G.R. No. L-5837. May 31, 1954
CRISTOBAL BONNEVIE, ET AL., PLAINTIFFS AND APPELLANTS VS. JAIME HERNANDEZ, DEFENDANT AND APPELLEE.
REYES, J.:
interests, as plaintiffs’ alleged share in the profits of a partnership.
It appears that prior to January, 1947, plaintiffs with other
associates formed a syndicate or secret partnership for the purpose of
acquiring the plants, franchises and other properties of the Manila
Electric Co.—hereinafter called the Meralco—in the provinces of
Camarines Sur, Albay, and Sorsogon, with the idea of continuing that
company’s business in that region. No formal articles were drawn for it
was the purpose of the members to incorporate once the deal had been
consumated. But in the meantime they elected Pedro Serranzana and David
Serrano general manager and secretary-treasurer, respectively, of the
partnership.
Negotiation for the purchase was commenced, but as it made no
headway, defendant was taken in as a member of the partnership so that
he could push the deal through, and to that end he was given the
necessary power of attorney. Using partnership funds, defendant was
able to buy the Meralco properties for P122,000, paying P40,000 upon
the signing of the deed of sale and agreeing to pay the balance in two
equal installments, that is, P41,000 on or before July 31, 1947, and
another P41,000 on or before January 31, 1948, with interests at 6 per
cent per annum and with a penalty clause which reads:
“(6) That in case the VENDEE fails to make the
payment or payments of the balance due or any part thereof as herein
provided, this contract shall, at the option of the VENDOR, be annulled
and, in such an event, all payments made by the VENDEE to the VENDOR by
virtue of this contract shall be forfeited and retained by the vendor
in full satisfaction as the liquidated damages sustained by said
VENDOR; and the said vendor shall have the right to forthwith reenter
and take possession of the premises, properties and rights which are
the subject-matter of this contract.”
Although defendant was the one named vendee in the deed of sale,
there is no question that the transaction was in reality made for the
partnership so that the latter assumed control of the business the day
following the sale.
About the latter half of the following month the members of the
partnership proceeded with the formation of the proposed corporation,
apportioning among themselves its shares of stock in proportion to
their respective contributions to the capital of the partnership and
their individual efforts in bringing about the acquisition of the
Meralco properties. But before the incorporation papers could be
perfected, several partners, not satisfied with the way matters were
being run and fearful that the venture might prove a failure because
the business was not going well and there was a possibility of their
being assessed more than their original investments when the time came1
to meet the two installments of the unpaid purchase price due the
Meralco, expressed their desire to withdraw from the partnership and
get back the money they had invested therein. In accordance with this
wish, one of them, Judge Jaime Reyes, in a meeting held on April 10,
1947, to consider various matters connected with the business,
presented a resolution to the effect that those partners who did not
want to remain in the association should be allowed to withdraw and get
back their contributions. The resolution was approved, with the herein
plaintiffs voting affirmatively, and on that same day plaintiffs and
Judge Reyes withdrew from the partnership, and, as admitted by both
parties, the partnership was then dissolved. In accordance with the
terms of the resolution, the withdrawing partners were, on the
following day, reimbursed their respective contributions to the
partnership fund.
Following the dissolution of the partnership, the members who
preferred to remain in the business went ahead with the formation of
the corporation, taking in new associates as stockholders. And
defendant, on his part, in fulfillment of his trust, made a formal
assignment of the Meralco properties to the treasurer of the
corporation, giving them a book value of P365,000, in return for which
the corporation issued, to the various subscribers to its capital
stock, shares of stock of the total face value of P225,000 and assumed
the obligation of paying what was still due the Meralco on the purchase
price. The new corporation was named “Bicol Electric Company.”
Though business was losing during the first year, that is, in 1947,
the corporation, thanks to a loan obtained from the RFC later prospered
and made money. Then trouble began for one of its big stockholders, the
defendant herein.
Two years from their withdrawal from the partnership, when the
corporate business was already in a prosperous condition, plaintiffs
brought the present suit against Jaime Hernandez, claiming a share in
the profit the latter is supposed to have made from the assignment of
the Meralco properties to the corporation, estimated by plaintiffs to
be P225,000 and their share of it to be P115,312.50.
Defendant’s answer denies that he has made any profit out of the
assignment in question and alleges that in any event plaintiffs, after
their withdrawal from the partnership, ceased to have any further
interest in the subsequent transactions of the remaining members.
After trial the lower court found that the partnership had not
realized any profit out of the assignment of the Meralco properties to
the corporation and that, even supposing that profit had really been
made, defendant would not be the one to answer to plaintiffs for their
share thereof, because he did not receive the consideration for the
assignment, which according to the court, consisted of the
subscriptions of various persons to the capital stock of the
corporation. The court therefore dismissed the complaint with costs
against the plaintiffs. From this decision plaintiffs appealed. The
case comes within our jurisdiction because of the amount involved.
We find no merit in the appeal.
In the first place, the profit alleged to have been realized from
the assignment of the Meralco properties to the new corporation, the
Bicol Electric Company, is more apparent than real. It is true that the
value set for those properties in the deed of assignment was P365,000
when the acquisition price was only P122,000. But one should not jump
to the conclusion that a profit, consisting of the difference between
the two sums was really made out of the transaction, for the assignment
was not made for cash put in payment for subscriptions to shares of
stock in the assignee, and while those shares had a total face value of
P225,000, this is not necessarily their real worth. Needless to say,
the real value of the shares of stock of a corporation depends upon the
value of its assets over and above its liabilities. It does not appear
that the Bicol Electric Company had any assets other than those
acquired from the Meralco, and according to the evidence the company,
aside from owing the Meralco, P82,000 was, in the language of the court
below, actually “in the red.”
In the second place, assuming that the assignment actually brought
profit to the partnership, it is hard to see how defendant could be
made to answer for plaintiffs’ alleged share thereof. As stated in the
decision below, defendant did not receive the consideration for the
assignment for, as already stated, the assignment was made in payment
for subscriptions of various persons to the capital stock of the new
corporation. Plaintiffs, in order to give color of legality to their
claim against defendant, maintain that the latter should be held liable
for damages caused to them, consisting of the loss of their share of
the profits, due to defendant’s failure properly to perform his duty as
a liquidator of the dissolved partnership, this on the theory that as
managing partner of the partnership, it was defendant’s duty to
liquidate its affairs upon its dissolutions. But it does not appear
that plaintiffs have ever asked for a liquidation, and as will
presently be explained no liquidation was called for because when
plaintiffs withdrew from the partnership the understanding was that
after they had been reimbursed their investment, they were no longer to
have any further interest in the partnership or its assets and
liabilities. Moreover, the stipulation of facts made at the hearing
does not bear out the claim that defendant was the managing partner of
the partnership, for if there appears that the partnership had its
general manager in the person of Pedro Serranzana, who upon the
formation of the new corporation also became its vice-president and
general manager,
As a general rule, when a partner retires from the firm, he is
entitled to the payment of what may be due him after a liquidation. But
certainly no liquidation is necessary where there is already a
settlement or an agreement as to what the retiring partner shall
receive. In the instant case, it appears that a settlement was agreed
upon on the very day the partnership was dissolved. For when plaintiffs
and Judge Jaime Reyes withdrew from the partnership on that day they
did so as agreed to by all the partners, subject to the only condition
that they were to be repaid their contributions or investments within
three days from said date. And this condition was fulfilled when on the
following day they were reimbursed the respective amounts due them
pursuant to the agreement.
There is evidence that the partnership was at that time operating
its business at a loss and that the partnership did not have necessary
funds to meet its obligation to Meralco for the balance of the purchase
price. And in that connection it should be recalled that nonpayment of
that obligation would result in the partnership losing its entire
investment because of the penalty clause in the deed of sale. Because
of these circumstances there is every reason to believe that plaintiffs
together with Judge Jaime Reyes, withdrew from the partnership for fear
that they might lose their entire investment should they choose to
remain in the partnership which then faced the danger of losing its
entire assets. As testified to by Judge Reyes, one of the withdrawing
partners, it was clearly understood that upon their withdrawal and
return to them of their investment they would have nothing more to do
with the association. It must, therefore, have been the intention or
understanding of the parties that the withdrawing partners were
relinquishing all their rights and interest in the partnership upon the
return to them of their investment. That Judge Reyes did not join the
plaintiffs in this action is a clear indication that such was really
the understanding. Judge Reyes has testified that when he was invited
to join in the present claim he refused because he did not want to be a
“sin verguenza.” And, indeed, if the agreement was that the withdrawing
partners were still to have participation in the subsequent
transactions of the partnership so that they would have a share not
only in the profits but also in the losses, it is not likely that their
investment would have been returned to them.
It is, therefore, our conclusion that the acceptance by the
withdrawing partners, including the plaintiffs, of their investment in
the instant case was understood and intended by all the parties as a
final settlement of whatever rights or claim the withdrawing partners
might have in the dissolved partnership. Such being the case they are
now precluded from claiming any share in the alleged profits, should
there be any, at the time of the dissolution.
In view of the foregoing, we find plaintiffs’ claim against
defendant to be without legal basis so that the judgment of dismissal
rendered by the court below should be, as it is hereby, affirmed, with
costs against the appellants.
Paras, C. J., Pablo, Bengzon, Montemayor, Jugo, Bautista Angelo, Labrador and Concepcion, JJ., concur.