Case Summary (G.R. No. 70926)
Factual Background
In October 1955 Dan Fue Leung established Sun Wah Panciteria as a sole proprietorship. Leung Yiu filed suit in July 1978 alleging that he contributed ₱4,000 at inception in exchange for a 22% share of annual profits. He presented a Chinese-language receipt (Exhibit A) signed by petitioner and later translated by an appointed interpreter. He also produced a 1974 check for ₱12,000 (Exhibit B) drawn by petitioner and credited to his account.
Trial Court Findings and Judgment
The Court of First Instance credited respondent’s evidence, including eyewitness testimony (So Sia, Antonio Ah Heng) and a P.C. Crime Laboratory report (Exhibit J) matching petitioner’s signatures on receipts to salary envelope signatures (Exhibits H–H-24). It declared the existence of a partnership and ordered petitioner to pay 22% of net profits (₱8,000/day) from judicial demand, plus ₱5,000 attorney’s fees and costs.
Appellate Court Modification
The Intermediate Appellate Court initially modified the award to temperate damages computed at 22% of profits at varying daily net-income rates and periods. In a subsequent resolution, it affirmed the trial court’s amended judgment ordering payment of 22% of ₱8,000 daily net profit from July 13, 1978, until fully paid, plus fees and costs.
Partnership Determination
Petitioner contended that the complaint only alleged “financial assistance,” not partnership. The Supreme Court held that under Civil Code Article 1767, the agreement to contribute money for profit sharing constitutes a partnership regardless of terminology. The Court applied the doctrine that a complaint’s nature is governed by the facts alleged.
Signature and Documentary Evidence
Petitioner challenged the P.C. Crime Laboratory report for lack of foundational testimony identifying handwriting specimens. The Court noted petitioner failed to object to the admission of specimen exhibits (H–H-24) or to oppose their submission for laboratory examination. Under these circumstances, the report’s probative value stood unrebutted.
Prescription and Right to Accounting
Petitioner argued the 10-year prescription under Article 1144 barred respondent’s claim filed 22 years later. The Court ruled that a partner’s right to an accounting arises upon dissolution (Article 1842) and prescription on accounting claims runs from dissolution, not from contribution. Articles 1806–1809 confirm that as long as a partnership subsists, accounting rights persist.
Income Evidence and Due Process
Respondent’s cashier testified to average daily gross receipts of ₱7,000–10,000 and catering earnings of ₱2,000–6,000 per event. Petitioner’s counsel waived cross-examination and failed to produce sales records despite subpoenas. The trial court, after multiple continuances, treated the non-production as a waiver and admit
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Summary of Facts
- In October 1955, Dan Fue Leung established Sun Wah Panciteria at Florentino Torres Street, Sta. Cruz, Manila, registered as his sole proprietorship with all permits in his name.
- Respondent Leung Yiu claimed he contributed ₱4,000.00 as initial capital, evidenced by a receipt in Chinese characters (Exhibit A) signed by petitioner and translated into English by an interpreter.
- Witnesses So Sia and Antonio Ah Heng corroborated that they observed petitioner signing the receipts for both private respondent’s and So Sia’s ₱4,000.00 contributions.
- The PC Crime Laboratory compared signatures on the receipts (Exhibits A and D) with petitioner’s known signatures (Exhibits H, H-1 to H-24) from employee pay envelopes and confirmed their identity (Exhibit J).
- Private respondent also produced Equitable Banking Corporation Check No. 13389470-B for ₱12,000.00 (Exhibit B), drawn and debited against petitioner’s account and credited to respondent’s savings account.
- Petitioner denied any receipt of capital from Leung Yiu, contested genuineness of the receipts, and maintained Sun Wah Panciteria was his sole property based on business licenses and permits.
Procedural History
- Civil Case No. 116725, Court of First Instance of Manila, Branch II: respondent sued for 22% of annual profits since October 1955; trial court credited Leung Yiu’s evidence and ordered petitioner to pay 22% of profits, attorney’s fees, and costs.
- Trial court granted respondent’s motion for reconsideration and amended its decision to specify 22% of net profit of ₱8,000.00 per day from judicial demand, attorney’s fees of ₱5,000.00, plus costs.
- Intermediate Appellate Court (“IAC”), AC-G.R. No. CV-00881: modified dispositive terms twice—first ordering “temperate damages” on varying daily net profit benchmarks (₱2,000.00 and ₱8,000.00) for defined periods, then reinstating trial court’s amended judgment with judicial demand dated July 13, 1978.
- Petitioner’s motion for reconsideration before IAC was denied; Supreme Court review ensued under G.R. No. 70926.
Issues Presented
- Wh