Case Digest (G.R. No. L-30616)
Facts:
Eufracio D. Rojas v. Constancio B. Maglana, G.R. No. L-30616, December 10, 1990, Supreme Court Second Division, Paras, J., writing for the Court (Melencio-Herrera, Chairman, Sarmiento and Regalado, JJ., concurring; Padilla, J., took no part).Plaintiff-appellant Eufracio D. Rojas and defendant-appellee Constancio B. Maglana originally executed Articles of Co‑Partnership dated January 14, 1955 (registered January 21, 1955) creating Eastcoast Development Enterprises (EDE). One stated purpose was to secure timber licenses; Timber License No. 35‑56 was obtained in the partnership’s name and later renewals were secured for the registered partnership. Under the 1955 articles the partners were to divide profits and losses “share and share alike”; Maglana was entrusted with management and signing authority, Rojas with logging supervision.
On March 4, 1956 the partners admitted Agustin Pahamotang as an industrial partner by executing new (unregistered) Articles of Co‑Partnership under the same firm name; the second partnership fixed a 30‑year term and gave Pahamotang an equal share. That enterprise began operations May 1, 1956 and realized income. On October 25, 1956 the three executed a “Conditional Sale of Interest” by which Maglana and Rojas agreed to purchase Pahamotang’s partnership interest for P31,501.12; Pahamotang was paid in full August 31, 1957 and no further acts were done in the second partnership’s name except to effect Pahamotang’s payment.
After Pahamotang’s withdrawal, Maglana and Rojas continued operations without reconstituting written articles. Rojas left on January 28, 1957 to manage logging for CMS Estate, Inc., withdrew partnership equipment (February 4, 1957), and later accepted funds and benefits from CMS. On March 17, 1957 Maglana reminded Rojas of his obligation to contribute capital and perform as logging superintendent; Rojas replied he could not comply and thereafter agreed to an 80/20 profit sharing (Maglana 80%, Rojas 20%) from 1957–1959 by mutual arrangement.
Tensions continued and on about February 1961 Maglana gave notice dissolving the partnership. On April 7, 1961 Rojas filed Civil Case No. 3518 in the Court of First Instance of Davao for recovery of properties, accounting, receivership and damages. A petition for receiver was denied, commissioners were appointed May 23, 1961 to examine accounts, and their voluminous report was approved May 27, 1964. After trial, the CFI rendered judgment March 11, 1968 declaring: (1) the partnership between Maglana and Rojas after Pahamotang’s retirement was a de facto, at‑will partnership; (2) sharing of profits should be by actual contribution (not share and share alike), with specific allocations for 1957–19...(Pro-only)
Issues:
- After Pahamotang’s withdrawal, was the partnership between Maglana and Rojas a continuation of the duly registered partnership governed by the 1955 Articles (with profit and loss sharing “share and share alike”), or was it a de facto partnership at will subject to different rules?
- Could Maglana unilaterally withdraw and thereby dissolve the partnership under the Civil Code, and what are the consequences for profit sharing and liabilities between the partners?
- Is Rojas entitled to any share of profits for the period in question, or is he liable to account to the partnership for unpaid cont...(Pro-only)
Ruling:
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Ratio:
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Doctrine:
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