Case Summary (G.R. No. 28028)
Partnership Formation and Operations
Prior to January 1947, the plaintiffs and associates formed a secret partnership to acquire Meralco properties. The partnership lacked formal articles of incorporation, with plans to create a corporation once the acquisition was complete. Pedro Serranzana and David Serrano were designated as general manager and secretary-treasurer, respectively. After efforts to negotiate the purchase stagnated, the defendant, Hernandez, joined the partnership to facilitate the deal and was given power of attorney.
Acquisition Details
Using partnership funds, Hernandez successfully purchased Meralco properties for P122,000, with payment terms that included a down payment and installment payments supported by a penalty clause for nonpayment. Despite being the vendee named in the deed, the properties were acquired for the partnership, which subsequently assumed control of the business.
Partnership Dissolution
Tensions arose, leading some partners, including plaintiffs and Judge Jaime Reyes, to withdraw from the partnership due to dissatisfaction with management and concerns about financial liabilities. A resolution was proposed at a meeting on April 10, 1947, allowing partners to withdraw and receive their contributions back, which was subsequently approved. The following day, plaintiffs and Judge Reyes were refunded their investments, and the partnership was officially dissolved.
Formation of the Corporation
Following the dissolution, remaining partners continued to form a new corporation, the Bicol Electric Company, which took over the Meralco properties. The assets were assigned a high book value, and despite initial losses in operations, the corporation later prospered. Two years after the dissolution, the plaintiffs sought to claim a share of the alleged profits from the corporate assignment.
Legal Proceedings and Issues
Plaintiffs claimed that Hernandez made profits from the assignment of the Meralco properties, seeking P115,312.50 as their share. However, the defendant contended that no profits had been realized, pointing out that any gain from the share subscriptions was not cash received directly. The lower court found no profit from the assignment and dismissed the complaint, asserting that the plaintiffs ceased to have interest after their withdrawal from the partnership.
Appeal and Court's Findings
On appeal, the court affirmed the lower court's decision, emphasizing that the profits
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Case Overview
- This case is an action for the recovery of P115,312.50, which plaintiffs claimed as their share in the profits of a partnership.
- The case involves the plaintiffs, Cristobal Bonnevie and others, against defendant Jaime Hernandez.
Background of the Partnership
- Prior to January 1947, the plaintiffs formed a syndicate or secret partnership with others to acquire the plants and properties of the Manila Electric Company (Meralco) in the provinces of Camarines Sur, Albay, and Sorsogon.
- The partnership intended to incorporate but opted not to draft formal articles until the acquisition was finalized.
- Pedro Serranzana and David Serrano were elected as the general manager and secretary-treasurer, respectively.
Acquisition of Meralco Properties
- Negotiations for the purchase began but stalled, prompting the inclusion of Jaime Hernandez as a partner to expedite the deal.
- Hernandez was given a power of attorney and facilitated the purchase of Meralco properties for P122,000, with specific terms for payment including a penalty clause for non-payment.
- Although Hernandez was named as the vendee, the transaction was intended for the partnership, which took control of the business post-sale.
Dissolution of the Partnership
- In April 1947, some partners, concerned about the business's