122. Dan Fue Leung v.
IAC The petitioner denied having received from the private respondent the
169 SCRA 746 amount of P4,000.00. He contested and impugned the genuineness of the
January 31, 1989 receipt.
Topic: ATP- Partner’s Rights The petitioner did not receive any contribution at the time he started the
Petitioner: Dan Feu Leung Sun Wah Panciteria. He used his savings from his salaries as an employee
Respondent: Honorable Intermediate Appellate Court and Leung Yiu at Camp Stotsenberg in Clark Field and later as waiter at the Toho
Ponente: Gutierrez, Jr., J. Restaurant amounting to a little more than P2,000.00 as capital in
establishing Sun Wah Panciteria.
FACTS: Petitioner presented various government licenses and permits showing
the Sun Wah Panciteria was and still is a single proprietorship solely
owned and operated by himself alone.
The petitioner asks for the reversal of the decision of the then
Fue Leung also flatly denied having issued to the private respondent the
Intermediate Appellate Court which affirmed the decision of the then
receipt and the Equitable Banking Corporation's Check No. 13389470 B in
Court of First Instance which states that private respondent Leung Yiu is
the amount of P12,000.00.
a partner of petitioner Dan Fue Leung in the business of Sun Wah
Panciteria
Moreoever, ordering the petitioner to pay to the private respondent his
share in the annual profits of the said restaurant.
The Sun Wah Panciteria, a restaurant, located at Florentino Torres ISSUE: W/N Private respondent is a partner of the petitioner in Sun Wah
Street, Sta. Cruz, Manila, was established sometime in October, 1955. Panciteria?
It was registered as a single proprietorship and its licenses and permits
were issued to and in favor of petitioner Dan Fue Leung as the sole HELD:
proprietor.
The private respondent is a partner of the petitioner in Sun Wah
Respondent: Panciteria. The requisites of a partnership:
Claimed that Sun Wah Panciteria was actually a partnership and that he 1) two or more persons bind themselves to contribute money, property, or
was one of the partners having contributed P4,000.00 to its initial industry to a common fund; and
establishment.
This is evidenced by a receipt wherein the petitioner acknowledged
2) intention on the part of the partners to divide the profits among themselves
his acceptance of the P4,000.00 by affixing his signature thereto.
Furthermore, the private respondent received from the petitioner the
amount of P12,000.00 covered by the latter's Equitable Banking As stated by the respondent, a partner shares not only in profits but also
Corporation Check from the profits of the operation of the restaurant for in the losses of the firm.
the year 1974 If excellent relations exist among the partners at the start of business and
all the partners are more interested in seeing the firm grow rather than
get immediate returns, a deferment of sharing in the profits is perfectly
Petitioner:
plausible.
It would be incorrect to state that if a partner does not assert his
reasonably practicable to carry on the business in partnership
rights anytime within ten years from the start of operations, such
with him;
rights are irretrievably lost.
The private respondent's cause of action is premised upon the failure of
the petitioner to give him the agreed profits in the operation of Sun Wah xxx xxx xxx
Panciteria. In effect the private respondent was asking for an accounting
of his interests in the partnership. (6) Other circumstances render a dissolution equitable.
It is Article 1842 of the Civil Code in conjunction with Articles 1144 and
1155 which is applicable. Article 1842 states: There shall be a liquidation and winding up of partnership affairs, return
of capital, and other incidents of dissolution because the continuation of
The right to an account of his interest shall accrue to any the partnership has become inequitable.
partner, or his legal representative as against the winding up
partners or the surviving partners or the person or partnership
continuing the business, at the date of dissolution, in the
absence or any agreement to the contrary.
Regarding the prescriptive period within which the private respondent
may demand an accounting, Articles 1806, 1807, and 1809 show that the
right to demand an accounting exists as long as the partnership exists.
Prescription begins to run only upon the dissolution of the partnership
when the final accounting is done.
Considering the facts of this case, the Court may decree a dissolution of
the partnership under Article 1831 of the Civil Code which, in part,
provides:
Art. 1831. On application by or for a partner the court shall
decree a dissolution whenever:
xxx xxx xxx
(3) A partner has been guilty of such conduct as tends to affect
prejudicially the carrying on of the business;
(4) A partner willfully or persistently commits a breach of
the partnership agreement, or otherwise so conducts
himself in matters relating to the partnership business that it
is not
