GREGORIO F. ORTEGA, TOMAS O. DEL CASTILLO, JR.

and
BENJAMIN T. BACORRO, petitioners
Versus
HON. COURT O F APPEALS, SECURITIES AND EXCHANGE
COMMISSION AND JOAQUIN L. MISA, respondents
G.R. No. 109248 July 3, 1995

Facts:

The law firm of ROSS, LAWRENCE, SELPH and CARRASCOSO

was duly registered in the Mercantile Registry on 4 January 1937 and
reconstituted with the Securities and Exchange Commission on 4 August
1948. The SEC records show that there were several subsequent
amendments to the articles of partnership. Respondent Misa associated
himself as senior partner with the petitioners Ortega, del Castillo, Jr. and
Bacorro as junior partners as of the date of December 19, 1980. Misa wrote
a letter on February 17, 1988 stating that he is withdrawing and retiring from
the firm. He also trusts the accountants to do a proper liquidation based on
his participation in the firm. On the same day, petitioner-appellant brought
up that he wanted to have a meeting regarding the mechanics of liquidation,
more particularly, the two floors of the firm’s building because he had plans
for it.

On 30 June 1988, petitioner filed with this Commission’s Securities

Investigation and Clearing Department (SICD) a petition for dissolution and
liquidation of partnership. On March 31, 1989, it was rendered by the
hearing officer the decision ruling that the withdrawal of the petitioner has
not resulted to the dissolution of the partnership. On appeal, en banc
reversed the decision and it was affirmed by the Court of Appeals. Hence,
this petition.

Issues:

1. Whether or not the partnership of Bito, Misa and Lozada (now Bito,
Lozada, Ortega and Castillo) is a partnership at will
2. Whether or not the withdrawal of private respondent dissolved the
partnership regardless of his good or bad faith

Decision:

1. Yes. The partnership agreement of the firm provides that ”the

partnership shall continue so long as mutually satisfactory and
upon the death or legal incapacity of one of the partners, shall be
continued by the surviving partners.”
The Supreme Court upheld the ruling of the Court of Appeals
with regards to the nature of the partnership. It was stated further
by the SC that a partnership that does not fix its term is a under
partnership at will. Its birth and life is based upon the mutual
desire and content of the partners. And it is the very essence and
foundation of that partnership the right to choose with whom a
person wishes to associate himself.

2. Yes. Its continued existence is in turn, dependent to the constancy

of that mutual resolve, along with each partner’s capability to give
it, and the absence of a cause for dissolution as the law provides. It
was certainly dictate dissolution in any one of the partners, at his
sole pleasure dictates for it. However, the one asking for it must act
in good faith, not that the attendance of bad faith will prevent the
dissolution of the partnership but for the reason that it will result in
liability for damages.