Case Digest (G.R. No. L-31684)
Facts:
In Evangelista & Co., a co-partnership was formed on October 9, 1954, by Domingo C. Evangelista, Jr., Conchita B. Navarro, and Leonarda Atienza Abad Santos as capitalist partners, each contributing ₱17,500.00. On June 7, 1955, the Articles of Co-partnership were amended to admit Estrella Abad Santos as an industrial partner, with her contribution defined solely as her industry and a 30% share in profits and losses, the remaining 70% to be equally divided among the three original partners. From that date until December 17, 1963, the partnership allegedly paid dividends to all but Estrella, who, despite demands, was denied access to the books and information. She thus sued the three partners and the firm in the Court of First Instance of Manila, praying for a formal accounting of partnership affairs from June 7, 1955, her share of declared profits, plus attorney’s fees and costs. The defendants denied the declaration of any dividends, Estrella’s demands, and contended that the ameCase Digest (G.R. No. L-31684)
Facts:
- Formation and amendment of partnership
- On October 9, 1954, a co-partnership was formed under the name “Evangelista & Co.”
- On June 7, 1955, the Articles of Co-partnership were amended to:
- Admit Estrella Abad Santos as industrial partner.
- Maintain Domingo C. Evangelista, Jr., Conchita P. Navarro and Leonardo A. A. Santos as capitalist partners with contributions of ₱17,500 each.
- Allocate profits and losses: 70% for the three capitalist partners (equally divided) and 30% for the industrial partner, Estrella.
- Dispute and litigation
- On December 17, 1963, Estrella filed suit in the CFI Manila seeking:
- An accounting of partnership affairs from June 7, 1955.
- Payment of her share of declared dividends and profits.
- Attorney’s fees and costs.
- Defendants’ Answer:
- Denied any dividends declared or profits distributed.
- Denied Estrella’s demand to examine books.
- Asserted Estrella was not an industrial partner but a mere profit-sharer until full payment of a ₱30,000 RFC loan for which she was co-maker and surety.
- Procedural history
- Trial Court (CFI Manila) ruled Estrella was an industrial partner, ordered accounting, payment of profits, ₱2,000 attorney’s fees, and costs.
- Court of Appeals affirmed the trial court decision in toto.
- Petitioners sought review in the Supreme Court, assigning errors concerning Estrella’s status and rights.
Issues:
- Whether Estrella Abad Santos is an industrial partner entitled to 30% of partnership profits indefinitely, despite her concurrent service as a judge and prior compensation.
- Whether Estrella can be lawfully excluded or deprived of any partnership share on the ground that she did not actually contribute industry.
- Whether the lower courts erred in declaring her an industrial partner, ordering accounting, profit distribution, attorney’s fees and costs, instead of dismissing her complaint.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)