000 Antonio Lim Tanhu, Dy Ochay, Alfonso Leonardo

Ng Sua and Co Oyo vs. Hon. Ramolete and Tan Put

TOPIC: Property Rights of a Partner
PONENTE: Barredo, J.:

AUTHOR: Nikki A
DOCTRINE: A partners right to accounting for properties
of the partnership that are within the custody or control of
the other partners shall apply only when there is proof that
such properties, registered in the individual names of the
other partners, have been acquired from the use of
partnership funds.

FACTS
Respondent Tan Put filed a complaint against spouses Lim Tanhu and Dy Ochay, spouses Alfonso Leonardo Ng
Sua and Co Oyo and their son Eng Chong Leonardo for the share of Tee Hoon Lim Po Chuan in the partnership.
Tan Put alleged the following:
i. that she is the widow of Tee Hoon Lim Po Chuan, who was a partner in the commercial
partnership, Glory Commercial Company with Antonio Lim Tanhu and Alfonso Ng Sua.
ii. that the defendant-petitioners, through fraud and machination, took actual and active management
of the partnershi and although Tee Hoon Lim Po Chuan was the manager of Glory Commercial
Company, defendant-petitioners managed to use the funds of the partnership to purchase lands in
the cities of Cebu, Lapulapu, Mandaue, and the municipalities of Talisay and Minglanilla.
iii. that after the death of her husband, the defendants, without liquidation of the partnership,
organized a corporation with the paid-up capital from the partnership. She contends that one-third
of the interest belongs to her late husband.
iv. When her husband died, he asked the defendants to liquidate the partnership but the defendants
never did. Later on, she was made to sign a quitclaim of all her rights and interest in the
partnership in consideration of P65,000.00. Said quitclaim was in the Hands of Lim Tanhu and a
copy was never given to her.
v. That she gave some of her money to her husband for the start-up capital of the partnership
Defendant-petitioners replied to her complaint alleging:
i. Ang Siok Tin is the legitimate wife, still living, and with whom Tee Hoon had four legitimate
children, a twin born in 1942, and two others, all residing in Hong Kong. Tee Hoon died in 1966
and as a result of which the partnership was dissolved and what corresponded to him were all
given to his legitimate wife and children.
ii. Tan Put is aware that she is the common law wife of Tee Hoon.
Defendants also filed a counterclaim against Tan Put for causing delay in the operations of the business.
(Note: This case involves a lot of appeals; motion to quash and 2 petitions for certiorari but I will stick to the
partnership issue only.)
Tan Put asked the lower court to dismiss the complaint as to the spouses Leonardo Ng Sua but retained with
respects to Tanhu and Ochay.
The lower court allowed the dismissal in part and allowed a motion to hold the petitioners in default, and motion to
present evidence ex-parte. (The judge here was very biased).
ISSUE: Whether or not Tan Put, the common law wife of Tee Hoon, has a right on behalf of Tee Hoon to claim his share
in the partnership.
HELD: NO.
RATIO:
1. Tan Put cannot be considered as a legal party in interest because she was unable to prove that her marriage was
valid and subsisting. There was no marriage contract shown nor evidence to support that such a marriage existed.
2. An agreement with Tee Hoon was shown and signed by Tan Put that she received P40,000 for her subsistence
when they terminated their relationship of common-law marriage and promised not to interfere with each others
affairs.
3. Stated differently, since the existence of the quitclaim has been duly established without any circumstance to
detract from its legal import, the court should have held that plaintiff was bound by her admission therein that she
was the common-law wife only of Po Chuan and what is more, that she had already renounced for valuable
consideration whatever claim she might have relative to the partnership Glory Commercial Co.
4. In the light of all these circumstances, We find no alternative but to hold that plaintiff Tan Put's allegation that she
is the widow of Tee Hoon Lim Po Chuan has not been satisfactorily established and that, on the contrary, the
evidence on record convincingly shows that her relation with said deceased was that of a common-law wife and
furthermore, that all her claims against the company and its surviving partners as well as those against the estate of

the deceased have already been settled and paid.

5. If Po Chuan was in control of the affairs and the running of the partnership, how could the defendants have
defrauded him of such huge amounts as plaintiff had made his Honor believe? Upon the other hand, since Po
Chuan was in control of the affairs of the partnership, the more logical inference is that if defendants had obtained
any portion of the funds of the partnership for themselves, it must have been with the knowledge and consent of Po
Chuan, for which reason no accounting could be demanded from them therefor, considering that Article 1807 of
the Civil Code refers only to what is taken by a partner without the consent of the other partner or partners.
6. Accordingly, defendants have no obligation to account to anyone for such acquisitions in the absence of clear
proof that they had violated the trust of Po Chuan during the existence of the partnership.
Dispositive Portion: IN VIEW OF ALL THE FOREGOING, the petition is granted. All proceedings held in respondent
court in its Civil Case No. 12328 subsequent to the order of dismissal of October 21, 1974 are hereby annulled and set
aside, particularly the ex-parte proceedings against petitioners and the decision on December 20, 1974. Respondent court
is hereby ordered to enter an order extending the effects of its order of dismissal of the action dated October 21, 1974 to
herein petitioners Antonio Lim Tanhu, Dy Ochay, Alfonso Leonardo Ng Sua and Co Oyo. And respondent court is hereby
permanently enjoined from taking any further action in said civil case gave and except as herein indicated. Costs against
private respondent.