Moran, Jr. v.

CA
G.R. No. L-59956 Oct. 31, 1984
Justice Gutierrez, Jr.
Facts:

Pecson and Moran entered into an agreement for the printing of posters
featuring the delegates of the 1971 Constitutional Convention
o That 95k posters were supposed to be printed and sold at P2/each
o That each would contribute P15k
o That Moran will supervise the work, while Pecson would receive a P1k
monthly commission
Pecson gave Moran P10k for which the latter issued a receipt
Only 2k posters were printed, but each was sold for P5
o Moran then executed 2 promissory notes in favor of Pecson
Pecson then filed an action for the recovery of a sum of money for the return
of his P10k contribution, payment of his share in the profits that the
partnership would have earned
TC: each party is entitled to rescind the contract since both failed to fulfill
their respective promises (Moran the printing of the 95k posters; Pecson
the P15k contribution)
CA: Moran must pay Pecson, among others, the amount of expected profits
and the latters commission in the partnership

Issue:

WON Moran is obliged to give Pecson the amount of expected profits from
their partnership.

Held:

No, he is not.
Rule: when a partner who has undertaken to contribute a sum of money fails
to do so, he becomes a debtor of the partnership for whatever he may have
promised to contribute (Art. 1786) and for interests and damages from the
time he should have complied with his obligations (Art. 1788)
Being a contract of partnership, each partner must share in the profits and
losses of the venture, for that is the essence of partnership.
o Even in the assurance of the other partner that they would earn a huge
amount of profits, in the absence of fraud, the other cannot claim a
right to recover the highly speculative profits
o In the present case, the fantastic nature of expected profits is obvious
that various factors need to be considered
o The failure of COMELEC to proclaim all 320 candidates of the
Constitutional Convention on time was a major factor in Morans
decision not to go on with the printing of all 95,000 posters

o Hidden risks in any business venture have to be considered

However, as it was shown that Pecson gave money to Moran (P10k) which the
latter used to print the first batch of posters, and since these posters were
sold and profits were realized from such sale, Pecson is entitled to recover his
share of such profits