SERGIO V. SISON vs. HELEN J.

MCQUAID
94 PHIL 201

DOCTRINE: NO CAUSE OF ACTION.—Plaintiff 'Seeks to recover from defendant one-half of

the purchase price of lumber sold by the partnership to the United States Army. But his complaint
does not show why he should be entitled to the sum he claims. It does not allege that there has
been a liquidation of their partnership business and the said sum has been found to be due him as
his share of the profits. Held: The complaint states no cause of .action. .The proceeds from the
sale of a certain amount of lumber - cannot be considered profits until costs and expenses have
been deducted. Moreover, the profits of a business cannot be determined by taking into account
the result of one particular transaction instead of all the transactions had. Hence, the need for a
general liquidation before a member of a partnership may claim a specific sum as his share of the
profits.

FACTS: In the year 1938, McQuaid loaned money amounting to Php 2,210.00 from Sergio Sison,
to be used to pay her obligations to the Bureau of Forestry and to add to her capital in her lumber
business. That same year, due to McQuaid’s inability to pay the loan, Sison proposed to take
McQuaid as a partner in her business. The Php 2,210 which McQuaid borrowed would serve as
her contribution. They agreed to share in the profits of the business and render services without
compensation.

Before the last World War, the partnership sold 230,000‐board ft. of lumber to the US
Army for P 13,800.00. However, McQuaid refused to deliver ½ of it or P 6,900.00 to Sison despite
his repeated demands. McQuaid used the money for her own benefit which prompted Sison to file
an action to compel defendant to pay him his half of the profit from the partnership.

The Court of First Instance dismissed the case upon the defendant’s filing of a Motion to
Dismiss on the ground of prescription.

ISSUE: Whether Sison is entitled to the claim of the specific sum as his share in the profits?

RULING: No. Although the reason given for the order of dismissal is untenable, the Supreme
Court held that the said order should be upheld on the ground that the complaint states no cause of
action, which is also one of the grounds on which defendant's motion to dismiss was based. The
plaintiff seeks to recover from defendant one-half of the purchase price of lumber sold by the
partnership to the United States Army. But his complaint does not show why he should be entitled
to the sum he claims. It does not allege that there has been a liquidation of the partnership business
and the said sum has been found to be due him as his share of the profits.

The proceeds from the sale of a certain amount of lumber cannot be considered profits until
costs and expenses have been deducted. Moreover, the profits of a business cannot be determined
by taking into account the result of one particular transaction instead of all the transactions had.
Hence, the need f or a general liquidation before a member of a partnership may claim a specific
sum as his share of the profits.