ENCARNACION MAGALONA ET AL., PLAINTIFFS AND APPELLEES, VS. JUAN PESAYCO, DEFENDANT AND APPELLANT.

In the month of September, 1930, the
plaintiffs, Encarnacion Magalona, Juan Sermeno, and the defendant, Juan
Pesayco, formed a partnership for the purpose of catching “semillas de
bangus o aua” in the sea and rivers within the jurisdiction of the
municipality of San Jose, Antique Province, for the year 1931. It was
agreed that the defendant should put in a bid for this privilege and
that the partners should each supply one third of the capital in case
the defendant was awarded the desired privilege. The defendant, having
had experience in this line, was to be the manager in case his bid was
accepted. The defendant offered the sum of P5,550.09 for the year
ending December 31, 1931. As a deposit of one-fourth of the amount of
the bid was required each of the partners put up one third of this
amount. This bid, being the highest, was accepted by the municipality
and the privilege was awarded to the defendant. The lattefc entered
upon his duties under the contract and gave an account of two sales of
“semillas de bangus”, to Tiburcio Lutero as representative of the
plaintiff Magalona. As the defendant, on April 21, 1931, had on hand
only P410 he wired, Exhibit A, Lutero for sufficient money to complete
the payment of the first quarter which was to be paid within the first
twenty days of the second quarter of the year 1931. This telegram reads
as follows: “Hemos conseguido plazo hasta esta tarde tenemos aqui
cuatrocientos diez gira telegraficamente restante.” Lutero immediately
sent P1,000 to the municipal treasurer of San Jose, Antique (Exhibit
D).

The defendant managed the business from January 1, 1931, and with
the exception of the two sales above-mentioned, never gave any account
of his catches or sales to his partners, the plaintiffs. In view of
this the herein complaint was filed April 21, 1931, in which it was
prayed that a receiver be appointed by the court to take charge of the
funds of the partnership and the management of its affairs; that the
defendant be ordered to render an account of his management and to pay
to the plaintiffs their participation in the profits thereof; that the
defendant be required to turn over to the receiver all of the funds of
the partnership and that the defendant be condemned to pay the costs.

The plaintiffs put up a bond of P5,000 and a receiver was appointed who also put up a bond for the same amount.

The receiver took over the management and took possession of all
the devices and implements used in the catching of “semillas de bangus“.

At the trial it was proven that before April 20, 1931, the
defendant obtained and sold a total of 975,000 “semillas de bangus” the
market value of which was P3 per thousand. The defendant made no report
of this nor did he pay the plaintiffs any part of the P2,925 realized
by him on the sales thereof. This was not denied.

In his two counter-complaints the defendant prays that he be
awarded damages in the sum of P34,700. He denies that there was a
partnership and depends principally upon the fact that the partnership
agreement was not in writing.

The partnership was conclusively proven by the oral testimony of
the plaintiffs and other witnesses, two of whom were Attorneys Lutero
and Maza. The defense made no objection to the questions asked with
regard to the forming of this partnership. This court has held that if
a party permits a contract, which the law provides shall be in writing,
to be proved, without objection as to the form of the proof, it is just
as binding as if the statute had been complied with.

However, we cannot agree with the appellant that one of the
requisites of a partnership agreement, such as the one under
consideration, is that it should be in writing.

Article 1667 of the Civil Code provides that “Civil partnerships
may be established in any form whatever, unless real property or real
rights are contributed to the same, in which case a public instrument
shall be necessary.”

“Articles of partnership are not required to be in
writing except in the cases mentioned in article 1667, Civil Code,
which controls article 1280 of the same Code. (Fernandez vs. De la Rosa, 1 Phil., 671.)

“A verbal partnership agreement is valid between the parties even though more than 1,500 pesetas
are involved and can be enforced without bringing action under article
1279, Civil Code, to compel execution of a written instrument. (Arts.
1261, 1278-1280, 1667, Civil Code; arts. 116-119, 51, Code of
Commerce.) Thunga Chui vs. Que Bentec, 2 Phil, 561.” (4 Phil. Digest, 3468.)

The dispositive part of the decision of the trial court reads as follows:

“Habiendose probado, sin pruebas en contrario, de
que el demandado obtuvo durante su administracion de este negocio,
semillas de bangtts por valor de P2,925 que no dio cuenta ni
participation a sus consocios los demandantes, el Juzgado declara al
demandado en deber a la sociedad, compuesta por demandantes y
demandado, en la suma de P2,925, importe de 975,000 semillas de bangus
a f3 el millar, y ordena que entregue esta suma al depositario judicial
nombrado, como fondos de dicha sociedad.

“Se sobreseen las contrademandas y se condena en costas al demandado. Asi se ordena.”

This decision is affirmed with costs in both instances against the defendant-appellant. So ordered.

Malcolm, Villa-Real, Hull, and Imperial, JJ., concur.