G.R. No.

109248 July 3, 1995

GREGORIO F. ORTEGA, TOMAS O. DEL CASTILLO, JR., and BENJAMIN T. BACORRO

vs.
CA, SEC and JOAQUIN L. MISA

Facts:

The law firm of ROSS, LAWRENCE, SELPH and CARRASCOSO was first registered in 1937 and
reconstituted with the SEC in 1948 (11 years after). From 1958 to 1977, there were several
amendments to the articles of partnership specifically its name due to in-and-out of senior partners.
Come December 1980, Joaquin Misa, Jesus B. Bito and Mariano M. Lozada associated themselves
together, as senior partners with Gregorio Ortega, Tomas del Castillo, Jr., and Benjamin Bacorro, as
junior partners.

Eight years after, Joaquin, through series of letters withdrew his participation from the law
firm. He asked for a meeting on the mechanics of liquidation and wrote them how upset he was with
other attorneys’ disposition and behavior. In the same year (1988), he filed a petition for dissolution
and liquidation at the Securities Investigation and Clearing Department (SICD) enjoining the firm from
using the name of Bito, Misa & Lozada, seeking payment for damages for its usage, seeking to pay him
the costs and expenses for his litigation and moral damages. The hearing officer ruled in favor of Misa.
On appeal, the SEC en banc reversed the decision and held that the withdrawal of Atty. Misa had
dissolved the partnership because it is a partnership at will, thus, the law firm could be dissolved by
any partner at anytime, regardless of good faith or bad faith, since no partner can be forced to continue
in the partnership against his will.

During the pendency of the case with the CA, Atty. Bito and Atty. Lozada both died successively
in the same year. The death of the two partners, as well as the admission of new partners, in the law
firm prompted Atty. Misa to renew his application for receivership. He expressed concern over the
need to preserve and care for the partnership assets. The other partners opposed the prayer. CA
affirmed the SEC decision.

Issues:

Is the law firm a partnership at will? Did the withdrawal of Atty. Misa from the law firm dissolve the
partnership regardless of his good or bad faith?

Ruling:
Yes, it is a partnership at will. A partnership that does not fix its term is a partnership at will.
Their partnership agreement does not provide for a specified period or undertaking. The birth and life
of a partnership at will is predicated on the mutual desire and consent of the partners. The right to
choose with whom a person wishes to associate himself is the very foundation and essence of that
partnership. Its continued existence is, in turn, dependent on the constancy of that mutual resolve,
along with each partner's capability to give it, and the absence of a cause for dissolution provided by
the law itself. Verily, any one of the partners may, at his sole pleasure, dictate a dissolution of the
partnership at will. He must, however, act in good faith, not that the attendance of bad faith can
prevent the dissolution of the partnership but that it can result in a liability for damages.
In passing, neither would the presence of a period for its specific duration or the statement of
a particular purpose for its creation prevent the dissolution of any partnership by an act or will of a
partner. Among partners, mutual agency arises and the doctrine of delectus personae allows them to
have the power, although not necessarily the right, to dissolve the partnership. An unjustified
dissolution by the partner can subject him to a possible action for damages.