People vs Campos

PEDRO MARTINEZ, PLAINTIFF-APPELLEE,

VS. ONG PONG CO AND ONG LAY, DEFENDANTS.
ONG PONG CO, APELLANT.
G.R. No. L-5236, January 10, 1910

FACTS:
On December 12, 1900, Pedro Martinez (plaintiff) delivered Php.1,500.00 to Ong
Pong Co and Ong Lay (defendants). Said amount was reflected in a private instrument
where the plaintiff and defendants agreed that they are to invest the amount in a store,
the profits or losses of which we are to divide with the former, in equal shares. The store
business did not prosper and the plaintiff demanded from the defendants either to
render an accounting of the partnership as agreed to, or to refund him the Php.1,500.00.
Ong Pong Co alleged in his defense that his co-defendant Ong Lay, now deceased, was
the one who managed the business. He also alleged that nothing had resulted from the
business venture save the loss of the capital of Php.1,500.00, to which the plaintiff
agreed.

ISSUE:
What is the extent of the liability of the partners?

HELD:
The partners are liable jointly. The defendants acted as administrators and as such,
they were obliged to render an accounting of the business. Since both failed in this
aspect, they are obliged to return the capital. Article 1688 of the Civil Code (Article 1796
of the New Civil Code) which provides that the partnership is liable to every partner for
the amounts he may have disbursed on account of the same and for the proper interest
does not apply to the case at bar since no other money than the one contributed by the
plaintiff was involved. The court ruled that Ong Pong Co should pay Pedro Martinez the
sum of Php.750.00 with the legal interest thereon, being liable jointly.

RAMNANI v. CA
196 scra 731; May 7, 1991
Ponente: J. Gancayco

FACTS:

Ishwar, Choithram and Navalrai, all surnamed Jethmal Ramnani, are brothers of the full
blood. Ishwar and his spouse Sonya had their main business based in New York. Realizing
the difficulty of managing their investments in the Philippines they executed a general
power of attorney on January 24, 1966 appointing Navalrai and Choithram as attorneys-
in-fact, empowering them to manage and conduct their business concern in the
Philippines

On February 1, 1966 and on May 16, 1966, Choithram entered into two agreements for
the purchase of two parcels of land located in Barrio Ugong, Pasig, Rizal, from Ortigas &
Company, Ltd. Partnership. A building was constructed thereon by Choithram in 1966.
Three other buildings were built thereon by Choithram through a loan of P100,000.00
obtained from the Merchants Bank as well as the income derived from the first building.

Sometime in 1970 Ishwar asked Choithram to account for the income and expenses
relative to these properties during the period 1967 to 1970. Choithram failed and refused
to render such accounting. Thereafter, Ishwar revoked the general power of attorney.
Choithram and Ortigas were duly notified of such revocation on April 1, 1971 and May
24, 1971, respectively. Said notice was also registered with the Securities and Exchange
Commission on March 29, 1971 and was published in the April 2, 1971 issue of The
Manila Times for the information of the general public.

Nevertheless, Choithram, transferred all rights and interests of Ishwar and Sonya in favor
of his daughter-in-law, Nirmla Ramnani, on February 19, 1973.

On October 6, 1982, Ishwar and Sonya filed a complaint against Choitram and/or spouses
Nirmla and Moti and Ortigas for reconveyance of said properties or payment of its value
and damages.

ISSUE:

W/N Ishram can recover the entire properties subject in the ligitation

HELD:

No, Ishram cannot recover the entire properties subject.

The Supreme Court held that despite the fact that Choithram, et al., have
committed acts which demonstrate their bad faith and scheme to defraud spouses
Ishwar and Sonya of their rightful share in the properties in litigation, the Court cannot
ignore the fact that Choithram must have been motivated by a strong conviction that as
the industrial partner in the acquisition of said assets he has as much claim to said
properties as Ishwar, the capitalist partner in the joint venture.

Choithram in turn decided to invest in the real estate business. He bought the two (2)
parcels of land in question from Ortigas as attorney-in-fact of Ishwar. Instead of paying
for the lots in cash, he paid in installments and used the balance of the capital entrusted
to him, plus a loan, to build two buildings. Although the buildings were burned later,
Choithram was able to build two other buildings on the property. He rented them out and
collected the rentals. Through the industry and genius of Choithram, Ishwar's property
was developed and improved into what it is now.

Justice and equity dictate that the two share equally the fruit of their joint
investment and efforts. Perhaps this Solomonic solution may pave the way towards their
reconciliation. Both would stand to gain. No one would end up the loser. After all, blood is
thicker than water.
Moran, Jr. v. CA
G.R. No. L-59956 Oct. 31, 1984
Justice Gutierrez, Jr.
Facts:
Pecson and Moran entered into an agreement for the printing of posters featuring
the delegates of the 1971 Constitutional Convention
o That 95k posters were supposed to be printed and sold at P2/each
o That each would contribute P15k
o That Moran will supervise the work, while Pecson would receive a P1k monthly
commission
Pecson gave Moran P10k for which the latter issued a receipt
Only 2k posters were printed, but each was sold for P5
o Moran then executed 2 promissory notes in favor of Pecson
Pecson then filed an action for the recovery of a sum of money for the return of his
P10k contribution, payment of his share in the profits that the partnership would have
earned
TC: each party is entitled to rescind the contract since both failed to fulfill their
respective promises (Moran the printing of the 95k posters; Pecson the P15k
contribution)
CA: Moran must pay Pecson, among others, the amount of expected profits and the
latters commission in the partnership
Issue:
WON Moran is obliged to give Pecson the amount of expected profits from their
partnership.
Held:
No, he is not.
Rule: when a partner who has undertaken to contribute a sum of money fails to do
so, he becomes a debtor of the partnership for whatever he may have promised to
contribute (Art. 1786) and for interests and damages from the time he should have
complied with his obligations (Art. 1788)
Being a contract of partnership, each partner must share in the profits and losses
of the venture, for that is the essence of partnership.
o Even in the assurance of the other partner that they would earn a huge amount of
profits, in the absence of fraud, the other cannot claim a right to recover the highly
speculative profits
o In the present case, the fantastic nature of expected profits is obvious that various
factors need to be considered
o The failure of COMELEC to proclaim all 320 candidates of the Constitutional
Convention on time was a major factor in Morans decision not to go on with the printing
of all 95,000 posters
o Hidden risks in any business venture have to be considered
However, as it was shown that Pecson gave money to Moran (P10k) which the
latter used to print the first batch of posters, and since these posters were sold and
profits were realized from such sale, Pecson is entitled to recover his share of such profits