Lim Tanhu vs.

Ramolete
66 SCRA 425

FACTS:

Private respondent Tan Put alleged that she is the widow of Tee Hoon Lim Po Chuan,
who was a partner and practically the owner who has controlling interest of Glory
Commercial Company and a Chinese Citizen until his death. Defendant Antonio Lim
Tanhu and Alfonso Leonardo Ng Sua were partners in name but they were mere
employees of Po Chuan and were naturalized Filipino Citizens. Tan Put filed complaint
against spouses-petitoner Lim Tanhu and Dy Ochay including their son Tech Chuan
and the other spouses-petitoner Ng Sua and Co Oyo including also their son Eng Chong
Leonardo, that through fraud and machination took actual and active management of
the partnership and that she alleged entitlement to share not only in the capital and
profits of the partnership but also in the other assets, both real and personal, acquired
by the partnership with funds of the latter during its lifetime."
According to the petitioners, 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 born
in 1949 and 1965, all presently 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.

Tan Put prior of her alleged marriage with Tee Hoon on 1949, was engaged in the
drugstore business; that not long after her marriage, upon the suggestion of the latter
sold her drugstore for P125,000.00 which amount she gave to her husband as
investment in Glory Commercial Co. sometime in 1950; that after the investment of the
above-stated amount in the partnership its business flourished and it embarked in the
import business and also engaged in the wholesale and retail trade of cement and GI
sheets and under huge profits.

Defendants interpose that Tan Put knew and was are that she was merely the common-
law wife of Tee Hoon. Tan Put and Tee Hoon were childless but the former had a foster
child, Antonio Nunez.

ISSUE: Whether Tan Put, as she alleged being married with Tee Hoon, can claim from
the company of the latters share.

HELD:

Under Article 55 of the Civil Code, the declaration of the contracting parties that they
take each other as husband and wife "shall be set forth in an instrument" signed by the
parties as well as by their witnesses and the person solemnizing the marriage.
Accordingly, the primary evidence of a marriage must be an authentic copy of the
marriage contract. While a marriage may also be proved by other competent evidence,
the absence of the contract must first be satisfactorily explained. Surely, the certification
of the person who allegedly solemnized a marriage is not admissible evidence of such
marriage unless proof of loss of the contract or of any other satisfactory reason for its
non-production is first presented to the court. In the case at bar, the purported
certification issued by a Mons. Jose M. Recoleto, Bishop, Philippine Independent
Church, Cebu City, is not, therefore, competent evidence, there being absolutely no
showing as to unavailability of the marriage contract and, indeed, as to the authenticity
of the signature of said certifier, the jurat allegedly signed by a second assistant
provincial fiscal not being authorized by law, since it is not part of the functions of his
office. Besides, inasmuch as the bishop did not testify, the same is hearsay.

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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 since they are
incompatible and not in the position to keep living together permanently. Hence, this
document not only proves that her relation was that of a common-law wife but had also
settled property interests in the payment of P40,000.
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-parteproceedings
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

LIM TANHU v. HON. JOSE R. RAMOLETE

LIM TANHU v. HON. JOSE R. RAMOLETE
G.R. No. L-40098; August 29, 1975
Ponente: J. Barredo

FACTS:

Tan alleged 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".

Defendant Antonio Lim Tanhu, Alfonso Leonardo Ng Sua, Lim Teck Chuan, and Eng
Chong Leonardo, through fraud and machination, took actual and active management
of the partnership and although Tee Hoon Lim Po Chuan was the manager of Glory
Commercial Company, defendants managed to use the funds of the partnership to
purchase lands and buildings in the cities of Cebu, Lapulapu, Mandaue, and the
municipalities of Talisay and Minglanilla.

She alleged in her complaint that after the death of Tee Hoon Lim Po Chuan, the
defendants, without liquidation, continued the business of Glory Commercial
Company, by purportedly organizing a corporation known as the Glory Commercial
Company, Incorporated and sometime in the month of November, 1967, defendants,
particularly Antonio Lim Tanhu, by means of fraud deceit, and misrepresentations did
then and there, induce and convince her to execute a quitclaim of all her rights and
interests, in the assets of the partnership of Glory Commercial Company.

Thereafter, in the year 1968-69, the defendants who had earlier promised to liquidate
the aforesaid properties and assets in favor, among others of plaintiff and until the
middle of the year 1970 when the plaintiff formally demanded from the defendants the
accounting of real and personal properties of the Glory Commercial Company,
defendants refused and stated that they would not give the share of the plaintiff.

ISSUE:
Whether Tan has a right over the liquidated properties of the partnership

HELD:

No, Tan has no right over the liquidated properties of the partnership

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 The Supreme Court held that there is 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.
Moreover, the Supreme Court said that the lower courts committed an error by
awarding 1/3 of the partnership properties to Tan because there has been no
liquidation proceedings yet. And if there has not yet been any liquidation of the
partnership, the only right plaintiff could have would be to what might result after
much liquidation to belong to the deceased partner (her alleged husband) and before
this is finished, it is impossible to determine, what rights or interest, if any the deceased
had.
In other words, no specific amounts or properties may be adjudicated to the heir or
legal representative of the deceased partner without the liquidation being first
terminated.

Litton vs. Hill

Facts:
Litton sold and delivered to Ceron, one of the managing partners of Hill & Ceron, a
certain number of mining claims. By virtue of said transaction, Ceron delivered to
plaintiff a document (receipt) acknowledging that he received from Litton certain share
certificates of Big Wedge Mining Company totalingP1870.Ceron paid to Litton P1, 150
leaving a balance of P720. Litton was unable to collect the unpaid balance from Hill &
Ceron or from its surety. Litton filed a complaint against the defendants for the
recovery of the balance. The court ordered Ceron to personally pay the amount claimed
and absolved the partnership, Hill and the surety.CA affirmed the decision of the court.
Issue: Did the transaction bind the partnership or Ceron only?
Held: While the transaction was entered into by Ceron, it bound the partnership. Robert
Hill had the same power to buy and sell; that in said partnership Hillas well as Ceron
made the transaction as partners in equal parts; that on the date of the transaction,
February 14, 1934, the partnership between Hill and Ceron was in existence. After this
date, or on February 19th, Hill &Ceron sold shares of the Big Wedge; and when the
transaction was entered into with Litton, it was neither published in the newspapers
nor stated in the commercial registry that the partnership Hill & Ceron had been
dissolved. The SC dissented from the view of the CA that for one of the partners tobind
the partnership the consent of the other is necessary. Third persons, like the plaintiff,
are not bound in entering into a contract with any of the two partners, to ascertain
whether or not this partner with whom the transaction is made has the consent of the
other partner. The public need not make inquires as to the agreements had between the
partners. Its knowledge is enough that it is contracting with the partnership which is
represented by one of the managing partners. The second paragraph of the articles of
partnership of Hill & Ceron reads inpart: Second: That the purpose or object for which
this co-partnership is organized is to engage in the business of brokerage in general,
such as stock and bond brokers, real brokers, investment security brokers, shipping
brokers, and other activities pertaining to the business of brokers in general. The kind of
business in which the partnership Hill & Ceron is to engage being thus determined,
none of the two partners, under article 130 of the Code of Commerce, may legally
engage in the business of brokerage in general as stock brokers, security brokers and
other activities pertaining to the business of the partnership. Ceron, therefore, could not
have entered into the contract of sale of shares with Litton as a private individual, but
as a managing partner of Hill & Ceron The stipulation in the articles of partnership that
any of the two managing partners may contract and sign in the name of the partnership
with the consent of the other, undoubtedly creates an obligation between the two
partners, which consists in asking the other's consent before contracting for the

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partnership. This obligation of course is not imposed upon a third person who contracts
with the partnership. Neither is it necessary for the third person to ascertain if the
managing partner with whom he contracts has previously obtained the consent of the
other. A third person may and has a right to presume that the partner with whom he
contracts has, in the ordinary and natural course of business, the consent of his co-
partner; for otherwise he would not enter into the contract. The third person would
naturally not presume that the partner with whom he enters into the transaction is
violating the articles of partnership but, on the contrary, is4By Joy Co

Acting in accordance therewith. And this finds support in the legal presumption that
the ordinary course of business has been followed. If we are to interpret the articles of
partnership in question by holding that it is the obligation of the third person to inquire
whether the managing co-partner of the one with whom he contracts has given his
consent to said contract, which is practically casting upon him the obligation to get such
consent, this interpretation would, in similar cases, operate to hinder effectively the
transactions, a thing not desirable and contrary to the nature of business which requires
promptness and dispatch one the basis of good faith and honesty which are always
presumed.

Hanlon vs. Haussermann and Beam

Facts:
This action was originally instituted by R. Y. Hanlon to compel the defendants, John
W.Haussermann and A. W. Beam, to account for a share of the profits gained by them
inrehabilitating the plant of the Benguet Consolidated Mining Company and in particular to
compelthem to surrender to the plaintiff 50,000 shares of the stock of said company, with
dividendspaid thereon.It was initially agreed by Hanlon, Haussermann, Beam and Sellner that
P75,000.00 was neededto rehabilitate the mine; P50,000.00 would come from Hanlon by securing
and obtaining subscriptions for the companys stocks, P25,000.00 would come from
Haussermann and Beam.
They were to receive compensation in the form of shares of stock for the services rendered inthe
flotation of this proposition. The funds were needed on a certain date. It was also stated inthe
contract that Haussermann and Beam would be discharged if Sellner could not provide
theamount due from him within the time frame stipulated.Hanlon was unable to raise the
P75,000.00, so that Haussermann and Beam madearrangements to finance the rehabilitation of
the mine. Because of this new arrangement, thecompany became profitable that it was able to
pay dividends. Because of this, the value of the companys stocks appreciated.

Issue: WON Hanlon is entitled to an accounting for his shares in the profits of the company

Held:
Hanlon is not entitled to an accounting for his share in the profits of the company;Haussermann
and Beam are absolved.Under the equitable doctrine, if the contracting parties have treated time
as of the essence of the contract, the delinquency will not be excused and specific performance
will not be granted;but on the other hand, if it appears that time has not been made of the essence
of the contract,equity will relieve from the delinquency and specific performance may be
granted, duecompensation being made for the damage caused by the delay.Time is of the
essence of the contract for the sale of an option on mining property, or a contractfor the sale
thereof, even though there is no express stipulation to that effect. The same idea isclearly
applicable to a contract like that now under consideration which provides for therehabilitation of
a mining plant with funds to be supplied by the contractor within a limited period.

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G.R. No. L-4281 March 30, 1908

JOSE GARRIDO, plaintiff-appellant,

vs.
AGUSTIN ASENCIO, defendant-appellee.

Gregorio Yulo for appellant.

P.Q. Rothrock for appellee.

CARSON, J.:

Plaintiff and defendant were members of a partnership doing business under the firm
name of Asencio y Cia. The business of the partnership did not prosper and it was
dissolved by mutual agreement of the members. The plaintiff brings this action to
recover from the defendant, who appears to have been left in charge of the books and
the funds of the firm, the amount of the capital which he had invested in the business.
The defendant, alleging that there had been considerable losses in the conduct of the
business of the partnership, denied that there was anything due the plaintiff as claimed,
and filed a cross complaint wherein he prayed for a judgment against the plaintiff for a
certain amount which he alleged to be due by the plaintiff under the articles of
partnership on account of plaintiff's share of these losses.

The trial court found that the evidence substantially sustains the claim of the defendant
as to the alleged losses in the business of the partnership and gave judgment in his
favor.

The only question submitted on appeal is the competency and sufficiently of the
evidence on which the trial court based its findings as to the status of the accounts of
the company.

Plaintiff and appellant makes the following assignment of errors:

First. The trial court erred in holding the estado de cuentas (statement of account) of the
partnership of Asencio y Cia. submitted by the defendant as competent and sufficient
evidence in this case.

Second. The trial court erred in holding that evidence of record proved the existence of
losses in the business of the said partnership.

Third. The trial court erred in refusing to give judgment in favor of the plaintiff.

It appears from the record that by mutual agreement the defendant had general charge
and supervision of the books and funds of the firm, but it appears that these books were
at all times open to the inspection of the plaintiff, and there is evidence which tends to
show that the plaintiff himself made entries in these books touching particular
transactions in which he happened to be interested; so that while it is clear that the
defendant was more especially burdened with the care of the books and accounts of the
partnership, it would appear that the plaintiff had equal rights with the defendant in
this regard, and that during the existence of the partnership they were equally
responsible for the mode in which the books were kept and that the entries made by one
had the same effect as if they had been made by the other.

At the trial the principal question at issue was the amount of the profits or losses of the
business of the partnership during the period of its operation. The plaintiff made no
allegation as to profits, but denied defendant's allegation as to the losses. The defendant

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in support of his allegations offered in evidence the estado de cuentas(general statement
of accounts) of the partnership, supported by a number of vouchers, and by his own
testimony under oath as to the accuracy and correctness of the items set out therein. The
plaintiff assigns as error the admission of this account on the ground that the books of
the partnership were not kept in accordance with the provisions of Title III, Book I, of
the Code of Commerce.

It is not necessary for us to consider this assignment of error as to the inadmissibility of

this account on the ground that the books were not kept in accordance with the
provisions of the Commercial Code, because no objection was made to its admission in
the court below; and further, because in any event it was admissible under the
provisions of section 338 of the Code of Civil Procedure as memorandum used to
refresh the memory of the witness. (Tan Machan vs. Gan Aya, 3 Phil. Rep., 684.) We
think further that in view of the testimony of record that the plaintiff jointly with the
defendant kept these books, made entries therein, and was responsible with him
therefor, the doctrine laid down in Behn, Meyer & Co., vs. Rosatzin (5 Phil. Rep., 660) is
applicable in this case, and the correctness of the entries in these books must be taken to
be admitted by him, except so far as it is made to appear that they are erroneous as a
result of fraud or mistake.

It appears from the record that the statement of account, the vouchers, and the books of
the company were placed at the disposition of the plaintiff for more than six weeks
prior to the trial, and that during the trial he was given every opportunity to indicate
any erroneous or fraudulent items appearing in the account, yet he was unable, or in
any event he declined to specify such items, contenting himself with a general
statement to the effect that there must be some mistake, as he did not and could not
believe that the business had been conducted at a loss.

The court below seems to have scrutinized the account with painstaking care, and to
have been satisfied as to its accuracy, except as to some unimportant items, which he
corrected, but counsel for the appellant reiterates in this court his general allegations as
to the inaccuracy of the account, and points out some instances wherein he alleges that
items of expenditure appear to have been charged against the partnership more than
once.

Upon the whole record as brought here by the appellant we are not able to say that the
weight of the evidence does not sustain the findings of the trial court, and the judgment
entered in that court should be, and is hereby, affirmed with the costs of this instance
against the appellant. So ordered.

Arellano, C.J., Torres, Mapa Johnson, Willard, and Tracey, JJ., concur.

Ornum v. Lasala74 Phil 242Facts:

Ornum submitted a statement of accounts to respondents, his copartner. Instead
ofobjecting to said statement, respondent Lasala promised to sign the same as soon as
hereceived his shares as shown in said statement. After said shares had been paid by
Ornumand accepted by respondents without reservation, the latter refused to sign the
statement.Lasala demanded a new liquidation, claiming that he was entitled to more
than what thestatement of account shows.
Issue:
Is the respondent entitled to a further liquidation?
Held:

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 No. After accepting his shares without any reservation, respondent virtually confirmed
his approval of the statement of accounts, and its signing thereby became amere
formality to be complied with by Lasala exclusively. His refusal to sign, after receiving
the shares, amounted to a waiver of that formality in favor of Ornum who had already
performed his obligation. This approval precludes any right on the part of respondent
to a further liquidation, unless he can show there was fraud or mistake in said approval

G.R. No. L-47823 July 26, 1943

JOSE ORNUM and EMERENCIANA ORNUM, petitioners,

vs.
MARIANO, LASALA, et al., respondent.

Marcelino Lontok for petitioners.

Duran, Lim and Bausa and Augusto Francisco for respondents.

PARAS, J.:

The following facts are practically admitted in the pleadings and briefs of the parties:
The respondents (plaintiffs below) are natives of Taal, Batangas, and resided therein or
in Manila. The petitioners (defendants below) are also natives of Taal, but resided in the
barrio of Tan-agan, municipality of Tablas, Province of Romblon. In 1908 Pedro Lasala,
father of the respondents, and Emerenciano Ornum formed a partnership, whereby the
former, as capitalist, delivered the sum of P1,000 to the latter who, as industrial partner,
was to conduct a business at his place of residence in Romblon. In 1912, when the
assets of the partnership consisted of outstanding accounts and old stock of
merchandise, Emerenciano Ornum, following the wishes of his wife, asked for the
dissolution of the Lasala, Emerenciano Ornum looked for some one who could take his
place and he suggested the names of the petitioners who accordingly became the new
partners. Upon joining the business, the petitioners, contributed P505.54 as their
capital, with the result that in the new partnership Pedro Lasala had a capital of P1,000,
appraised value of the assets of the former partnership, plus the said P505.54 invested
by the petitioners who, as industrial partners, were to run the business in Romblon.
After the death of Pedro Lasala, his children (the respondents) succeeded to all his
rights and interest in the partnership. The partners never knew each other personally.
No formal partnership agreement was ever executed. The petitioners, as managing
partners, were received one-half of the net gains, and the other half was to be divided
between them and the Lasala group in proportion to the capital put in by each group.
During the course divided, but the partners were given the election, as evidenced by the
statements of accounts referred to in the decision of the Court of Appeals, to invest their
respective shares in such profits as additional capital. The petitioners accordingly let a
greater part of their profits as additional investment in the partnership. After twenty
years the business had grown to such an extent that is total value, including profits,
amounted to P44,618.67. Statements of accounts were periodically prepared by the
petitioners and sent to the respondents who invariably did not make any objection
thereto. Before the last statement of accounts was made, the respondents had received
P5,387.29 by way of profits. The last and final statement of accounts, dated May 27,
1932, and prepared by the petitioners after the respondents had announced their desire
to dissolve the partnership, read as follows:

Ganancia total desde el ultimo balance hasta la P575.45

fecha
Participacion del capital de los hermanos Lasala P55.39
en la ganancia

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 Participacion del capital de Jose Ornum en el 125.79
ganancia
Participacion de Jose Ornum como socio 143.96
industrial
Participacion del capital de Emerenciana Ornum 106.54
en la ganancia
Participacion de Emerenciana Ornum como 143.86
socia industrial

Siendo este el balance final lo siguiente es la cantidad que debe corresponder a

cada socio:

Capital de los hermanos Lasala

segun el ultimo balance P4,393.08
Ganancia de este capital 55.39 P4,448.47
Pero se debe deducir la
cantidad tomada por los
hermanos Lasala 1,730.00
Cantidad nota que debe
corresponder a los hermanos
Lasala P2,718.47
Capital de Jose Ornum segun
el ultimo balance P9,975.13
Ganancia de este capital 125.79
Participacion de Jose Ornum
como socio industrial 143.86 P10,244.65
Pero se debe deducir la
cantidad tomada por Jose
Ornum 1,650.00
Cantidad neta que debe
corresponder a Jose Ornum P8,594.65
Capital de Emerenciana Ornum
segun el ultimo balance P8,448.00
Ganancia de este capital 106.54
Participacion de Emerenciana
Ornum como socia industrial 143.86 P8,698.40
Pero se debe deducir la
cantidad tomada por
Emerenciana Ornum 1,850.00
Cantidad neta que debe
corresponder a Emerenciana
Ornum P6,848.40

After the receipt of the foregoing statement of accounts, Father Mariano Lasala,
spokesman for the respondents, wrote the following letter to the petitioners on July 19,
1932:

Ya te manifestamos francamente aqui, como consocio, y te autorizamos tambien

para que lo repitas a tu hermana Mering, viuda, que el motivo porque recogemos
el capital y utilidades de nuestra sociedad en todo nuestro negocio que esta al
cuidado vosotros dos, es que tenemos un grande compromiso que casi no
podemos evitarlo. Por esto volvemos a rogarles que por cualquier medio antes

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 de terminar este mes de julio, 1932, nosotros esperamos vuestra consideracion.
Gracias.

En cuanto hayamos recibido esto, entonces firmaremos el balance que habeis

hecho alli, cuya copia has dejado aqui.

Recuerdos a todos alli y mandar.

Pursuant to the request contained in this letter, the petitioners remitted and paid to the
respondents the total amount corresponding to them under the above-quoted statement
of accounts which, however, was not signed by the latter. Thereafter the complaint in
this case was filed by the respondents, praying for an accounting and final liquidation of
the assets of the partnership. The Court of First Instance of Manila held that the last and
final statement of accounts prepared by the petitioners was tacitly approved and
accepted by the respondents who, by virtue of the above-quoted letter of Father
Mariano Lasala, lost their right to a further accounting from the moment they received
and accepted their shares as itemized in said statement. This judgment was reversed
by the Court of Appeals principally on the ground that as the final statement of accounts
remains unsigned by the respondents, the same stands disapproved. The decision
appealed by the petitioners thus said:

To support a plea of a stated account so as to conclude the parties in relation to

all dealings between them, the accounting must be shown to have been final. (1
Cyc. 366.) All the first nine statements which the defendants sent the plaintiffs
were partial settlements, while the last, although intended to be final, has not
been signed.

We hold that the last and final statement of accounts hereinabove quoted, had been
approved by the respondents. This approval resulted, by virtue of the letter of Father
Mariano Lasala of July 19, 1932, quoted in part in the appealed decision from the failure
of the respondents to object to the statement and from their promise to sign the same
as soon as they received their shares as shown in said statement. After such shares
had been paid by the petitioners and accepted by the respondents without any
reservation, the approval of the statement of accounts was virtually confirmed and its
signing thereby became a mere formality to be complied with by the respondents
exclusively. Their refusal to sign, after receiving their shares, amounted to a waiver to
that formality in favor of the petitioners who has already performed their obligation.

This approval precludes any right on the part of the respondents to a further liquidation,
unless the latter can show that there was fraud, deceit, error or mistake in said
approval. (Pastor, vs. Nicasio, 6 Phil., 152; Aldecoa & Co., vs. Warner, Barnes & Co.,
16 Phil., 423; Gonsalez vs. Harty, 32 Phil. 328.) The Court of Appeals did not make any
findings that there was fraud, and on the matter of error or mistake it merely said:

The question, then is, have mistakes, been committed in the statements sent
appellants? Not only do plaintiffs so allege, and not only does not evidence so
tend to prove, but the charge is seconded by the defendants themselves when in
their counterclaims they said:

"(a) Que recientemente se ha hecho una acabada revision de las cuentas y

libros del negocio, y, se ha descubierto que los demandados cometieron un error
al hacer las entregas de las varias cantidades en efectivo a los demandantes,
entregando en total mayor cantidades a la que tenian derecho estos por su
participacion y ganancias en dicho negocio;

"(b) Que el exceso entregado a los demandantes, asciende a la suma de

quinientos setenta y cinco pesos con doce centimos (P575.12), y que los

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 demandados reclaman ahora de aquellos su devolucion o pago en la presente
contrademanda;"

In our opinion, the pronouncement that the evidence tends to prove that there were
mistakes in the petitioners' statements of accounts, without specifying the mistakes,
merely intimates as suspicion and is not such a positive and unmistakable finding of fact
(Cf. Concepcion vs. People, G.R. No. 48169, promulgated December 28, 1942) as to
justify a revision, especially because the Court of Appeals has relied on the bare
allegations of the parties, Even admitting that, as alleged by the petitioners in their
counterclaim, they overpaid the respondents in the sum of P575.12, this error is
essentially fatal to the latter's theory what the statement of accounts shows, and is
therefore not the kind of error that calls for another accounting which will serve the
purpose of the respondent's suit. Moreover, as the petitioners did not appeal from the
decision of the Court abandoned such allegation in the Court of Appeals.

If the liquidation is ordered in the absence of any particular error, found as a fact, simply
because no damage will be suffered by the petitioners in case the latter's final statement
of the accounts proves to be correct, we shall be assuming a fundamentally inconsistent
position. If there is not mistake, the only reason for a new accounting disappears. The
petitioners may not be prejudiced in the sense that they will be required to pay anything
to the respondents, but they will have to go to the trouble of itemizing accounts covering
a period of twenty years mostly from memory, its appearing that no regular books of
accounts were kept. Stated more emphatically, they will be told to do what seems to be
hardly possible. When it is borne in mind that this case has been pending for nearly nine
years and that, if another accounting is ordered, a costly action or proceeding may arise
which may not be disposed of within a similar period, it is not improbable that the
intended relief may in fact be the respondents' funeral.

We are reversing the appealed decision on the legal ground that the petitioners' final
statement of accounts had been approved by the respondents and no justifiable reason
(fraud, deceit, error or mistake) has been positively and unmistakably found by the
Court of Appeals so as to warrant the liquidations sought by the respondents. In justice
to the petitioners, however, we may add that, considering that they ran the business of
the partnership for about twenty years at a place far from the residence of the
respondents and without the latter's intervention; that the partners did not even know
each other personally; that no formal partnership agreement was entered into which
bound the petitioners under specific conditions; that the petitioners could have easily
and freely alleged that the business became partial, or even a total, loss for any
plausible reason which they could have concocted, it appearing that the partnership
engaged in such uncertain ventures as agriculture, cattle raising and operation of rice
mill, and the petitioners did not keep any regular books of accounts; that the petitioners
were still frank enough to disclose that the original capital of P1,505.54 amounted, as of
the date of the dissolution of the partnership, to P44,618.67; and that the respondents
had received a total of P8,105.76 out of their capital of P1,000, without any effort on
their part, we are reluctant even to make the conjecture that the petitioners had ever
intended to, or actually did, take undue advantage of the absence and confidence of the
respondents. Indeed, we feel justified in stating that the petitioners have here given a
remarkable demonstration of the legendary honesty, good faith and industry with which
the natives of Taal pursue business arrangements similar to the partnership in question,
and we would hate, in the absence of any sufficient reason, to let such a beautiful
legend have a distateful ending.

The appealed decision is hereby reversed and the petitioners (defendants below)
absolved from the complaints of the respondents (plaintiffs below), with costs against
the latter.

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CTC/LEGAL