VICENTE DIRA, PLAINTIFF-APPELLANT, VS. PABLO D. TAÑEGA, DEFENDANT-APPELLEE.

Direct appeal by plaintiff-appellant Vicente Dira
from a decision of the Court of First In­stance of Leyte,
dated February 13, 1964, dismissing, on the grounds of prescription and laches, the complaint in its Civil Case No. 2886, an act­ion
for accounting of a share in an alleged partnership, payment of salaries and
other money claims, without pronouncement as to costs.

The material facts as found by the trial judge are as follows:

“That sometime in March 1946, plain­tiff and defendant
together with Fran­cisco Pagulayan entered into a
partner­ship for the purpose of engaging in the printing business in the City
of Tacloban and that the terms of the said
partnership was for a period of five (5) years from the organization thereof;
that this fact was admitted by the defendant in his ans­wer; that, in the
articles of co-partnership, the plaintiff was designated as President and his
salary as such was P150.00 a month, that, during his incum­bency as President
until the expiration of the period, the defendant who was the manager-treasurer
of the partnership never paid him his salary; that at the time the plaintiff
was also the editor of the Leyte-Samar Tribune and in
accord­ance with their Articles of Partnership established the said periodicals
, the plaintiff as editor was to receive a sa­lary of P100.00 a month; that
this salary and the accrued amount therein was not also paid by the defendant,
who was the business manager of the enterprise; that the capital of the said
partnership was P5,000.00 equally divided among the part­ners; that this amount
was used by the partnership to purchase printing equip­ments from the 64th
Naval Construction Battalion, U.S.N. and which
printing equipments are in the possession of the defendant up to now; that,
before the purchase by the three of them of the printing equipments, the
plaintiff ob­tained a personal loan from Francisco Pagulayan
in the amount of P1,100.00 and he pledged his share in the said equip­ments to
pay the same; that, upon the re­quest of the plaintiff, the defendant paid the
said amount to Francisco Pagu­layan and this time plaintiff
used his share in the partnership as guarantee for the defendant’s payment;
that on June 3, 1946, Francisco Pagulayan sold his
share of the partnership to the def­endant and who by virtue thereof became 2/3
owner of the business; that the defendant presented Exhibit ‘5’ which  purports to be a letter of demand to
plaintiff asking him to settle his ac­count, but due to his failure to do so,
he (defendant) assumed full ownership of the business, he changed the name from
the Leyte-Samar Press to Tañega
Press; that from the time the partner­ship was organized and went into busi­ness,
the defendant as Manager-Treasurer never rendered any accounting of the
business operations, or paid the share of the plaintiff in the profits; and
that the present action of partnership accounting and sum of money was only
filed in Court by the plaintiff against the defendant on February 10, 1961,
that is after a lapse of 9 years, 10 months and 11 days after the expiration of
the con­tract of partnership, Exhibit ‘A’ on February 28, 1951.” (Pp.49-51, R. on A.)

” x      x          x          x          x          x

“It
is undisputed that the defendant had been in the exclusive possession of all
the printing equipments since 1946. 
Plaintiff himself admitted that the defendant conducted himself as ab­solute
owner of the printing equipments.  He
testified that defendant changed lo­cation of the printing press which place he (Dira) did
not know.  According to defendant
himself, he believed in good faith and acted accordingly since 1947 that he was
the sole owner of the printing press, after the refusal of the plaintiff to pay
his indebtedness of P1,100.00 to him.  From the above facts, it can be deduced that
defendant had acquired ownership of the printing equipments and accessories in
question as Article 1132 of the Civil Code pro­vides that the ownership of
movables prescribes through uninterrupted posses­sion of eight years, without
need of any condition.  Surely 1946 or
1947 to 1961, more than four and/or eight years had elapsed.

“Plaintiff stated that defendant ig­nored him and did not give
him any parti­cipation, since 1947, in the business, yet he did not demand an
immediate accounting of the business. For his fail­ure to demand accounting
five years before February 10, 1961,
from the def­endant, he had forfeited his right by prescription.  In support, Article 1153 of the Civil Code,
among other things, provides that the period for prescription of actions to
demand accounting runs from the day the persons who should ren­der same cease
in their functions, and Article 1149 of the Civil Code provides that ‘all other
actions whose periods are not fixed in this Code or in other laws within five
years from the time the right of action accrues.’

“It is an incontrovertible fact that the plaintiff had filed
this action against the defendant on February 10, 1961, nearly
ten years after the expiration of the contract of partnership between them on
March, 1951. x x x” (Pp. 56-57, R. on A.)

In his complaint, plaintiff-appellant prayed for payment of his
salaries not only as President of the partnership but also as editor of the Leyte-Samar Tribune which admittedly he had not been paid
from the start, for accounting of the partnership affairs, for payment of his
alleged share in the ren­tal value of the printing equipment and accessories
used by the partnership, of which he also claimed part-ownership proportionally
to his share in the partnership, and for damages, attorney’s fees and
costs.  The defendant-appellee
admitted practically all the material allegations of the complaint about the
organization of the partnership and the terms thereof as well as the
non-payment of the salaries claimed by appellant, but, in defense, he alleged
that the whole business of the partnership became his alone in 1947 after he
had acquired by purchase the share of Francisco Pagulayan
and had taken over the share of appellant, since the latter failed to pay the
P1,100 he had requested appellee to pay to Pagu­layan, as security for the payment of which, he had
pledged his said share to appellee; that since 1947,
the place of the business was transferred by him, he had its name changed to Tañega Press and he had always been operating openly and
publicly the said printing business from 1947 without any intervention or
participation of appellant and without said appel­lant making any claim of any
kind in connection therewith
until the filing of the complaint on February 10, 1961, hence, all the claims
and causes of action of the appellant had already prescribed.

Upon the facts found by His Honor quoted above, We agree with His Honor
in upholding appellee’s defense of prescription.  From any angle that this case may be viewed,
it is obvious that appellant’s
causes of action are barred by the statute of limitations.

Appellee took exclusive control of the
partner­ship affairs since 1947, publicly and openly and after having notified
appellant that he would do so should the latter fail to comply with his letter
of demand, Exhibit “5”, dated April
19, 1947.  Nowhere in the
facts found by the trial judge does it appear that appellant did anything about
said demand or that he ever contested the action of the appellee
of transferring the place of business and changing its name to Tañega Press.  There is nothing to show that he had taken
any move for the payment to him of his unpaid salaries both as President of the
business and as editor of the Leyte-Samar Tribune.

Under these circumstances, it would be giving premium to inaction
and indifference to still hold that appellant could sue appellee,
almost fourteen years after the latter, with prior notice to the former, had
openly and publicly taken over exclusive control of the partnership business as
if it were his own and only a little short of ten years after the expira­tion
of the stipulated term of partnership. 
His claims for salaries accrued after each month they were unpaid.  Whether we assume that these claims lost
basis in 1947 when appellee took over the businesses
of the printing press and the newspaper or in 1951, upon the expira­tion of the
term of the agreements, by all standards, these claims had already prescribed
when the present suit was filed.  On the
other hand, under Article 1153 of the Civil Code, a demand for “accounting
runs from the day the persons who should render the same ceases in their
functions”, which in this case was in 1947, when the appellee
began to operate the businesses as exclusively his own.  Again, inasmuch as the longest period in the
chapter on prescription of the Civil Code is ten years, it is evident that appellant’s action for accounting
is already barred.  The same is true with the claim for rentals
and recovery of proportional ownership of the printing equipment and
accessories, as to which, appellant’s period to bring his actions accrued also in 1947, fourteen years before this suit
was filed.

As a matter of fact, appellant impliedly admits the correctness
of this position, since in this ap­peal his only contention is that both as his
partner and as pledgee of his share, the appellee became his trustee, in legal contemplation, or that,
in the eyes of the law, a relationship of trusteeship arose between him and appellee, hence his actions against him are imprescriptible. 
Appellant’s pose is without merit. 
In bad faith or in good faith, after eight years of actual adverse
possession, appellee acquired clear ownership of
appellant’s share by ac­quisitive prescription. 
According to Art. 1132 of the Civil Code, “the ownership of
personal property also prescribes through uninterrupted possession for
eight years, without need of any other condition.”  So, appellee became
undisputed owner of appellant’s share since 1955 or six years before this action
was filed and since said year the allegation of trusteeship had already lost
any basis whatsoever.  Under Article 1140
of same Code, “Actions to recover movables shall prescribe eight years
from the time the possession thereof is lost, unless the possessor has acquired
the ownership by prescription for a less period” or for an equal period,
in which latter case, the right to sue prescribes together with the title.

Equally untenable is appellant’s reliance on the theory that as a
member of the partnership, appel­lee continued as a
trustee even after 1947, when said appellee took the
business for himself and even after 1951, the expiry
date of the agreements.  The provi­sions
of Article 1785 to the effect that:

“When a partnership for a fixed term or particular undertaking
is continued after the termination of such term or particular undertaking
without any express agreement, the rights and duties of the partners remain the
same as they were at such termination, so far as is consistent with a
partnership at will.

“A continuation of the business by the partners or such of
them as habitually acted therein during the term, without any settlement or liquidation
of the partnership affairs, is prima
facie evidence of a continuation of the partnership.”

and Article 1829
thus:

“On dissolution the partner­ship is not terminated, but
continues until the winding up of partnership affairs is completed.”

are clearly inapplicable here, for the
simple reason that those articles are premised on a continuation of the
partnership as such, which is
not our case, because here appellee repudiated the
partnership as early as 1947 with either actual or presumed know­ledge of the
appellant.  By analogy, at least, with
the rule as to a co-ownership, which a partnership essentially is, prescription
does not run in favor of any of the co-owners only as long as the co-owner
claiming against the others “expressly or impliedly recognizes the
co-ownership”, a circumstance irrecon­cilably inconsistent with appellee’s conduct of transferring the place of business,
changing its name and not paying appellant any of the salaries agreed upon in
the articles of partnership.

What is more, this case may well be decided on the basis of laches as was done by the trial judge.  In other words, even if prescription were not
proper­ly applicable, We could still hold that under
the facts proven in the record and found by the lower court, appellant has been
guilty of laches and his stale demands may not gain
the ears of the court.  We note, however,
that in his answer, the appellee limi­ted his defense
specifically to prescription which is a separate defense from laches.  Not that such par­ticularity of appellee’s defense is fatal, because, after all, it does
not appear that the evidence proving laches were
objected to by appellant, (Sec­tion 5, Rule 10, Rules of Court) but We do not feel that in this case We need to go beyond the
specific defense expressly invoked by the appellant.  This is mentioned only, lest appellant may
still entertain any hope regarding this case.

WHEREFORE, the judgment of the lower court is affirmed,
with costs against appellant.

Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Castro, Fernando, Teehankee,
and Villamor, JJ., concur.