of December 1st, asserting it began on June 30,
1899; wherefore, on defendant's rendering those accounts, it is to be presumed that it did so from the
date which it avers was that of the information of the partnership and the beginning of the business,
and it is therefore evident that it has not rendered accounts pertaining to the seven months mentioned.
With respect to the third point relative to whether errors and omissions prejudicial to the plaintiff,
Aldecoa & Co., exist in the partnership books and in its accounts, and whether, in the management of
the said business, fraudulent acts were committed to plaintiff's injury, it must be borne in mind that
once accounts have been approved which were rendered by the managing firm of Warner, Barnes &
Co., Ltd., the plaintiff, Aldecoa & Co., is not entitled afterwards to claim a revision of the same, unless it
shows that there was fraud, deceit, error, or mistake in the approval of the said accounts.
Under these hypothesis, Alcodea & Co. are strictly obliged to prove the errors, omissions, and
fraudulent acts attributed to the defendant, in connection with the accounts already rendered, and
approved by them, in order that the same may be revised in accordance with law and the jurisprudence
of the courts. (Pastor vs. Nicasio, 6 Phil. Rep., 152.)
The approval of an account does not prevent its subsequent revision, or at least its correction, if it is
proved in a satisfactory manner that there was deceit and fraud or error and omission in it. (Arts. 1265,
1266, Civil Code.)
Law 30, title 11, 5th Partida, provides, among other things, the following:
That is precisely what we say should be observed, in all other accounts that men make among
themselves, in connection with the things which belong to them. Notwithstanding that they may
acknowledge the settlement of the accounts between them and promise never to bring them up again,
if it had be known in truth that he who gave the account or had the things in his keeping, concealed
anything deceitfully, or committed other fraud against those who have a share in such thing, then
neither the suit, nor such previous status and promise shall avail; on the contrary, we say that they
may sue him to compel him to remedy the deceit he committed against them, and to pay all the
damages and losses that have accrued to them by reason thereof; provided, however, he especially
shall not have repaired the deceit that he committed.
So that it does not matter that the accounts pertaining to the years comprised between the 30th of
June, 1899, and the 31st of December, 1902, may have been approved by Aldecoa & Co. Whenever this
firm shall succeed in proving that there was error, omission, fraud, or deceit in these accounts, they
may be duly revised, according to the law.
With regard to the last point in controversy, the defendant agrees that the plaintiff has not yet
approved the accounts that the former rendered, pertaining to 1903, the last years of the existence of
the joint-account partnership; and, for this reason, it was provided in the judgment appealed from that
the trial should continue with respect to the said accounts corresponding to the year 1903, in order that
the plaintiff might take such objections and statements in regard to the same as he deemed proper, and
adduce the evidence conducive to prove his claim, in accordance with law.

Classified - Confidential

It is one of the duties of the manager of a joint-account partnership, to liquidate the assets that form
the common property, and to state the result obtained therefrom in the final rendering of the accounts
which he is to present at the conclusion of the partnership.
Article 243 of the Code of Commerce says;
The liquidation shall be effected by the manager, and after the transactions have been concluded he
shall render a proper account of its results.
It is a recognized fact, and one admitted by both parties that the partnership herein concerned
concluded its transactions on December 31, 1903; wherefore the firm of Warner, Barnes & Co. Ltd., the
manager of the partnership, in declaring the latter's transactions concluded and in rendering duly
verified accounts of its results, owes the duty to include therein the property and effects belonging to
the partnership in common. This rule was established by the supreme court of Spain in applying a
similar precept of the mercantile code, in its decision on an appeal in causation of the 1st of July, 1870,
setting up the following doctrine:
In case of the liquidation of a company of this kind (denominated joint-account partnership), inasmuch
as the sale of the firm assets is necessarily uncertain and eventual, considering the greater or lesser
selling price that may be obtained from the property and effects which comprise such assets, the price
received should be alloted in the same proportion as that fixed in the contract for the division of the
profits and losses, for otherwise one of the partners would be benefited to the detriment and loss of his
copartners.
This doctrine is perfectly legal and in accord with justice, as no person should enrich himself wrongfully
at the expense of another; and, in the case under review, should it be duly and fully proved that the
managing firm acquired realty in the name and at the expense of the joint-account partnership with the
plaintiff firm, it is just that, in liquidating the property of common ownership, such realty should be
divided between the partners in the same manner as were the profits and losses during the existence of
the business, from the beginning of the partnership to the date of its dissolution.
By the facts herein above set forth, it has been shown that in the present state of this cause resulting
from the rendering of the judgment appealed from, it has not been possible to decide in a final manner
the various issues brought up and controverted by the litigants, for, though it be granted as proved that
the defendant firm, the manager of the said partnership, has in fact rendered accounts pertaining to the
years from June 30, 1899, to December 31, 1902, as found in the said judgment, there still remain to
be decided the four points or questions of fact before specified. Wherefore, and in accordance with
section 496 of the Code of Civil Procedure, a new trial should be held For the purpose of a final decision
of all the questions involved in this litigation, and accordingly the judgment appealed from is set aside
and this cause shall be returned to the court below, accompanied by a certified copy of this decision, for
the holding of a new trial, for which purpose, first, the defendant shall be advised that it must, within a
fixed period, render an account, verified by vouchers, of its management of the business of the jointaccount partnership with the plaintiff, pertaining to the months from December 1, 1898, to June 29,
1899, and to the twelve months of the year 1903, unless it shall prove in a satisfactory manner that the
said partnership began on June 30, 1899, contrary to the averment of the plaintiff supported by
evidence that it commenced on December 1, 1898, in which case the said rendering of account shall be
restricted to the twelve months of the year 1903, in the accounts of which last period must be included
all the property that is found to belong to the said partnership; second, in the examination of the
accounts that may be found to have been rendered, the parties may allege and prove facts conducive to
their revision or approval besides availing themselves of the evidence already adduced at trial; and,
third, with respect to the accounts corresponding to the period from June 30, 1899, to December 31,
1902, already approved, the trial court shall be proceed in accordance with law, duly considering the
errors, omissions, mistakes and fraudulent or deceitful acts that have been alleged or may specifically
be alleged in rejecting the said approved accounts, as well as the evidence introduced by both parties,
and it shall be careful to decide in its final judgment all the issues raised between the parties in the
course of this litigation and to provide such remedies as are proper in regard to their respective claims.
So ordered.

Classified - Confidential

Johnson, Moreland and Trent, JJ., concur.


G.R. No. L-18707 December 9, 1922 PO YENG CHEO vs. LIM KA YAM
(1)

(2)

Effect of Death on Pending Action -- An action for accounting against a managing partner
should be discontinued if he dies during the pendency of the action. The suit must be
conducted in the settlement proceedings of the deceaseds estate, particularly if this is the
desire of his administrator.
Survivors right and duty to liquidate. -- When a member of a partnership dies, the duty
of liquidating its affairs devolves upon the surviving member or members of the firm, not
upon the legal representative of the deceased partner (except when such partner was the last
surviving partner).

By the amended complaint in this action, the present plaintiff, Po Yeng Cheo, alleged sole owner of a
business formerly conducted in the City of Manila under the style of Kwong Cheong, as managing
partner in said business and to recover from him its properties and assets. The defendant having died
during the pendency of the cause in the court below and the death suggested of record, his
administrator, one Lim Yock Tock, was required to appear and make defense.
In a decision dated July 1, 1921, the Honorable C. A. Imperial, presiding in the court below, found that
the plaintiff was entitled to an accounting from Lim Ka Yam, the original defendant, as manager of the
business already reffered to, and he accordingly required Lim Yock Tock, as administrator, to present a
liquidation of said business within a stated time. This order bore no substantial fruit, for the reason that
Lim Yock Tock personally knew nothing about the aforesaid business (which had ceased operation more
than ten years previously) and was apparently unable to find any books or documents that could shed
any real light on its transaction. However, he did submit to the court a paper written by Lim Ka Yam in
life purporting to give, with vague and uncertain details, a history of the formation of the Kwong
Cheong Tay and some account of its disruption and cessation from business in 1910. To this narrative
was appended a statement of assets and liabilities, purporting to show that after the business was
liquidate, it was actually debtor to Lim Ka Yam to the extent of several thousand pesos. Appreciating
the worthlessness of this so-called statement, and all parties apparently realizing that nothing more was
likely to be discovered by further insisting on an accounting, the court proceeded, on December 27,
1921, to render final judgment in favor of the plaintiff.
The decision made on this occasion takes as its basis the fact stated by the court in its earlier decision
of July 1, 1921, which may be briefly set fourth as follows:lawphil.net
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, with a capitalization of P160,000, 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, P60,000; Chua Chi Yek, P50,000;
Lim Ka Yam, P10,000; Lee Kom Chuen, P10,000; Ley Wing Kwong, P10,000; Chan Liong Chao,
P10,000; Lee Ho Yuen, P10,000. 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 (exact date unstated) 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 repeated demands to that effect have been made upon him by the plaintiff.

Classified - Confidential

In view of the facts above stated, 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.
In beginning our comment on the case, it is to be observed that this court finds itself strictly
circumscribed so far as our power of review is concerned, to the facts found by the trial judge, for the
plaintiff did not appeal from the decision of the court below in so far as it was unfavorable to him, and
the defendant, as appellant, has not caused a great part of the oral testimony to be brought up. It
results, as stated, that we must accept the facts as found by the trial judge; and our review must be
limited to the error, or errors, if any, which may be apparent upon the face of the appealed decision, in
relation with the pleadings of record.
Proceeding then to consider the appealed decision in relation with the facts therein stated and other
facts appearing in the orders and proceedings in the cause, it is quite apparent that the judgment
cannot be sustained. In the first place, 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. That the sum of one hundred and sixty
thousand pesos (P160,000) was embarked in this business many years ago reveals nothing as to the
condition of the capital account at the time the concern ceased to do business; and even supposing--as
the court possibly did--that the capital was intact in 1908, this would not prove it was intact in 1910
when the business ceased to be a going concern; for in that precise interval of time the capital may
have been diminished or dissipated from causes in no wise chargeable to the negligence or misfeasance
of the manager.
Again, so far as appears from the appealed decision, 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. It is true that in Lichauco vs. Lichauco (33 Phil., 350), this court
permitted one partner to recover of the manager the plaintiff's aliquot part of the proceeds of the
business, then long since closed; but in that case the affairs of the defunct concern had been actually
liquidate by the manager to the extent that he had apparently converted all its properties into money
and had pocketed the same--which was admitted;--and nothing remained to be done except to compel
him to pay over the money to the persons in interest. In the present case, the shares referred to-constituting the only assets of Kwong Cheong Tay--have not been converted into ready money and
doubtless still remain in the name of Kwong Cheong Tay as owner. Under these circumstances it is
impossible to sustain a judgment in favor of the plaintiff for his aliquot part of the par value of said
shares, which would be equivalent to allowing one of several coowners to recover from another, without
process of division, a part of an undivided property.
Another condition will be noted as present in this case which in our opinion is fatal to the maintenance
of the appealed judgment. This is that, 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,--notwithstanding the insistence
of the attorneys for the latter that the action should be discontinued in the form in which it was then
being prosecuted. The error of the trial court in so doing can be readily demonstrated from more than
one point of view.

Classified - Confidential

In the first place, 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. (Wahl vs. Donaldson Sim & Co., 5 Phil., 11; Sugo and Shibata
vs. Green, 6 Phil., 744) And the same rule must be equally applicable to a civil partnership clothed with
the form of a commercial association (art. 1670, Civil Code; Lichauco vs. Lichauco, 33 Phil., 350) Upon
the death of Lim Ka Yam it therefore became the duty of his surviving associates to take the proper
steps to settle the affairs of the firm, and any claim against him, or his estate, for a sum of money due
to the partnership by reason of any misappropriation of its funds by him, or for damages resulting from
his wrongful acts as manager, should be prosecuted against his estate in administration in the manner
pointed out in sections 686 to 701, inclusive, of the Code of Civil Procedure. Moreover, when it appears,
as here, that the property pertaining to Kwong Cheong Tay, like the shares in the Yut Siong Chyip
Konski and the Manila Electric Railroad and Light Company, are in the possession of the deceased
partner, the proper step for the surviving associates to take would be to make application to the court
having charge to the administration to require the administrator to surrender such property.
But, in the second place, as already indicated, the proceedings in this cause, considered in the character
of an action for an accounting, were futile; and the court, abandoning entirely the effort to obtain an
accounting, gave judgment against the administrator upon the supposed liability of his intestate to
respond for the plaintiff's proportionate share of the capital and assets. But of course the action was not
maintainable in this aspect after the death of the defendant; and the motion to discontinue the action
as against the administrator should have been granted.
The judgment must be reversed, and the defendant will be absolved from the complaint; but it will be
understood that this order is without prejudice to any proceeding which may be undertaken by the
proper person or persons in interest to settle the affairs of Kwong Cheong Tay and in connection
therewith to recover from the administrator of Lim Ka Yam the shares in the two concerns mentioned
above. No special pronouncement will be made as to costs of either. So ordered.
MAXIMO GUIDOTE v. ROMANA BORJA (administratrix of the estate of Narciso Santos)

(1) Liquidation of its affairs. The liquidation of its affairs is by law entrusted to the surviving
partners, or to liquidators appointed by them and not to the administrator or executor of the
deceased partner.
(2) Survivors right and duty to liquidate. -- When a member of a partnership dies, the duty of
liquidating its affairs devolves upon the surviving member or members of the firm, not upon the
legal representative of the deceased partner (except when such partner was the last surviving
partner).
FACTS
Maximo Guidote and Narciso Santos formed in 1918 a partnership business under the name of Taller
Sinukuan, in which Santos was the capitalist partner and Guidote was the industrial partner. Santos
died in 1920. Guidote failed to liquidate the affairs of the partnership and to render an account thereof
to Borja, the administratrix of Santos estate.
Guidote brought an action against Borja to recover a sum of money [9k~], a part of which was
alleged to be the net profits from the business due Guidote, and the rest of the sum consisting of
advances allegedly made by Guidote. Borja admitted the partnerships existence and prayed that
Guidote be ordered to render an accounting and to pay the estate 25k as net profits, credits,
and property pertaining to Santos.
Guidote called several witnesses and introduced a so-called accounting and a mass of
documentary evidence, which was so hopelessly and inextricably confused that the court could
not consider it of much probative value. The court dismissed Guidotes complaint and absolved
Borja. Guidote was ordered to render a full and complete accounting, verified by vouchers, of
the partnership business.

Classified - Confidential

Guidote rendered an account prepared by one Tomas Alfonso, a public accountant. Numerous objections
were presented by Borja. The court disapproved the account and ordered that Borja submit an
accounting from the date of the commencement of the partnership up to the time the business was
closed.
Borja presented an account and liquidation prepared by a public accountant, Santiago A. Lindaya,
showing a balance of P29k~ in Borjas [Santos estate] favor. At the hearing, Borja introduced the
public accountant Jose Turiano Santiago to testify as to the results of an audit made by him of the
partnership accounts. Santiago testified that he had prepared a separate accounting or liquidation
similar in results to that prepared by Lindaya, but with a few differences in the sums total.
[Computation: Santos is a creditor of the Taller Sinukuan in the sum of P26k. Guidote is a debtor to the
Taller Sinukuan in the sum of P20k.]
In order to contradict the conclusions of the two public accountants, Guidote presented Tomas Alfonso
and the bookkeeper, Pio Gaudier, as witnesses. The trial court judge said that the testimonies of these
witnesses are unreliable.

Tomas Alfonso is the same public accountant who filed the liquidation Exhibit O on behalf of
Guidote, in relation to the partnership business, which liquidation was disapproved by this court
in a decision. The judge did not believe Alfonsos proposition that Guidote, a mere industrial
partner, notwithstanding his having received 21k on the various jobs and contracts of the
business had actually expended and paid out 63k, of 44k in excess of the gross receipts of the
business. It materially contradicts Guidotes allegations to the effect that the advances that he
[Guidote] made amounted only to 2k.
Pio Gaudier is the same bookkeeper who prepared three entirely separate and distinct liquidation
for the same partnership business, and the court found that the testimony given by him at the
last hearing is confusing, contradictory and unreliable.
Other witnesses were given scant consideration Chua Chak can neither read nor write English,
Spanish, or Tagalog; Claro Reyes was forced to admit that a certain exhibit was not the original.

The court gave credence to the conclusions reached by the public accountants presented by
Borja. Guidote was ordered to pay P26k to Borja, with legal interest, plus costs.
ISSUE & HOLDING
WON the trial court is correct in ordering Guidote to pay P26k to Borja. YES
RATIO
There may be some merit in Guidotes contention that the dismissal of his complaint was premature.
The better practice would been to let the complaint stand until the result of the liquidation of the
partnership affairs was known. But under the circumstances, no harm was done by the dismissal of
Guidotes complaint.
GUIDOTES ARGUMENT
Since Santos, up to the time of his death, generally took care of the partnerships payments and
collections, his legal representatives were under the obligation to render accounts of the operations,
notwithstanding the fact that Guidote was in charge of the business subsequent to the death of Santos.
GUIDOTES ARGUMENT IS UNAVAILING
Wahl v. Donaldson Sim & Co.
The death of one of the partners dissolves the partnership, but that the liquidation of its affairs is by law
entrusted, not to the executors of the deceased partner, but to the surviving partners or the liquidators
appointed by them.
The rule for the conduct of a surviving partner
In equity, surviving partners are treated as trustees of the representatives of the deceased partner,
with regard to the interest of the deceased partner in the firm. As a consequence of this trusteeship,
surviving partners are held in their dealings with the firm assets and the representatives of the
deceased to that nicety of dealing and that strictness of accountability required of and incident to the

Classified - Confidential

position of one occupying a confidential relation. It is the duty of surviving partners to render an
account of the performance of their trust to the personal representatives of the deceased partner, and
to pay over to them the share of such deceased member in the surplus of firm property, whether it
consists of real or personal assets. Guidote failed to observe this rule, and he is not in position to
complain if his testimony and that of his witnesses is discredited.
The appealed judgment is AFFIRMED.
MAXIMO GUIDOTE, plaintiff-appellant,
vs.
ROMANA BORJA, as administratrix of the estate of Narciso Santos, deceased, defendant-appellee.
Francisco, Lualhati and Lopez for appellant.
M. G. Goyena for appellee.

OSTRAND, J.:
On March 4, 1921, the plaintiff brought an action against the administratrix of the estate of Narciso
Santos, deceased, to recover the sum of P9,534.14, a part of which was alleged to be the net profits
due the plaintiff in a partnership business conducted under the name of "Taller Sinukuan," in which the
deceased was the capitalist partner and the plaintiff the industrial partner, the rest of the sum
consisting of advances alleged to have been made to said partnership by the plaintiff. The defendant in
her answer admitted the existence of the partnership and in a cross-complaint and counter-claim
prayed that the plaintiff be ordered to render an accounting of the partnership business and to pay to
the estate of the deceased the sum of P25,000 as net profits, credits, and property pertaining to said
deceased.
In the first trial of the case the plaintiff called several witnesses and introduced a so-called accounting
and a mass of documentary evidence consisting of books, bills, and alleged vouchers, which
documentary evidence was so hopelessly and inextricably confused that the court, as stated in its
decision, could not consider it of much probative value. It was, however, fund as facts that the
aforesaid partnership had been formed, on or about June 15, 1918; that Narciso Santos died on April 6,
1920, leaving the plaintiff as the surviving partner; and that plaintiff failed to liquidate the affairs of the
partnership and to render an account thereof to the administratrix of Santos' estate. The court,
therefore, dismissed the plaintiff's complaint and absolved the defendant therefrom, and ordered the
plaintiff to render a full and complete accounting, verified by vouchers, of the partnership business from
June 15, 1918, until September 1, 1922. To this decision and order the plaintiff duly excepted.
The plaintiff thereupon rendered an account prepared by one Tomas Alfonso, a public accountant.
Numerous objections to said account were presented by the defendant, and the court, upon hearing,
disapproved the account and ordered that the defendant submit to the court an accounting of the
partnership business from the date of the commencement of the partnership, June 15, 1918, up to the
time the business was closed. 1awph!l.net
On January 25, 1924, the defendant presented an account and liquidation prepared by a public
accountant, Santiago A. Lindaya, showing a balance of P29,088.95 in favor of the defendant. The
account was set down for hearing upon the question of its approval or disapproval by the court, at
which hearing the defendant introduced the public accountant Jose Turiano Santiago to testify as to the
results of an audit made by him of the accounts of the partnership. Santiago testified that he had been
a public accountant for over 20 years, having appeared in court as such on several occasions; that he
had examined the exhibits offered in evidence of the case by both parties; that he had prepared a
separate accounting or liquidation similar in results to that prepared by Lindaya, but with a few
differences in the sums total; and that according to his examination, the financial status of the
partnership was as follows:
Narciso Santos is a creditor of the Taller Sinukuan in the sum of P26,020.89 consisting as follows:

Classified - Confidential

For his capital .................................. P12,588.53


For his credit ................................... 10,348.30
For his share of the profits ............ 3,068.06
Total ...................................................
-------------------------------------------------------------------------------26,020.89
Maximo Guidote is a debtor to the Taller Sinukuan in the sum of P20,020.89, consisting as follows:
For his debt (debito) ......................... P29,088.95
Less his share of the profits ........... 3,068.06
Total balance ......................................
-------------------------------------------------------------------------------26.020.89
In order to contradict the conclusions of Lindaya and Jose Turiano Santiago, the plaintiff presented
Tomas Alfonso and the bookkeeper, Pio Gaudier, as witnesses in his favor. In regard to the character of
the testimony of these witnesses, His Honor, the trial judge, says:
The testimony of these two witnesses is so unreliable that the court can place no reliance thereon. Mr.
Tomas Alfonso is the same public accountant who filed the liquidation Exhibit O on behalf of the
plaintiff, in relation to the partnership business, which liquidation was disapproved by this court in its
decision of August 20, 1923. It is also to be noted that Mr. Alfonso would have this court believe the
proposition that the plaintiff, a mere industrial partner, notwithstanding his having received the sum of
P21,649.61 on the various jobs and contracts of the "Taller Sinukuan," had actually expended and paid
out the sum of P63,360.27, of P44,710.66 in excess of the gross receipts of the business. This
proposition is not only improbable on its face, but it materially contradicts the allegations of plaintiff's
complaint to the effect that the advances made by the plaintiff only the amount to P2,017.50.
Mr. Pio Gaudier is the same bookkeeper who prepared three entirely separate and distinct liquidation for
the same partnership business all of which were repeated by the court in its decisions of September 1,
1922 and the court finds that the testimony given by him at the last hearing is confusing, contradictory
and unreliable.1awph!l.net
As to the other witnesses for the plaintiff His Honor further says:
The testimony of the other witnesses for the plaintiff deserves but scant consideration as evidence to
overcome the testimony of Mr. Santiago, as a whole particularly that of the witness Chua Chak, who,
after identifying and testifying as to a certain exhibit shown him by counsel for plaintiff, showed that he
could neither read nor write English, Spanish, or Tagalog, and that of the witness Mr. Claro Reyes, who,
after positively assuring the court that a certain exhibit tendered him for identification was an original
document, was forced to admit that it was but a mere copy.
The court therefore, found that the conclusions reached by Santiago A. Lindaya as modified by Jose
Turinao Santiago were just and correct and ordered the plaintiff to pay the defendant the sum of
P26,020.89, Philippine currency, with legal interest thereon from April 2, 1921, the date of the
defendant's answer, and to pay the costs. From this judgment the plaintiff appealed to this court and
presents the following assignments of error:
(1) That the court erred in dismissing the plaintiff's complaint and ordering him to present a liquidation
of the operations and accounts of the partnership formed with the deceased Narciso Santos, from the
beginning of the partnership until September 1, 1922.
(2) That the court erred in approving the liquidation made by the public accountant Santiago A.
Lindaya, with the modification introduced by the witness Jose Turiano Santiago.
(3) That the court erred in ordering the plaintiff and appellant to pay to the defendant and appellee the
sum of P26,020.89.

Classified - Confidential

As to the first assignment of error there may be some merit in the appellant's contention that the
dismissal of his complaint was premature. The better practise would, perhaps, have been to let the
complaint stand until the result of the liquidation of the partnership affairs was known. But under the
circumstances of this case no harm was done by the dismissal of the complaint, and the error, if any
there be, is not reversible.
Under the same assignment of error the plaintiff argues that as the deceased up to the time of his
death generally took care of the payments and collections of the partnership, his legal representatives
were under the obligation to render accounts of the operations of the partnership, notwithstanding the
fact that the plaintiff was in charge of the business subsequent to the death of Santos. This argument is
without merit. In the case of Wahl vs. Donaldson Sim & Co. (5 Phil., 11, 14), it was held that the death
of one of the partners dissolves the partnership, but that the liquidation of its affairs is by law intrusted,
not to the executors of the deceased partner, but to the surviving partners or the liquidators appointed
by them (citing article 229 of the Code of Commerce and secs. 664 and 665 of the Code of Civil
Procedure). The same rule is laid down by the Supreme Court of Spain in sentence of October 12, 1870.
The other assignments of error have reference only to questions of fact in regard to which the findings
of the court below seem to be as nearly correct as possible upon the evidence presented. There may be
errors in the interpretation of the accounts, and it is possible that the amount of P26,020.89 charged
against the plaintiff is excessive, but the evidence presented by him is so confusing and unreliable as to
be practically of no weight and cannot serve as a basis for a readjustment of the accounts prepared by
the accountant Lindaya and the apparently reliable witness, Jose Turiano Santiago.
We should, perhaps, have been more inclined to question the conclusions of Lindaya and Santiago if the
plaintiff had shown a disposition to render an honest account of the business and to effect a fair
liquidation of the partnership but instead of doing so, he has by means of very questionable, and
apparently false, evidence sought to mulct his deceased partner's estate to the extent of over P9,000.
The rule for the conduct of a surviving partner is thus stated in 20 R. C. L., 1003:
In equity surviving partners are treated as trustees of the representatives of the deceased partner, in
regard to the interest of the deceased partner in the firm. As a consequence of this trusteeship,
surviving partners are held in their dealings with the firm assets and the representatives of the
deceased to that nicety of dealing and that strictness of accountability required of and incident to the
position of one occupying a confidential relation. It is the duty of surviving partners to render an
account of the performance of their trust to the personal representatives of the deceased partner, and
to pay over to them the share of such deceased member in the surplus of firm property, whether it
consists of real or personal assets.
The appellant has completely failed to observe the rule quoted, and he is not in position to complain if
his testimony and that of his witnesses is discredited.
The appealed judgment is affirmed with the costs against the appellant. So ordered.

Classified - Confidential