Lim Pok V CA

Facts:
1. Pang Lim and Lo Seng were partners under the firm name, Lo Seng & Co. The partnership was in
the business of running a distillery
2. The land on which the distillery was build was leased from another, Lo Yao, through his agent Lo
Shui.
3. Upon expiration of the lease, a contract to extend the lease for 15 years was entered into by the
parties
4. Later on, Lim sold ALL his interest in the distillery to Seng (including his interest in the lease).
5. Lo Shui, as agent of Lo Yao, conveyed the land to Pang Lim and Benito Galvez. However, Lo Seng
refused to yield the property causing Lim and Galvez to institute an action for unlawful detainer
against Seng.

Justice of Peace: Favored Lim and Galvez

CFI: Upheld

Issue: Whether it is contrary to law for partner who has left the partnership may, after his departure,
use information known to him by reason of the partnership for his own benefit.
Held: Yes, it is contrary.
Ratio:
1. In business relations, partners are required to exhibit towards each other the highest degree of
good faith. The relation of the partners is essentially fiduciary as one is the confidential agent of
the other.
2. The partner cannot, to the detriment of another, apply exclusively to his own benefit,
knowledge and information gained as a partner.

RE: W/N the Unlawful Detainer action may prosper

Held: No, it may not.
Ratio:
1. In an action for unlawful detainer, the question to be resolved is that of the right to possession.
It must be shown that the occupant’s possession is unlawful.
2. In selling all his share in the partnership, Lim likewise sold his interest in the lease. Hence, Lo
Seng became the owner of such rights in the lease. Lim cannot terminate the lease on the basis
that he is estopped from the sale (estoppel by deed).