Case Digest (G.R. No. L-30616)
Facts:
Eufracio D. Rojas, plaintiff-appellant, sued Constancio B. Maglana, defendant-appellee, for recovery of properties, accounting, receivership and damages arising from their business under the firm name Eastcoast Development Enterprises (EDE); the Court of First Instance of Davao dismissed the complaint after commissioners made an accounting and rendered findings on contributions, profit shares and dissolution. The parties first executed Articles of Co-Partnership dated January 14, 1955 (registered), later formed an unregistered three-party partnership on March 4, 1956 with Agustin Pahamotang who withdrew and was paid on August 31, 1957; thereafter Rojas abandoned the enterprise, withdrew equipment, contracted with CMS Estate, Inc., and the partnership was later dissolved by a February 23, 1961 letter from Maglana.
Issues:
- Did the unregistered March 4, 1956 partnership novate or dissolve the registered Articles of Co-Partnership dated January 14, 1955?
- Could Maglana unilaterally dissolve or effect withdrawal from the partnership by his February 23, 1961 letter?
- What is the proper basis for sharing profits and losses and the liability of Rojas for unpaid contributions and funds taken?
Ruling:
The Court modified and reversed in part and affirmed in part: it held that the registered partnership dated January 14, 1955 continued to govern the parties' relations and that profit and loss sharing was governed by the registered articles on a share and share alike basis as to liquidation, and it approved the commissioners' accounting and computations of liabilities. The Court also affirmed the trial court's findings that no damages were recoverable against Maglana and otherwise sustained the trial court's disposition.
Ratio:
The Court found the March 4, 1956 instrument to be a supplementary agreement that did not novate the registered articles because the name, purposes, capital amounts and subsequent timber license renewals remained under the registered partnership, and the partners conducted business under the registered articles. Nevertheless, under Article 1830, par. 2, Civil Code, a partner may withdraw and thus effect dissolution as between remaining parties; the February 23, 1961 letter operated as withdrawal. Rojas' failure to contribute rendered him a debtor of the partnership under Article 1786, Civil Code, with liability for interest and damages under Article 1788, Civil Code, and the commissioners' report provided the proper basis for quantifying the parties' respective accounts.
Doctrine:
- An unregistered supplementary agreement does not novate a duly registered partnership where its essential terms and operations remain under the registered articles.
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