NICANOR JACINTO, AS ADMINISTRATOR OF THE ESTATE OF THE DECEASED SILVINO LIM, PLAINTIFF AND APPELLEE, VS. BERNARDO & CO. ET AL., DEFENDANTS AND APPELLANTS.

In October, 1920, Pedro Claudio, Manuel Escobar, Joaquin Lazo,
Josefa Bernardo, Felicidad Bernardo and Vicenta Pantangco organized a so-called
mercantil collective partnership, under the name and style of “Bernardo &
Company,” as successor to another partnership organized in July, 1910,
apparently by the same parties. The partnership articles provided for the
admission of cuentas en participacion or joint accounts. Article 3 of the
document reads as follows:

“No participant in joint account can separate himself from the
partnership, except after the annual balance is made, giving notice in writing
of his intention addressed to the manager, and abiding by the profits or losses
that according to said balance, the partnership may have obtained, after
deducting such proportional part of the reserve fund as may belong to him. In
case the separation is by transfer of his rights to another, preference is to be
given, all conditions being equal, to the members of the firm and the other
partners in joint account, before they are transferred to other persons
strangers to tne firm, and in any case the transfer must be recorded in the
offices of the firm, without which requisite the transfer shall be void.”

A number of persons, among them one Silvino Lim, were admitted
as participants in the joint account. Silvino Lim died, and the plaintiff,
Nicanor Jacinto, was appointed administrator of his estate. After the death of
Silvino Lim, Josefa Lim de Barcelon, his daughter and only heir, desired to
withdraw the capital contributed by him as participant in the joint account and
made several verbal demands on the company to that effect subsequent to the
balance struck June 30, 1924. No action was taken by the company, and on April
17, 1925, Josefa wrote Pedro Claudio, the manager of the company, the following
letter:

“Manila, 17 de abril de 1925

“Sr. D. PEDRO CLAUDIO

“Gerente de ‘Los Filipinos‘

“SEÑOR GERENTE: Veo que se va demorando indefinidamente al
parecer la devolution del capital que mi padre, Don Silvino Lim, tiene puesto en
ese establecimiento de que es V. digno gerente, no obstante las reiteradas
instancias que le he hecho a ese efecto, y la promesa de V. de que se accederia
a la retirada que he solicitado de la participacion de mi padre, tan pronto se
arreglasen algunas cosas del establecimiento. Esta es la razon porque vuelvo a
insistir en mi peticion de retirada de capital como socio cuentaparticipante,
suplicandole encarecidamente que proveyera lo antes posible a esta mi peticion,
porque la mucha demora en su solucion perjudica grandemente a mis intereses.

“Respetuosamente,

“JOSEFA LIM DE BARCELON”

No answer to the letter was received, and on May 25, 1925,
Josefa wrote Claudio another letter to the same effect, and of which he
acknowledged receipt, but still paid no attention to the demand.

The present action was thereupon brought, and upon trial the
Court of First Instance rendered judgment in favor of the plaintiff and against
all of the defendants for the sum of P35,652.30 with legal interest from March
1, 1926, the date of filing the complaint, said sum representing the remainder
of the capital contributed by Silvino Lim according to the balance shown on June
30, 1924. From this judgment the defendants appeal.

Upon appeal the main contention of the appellants is that the
partnership was in reality a sociedad en comandita; that the deceased Silvino
Lim, having furnished a large part of the working capital of the partnership,
was a socio comanditario instead of being a participant in a joint account; and
that he therefore could not withdraw his capital until the partnership was
liquidated and its debts to outsiders paid.

Aside from the fact that the organization of the partnership
lacks several important features characteristic of a sociedad en comandita, it
is to be observed that the defendants, in their answer to the complaint,
expressly admit that the partnership is collective and that Silvino Lim in his
lifetime was a participant in the joint account. The case was consequently tried
on that theory, and the defendants’ change of front now comes too late. Their
present contention upon this point will, therefore, not be considered.

The appellants also assert that the partnership was in process
of liquidation at the time the plaintiff gave notice of the withdrawal of the
capital contributed by Silvino Lim and that therefore the plaintiff must await
the result of the liquidation and then, with the other creditors of the
partnership, take his proportionate share of the remaining assets. This argument
would have had some weight if it had been shown that a real liquidation had
existed, but such does not appear to have been the case. The manager, Pedro
Claudio, continued to buy and sell merchandise on behalf of the partnership, and
the fact that he sold more than he bought did not constitute a liquidation in
the true sense of the word.

We agree with the court below that, after giving notice of
withdrawal, the plaintiff became creditor of the partnership and ceased to be a
participant in the joint account. But we think the court erred in allowing the
plaintiff to recover the full amount of the credit appearing to be due him in
the 1924 balance. That balance was based on the financial condition of the
partnership on June 30, 1924. No formal notice of withdrawal of the plaintiff’s
share of the capital was made until April 17, 1925, nine and a half months
afterwards. In the meantime, the partnership had suffered losses, which in part
would be charged against the capital contributed by the participants in the
joint account, and it seems to us that from an equitable standpoint the balance
of June 30, 1925, should have been made the basis of the computation of the
amount due the plaintiff. But the defendants argue that as the notice of
withdrawal was presented before, and not after, the striking of the 1925
balance, it was of no effect as to that balance. We cannot find much force in
this argument; the notice was not cancelled, and the presumption is that the
plaintiff continued to insist on the withdrawal of his capital.

It appears from the accounts attached to the record that the
amount due the plaintiff on June 30, 1925, was P26,363.72.

The appealed judgment is therefore modified by reducing the
plaintiff’s recovery to the sum of P26,363.72, with interest at the rate of 6
per cent per annum from March 9, 1926. In all other respects the judgment is
affirmed with the costs against the appellants. So ordered.

Johnson, Street, Malcolm, Villamor, Johns, Romualdez, and
Villa-Real, JJ., concur.