CHARLES F.

WOODHOUSE, plaintiff-appellant
Versus
FORTUATO HALILI, defendant-appellant
G.R. No. L-4811 July 31, 1953

Facts:
On November 29, 1947, Charles Woodhouse entered into on written
agreement with Fortunato Halili for which they shall organize a partnership
for bottling and distribution of Mission soft drinks. In the partnership they
both decided that the defendant or Halili act as the capitalist partner while
Charles Woodhouse or the plaintiff act as industrial partner or manager. In
their partnership formation, it was actually established that defendant
required the plaintiff to secure an exclusive franchise for the said venture. In
behalf of the said partnership and upon obtaining the said exclusive
franchise the defendant stipulated to pay the plaintiff 30% of the profits. The
plaintiff sought to obtain the said exclusive franchise but was only given a
temporary one, subject only to 30 days. The parties then proceeded with the
signing of the agreement. The partnership was still not initiated, only the
agreement to work with each other, with the plaintiff as manager and the
defendant as financer, was established.
Together the two parties went to the US to formally sign the contract of
franchise with Mission Dry Corporation. The defendant then found out about
the temporary franchise right given to the plaintiff, different from the
exclusive franchise rights they stipulated in their contract.
 When the operations of the business began he was paid P 2,000 and
was allowed the use of a car. But in the next month, the pay was decreased
to P 1,000 and the car was withdrawn from him.
The plaintiff demanded the execution of the partnership, but the defendant
excused himself, saying that there was no hurry to do so. The Court of First
Instance ordered the defendant to render an accounting of the profits and to
pay the plaintiff 15% of such amount. It also held that execution of the
contract of partnership cannot be enforced upon the defendant and that fraud
as alleged by the defendant was also not proved. Hence the petition.
Issue:
Whether or not Halili could be compelled to execute the
Decision:
A contract to form a partnership cannot be executed. It entails an
obligation to do. The law recognizes the individual’s freedom or liberty to
do an act he has promised to do, or not to do it, as he pleases. This is a very
personal act of which courts may not compel compliance, as it is considered
as an act of violence to do so.