CASE TITLE: Island Sales, Inc. v. United Pioneers General Construction Company, et al., G.R.

No. L-22493, July 31, 1975

FACTS:
On April 22, 1961, United Pioneer General Construction Company, a general partnership
registered under Philippine law, purchased a motor vehicle on installment from Island Sales, Inc.,
executing a promissory note for P9,440.00. The note stipulated twelve equal monthly payments
of P786.63, with the first payment due on May 22, 1961, and a condition that any missed
payment would render the entire balance immediately due. After failing to pay the installment
due on July 22, 1961, Island Sales, Inc. sued for the unpaid balance of P7,119.07, including the
company's general partners Benjamin C. Daco, Daniel A. Guizona, Noel C. Sim, Romulo B.
Lumauig, and Augusto Palisoc as co-defendants. Daniel A. Guizona was declared in default for
not filing an answer, and the complaint against Romulo B. Lumauig was later dismissed. The
remaining defendants and their counsel failed to appear in court, leading to an ex-parte decision
against them. The trial court ruled in favor of Island Sales, Inc., ordering the company and its
partners to pay the outstanding amount with interest and attorney’s fees, to be enforced against
individual partners only if the company had no leviable properties. Defendants Daco and Sim’s
motion to reconsider, arguing for limited liability to one-fifth each, was denied, prompting this
appeal.

ISSUES:
● Whether the dismissal of the complaint against one general partner increases the joint and
subsidiary liability of the remaining partners for the partnership’s obligations.

RULING
The Supreme Court ruled that the dismissal of the complaint against one partner does not
increase the liability of the remaining partners. According to Article 1816 of the Civil Code, all
partners are liable pro rata after the partnership’s assets are exhausted. The dismissal of the
complaint against Lumauig, a general partner, did not change his status within the partnership or
increase the share of the debt owed by the remaining partners. Thus, Benjamin C. Daco's liability
is limited to one-fifth of the partnership's obligation, consistent with the pro rata liability among
all partners. Consequently, the trial court's decision, as clarified, was affirmed.
CASE TITLE: Gregorio F. Ortega, et al. v. CA, G.R. No. 109248, July 3, 1995;

FACTS:
The law firm initially known as ROSS, LAWRENCE, SELPH, and CARRASCOSO underwent
several name changes, ultimately becoming BITO, MISA & LOZADA. On February 17, 1988,
Joaquin L. Misa, a partner, expressed his intent to withdraw from the firm, citing dissatisfaction
with working conditions. Consequently, he filed a petition with the SEC for the dissolution and
liquidation of the partnership. The SEC Hearing Officer initially ruled that Misa’s withdrawal did
not dissolve the partnership. However, on appeal, the SEC en banc reversed this decision,
declaring that the partnership, being a partnership at will, was dissolved by Misa’s withdrawal.
The case was remanded to the Hearing Officer to determine Misa’s share. Misa’s request for
receivership was denied. Both parties appealed to the Court of Appeals, which affirmed the
SEC’s decision.

ISSUES:
● Whether the Court of Appeals erred in holding that the partnership was a partnership at
will.
● Whether the Court of Appeals erred in holding that Misa's withdrawal dissolved the
partnership regardless of good or bad faith.
● Whether the Court of Appeals erred in holding that Misa's demand for dissolution was
not made in bad faith.

RULING:

The Supreme Court affirmed the decision of the Court of Appeals, holding that the partnership
was dissolved by Misa's withdrawal, and remanded the case to the SEC Hearing Officer to
determine the value of Misa’s share in the partnership assets. The petition for receivership was
denied due to a lack of evidence that the partnership assets were at risk.
CASE TITLE: Maximiliano Sancho v. Severiano Lizarraga, G.R. No. L-33580, February 6, 1931

FACTS:
Maximiliano Sancho initiated an action seeking the rescission of a partnership contract with
Severiano Lizarraga, reimbursement of his P50,000 investment with 12% annual interest from
October 15, 1920, and associated costs. The defendant countered by denying the plaintiff's
allegations and requesting the partnership's dissolution. He also sought compensation as the
manager at P500 monthly from the partnership’s inception until dissolution, with interest, and
claimed half of this amount from the plaintiff. The Court of First Instance of Manila found that
Lizarraga had not fully contributed the capital he committed and that Sancho had demanded
liquidation. Consequently, the court dissolved the partnership due to the expiration of its term
and ordered Lizarraga to liquidate the partnership and submit accounts within thirty days without
costs. Sancho appealed this decision.

ISSUE
● Whether the plaintiff is entitled to the rescission of the partnership contract under Article
1124 of the Civil Code.
● Whether the defendant should be ordered to return the sum of P50,000 with interest from
October 15, 1920.
● Whether the denial of the motion for a new trial was erroneous.

RULING:
The Supreme Court found the appeal premature because the liquidation and subsequent
accounting ordered by the trial court had not yet been completed. Therefore, the case was not
fully resolved at the lower court level, making the appeal inadmissible at this stage, per section
123 of the Code of Civil Procedure and the precedent set in Natividad vs. Villarica. Additionally,
addressing the merits, the Court affirmed the trial court’s decision, noting that Articles 1681 and
1682 of the Civil Code specifically govern partnership contracts and prevail over the general
provisions of Article 1124. Sancho did not have the right to rescind the partnership contract due
to Lizarraga's partial capital contribution; instead, Lizarraga was liable to the partnership for the
unpaid amount with interest and damages. Therefore, the appeal was dismissed, and the lower
court's decision was upheld without special pronouncement of costs.
CASE TITLE: Eufracio D. Rojas v. Constancio B. Maglana, G.R. No. 30616, December 10,
1990
FACTS:
On January 14, 1955, Maglana and Rojas formed a partnership named Eastcoast Development
Enterprises (EDE) to secure timber and forest products licenses, registered with the Securities
and Exchange Commission. Maglana managed the business and Rojas the logging operations,
with profits and losses shared equally. The partnership did not operate until April 30, 1956, due
to difficulties, leading to the inclusion of Pahamotang as an industrial partner on March 4, 1956.
The reconstituted partnership operated from May 1, 1956, generating significant income. On
October 25, 1956, Maglana and Rojas bought Pahamotang's share, and the partnership continued
without written reconstitution. Rojas abandoned the partnership on January 28, 1957, and
withdrew his equipment for a contract with another enterprise. Maglana dissolved the partnership
on February 21, 1961. Rojas sued for recovery, accounting, receivership, and damages. The trial
court ruled on various issues, leading to Rojas's appeal.
ISSUES:
● Whether the partnership between Maglana and Rojas was dissolved upon Pahamotang's
withdrawal.
● Whether Maglana had the right to unilaterally dissolve the partnership.
● Whether the sharing of partnership profits should be based on contributions or share and
share alike.
● Whether properties bought by Maglana were acquired with partnership funds.
● Whether either party is entitled to damages.
● Whether the letter from Maglana dated February 23, 1961, effectively dissolved the
partnership.
● Whether the canteen operated by the partnership belonged to the partnership.
● Whether the sale of a forest concession was valid and binding.
● Whether Rojas should pay profits received from another enterprise.
● Whether Rojas should pay an unreceived sum from another enterprise.
● Whether Rojas should pay his personal account to the partnership.
● Whether Maglana's unpaid amount as logging superintendent should be considered his
contribution to the partnership.
RULING:
The court found that the original partnership, registered in 1955, continued despite the formation
of the second partnership with Pahamotang. The dissolution of the second partnership did not
affect the first partnership, which remained governed by its original terms. Maglana’s unilateral
dissolution of the partnership was valid, effectively a notice of withdrawal. Consequently, the
profits and losses should be shared equally as stipulated in the original partnership agreement.
However, due to Rojas's failure to fulfill his contribution obligations and his abandonment of the
partnership, he was not entitled to any profits. The court affirmed the trial court's decision,
except for recognizing the original partnership's continuity and equal profit-sharing provision.
CASE TITLE: Isabelo Moran, Jr. v. Court of Appeals and Mariano E. Pecson, G.R. No. L-59956,
October 31, 1984

FACTS:
Isabelo Moran, Jr. and Mariano E. Pecson entered into an agreement on February 22, 1971,
where both would contribute P15,000 each for printing 95,000 posters featuring the delegates to
the 1971 Constitutional Convention, with Moran supervising the work. Pecson was to receive a
commission of P1,000 monthly from April 15, 1971, to December 15, 1971, with a liquidation of
accounts on December 15, 1971. Pecson gave Moran P10,000, receiving a receipt in return.
However, only 2,000 posters were printed. On May 28, 1971, Moran issued a promissory note to
Pecson for P20,000, payable in two installments of P10,000 each, due on June 15, 1971, and
June 30, 1971. Pecson filed an action with the Court of First Instance of Manila for recovery of
money based on three causes: the partnership agreement, the promissory note, and claims for
moral and exemplary damages and attorney's fees. The Court of First Instance found that the
partnership did not fully materialize and each party failed to fulfill their full contribution. The
court ordered Moran to return P17,000 to Pecson. Both parties appealed to the Court of Appeals,
which reversed the decision, awarding Pecson P47,500 for expected profits, P8,000 for unpaid
commission, and P7,000 for investment in a separate magazine venture, with legal interest.
ISSUES:
● Whether the Court of Appeals erred in awarding P47,500 as supposed expected profits to
Pecson.
● Whether the Court of Appeals erred in awarding P8,000 as commission to Pecson.
● Whether the Court of Appeals erred in awarding P7,000 as a return of investment in a
magazine venture to Pecson.
● Whether the Court of Appeals erred in not offsetting payments received by Pecson from
Moran.
● Whether the Court of Appeals erred in not granting Moran's compulsory counterclaim for
damages.
RULING:
The Supreme Court ruled that the award of speculative damages (P47,500 for expected profits)
by the Court of Appeals had no basis in fact or law since there was no evidence that the
partnership would have been profitable. Furthermore, both parties were in mutual breach of their
obligations. Consequently, Pecson was not entitled to the P8,000 commission, as it was
predicated on the success of the venture. Regarding the P7,000 awarded as return on investment
for the "Voice of the Veterans" project, the Court found that Pecson had invested only P3,000 and
that the project did take place but failed, hence Pecson was not entitled to a return on investment.
The Supreme Court set aside the Court of Appeals' decision and ordered Moran to pay Pecson
P6,000 (the unused portion of Pecson's contribution) and P3,000 (one-half of the net profits from
the posters), with legal interest from the date the complaint was filed until full payment. The
counterclaim of Moran was dismissed.
CASE TITLE: Marsman Drysdale Land, Inc. v. Philippine Geoanalytics, Inc. and Gotesco
Properties, Inc., G.R. No. 183374, June 29, 2010

FACTS:
On February 12, 1997, Marsman Drysdale Land, Inc. (Marsman Drysdale) and Gotesco
Properties, Inc. (Gotesco) entered into a Joint Venture Agreement (JVA) to construct and develop
an office building in Makati City. Marsman Drysdale contributed the land, appraised at
P420,000,000, while Gotesco contributed an equal amount in cash and was responsible for
funding the project. They hired Philippine Geoanalytics, Inc. (PGI) for subsurface soil
exploration and other services. PGI billed the joint venture P535,353.50 for completed services
but was not paid. The joint venture was abandoned due to economic conditions, leading PGI to
sue both parties. The RTC ruled in favor of PGI, holding Marsman Drysdale and Gotesco jointly
liable. Marsman Drysdale's cross-claim against Gotesco was granted. On appeal, the Court of
Appeals affirmed the joint liability but modified the reimbursement and attorney’s fees awards.
Both parties appealed to the Supreme Court.

ISSUES:
● Whether the appellate court erred in adjudging Marsman Drysdale jointly liable with
Gotesco.
● Whether PGI was entitled to the payment for services despite not completing all tasks.
● Whether the reimbursement order to Marsman Drysdale was correct.
● Whether the award of attorney’s fees to PGI was justified.
● Whether Marsman Drysdale was entitled to attorney’s fees.
● Whether Marsman Drysdale and Gotesco should pay interest on the unpaid amount.

RULING:
The Supreme Court affirmed the joint liability of Marsman Drysdale and Gotesco to PGI, stating
that the JVA could not negate their joint obligation to a third party under the Technical Services
Contract. PGI was entitled to payment as it had sufficiently established its claims, and Marsman
Drysdale’s issuance of a Certificate of Payment validated this. The Court deleted the order for
Gotesco to reimburse Marsman Drysdale, as both parties shared responsibility for losses per the
nature of their joint venture. The award of attorney’s fees to PGI was upheld, but Marsman
Drysdale’s claim for attorney’s fees was denied. An interest of 12% per annum was imposed on
the unpaid amount from the date of the last demand until full payment. The appellate court's
decision was affirmed with these modifications.
CASE TITLE: Zenaida G. Mendoza v. Engr. Eduardo Paule, et al., G.R. No. 175885, February
13, 2009

FACTS:
Eduardo M. Paule, proprietor of E.M. Paule Construction and Trading (EMPCT), authorized
Zenaida G. Mendoza via a Special Power of Attorney (SPA) to handle bidding and transactions
for a National Irrigation Administration (NIA) project. EMPCT, represented by Zenaida G.
Mendoza, won the bid for Packages A-10 and B-11. Zenaida G. Mendoza leased equipment from
Manuel de la Cruz for the project. On April 27, 2000, Eduardo M. Paule revoked the SPA,
causing payment issues. Manuel de la Cruz demanded payment directly from NIA, which was
refused, leading him to sue Eduardo M. Paule, Buenaventura Coloma, and NIA for unpaid
rentals. The trial court held Eduardo M. Paule liable, but the Court of Appeals dismissed the
complaint, stating Zenaida G. Mendoza exceeded her authority. Both Manuel de la Cruz and
Zenaida G. Mendoza appealed.

ISSUES:
● Whether the Court of Appeals erred in dismissing Manuel de la Cruz's complaint based
on the finding that Zenaida G. Mendoza exceeded her authority under the SPA.
● Whether the Court of Appeals erred in dismissing Zenaida G. Mendoza's appeal and
failing to resolve her cross-claim against Eduardo M. Paule.
● Whether Eduardo M. Paule can be held liable for the obligations incurred by Zenaida G.
Mendoza under the SPA.

RULING:
The Supreme Court granted the petitions of Manuel de la Cruz and Zenaida G. Mendoza, holding
that Eduardo M. Paule and Zenaida G. Mendoza were in a partnership and that Zenaida G.
Mendoza was authorized to contract for necessary resources. Eduardo M. Paule’s revocation of
the SPA was in bad faith. The Court reversed the Court of Appeals’ decision, reinstating the trial
court’s ruling that Eduardo M. Paule must pay Manuel de la Cruz and awarded damages to
Zenaida G. Mendoza.
CASE TITLE: Antonio C. Goquiolay, et al. v. Washington Z. Sycip, et al., G.R. No. L-11840

FACTS:
Tan Sin An and Antonio C. Goquiolay formed a partnership aimed at real estate dealings, with
Tan Sin An being explicitly designated as the sole managing partner, while Goquiolay held the
position of a co-partner without any managerial authority. The partnership agreement, spanning a
period of ten years and extendable even after a partner's death, entrusted Tan Sin An with
extensive powers to manage the partnership's affairs, including the ability to delegate
management responsibilities through irrevocable power of attorney. Following Tan Sin An's
demise, his widow, Kong Chai Pin, assumed the role of administratrix of his estate. In this
capacity, she executed a sale of partnership land to settle outstanding debts, a decision later
contested by Goquiolay.

ISSUES:
● Whether Tan Sin An's widow had the authority to sell partnership properties to settle
debts.
● Whether consent from other partners was required for the sale to third parties.

RULING:
The court deliberated on whether Kong Chai Pin, as Tan Sin An's widow and administrator,
possessed the requisite authority to sell partnership properties for the purpose of debt settlement.
It was determined that Kong Chai Pin's active involvement in managing partnership affairs,
coupled with her representation of Tan Sin An's estate, indicated her acknowledgment and
assumption of general partnership responsibilities. Consequently, she was deemed to possess the
authority to execute the sale of partnership properties. Additionally, the court clarified that third
parties engaging in transactions with the partnership could reasonably assume Tan Sin An's
authority to bind the partnership, given his previous role as the sole managing partner. Therefore,
the objection raised by Goquiolay against the sale was deemed untimely and ineffective.
CASE TITLE: Antonio Pardo v. The Hercules Lumber Co., Inc. and Ignacio Ferrer, G.R. No.
L-22442, August 1, 1924

FACTS:

The petitioner, Antonio Pardo, sought a writ of mandamus from the Supreme Court to compel
the respondents, including the Hercules Lumber Company, Inc., to allow him and his authorized
representative to examine the company's records and business transactions. The respondents
initially answered the petition, admitting certain allegations while presenting defenses. The
petitioner then demurred to the answer, leading to the issue's presentation before the court. The
petitioner's status as a stockholder in the Hercules Lumber Company, Inc. is inferentially
admitted. However, the acting secretary of the company, Ignacio Ferrer, refused the petitioner's
request to inspect records at desired times. The right of stockholders to inspect company records,
as provided by section 51 of Act No. 1459, was acknowledged. This right, as established in
previous jurisprudence, can be exercised by the stockholder personally or through an authorized
agent. The respondents argued that a by-law of the company, particularly Article 10, limited the
time frame for stockholders to inspect records, setting it annually based on dates determined by
the board of directors. They cited a resolution passed by the board, indicating specific days
during which shareholders could inspect records. The respondents contended that failure to
inspect within this defined period nullified the right for the current year.

ISSUES:
● Whether the petitioner, as a stockholder in the Hercules Lumber Company, Inc., has the
right to inspect the company's records and business transactions.
● Whether the resolution passed by the company's board of directors, restricting the time
frame for stockholders to exercise their inspection rights, is valid under statutory
provisions.

RULING:
The court rejected the respondents' argument, affirming that the statutory right of inspection
cannot be unduly restricted by by-laws or board resolutions. While officials may deny inspection
under improper conditions, they cannot deprive stockholders of this right altogether. Numerous
legal authorities supported this principle. The statute explicitly allows inspection "at reasonable
hours," meaning throughout the year on business days, not limited to arbitrary periods chosen by
directors. Moreover, the court disregarded allegations regarding the petitioner's motives for
inspection, emphasizing that the shareholder's intent is generally immaterial. Based on the
petition's allegations and the answer's admissions, the court ruled in favor of the petitioner,
sustaining the demurrer and granting the writ of mandamus. Costs were awarded against the
respondents.
CASE TITLE: Priscilla Z. Orbe v. Leonora O. Miaral, G.R. No. 217777, August 16, 2017.

FACTS:
The petition seeks to annul the 24 September 2014 Decision and the 24 March 2015 Resolution
of the Court of Appeals, which overturned the 27 August 2013 and 7 January 2014 Orders of the
RTC of Quezon City, Branch 104. These RTC Orders denied the Motion to Withdraw
Information for Estafa filed by Quezon City Prosecutor Donald T. Lee in Criminal Case Q-
12-174206 against Leonora O. Miaral and Anne Kristine Miaral. The partnership agreement
between Leonora O. Miaral (respondent) and Priscilla Z. Orbe (petitioner) for the garment
exportation business involved an investment of ₱250,000.00 each. However, respondent
allegedly misappropriated funds, including a payment for plane tickets, leading petitioner to file
a complaint for estafa against respondent and Anne Kristine. The Quezon City Prosecutor
initially recommended the filing of an Information for Estafa against respondent and Anne
Kristine. However, upon motion for reconsideration, the Prosecutor reversed its decision, basing
it on a partnership agreement between the parties. The RTC then denied the Motion to Withdraw
Information, finding probable cause for the estafa charges. The Court of Appeals granted
respondent's petition, ruling that the RTC gravely abused its discretion. It relied on the doctrine
established in United States v. Clarin, which was subsequently found inapplicable by the
Supreme Court in Liwanag v. Court of Appeals.

ISSUES:
● Whether the Court of Appeals committed reversible error in ruling that the RTC
committed grave abuse of discretion amounting to lack or excess of jurisdiction.
● Whether the Court of Appeals committed reversible error in reversing and setting aside
the 27 August 2013 and 7 January 2014 Orders of the RTC, and in directing the issuance
of an Order for the Withdrawal of the Information for estafa against respondent and Anne
Kristine.
● Whether the action for estafa penalized under Article 315 2(a) of the Revised Penal Code
has been barred by prescription.

RULING:
The Supreme Court disagreed with the Court of Appeals, finding that the Regional Trial Court
(RTC) did not commit grave abuse of discretion in denying the Motion to Withdraw Information
for Estafa. The RTC's decision was based on an independent assessment of evidence, which
showed probable cause for estafa. Additionally, the Court clarified that the action for estafa had
not yet prescribed, as the complaint was filed within the fifteen-year prescriptive period.
Therefore, the Supreme Court granted the petition, reinstating the RTC's orders and allowing the
case to proceed against the accused.