Related cases

1811

Deluao vs Casteel, 29 SCRA 250

LOZANA VS DEPAKAKIBO, 107 PHIL 728

FACTS:

Lozana and Depakakibo established a partnership for the purpose of

maintaining, operating, and distributing electric light and power under a franchise.
Lozana furnished 60% and defendant 40% of the 30,000 capital.

However, the franchise was cancelled causing Lozana to sell a generator to

grantee Decolongon by a deed. Depakakibo, on the other hand, sold one Crossly
Engine Diesel to spouses Felix Jimenea and Felina Harder by a deed.

Lozana then brought an action against Depakakibo alleging ownership of the

Generator Buda and 70 wooden posts with wires and that he is entitled to
possession thereof. On the other hand, defendant counterclaimed that under the
partneship agreement, the parties were to contirbute equipments, plaintiff
contributing the generator, and the defendant, the wires; that plaintiff sold his
contribution to the partnership in violation of the partnership agreement.

The trial court declared that the partnership is null and void.

ISSUE:

Whether or not the partneship is null and void

HELD:

No, the partnership is not null and void.

As it appears from the above stipulation of facts, the plaintiff and the
defendant entered into the contract of partnership. The plaintiff had actually
contributed one engine and 70 posts to the partnership, it necessarily follows, that
the Buda diesel engine contributed by the plaintiff had become the property of the
 partnership. As properties of the partnership, the same could not be disposed of by
the party contributing the same without the consent or approval of the partnership
or of the other partner.

Under the circumstances, therefore, the court erred in declaring that the
contract was illegal from the beginning and that parties to the partnership are not
bound therefor, such that the contribution of the plaintiff to the partnership did not
pass to it as its property. It also follows that the claim of the defendant in his
counterclaim that the partnership be dissolved and its assets liquidated is the
proper remedy, not for each contributing partner to claim back what he had
contributed.

1812

THE LEYTE-SAMAR SALES AND K. TOMASSI VS S. CEA AND O. CASTRILLA, 93 PHIL 100

G.R. NO. L-5963; MAY 20, 1953

FACTS:

In civil case No. 193 of the Court of First Instance of Leyte, which is a suit for
damages by the Leyte-Samar Sales Co. (LESSCO) and Raymond Tomassi against the
Far Eastern Lumber & Commercial Co. (unregistered commercial partnership
hereinafter called FELCO), Arnold Hall, Fred Brown and Jean Roxas, judgment was
issued against defendants jointly.

The CA confirmed the award, minus P2,000 representing attorney's fees

mistakenly included. The decision having become final, the sheriff sold at auction to
Robert Dorfe and Pepito Asturias "all the rights, interests, titles and participation" of
the defendants in certain buildings and properties described in the certificate, for a
total price of P8,100.00.

Olegario Lastrilla filed in the case a motion, wherein he claimed to be the

owner by purchase of all the "shares and interests" of defendant Fred Brown in the
FELCO, and requested "under the law of preference of credits" that the sheriff be
required to retain in his possession so much of the deeds of the auction sale as may
be necessary "to pay his right".

Over the plaintiffs' objection the judge in his order granted Lastrilla's motion
by requiring the sheriff to retain 17% of the money "for delivery to the assignee,
administrator or receiver" of the FELCO.

On motion of Lastrilla, the court, modified its order of delivery and merely declared
that Lastrilla was entitled to 17 % of the properties sold.

ISSUE:

Whether or not Lastrilla has any proper claim to the proceeds of the sale

HELD:

None.

If he were a creditor of the FELCO, perhaps or maybe. But he was not. The
partner of a partnership is not a creditor of such partnership for the amount of his
shares.

Granting arguendo that the auction sale and not included the interest or
portion of the FELCO properties corresponding to the shares of Lastrilla in the same
partnership (17%), the resulting situation would be — at most — that the
purchasers Dorfe and Austrias will have to recognize dominion of Lastrillas over 17
per cent of the properties awarded to them. So, Lastrilla acquired no right to
demand any part of the money paid by Dorfe and Austrias to the sheriff for the
benefit of FELCO and Tomassi, the plaintiffs in that case, for the reason that, as he
says, his shares (acquired from Brown) could not have been and were not auctioned
off to Dorfe and Austrias.
 Supposing, however, that Lastrillas shares have been actually (but
unlawfully) sold by the sheriff (at the instance of plaintiffs) to Dorfe and Austrias,
what is his remedy? Section 15, Rule 39 furnishes the answer.

Precisely, respondents argue, Lastrilla vindicated his claim by proper action,

i.e., motion in the case. We ruled once that "action" in this section means action as
defined in section 1, Rule 2.3 Anyway his remedy is to claim "the property", not the
proceeds of the sale, which the sheriff is directed by section 14, Rule 39 to deliver
unto the judgment creditors.

In other words, the owner of property wrongfully sold may not voluntarily
come to court, and insist, "I approve the sale, therefore give me the proceeds
because I am the owner". The reason is that the sale was made for the judgment
creditor (who paid for the fees and notices), and not for anybody else.

Northampton Brewery vs Lande, 2A.2d 553

1813

1814

JOSE MACHUCA, plaintiff-appellee, vs. CHUIDIAN, BUENAVENTURA & CO.

G.R. No. 1011

FACTS:
CHUIDIAN, BUENAVENTURA & CO (defendants) is a regular general
partnership. The original partners were D. Telesforo Chuidian, Doña Raymunda
Chuidian, Doña Candelaria Chuidian, and D. Mariano Buenaventura. The partners
each contributed a certain amount of money to the partnership.

Dona Raymunda retired from the partnership on November 1885. The

partnership subsequently went into liquidation (it does not appear that the
liquidation has been terminated when this action was brought).
 On January 1894, D. Mariano Buenaventura died, his estate passing by will to
his children, including D. Vicente Buenaventura. In 1898, D. Vicente Buenaventura
executed a public instrument in which for a valuable consideration he “assigns to D.
Jose Gervasio Garcia . . . a 25 per cent share in all that may be obtained by whatever
right in whatever form from the liquidation of the partnership of Chuidian,
Buenaventura & Co., in the part pertaining to him in said partnership.

A subsequent assignment was made by Garcia in favor of Jose Machuca (now

plaintiff), which has been notified to the liquidator of the partnership. The
liquidator, however, declined to record in the books of the partnership Machuca’s
claim under the assignment as a credit due to him. Hence, Machuca filed an action to
compel such record to be made, and he further asks that he be adjudicated to be a
creditor of the partnership in an amount equal to 25% of D. Vicente Buenaventura’s
share (that he be immediately given the 25% share).

ISSUE:

Whether or not Machuca is entitled to 25% of D. Vicente Buenaventura’s

share in the partnership

HELD:

No.

According to clause 19 of the partnership agreement: "upon the dissolution

of the company, the pending obligations in favor of outside parties should be
satisfied, the funds of the minors Jose and Francisco Chuidian should be taken out,
and afterwards the resulting balance of the account-current of each one of those
who had put in money should be paid."

Our construction of this clause is that it establishes a a basis for the final
adjustment of the affairs of the partnership; that that basis is that the liabilities to
noncompartners are to be first discharged; that the claims of the Chuidian minors
are to be next satisfied; and that what is due to the respective partners on account of
their advances to the firm is to be paid last of all, leaving the ultimate residue, of
course, if there be any, to be distributed, among the partners in the proportions in
which they may be entitled thereto.

Hence, it follows that D. Vicente Buenaventura, whose rights are those of his
father, is in no case entitled to receive any part of the assets until the creditors, who
are nonpartners, and the Chuidian minors are paid. Whatever rights he had, he
could only transfer subject to this condition. It is clear, from the language of the
instrument under which plaintiff claims, that this conditional interest was all that
Vicente ever intended to transfer.