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Sison v.

Helen McQuaid December 29, 1953 Principle: Liquidation shall happen before a partner may claim his share of profit from the partnership. Facts: Plaintiff brought an action in the CFI against defendant. Defendant borrowed from him money (P 2,210) to enable her to pay her obligations and to add to her capital in her lumber business. She could not pay so she proposed to take plaintiff as a partner in her business, plaintiff to contribute the P 2,210 due him from defendant. Before the last World War, the partnership sold 230,000board ft. of lumbe rto the US Army for P 13,800.00. Defendant refused to deliver of it (P 6,900.00) to plaintiff despite his repeated demands. Plaintiff filed an action to compel defendant to pay him his half of the profit from the partnership. The case was dismissed upon the ground of prescription. Issue: Whether or not plaintiff is entitled to the sum he claims Held:NO. Order of dismissal was affirmed, but on the ground that the complaint states no cause of action. Ratio: It is not clear from the complaint just when the cause of action accrued. Thus the dismissal of the case is erroneous. However order should be retained on the ground that the complaint has no cause of action. Plaintiff seeks to recover from defendant one-half of the purchase price of lumber sold by the partnership to the United States Army. But his complaint does not show why he should be entitled to the sum he claims. It does not allege that there has been a liquidation of the partnership business and the said sum has been found to be due him as his share of the profits. The proceeds from the sale of a certain amount of lumber cannot be considered profits until costs and expenses have been deducted. Moreover, the profits of the business cannot be determined by taking into account the result of one particular transaction instead of all the transactions had. Hence, the need for a general liquidation before a member of a partnership may claim a specific sum as his share of the profits.