Case Digest (G.R. No. 59956)
Facts:
On February 22, 1971, Isabelo Moran, Jr. and Mariano E. Pecson entered into a partnership agreement in Manila to print 95,000 colored posters of delegates to the 1971 Constitutional Convention. Each partner was to contribute ₱15,000, with Moran supervising printing. Pecson would receive a monthly commission of ₱1,000 from April 15 to December 15, 1971, and the accounts would be liquidated on December 15, 1971. Pecson advanced Moran ₱10,000 and later furnished additional funds for a separate magazine project, receiving in turn promissory notes: one for ₱14,000 (₱6,000 capital plus ₱8,000 promised profit) and another for ₱7,000 after partial return of capital. Only 2,000 posters were printed, sold at ₱5 each, and the magazine venture failed. On June 19, 1972, Pecson sued in the Court of First Instance of Manila for (1) return of contribution and share of profits plus commission under the partnership; (2) ₱20,000 on the promissory note; and (3) moral and exemplary damages and attorCase Digest (G.R. No. 59956)
Facts:
- Partnership Agreement and Terms
- On February 22, 1971, petitioner Isabelo Moran, Jr. and respondent Mariano E. Pecson entered into a partnership to print 95,000 colored posters featuring delegates to the 1971 Constitutional Convention.
- Each partner agreed to contribute ₱15,000; Pecson was to receive a commission of ₱1,000 per month from April 15 to December 15, 1971; and a liquidation of accounts was set for December 15, 1971.
- Pecson delivered ₱10,000 to Moran and received a receipt. Moran executed a promissory note for ₱20,000 payable in two ₱10,000 installments (due June 15 and June 30, 1971), with acceleration upon default.
- Performance and Preliminary Proceedings
- Only 2,000 of the 95,000 posters were printed and sold at ₱5 each, yielding gross proceeds of ₱10,000. Printing cost totaled ₱4,000.
- Pecson sued in the Court of First Instance of Manila on June 19, 1972, asserting three causes of action: return of contribution and share of profits under the partnership; payment under the promissory note; and moral/exemplary damages plus attorney’s fees.
- The trial court deemed the venture a failure, ordered rescission under Art. 1385, and directed Moran to return ₱17,000 (₱10,000 contribution + ₱7,000 for “Voice of the Veteran” magazine investment) with legal interest; counterclaim dismissed.
- Appeals and CA Decision
- Both parties appealed to the Court of Appeals.
- The CA set aside the trial court’s decision and ordered Moran to pay:
- ₱47,500 as Pecson’s expected share of unrealized profits;
- ₱8,000 commission for eight months;
- ₱7,000 return of investment in the magazine venture; and
- legal interest on all amounts from date of complaint.
- Petition for Review
- Moran filed a petition for certiorari before the Supreme Court, assigning five errors:
- Award of ₱47,500 as speculative profits;
- Award of ₱8,000 commission;
- Award of ₱7,000 for magazine investment;
- Failure to offset payments received by Pecson;
- Denial of Moran’s counterclaim for damages.
Issues:
- Whether the CA erred in awarding ₱47,500 as Pecson’s share of speculative profits.
- Whether the CA erred in awarding ₱8,000 as commission despite the venture’s failure.
- Whether the CA erred in awarding ₱7,000 as return of investment in the magazine venture.
- Whether the CA should have offset amounts already received by Pecson.
- Whether the CA committed grave abuse of discretion in denying Moran’s counterclaim for damages.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)