Mauricio Agad vs. Severino Mabato G.R. No. L-24193, June 28, 1968 Ponente: Concepcion, C. J.

Facts: Mauricio Agad and defendant Severino Mabato are partners in a fishpond business. From 1952up to and including 1956, Mabato who handled the partnership funds, had yearly rendered accounts of the operations of the partnership, that despite repeated demands, Mabato failed and refused to render accounts for the years 1957 to 1963. Consequently Agad filed a complaint in the CIF of Davao. In his answer, Mabato admitted the formal allegations of the complaint and denied the existence of said partnership, upon the ground that the contract there for had not been perfected, despite the execution of Annex "A", because Agad had allegedly failed to give his P1,000 contribution to the partnership capital. Subsequently, Mabato filed a motion to dismiss, upon the ground that the complaint states no cause of action and that the lower court had no jurisdiction over the subject matter of the case, because it involves principally the determination of rights over public lands. After due hearing, the court issued the order appealed from, granting the motion to dismiss the complaint for failure to state a cause of action. This conclusion was predicated upon the theory that the contract of partnership, Annex"A", is null and void, pursuant to Art. 1773 of our Civil Code, because an inventory of the fishpond referred in said instrument had not been attached thereto. A reconsideration of this order having been denied, Agad brought the matter to the Supreme Court for review by record on appeal. Issue: Whether Art. 1773 of the Civil Code is applicable in this case. Held: We find that said Article 1773 of the Civil Code is not in point. Ratio: The issue before us hinges on whether or not "immovable property or real rights" have been contributed to the partnership under consideration. Mabato alleged and the lower court held that the answer should be in the affirmative, because "it is really inconceivable how a partnership engaged in the fishpond business could exist without said fishpond property (being)contributed to the partnership." It should be noted, however, that, as stated in Annex "A" thepartnership was established "to operate a fishpond", not to "engage in a fishpond business" .Moreover, none of the partners contributed either a fishpond or a real right to any fishpond .Their contributions were limited to the sum of P1,000 each. Indeed, Paragraph 4 of Annex "A" provides:
That the capital of the said partnership is Two Thousand (P2,000.00) Pesos Philippine Currency, of which One Thousand(P1,000.00) pesos has been contributed by Severino Mabato and One Thousand (P1,000.00) Pesos has been contributed by Mauricio Agad. x x x x x x x x x

The operation of the fishpond mentioned in Annex "A" was the purpose of the partnership. Neither said fishpond nor a real right thereto was contributed to the partnership or became part of the capital thereof, even if a fishpond or a real right thereto could become part of its assets.

and that each co-owner may demand at any time partition of the thing owned in common insofar as his share is concerned. The law is clear that the appearance of parties at the pretrial is mandatory. 498 of the Code states that whenever the thing is essentially indivisible and the co-owners cannot agree that it be allotted to one of them who shall indemnify the others. thereafter the proceeds of the sale shall be divided equally according to their respective interests. it shall be sold and its proceeds accordingly distributed. B) YES. Senen was left in the said lot to take care of their father since Vergilio’s family was in Cebu. but later they agreed on equal shares. A party who fails to appear at a pre-trial conference may be non-suited or considered as in default. After their father’s death petitioner demanded from private respondent that the latter vacate the house and that the property be sold and proceeds thereof divided among them but the latter refused. the co-ownership was deemed terminated and the right to enjoy the possession jointly also ceased. the case was then remanded to the trial court. Respondent filed a motion to cancel Pre-trial since the counsel had to accompany his wife in Dumaguete City where she would be a principal sponsor in a wedding. SC held that ½ of the proceeds should go to the petitioner and the remainder to the respondent (1. BASIS: Article 494 of the Civil Code provides that no co-owner shall be obliged to remain in the coownership. Hence this appeal. Jr. ISSUE: A) W/N CA erred (1) in holding that the motion of respondent through counsel to cancel the pre-trial was dilatory in character and (2) in remanding the case to the trial court for pre-trial and trial? ISSUE RELEVANT TO PROPERTY: B) W/N trial court was correct with regards to the sale and rent? RULING: A) YES. SC found that the reason for the cancelation of the pre-trial was insufficient and that the trial court was not in grave abuse of discretion when they denied it. vs. Petitioner then filed to compel the sale of the property. The chunk of the issue tackled by the courts was regarding the pretrial. The trial went on ex parte without the respondent and held that the property should be sold to a third party and that the proceeds be distributed to the parties.200 each.Aguila. Art. and the pre-trial proceeded on the scheduled date. for the use and enjoyment of the other half of the property. CA erred in granting the respondents motion and remanding the case. Petitioner and respondents are co-owners of subject house and lot in equal shares. They initially agreed that Vergilio will get 2/3 and Senen will get 1/3. It is the discretion of the court to grant the motion if it sees that the reason for the cancelation of the same would be reasonable. either one of them may demand the sale of the house and lot at any time and the other cannot object to such demand. .200 pesos per month with legal interest from the time the trial court ordered the respondent to vacate. BASIS: When petitioner filed an action to compel the sale of the property and the trial court granted the petition and ordered the ejectment of respondent. Court of Appeals FACTS: Petitioner Vergilio and respondent Senen bought a house and lot in Paraňaque where their father could spend and enjoy his remaining years in a peaceful neighborhood.) Also rent was awarded 1. Respondents appealed this and the decision was reversed by the CA saying that the TC erred in declaring respondents in default. in addition respondent was made to pay rent from the time the action was filed. Corollary to this rule. CFI denied the motion. with a few modification. The respondents did not appear thus they were declared in default.

and that notwithstanding her demands the defendants had refused and continued to refuse and let her examine the partnership books or to give her information regarding the partnership affairs to pay her any share in the dividends declared by the partnership.00 obtained from the Rehabilitation Finance Corporal shall have been fully paid. defendants reached an agreement whereby the herein plaintiff been excluded from. and deprived of. plus attorney's fees and costs. 1955. why did it take appellants many yearn before excluding her from said company as a fore quoted allegations? And how can they reconcile such exclusive with their main theory that appellee has never been such a partner because "The real agreement was to grant the appellee a share of 30% of the net profits which the appellant partnership may realize from June 7. Domingo C. alleging that the partnership. 1954 a co-partnership was formed under the name of "Evangelista & Co.R. with herein petitioners Domingo C. and 30% for the fourth partner Estrella Abad Santos. She therefore prayed that the defendants be ordered to render accounting to her of the partnership business and to pay her corresponding share in the partnership profits after such accounting. and that the profits and losses "shall be divided and distributed among the partners . 31684.000. ABAD SANTOS (G. 1963 herein respondent filed suit against the three other partners in the Court of First Instance of Manila. aside from teaching in law school in Manila. No. which was also made a party-defendant. Jr. as an alleged industrial partner. That appellee has faithfully complied with her prestation with respect to appellants is clearly shown by the fact that it was only after filing of the complaint in this case and the answer thereto appellants exercised their right of exclusion under the codal art just mentioned by alleging in their Supplemental Answer. ISSUE: Whether or not Abad Santos is an industrial partner and is entitled to the shares of the partnership? HELD: Yes.. the original capitalist partners. . instead she has been and still is a judge of the City Court (formerly Municipal Court) of the City of Manila. without the express consent of the herein defendants'. that "the contribution of Estrella Abad Santos consists of her industry being an industrial partner". Estrella Abad Santos. interests or participation. June 28. her alleged share. The amended Articles provided. in the defendant partnership and/or in its net profits or income..500 each. Leonardo Atienza Abad Santos and Conchita P. Jr. had been paying dividends to the partners except to her.. until the mortgage of P30. inter alia. Navarro and Leonardo Atienza Abad Santos to be divided among them equally. in the proportion of 70% for the first three partners.EVANGELISTA & CO v. with a contribution of P17. 1973) FACTS: On October 9. and to insure faithful compliance by said partner with this prestation. Evangelista. Evangelista. on the ground plaintiff has never contributed her industry to the partnership.."On December 17. as industrial partner.Navarro. Conchita P. devoting her time to performance of her duties as such judge and enjoying the privilege and emoluments appertaining to the said office. subsequent to the filing of defendants' answer to the complaint. 1955the Articles of Co-partnership was amended as to include herein respondent. It is not disputed that the provision against the industrial partner engaging in business for himself seeks to prevent any conflict of interest between the industrial partner and the partnership. remaining in that capacity. Having always knows as a appellee as a City judge even before she joined appellant company as an industrial partner." On June 7.

security brokers and other activities pertaining to the business of the partnership. may legally engage in the business of brokerage in general as stock brokers. and unable to collect this sum either from Hill & Ceron or from its surety Visayan Surety & Insurance Corporation. of certain undisputed facts and of certain regulations and provisions of the Code of Commerce. however. but in view.R. therefore. after trial. Robert Hill and the Visayan Surety & Insurance Corporation.150 leaving an unpaid balance of P720. with legal interest. ET AL. we reach the conclusion that the transaction made by Ceron with the plaintiff should be understood in law as effected by Hill & Ceron and binding upon it. The conclusion arrived at by the Court of Appeals as to the question of fact just mentioned. Ceron. that Ceron individually entered into the transaction with the plaintiff. vs. HILL & CERON. none of the two partners.. The appealed decision is reversed and the defendants are ordered to pay to the plaintiff. . Litton filed a complaint in the Court of First Instance of Manila against the said defendants for the recovery of the said balance. namely. could not have entered into the contract of sale of shares with Litton as a private individual. the latter affirmed the decision of the court on May 29. jointly and severally.870. On appeal to the Court of Appeals. the sum of P720. FACTS: Ceron paid to the plaintiff the sum or P1. ordered Carlos Ceron personally to pay the amount claimed and absolved the partnership Hill & Ceron. 1937. but as a managing partner of Hill & Ceron. petitioner-appellant.G. The court. ISSUE: Whether or not they have violated Article 226 of the Code of Commerce which states that. respondents-appellees. HELD: The kind of business in which the partnership Hill & Ceron is to engage being thus determined. the dissolution of a commercial association shall not cause any prejudice to third parties until it has been recorded in the commercial registry. L-45624 April 25. with the costs to the respondents. under article 130 of the Code of Commerce. from the date of the filing of the complaint. having reached the conclusion that Ceron did not intend to represent and did not act for the firm Hill & Ceron in the transaction involved in this litigation. minus the commission of one-half per cent (½%) from the original price of P1. We do not find this alleged corroboration because the only finding of fact made by the Court of Appeals is to the effect that the transaction made by Ceron with the plaintiff was in his individual capacity. 1939 GEORGE LITTON. No.

the available balance of the savings account. shame and anxiety. Under the clearing house rules. petitioners.” On December 12. C. The next day. When petitioners’ checks were dishonored. Held: No. through Librada Moran. a bank processes a check on the date it was presented for clearing. since December 15.A Facts: Petitioner spouses Moran maintained three joint accounts with respondent Citytrust Banking Corporation. (4) Citytrust is free and harmless for any and all omissions or oversight in executing this automatic transfer of funds. unless the bank clears their name and paid for moral damages. Hence. ROJAS VS. 1983 was the actual date when the checks were processed. although what was stamped on the dorsal side of the two checks was “DAIF/1215-83”. which was subject of the PAT agreement. The non-delivery of gasoline forced petitioners to temporarily stop business operations. a pre-authorized transfer (PAT) agreement was entered into by the parties. As a result. The PAT letter-agreement contained the following provisions: (1) xxx “the checks would be honored if the savings account has sufficient balance to cover the overdraft. Petrophil refused to deliver the orders of petitioners on a credit. Later. MAGLANA Facts: . petitioners issued another check in favor of the same corporation. xxx (3) that the bank has the right to refuse to effect transfer of funds at their sole and absolute option and discretion. The available balance of December 14. The CA affirmed. JR.MORAN. Petitioners wrote Citytrust claiming the dishonor of the checks caused them besmirched business and personal reputation. The trial court dismissed the complaint. 1983. VS. As a special privilege to the Morans. they were contemplating filing legal actions. 1983 was used by the bank in determining whether or not there was sufficient cash deposited to fund the two checks. Issue: Whether or not petitioners had sufficient funds in their accounts when the bank dishonored the checks in question. was not enough to cover either of the two checks. drew a check payable to Petrophil Corporation. the bank dishonored the checks due to “insufficiency of funds”.

Their sharing basis: whether in proportion to their contribution or share and share alike. 2. Being a contract of partnership.Withdrawing partner is liable for damages if the cause of withdrawal is not justified or no cause was given but in no case can he be compelled to be in the firm. Whether or not the nature of partnership and the legal relations of Maglana and Rojas after the dissolution of the second partnership. he becomes a debtor of the partnership for whatever he promised to contribute and for interests and damages from the time he should have complied w/ his obligation. . each partner must share in the profits and losses of the venture. Issue: 1. Held: A party who has undertaken to contribute a sum of money fails to do so. That’s the essence of a partnership.

Sign up to vote on this title
UsefulNot useful