G.R. No.

L-59956 October 31, 1984

ISABELO MORAN JR, petitioner,
vs.
THE HON. COURT OF APPEALS and MARIANO PECSON, respondents.

Facts:
• Moran and Pecson entered into an agreement where both would contribute P15,000 for the
purpose of printing 95,000 posters featuring the 1971 Constitutional Convention Delegates.
Moran supervising the work and Pecson would receive P1,000 commission a month.
• Pecson only paid P10,000. Moran executed a P20,000 promissory note in favor of Pecson.
• Pecson filed a complaint for a) return of his contribution, payment of his share of profits and
unpaid commission.
• Lower Court: Each party is entitled to rescind the contracts as a right implied in reciprocal
obligations. Defendant was only able to print 2,000 posters. Plaintiff failed to pay in full the
P15,000.
• Court of Appeals: Decision against petitioner ordering him to pay P47,500 accruing to
respondent, P8,000 for commission, and P7,000 for Pecson’s investment.

Issue:
• Whether or not CA erred on awarding the P47, 500 to private respondent

Ruling:
• Yes. The CA erred on awarding the P47,500 to private respondent being a speculative damage.
• Under the law, each partner must share in the profits and losses of the venture. Even with an
assurance made by one of the partners that they would earn a huge amount of profits, in the
absence of fraud, the other partner cannot claim a right to recover the highly speculative
profits.
• In this case, even with an assurance made by one of the partners that they would earn a huge
amount of profits, in the absence of fraud, the other partner cannot claim a right to recover the
highly speculative profits. It is a rare business venture guaranteed to give 100% profits.