4. ROJAS VS. MAGLANA transferred to CMS Estate, Inc.
by way of chattel
192 SCRA 110 , DECEMBER 10, 1990 mortgage
Maglana wrote Rojas reminding the latter of his
FACTS: obligation to contribute, either in cash or in equipment,
to the capital investments of the partnership as well as
On January 14, 1955, Maglana and Rojas executed their
his obligation to perform his duties as logging
Articles of Co-Partnership called Eastcoast
superintendent.
Development Enterprises (EDE) with only the two of
them as partners. Two weeks after March 17, 1957, Rojas told Maglana
that he will not be able to comply with the promised
The partnership EDE with an indefinite term of
contributions and he will not work as logging
existence was duly registered on January 21, 1955 with
superintendent.
the Securities and Exchange Commission.
Meanwhile, Rojas took funds from the partnership more
During the period from January 14, 1955 to April 30,
than his contribution.
1956, there was no operation of said partnership
Thus, in a letter dated February 21, 1961 Maglana
Because of the difficulties encountered, Rojas and
notified Rojas that he dissolved the partnership
Maglana decided to avail of the services of Pahamotang
as industrial partner. Rojas filed an action before the Court of First Instance of
Davao against Maglana for the recovery of properties,
On March 4, 1956, Maglana, Rojas and Agustin
accounting, receivership and damages
Pahamotang executed their Articles of Co-Partnership
under the firm name EASTCOAST DEVELOPMENT lower court rendered its decision in favor of defendant
ENTERPRISES (EDE).
The partnership formed by Maglana, Pahamotang and
Rojas started operation on May 1, 1956, and was able to ISSUE:
ship logs and realize profits. An income was derived 1. nature of the partnership and legal relationship
from the proceeds of the logs in the sum of P643,633.07 of the Maglana-Rojas after Pahamotang retired
Pahamotang, Maglana and Rojas executed a document from the second partnership.
entitled "CONDITIONAL SALE OF INTEREST IN THE 2. whether or not Maglana can unilaterally
PARTNERSHIP, EASTCOAST DEVELOPMENT dissolve the partnership in the case at bar
ENTERPRISE" agreeing among themselves that Maglana
and Rojas shall purchase the interest, share and 3. whether Maglana is liable for damages because
participation in the Partnership of Pahamotang of such withdrawal
assessed in the amount of P31,501.12. RULINGS:
It was also agreed in the said instrument that after ISSUE 1: nature of the partnership and legal
payment of the sum of P31,501.12 to Pahamotang relationship of the Maglana-Rojas after Pahamotang
including the amount of loan secured by Pahamotang in retired from the second partnership.
favor of the partnership, the two (Maglana and Rojas)
shall become the owners of all equipment contributed it appears evident that it was not the intention of the
by Pahamotang and the EASTCOAST DEVELOPMENT partners to dissolve the first partnership, upon the
ENTERPRISES, the name also given to the second constitution of the second one, which they unmistakably
partnership, be dissolved. called an "Additional Agreement".
Pahamotang was paid in fun on August 31, 1957. No Except for the fact that they took in one industrial
other rights and obligations accrued in the name of the partner; gave him an equal share in the profits and fixed
second partnership (R.A. 921). the term of the second partnership to thirty (30) years,
everything else was the same.
After the withdrawal of Pahamotang, the partnership
was continued by Maglana and Rojas without the Thus, they adopted the same name, EASTCOAST
benefit of any written agreement or reconstitution of DEVELOPMENT ENTERPRISES, they pursued the same
their written Articles of Partnership purposes and the capital contributions of Rojas and
Maglana as stipulated in both partnerships call for the
On January 28, 1957, Rojas entered into a management same amounts.
contract with another logging enterprise, the CMS
Estate, Inc. He left and abandoned the partnership To all intents and purposes therefore, the First Articles
of Partnership were only amended, in the form of
Rojas withdrew his equipment from the partnership for Supplementary Articles of Co-Partnershipwhich was
use in the newly acquired area never registered.
The equipment withdrawn were his supposed Otherwise stated, even during the existence of the
contributions to the first partnership and was second partnership, all business transactions were
carried out under the duly registered articles. As found With his withdrawal, the number of members is
by the trial court, it is an admitted fact that even up to decreased, hence, the dissolution.
now, there are still subsisting obligations and contracts
And in whatever way he may view the situation, the
of the latter.
conclusion is inevitable that Rojas and Maglana shall be
No rights and obligations accrued in the name of the guided in the liquidation of the partnership by the
second partnership except in favor of Pahamotang provisions of its duly registered Articles of Co-
which was fully paid by the duly registered partnership Partnership; that is, all profits and losses of the
partnership shall be divided "share and share alike"
Effect of the dissolution of the 2nd partnership:
between the partners.
On the other hand, there is no dispute that the second
But an accounting must first be made and which in fact
partnership was dissolved by common consent.
was ordered by the trial court and accomplished by the
Said dissolution did not affect the first partnership commissioners appointed for the purpose.
which continued to exist.
On the basis of the Commissioners' Report, the
Significantly, Maglana and Rojas agreed to purchase the corresponding contribution of the partners from 1956-
interest, share and participation in the second 1961 are as follows:
partnership of Pahamotang and that thereafter, the two
Eufracio Rojas who should have contributed
(Maglana and Rojas) became the owners of equipment
P158,158.00, contributed only P18,750.00
contributed by Pahamotang.
while Maglana who should have contributed
Even more convincing, is the fact that Maglana on March P160,984.00, contributed P267,541.44
17, 1957, wrote Rojas, reminding the latter of his (Decision, R.A. p. 976).
obligation to contribute either in cash or in equipment,
It is a settled rule that when a partner who has
to the capital investment of the partnership as well as
undertaken to contribute a sum of money fails to do
his obligation to perform his duties as logging
so, he becomes a debtor of the partnership for
superintendent. This reminder cannot refer to any other
whatever he may have promised to contribute
but to the provisions of the duly registered Articles of
(Article 1786, Civil Code) and for interests and
Co-Partnership.
damages from the time he should have complied
As earlier stated, Rojas replied that he will not be able with his obligation (Article 1788, Civil Code)
to comply with the promised contributions and he will
Being a contract of partnership, each partner must
not work as logging superintendent.
share in the profits and losses of the venture. That is
By such statements, it is obvious that Roxas understood the essence of a partnership (Ibid., p. 95).
what Maglana was referring to and left no room for
Thus, as reported in the Commissioners' Report, Rojas
doubt that both considered themselves governed by the
is not entitled to any profits
articles of the duly registered partnership.
Under the circumstances, the relationship of Rojas and
Maglana after the withdrawal of Pahamotang can ISSUE 3: whether Maglana is liable for damages
neither be considered as a De Facto Partnership, nor a because of such withdrawal
Partnership at Will, for as stressed, there is an existing
NO. (I don’t get it why SC said dili siya liable)
partnership, duly registered.
After the withdrawal of Pahamotang, Rojas entered into
a management contract with another logging
ISSUE 2: whether or not Maglana can unilaterally enterprise, the CMS Estate, Inc., a company engaged in
dissolve the partnership in the case at bar the same business as the partnership. He withdrew his
equipment, refused to contribute either in cash or in
YES.
equipment to the capital investment and to perform his
As there are only two parties when Maglana notified duties as logging superintendent, as stipulated in their
Rojas that he dissolved the partnership, it is in effect a partnership agreement. The records also show that
notice of withdrawal. Rojas not only abandoned the partnership but also took
funds in an amount more than his contribution
Under Article 1830, par. 2 of the Civil Code, even if there (Decision, R.A., p. 949).
is a specified term, one partner can cause its dissolution
by expressly withdrawing even before the expiration of In the given situation Maglana cannot be said to be in
the period, with or without justifiable cause. bad faith nor can he be liable for damages.
Of course, if the cause is not justified or no cause was
given, the withdrawing partner is liable for damages but
in no case can he be compelled to remain in the firm.
