PEDRO MARTINEZ, plaintiff-appellee, vs.

ONG PONG CO and

ONG LAY, defendants. ONG PONG CO., appellant.Fernando de
la Cantera for appellant. O'Brien and DeWitt for appellee.

G. R. No. L-5236 January 10, 1910

FACTS:
December 12, 1900, the plaintiff herein delivered P1, 500 to the
defendants who, in a private document, acknowledged that they had received
the same with the agreement, as stated by them, "that we are to invest the
amount in a store, the profits or losses of which we are to divide with the
former, in equal shares."

April 25, 1907, a complaint filed by the plaintiff to compel the

defendants to render him an accounting of the partnership, as agreed to, or
else refund him the P1, 500 given by him for said purpose. Appeared alone,
Ong Pong Co answered the complaint and admitted then, the fact of the
agreement and the delivery of P1,500 but alleged that Ong Lay was the
deceased, and was one who managed the business and that nothing had
resulted therefrom save the loss of the capital P1,500, to which loss the
plaintiff agreed.

Tried the case, the Court of Instance of the City of Manila ordered that
Ong Pong Co to return, one-half of the plaintiff’s capital of P1, 500 together
with Ong Lay’s amount received from the plaintiff P 750 plus P 90 (one-half
of the profits) and as calculated at the rate of 12 per cent per annum for the
six months that the store was supposed to be open, totaled to P 840 with
legal interest at the rate of 6 per cent per annum, from June 12, 1901, at the
time the business terminated and the time he ought to pay the plaintiff with
the full costs.
ISSUES:
(1) For not having taken into consideration the fact that the reason for
the closing of the store was the ejectment from the premises occupied by it.
(2) For not having considered the fact that there were losses.
(3) For holding that there should have been profits.
(4) For having applied article 1138 of the Civil Code
(5) and (6) For holding that the capital ought to have yielded profits,
and that the latter should be calculated 12 per cent per annum; and
(7) The findings of the ejectment.
DECISION:
(1) There is no importance to the effects of the suit that the store was
closed due to the virtue of ejectment. The basis for the whole action was the
fact that the defendants received certain capital from the plaintiff with the
purpose of organizing a company, handling and investing it in the store as
objects of their association. Accordingly to Arts 1695 and 1720, Civil Code
as to the absence of special agreement vesting in one sole person the
management of the business, were the actual administrators thereof; as such
administrators they were the agent of the company and incurred the
liabilities peculiar to every agent, among which is that of rendering account
to the principal of their transactions, and paying him everything they may
have received by virtue of the mandatum. Neither of them rendered such
account nor proven the losses referred to by Ong Pong Co, they are to refund
the money that they received for the establishment of the said store.
(2) and (3) the court finds no evidence that the entire capital or any part
thereof was lost. With such lack of evidence to aver, without proof, that the
effects of the store were ejected. Even though proven, it could not be
inferred that the ejectment was due to the fact that no rents were paid, and
that the rent was not paid on account of the loss of the capital belonging to
the enterprise.
As regards to the possible profit, findings of the court were based on
Ong Pong Co’s statements, to the effect that that "there were some profits,
but not large ones." Thus, does not find that the amount thereof was proven,
nor deem possible to estimate. It cannot admit the estimation as well of 12
per cent per annum for the period of six months.

(4) Article 1138 of the Civil Code invoked, that the partnership has two
agents liable for the above-named amount. Article 1723 of the said code
provides with respect to the liability of two or more agents with respect to
the return of the money that they received from their principal. Therefore,
the other errors assigned have not been committed.

(5) and (6) affirmed by the judgment that the defendant, Ong Pong co shall
pay only the sum of P 750 to the plaintiff with legal interest at the rate of 6
per cent per annum from the time of the filing of the complaint.