17.Benjamin Yu v. National Labor Relations Commission & No winding up of affairs in this case as contemplated in Art.

Jade Mountain Products Co. Ltd., Willy Co, Rhodora Bendal, 1829: on dissolution the partnership is not terminated, but
Lea Bendal, Chiu Shian Jeng and Chen Ho-Fu continues until the winding up of partnership affairs is
completed
the new partnership simply took over the business
Facts: enterprise owned by the old partnership, and continued
using the old name of Jade Mountain Products Company
Yu ex-Assistant General Manager of the marble quarrying
Limited, without winding up the business affairs of the old
and export business operated by a registered partnership
partnership, paying off its debts, liquidating and
called Jade Mountain Products Co. Ltd.
distributing its net assets, and then re-assembling the said
partnership was originally organized with Bendals as
assets or most of them and opening a new business
general partners and Chin Shian Jeng, Chen Ho-Fu and Yu
enterprise
Chang as limited partners; partnership business consisted
2. Yes. the new partnership is liable for the debts of the old
of exploiting a marble deposit in Bulacan
partnership
Yu, as Assistant General Manager, had a monthly salary of
Legal basis: Art. 1840 (see codal)
4000. Yu, however, actually received only half of his
Yu is entitled to enforce his claim for unpaid salaries, as
stipulated salary, since he had accepted the promise of the
well as other claims relating to his employment with the
partners that the balance would be paid when the firm
previous partnership, against the new partnership
shall have secured additional operating funds from abroad.
But Yu is not entitled to reinstatement. Reason: new
Yu actually managed the operations and finances of the
partnership was entitled to appoint and hire a new gen. or
business; he had overall supervision of the workers at the
asst. gen. manager to run the affairs of the business
marble quarry in Bulacan and took charge of the
enterprise take over. An asst. gen. manager belongs to the
preparation of papers relating to the exportation of the
most senior ranks of management and a new partnership is
firms products.
entitled to appoint a top manager of its own choice and
general partners Bendals sold and transferred their
confidence. The non-retention of Yu did not constitute
interests in the partnership to Co and Emmanuel Zapanta
unlawful termination. The new partnership had its own
partnership was constituted solely by Co and Zapanta; it
new General Manager, Co, the principal new owner
continued to use the old firm name of Jade Mountain
himself. Yus old position thus became superfluous or
Yu dismissed by the new partners
redundant.
Yu is entitled to separation pay at the rate of one months
pay for each year of service that he had rendered to the old
Issues: 1. WON the partnership which had hired Yu as Asst.
partnership, a fraction of at least 6 months being
Gen. Manager had been extinguished and replaced by a new
considered as a whole year.
partnership composed of Co and Zapanta; 2. if indeed a new
partnership had come into existence, WON Yu could
nonetheless assert his rights under his employment contract
with the old partnership as against the new partnership
18. MANUEL G. SINGSONG, et al. plaintiffs
vs. ISABELA SAWMILL, et al. defendants
Held: 1. Yes. Changes in the membership of the partnership
resulted in the dissolution of the old partnership which had
hired Yu and the emergence of a new partnership composed
FACTS:
of Co and Zapanta.
Legal bases:
Art. 1828. The dissolution of a partnership is the change in Defendants Leon Garibay, Margarita G. Saldejeno, and
the relation of the partners caused by any partner ceasing Timoteo Tubungbanua entered into a Contract of Partnership
to be associated in the carrying on as distinguished from under the firm name "Isabela Sawmill". Later on, an action to
the winding up of the business. dissolve the partnership was filed by the spouses Cecilio
Art. 1830. Dissolution is caused: Saldajeno and Margarita G. Saldajeno against Isabela Sawmill,
(1) without violation of the agreement between the Leon Garibay and Timoteo Tubungbanua.
partners;
The defendants Leon Garibay, Timoteo Tubungbanua and
(b) by the express will of any partner, who must act in
Margarita G. Saldajeno entered into a "Memorandum of
good faith, when no definite term or particular undertaking
Agreement
is specified;
(2) in contravention of the agreement between the They also executed a document entitled "Assignment of
partners, where the circumstances do not permit a Rights with Chattel Mortgage" in favor of Saldejano.
dissolution under any other provision of this article, by the
Thereafter the defendants Leon Garibay and Timoteo
express will of any partner at any time;
Tubungbanua did not divide he assets and properties of the
"Isabela Sawmill" between them, but they continued the
business of said partnership under the same firm name
"Isabela Sawmill".
The chattel mortgage was later foreclosed.
The Provincial Sheriff of Negros Occidental published
two notices that he would sell at public auction certain
trucks, tractors, machinery, office equipment and other
things. The Provincial Sheriff subsequently executed a
Certificate of Sale in favor of the defendant Margarita G.
Saldajeno.
The defendant Margarita G. Saldajeno executed a deed of
sale in favor of the Pan Oriental Lumber Company
transferring to the latter for the sum of P45,000.00 the
trucks, tractors, machinery, and other things that she
had purchased at a public auction.
Plaintiffs herein are creditors of the defendant partnership.
Breakdown of Outstanding Balance
a. Oppen, Esteban, Inc. - P1,288.89
b. Agustin E. Tonssay - P933.73
c. Manuel G. Singsong - P3,580.50, P143.00
d. Jose L. Espinos - P1,579.44
e. Bacolod Southern Lumber Yard - P1,048.78
f. Jose Balzunce - P2,052.10
They sued the defendants to recover the sums of money they
have advanced to the partnership, and asked for the nullity of
the chattel mortgage.
CFI of Negros Occidental ruled in favor of plaintiffs, saying
that plaintiffs, as creditors of the defendant partnership, have
a preferred right over the assets of the said partnership,
and over the proceeds of their sale at the public auction.
Saldejanos appealed.
CA certified the case to SC considering that the resolution of
appeal involves purely questions of law.
ISSUES:
1. WON, the Court of First Instance of Negros Occidental had
no jurisdiction over the case because the plaintiffs Oppen,
Esteban, Inc., Agustin R. Tonsay, Jose L. Espinos and the
Bacolod Southern Lumber Yard sought to collect sums of
money. The biggest amount of which was less than P2,000.00
and, therefore, within the jurisdiction of the municipal court?
2. WON, the chattel mortgage may no longer be annulled
because it had been judicially approved by the Court of First
Instance of Negros Occidental and said chattel mortgage had
been ordered foreclosed by the same court (different branch
from that which gave the judgment subject of this appeal)?
3. WON, plaintiffs cannot bring an action to annul the chattel
mortgage of the properties of the partnership executed by
Leon Garibay and Timoteo Tubungbanuain favor of Margarita
G. Saldajeno?
4. WON, appellants are liable for attorneys fee?
HELD:
1. NO
This contention is devoid of merit because all the plaintiffs
also asked for the nullity of the assignment of right with
chattel mortgage. This cause of action is not capable of
pecuniary estimation and falls under the jurisdiction of the
Court of First Instance.
Where the basic issue is something more than the right to
recover a sum of money and where the money claim is purely
incidental to or a consequence of theprincipal relief sought,
the action is as a case where the subject of the litigation isnot
capable of pecuniary estimation and is cognizable exclusively
by the Court ofFirst Instance.
2. NO
One branch of the Court of First Instance of Negros
Occidental can take cognizance of an action to nullify a final
judgment of the other two branches of the same court.
Reasoning On the question of whether a court may nullify a
final judgment of another court of co-equal, concurrent
and coordinate jusridiction, this Court originally ruled that a
court has no power to interfere with the judgments or
decrees of a court of concurrent or coordinate jurisdiction
having equal power to grant the relief sought by the
injunction.
In December 1971, however, this court re-examined and
reversed its earlier doctrine on the matter. In Dupla V Court
of Appeals, the SC declared that a court of first instance or a
branch thereof has the authority and jurisdiction to take
cognizance of, and to act in, suit to annul final and executory
judgment or order rendered by another court of first instance
or by another branch of the same court.
3. NO
A contract cannot be assailed by one who is not a party
thereto. However, when a contract prejudices the rights of a
third person, he may file an action to annul the contract.
Reasoning This Court has held that a person, who is not a
party obliged principally or subsidiarily under a contract, may
exercise an action for nullity of the contract if he is prejudiced
in his rights with respect to one of the contracting parties,
and can show detriment which would positively result to him
from the contract in which he has no intervention.
The plaintiffs-appellees were prejudiced in their rights by the
execution of the chattel mortgage over the properties of the
partnership "Isabela Sawmill" in favor of Margarita G.
Saldajeno by the remaining partners, Leon Garibay and
Timoteo Tubungbanua, hence, they have a right to file an
action to nullify the chattel mortgage
4. NO
There will be no liability for attorneys fees absent a showing
of wanton disregard of the rights of the plaintiffs.
19. DIRA vs. TANEGA
FACTS:
March 1946, Dira, Tanega and Francisco Pagulayan entered
into a partnership to engage in a printing business in
Tacloban; the partnership was for a period of five (5) years
The capital of the said partnership was P5,000.00 equally
divided among the partners; this amount was used by the
partnership to purchase printing equipment from the 64th
Naval Construction Battalion, U.S.N; the printing equipment
are with Tanega up to now
Before the printing equipment was purchased, DIra obtained
a loan from Pagulayan and pledged his share in the
equipment to pay for it; but he later on requested Tanega to
pay the amount to Pagulayan, this time pledging his share in
the partnership as guarantee for payment.
Pagulayan sold his share to Tanega, who, upon failure of DIra
to pay his obligation, assumed full ownership of the business.
In the articles of co-partnership, the Dira was designated as
President; he was also the editor of the Leyte-Samar Tribune
and in accordance with their Articles of Partnership but
Tanega, who was the manager-treasurer of the partnership
never paid him his salary
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 on February 28, 1951
TANEGAs Contention: 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 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.
ISSUES:
1. has the Diras cause of action prescribed?
2. Did a relationship of trusteeship arose between him and
appellee, hence his actions against him are imprescriptible?
HELD:
1. YES. Dira's causes of action barred by the statute of
limitations.
Tanega 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- but Dira never did anything about this.
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.
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 as in 1947, when the
appellee began to operate the businesses as exclusively his
own. But the longest period in the chapter on prescription of
the Civil Code is ten years, 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.
NO. In bad faith or in good faith, after eight years of actual
adverse possession, Tanega acquired clear ownership of
appellant's share by acquisitive prescription.
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 Diras reliance on the theory that as a
member of the partnership, Tanega continued as a trustee
even after 1947, when the latter took the business for himself
and even after 1951, the expiry date of the agreements.
20. LILIBETH SUNGA-CHAN and CECILIA
SUNGA, petitioners, vs.
LAMBERTO T. CHUA, respondent.
FACTS:
Respondent alleged that, he verbally entered into a business
partnership with Jacinto. Respondent and Jacinto allegedly
agreed to register the business name of their partnership,
under the name of Jacinto as a sole proprietorship. The
partnership allegedly had Jacinto as manager, assisted by
Josephine Sy, a sister of the wife respondent, Erlinda Sy.
Upon Jacinto's death, his surviving wife, petitioner Cecilia and
particularly his daughter, petitioner Lilibeth, took over the
operations, control, custody, disposition and management of
Shellite without respondent's consent. Despite respondent's
repeated demands upon petitioners for accounting,
inventory, appraisal, winding up and restitution of his net
shares in the partnership, petitioners failed to comply.
Petitioners filed their Answer with Compulsory Counter-
claims, contending that they are not liable for partnership
shares, unreceived income/profits, interests, damages and
attorney's fees, that respondent does not have a cause of
action against them, and that the trial court has no
jurisdiction over the nature of the action, the SEC being the
agency that has original and exclusive jurisdiction over the
case. As counterclaim, petitioner sought attorney's fees and
expenses of litigation.
The trial court rendered its Decision ruling for respondent.
Petitioners filed a Notice of Appeal with the trial court, the CA
dismissed the appeal. Hence, this petition.
Petitioners question the correctness of the finding of the trial
court and the Court of Appeals that a partnership existed
between respondent and Jacinto from 1977 until Jacinto's
death. In the absence of any written document to show such
partnership between respondent and Jacinto, petitioners
argues that these courts were proscribes from hearing the
testimonies of respondent and his witness, Josephine, to
prove the alleged partnership three years after Jacinto's
death. To support this argument, petitioners invoke the
"Dead Man's Statute' or "Survivorship Rule" under Section 23,
Rule 130 of the Rules of Court.
Petitioners thus implore this Court to rule that the
testimonies of respondent and his alter ego, Josephine,
should not have been admitted to prove certain claims
against a deceased person (Jacinto), now represented by
petitioners.
ISSUE:
Whether or not the "Dead Man's Statute" applies to this case
so as to render respondent's testimony and that of Josephine
inadmissible.
RULING:
The "Dead Man's Statute" provides that if one party to the
alleged transaction is precluded from testifying by death,
insanity, or other mental disabilities, the surviving party is not
entitled to the undue advantage of giving his own
uncontradicted and unexplained account of the
transaction. But before this rule can be successfully invoked
to bar the introduction of testimonial evidence, it is necessary
that:
"1. The witness is a party or assignor of a party to
case or persons in whose behalf a case in
prosecuted.
2. The action is against an executor or administrator
or other representative of a deceased person or a
person of unsound mind;
3. The subject-matter of the action is a claim or
demand against the estate of such deceased person
or against person of unsound mind;
4. His testimony refers to any matter of fact of which
occurred before the death of such deceased person
or before such person became of unsound mind."
Two reasons forestall the application of the "Dead Man's
Statute" to this case.
First, petitioners filed a compulsory counterclaim against
respondents in their answer before the trial court, and with
the filing of their counterclaim, petitioners themselves
effectively removed this case from the ambit of the "Dead
Man's Statute". Well entrenched is the rule that when it is
the executor or administrator or representatives of the
estates that sets up the counterclaim, the plaintiff, herein
respondent, may testify to occurrences before the death of
the deceased to defeat the counterclaim. Moreover, as
defendant in the counterclaim, respondent is not disqualified
from testifying as to matters of facts occurring before the
death of the deceased, said action not having been brought
against but by the estate or representatives of the deceased.
Second, the testimony of Josephine is not covered by the
"Dead Man's Statute" for the simple reason that she is not "a
party or assignor of a party to a case or persons in whose
behalf a case is prosecuted." Records show that respondent
offered the testimony of Josephine to establish the existence
of the partnership between respondent and Jacinto.
Petitioners' insistence that Josephine is the alter ego of
respondent does not make her an assignor because the term
"assignor" of a party means "assignor of a cause of action
which has arisen, and not the assignor of a right assigned
before any cause of action has arisen." Plainly then,
Josephine is merely a witness of respondent, the latter being
the party plaintiff.
21. JESUS SY, JAIME SY vs.
THE COURT OF APPEALS, INTESTATE ESTATE OF SY YONG
HU,
SEC. HEARING OFFICER FELIPE TONGCO, SECURITIES AND
EXCHANGE COMMISSION, respondents.
SY vs. CA
G. R. Nos. 94285
August 31, 1999
At bar are two consolidated petitions for review on
certiorari under Rule 45 of the Revised Rules of Court,
docketed as G. R. Nos. 94285 and G.R. No. 100313,
respectively, seeking to reinstate the Resolution and Decision
of the Court of Appeals.
FACTS:
Sy Yong Hu & Sons is a partnership of Sy Yung Hu
and his six (6) sons. The partnership has valuable assets such
as tracts of land planted with sugar cane and commercial lots
in the business district of Bacolod City. Sometime in
September 1977, a certain Keng Sian brought an action
before the then Court of First Instance of Negros Occidental,
docketed as Civil Case No. 13388, against the partnership for
accounting of all the partnership properties and for the
delivery or reconveyance of her one-half (1/2) share in the
properties and in the fruits thereof. Keng Sian averred that
she is the common-law wife of Sy Yung Hu and that the latter
and his children connived to deprive her of her share in the
properties by diverting it to the partnership. During the
pendency of said civil case, partner Marciano Sy filed a
petition for declaratory relief against his co-partners
docketed as SEC Case No. 1648, praying that he be appointed
managing partner to replace Jose Sy who just died. Answering
the petition, his brothers, Vicente, Jesus and Jaime, who
claimed to represent the majority interest in the partnership,
sought the dissolution of the partnership and the
appointment of Vicente Sy as managing partner.
The Hearing Officer, in a decision (Sison Decision)
dismissed the petition, and dissolved the partnership. The
Sison Decision was affirmed by the SEC En Bane (Abello
Decision). In the meantime, Branch 43 of the Regional Trial
Court of Negros Occidental appointed one Alex Ferrer as
Special Administrator. Thereafter, Alex Ferrer moved to
intervene in the proceedings in SEC Case No. 1648 for the
partition and distribution of the of the partnership assets on
behalf of the respondent intestate estate. The motion was
denied. The Intestate Estate appealed to the SEC en banc. In
its decision (Sulit Decision), the SEC en bane reiterated that
the Abello decision, which upheld the order of dissolution of
the partnership, had long become final and executory. No
further appeal was taken from said decision. During the
continuation of SEC Case 1648, presided by Hearing Office
Felipe S. Tongco who substituted Hearing Officer Sison, the
parties brought to the attention of the Hearing Officer the
fact of existence of Civil Case 903 (formerly Civil Case No.
13388) pending before the RTC of Negros Occidental. They
also agreed that during the pendency of said case, there
would be no disposition of partnership assets. Hearing Officer
Tongco in an order (Tongco Order) placed the partnership
under a receivership committee. Petitioners appealed to the
SEC en banc. In an order (Lopez Order), the SEC en banc
affirmed the Tongco order. Petitioners motion for
reconsideration was denied. Then they filed a special civil
action for certiorari with the Court of Appeals. The appellate
court granted the petition and remanded the case for further
execution of the Abello and Sulit Decisions, ordering partition
and distribution of partnership properties. On motion for
reconsideration by private respondents, the Court of Appeals
reversed its earlier decision and remanded the case to the
SEC for the formation of a receivership committee as
envisioned in the Tongco Order. Hence the present petition.
ISSUE:
Whether or not the placing of the partnership properties
under receivership suspended the dissolution of the
partnership and the distribution of its assets.
HELD:
No.
The Supreme Court affirmed the assailed resolution
of the Court of Appeals. It ruled that although the Abello
Decision was, indeed, final and executory, it did not pose any
obstacle to the hearing officer to issue orders not
inconsistent therewith because from the time a dissolution is
ordered until the actual termination of the partnership, the
SEC retained jurisdiction to adjudicate all incidents relative
thereto. Thus, the disputed order placing the partnership
under a receivership committee cannot be said to have varied
the final order of dissolution. Neither did it suspend the
dissolution of the partnership. If at all, it only suspended the
partition and distribution of partnership assets pending
disposition of Civil Case No. 903 on the basis of the
agreement of the parties and under the circumstances of the
case. The Court added that having agreed with the
respondents not to dispose of the partnership assets,
petitioners effectively consented to the suspension of the
winding up or, more specifically, the partition and distribution
of subject assets. Petitioners are now estopped from
questioning the order of the Hearing officer issued in
accordance with the said agreement.
Petitioners fail to recognize the basic distinctions
underlying the principles of dissolution, winding up and
partition or distribution. The dissolution of a partnership is
the change in the relation of the parties caused by any
partner ceasing to be associated in the carrying on, as might
be distinguished from the winding up, of its business. Upon
its dissolution, the partnership continues and its legal
personality is retained until the complete winding up of its
business culminating in its termination. The dissolution of the
partnership did not mean that the juridical entity was
immediately terminated and that the distribution of the
assets to its partners should perfunctorily follow. On the
contrary, the dissolution simply effected a change in the
relationship among the partners. The partnership, although
dissolved, continues to exist until its termination, at which
time the winding up of its affairs should have been completed
and the net partnership assets are partitioned and distributed
to the partners.
22. Dan Fue Leung vs IAC
FACTS:
The petitioner asks for the reversal of the decision of the then
Intermediate Appellate Court in AC-G.R. No. CV-00881 which
affirmed the decision of the then Court of First Instance of
Manila, Branch II in Civil Case No. 116725 declaring private
respondent Leung Yiu a partner of petitioner Dan Fue Leung
in the business of Sun Wah Panciteria and ordering the
petitioner to pay to the private respondent his share in the
annual profits of the said restaurant.
This case originated from a complaint filed by respondent
Leung Yiu with the then Court of First Instance of Manila,
Branch II to recover the sum equivalent to twenty-two
percent (22%) of the annual profits derived from the
operation of Sun Wah Panciteria since October, 1955 from
petitioner Dan Fue Leung.
The Sun Wah Panciteria, a restaurant, located at Florentino
Torres Street, Sta. Cruz, Manila, was established sometime in
October, 1955. It was registered as a single proprietorship
and its licenses and permits were issued to and in favor of
petitioner Dan Fue Leung as the sole proprietor. Respondent
Leung Yiu adduced evidence during the trial of the case to
show that Sun Wah Panciteria was actually a partnership and
that he was one of the partners having contributed P4,000.00
to its initial establishment.
The private respondents evidence is summarized as follows:
About the time the Sun Wah Panciteria started to become
operational, the private respondent gave P4,000.00 as his
contribution to the partnership. This is evidenced by a receipt
wherein the petitioner acknowledged his acceptance of the
P4,000.00 by affixing his signature thereto. Furthermore, the
private respondent received from the petitioner the amount
of P12,000.00 covered by the latter's Equitable Banking
Corporation Check from the profits of the operation of the
restaurant for the year 1974. The petitioner denied having
received from the private respondent the amount of
P4,000.00. He contested and impugned the genuineness of
the receipt. His evidence is summarized as follows:
The petitioner did not receive any contribution at the time he
started the Sun Wah Panciteria. He used his savings from his
salaries as an employee at Camp Stotsenberg in Clark Field
and later as waiter at the Toho Restaurant amounting to a
little more than P2,000.00 as capital in establishing Sun Wah
Panciteria. Petitioner presented various government licenses
and permits showing the Sun Wah Panciteria was and still is a
single proprietorship solely owned and operated by himself
alone. Fue Leung also flatly denied having issued to the
private respondent the receipt (Exhibit G) and the Equitable
Banking Corporation's Check No. 13389470 B in the amount
of P12,000.00 (Exhibit B).
ISSUE: WON Private respondent is a partner of the
petitioner in Sun Wah Panciteria?
HELD: The private respondent is a partner of the petitioner in
Sun Wah Panciteria. The requisites of a partnership which are
1) two or more persons bind themselves to contribute
money, property, or industry to a common fund; and 2)
intention on the part of the partners to divide the profits
among themselves (Article 1767, Civil Code; Yulo v. Yang
Chiao Cheng, 106 Phil. 110)-have been established. As stated
by the respondent, a partner shares not only in profits but
also in the losses of the firm. If excellent relations exist
among the partners at the start of business and all the
partners are more interested in seeing the firm grow rather
than get immediate returns, a deferment of sharing in the
profits is perfectly plausible. It would be incorrect to state
that if a partner does not assert his rights anytime within ten
years from the start of operations, such rights are
irretrievably lost. The private respondent's cause of action is
premised upon the failure of the petitioner to give him the
agreed profits in the operation of Sun Wah Panciteria. In
effect the private respondent was asking for an accounting of
his interests in the partnership.
It is Article 1842 of the Civil Code in conjunction with Articles
1144 and 1155 which is applicable. Article 1842 states:
The right to an account of his interest shall accrue to any
partner, or his legal representative as against the
winding up partners or the surviving partners or the
person or partnership continuing the business, at the
date of dissolution, in the absence or any agreement to
the contrary.
Regarding the prescriptive period within which the private
respondent may demand an accounting, Articles 1806, 1807,
and 1809 show that the right to demand an accounting exists
as long as the partnership exists. Prescription begins to run
only upon the dissolution of the partnership when the final
accounting is done.
Considering the facts of this case, the Court may decree a
dissolution of the partnership under Article 1831 of the Civil
Code which, in part, provides:
Art. 1831. On application by or for a partner the court shall
decree a dissolution whenever:
(3) A partner has been guilty of such conduct as tends to
affect prejudicially the carrying on of the business;
(4) A partner willfully or persistently commits a breach of the
partnership agreement, or otherwise so conducts himself in
matters relating to the partnership business that it is not
reasonably practicable to carry on the business in partnership
with him;
(6) Other circumstances render a dissolution equitable.
There shall be a liquidation and winding up of partnership
affairs, return of capital, and other incidents of dissolution
because the continuation
23. TESTATE ESTATE OF LAZARO MOTA, deceased, ET
AL., plaintiffs-appellants,
vs.
SALVADOR SERRA, defendant-appellee.
SUMMARY: Serra, as owner of Palma Central, entered into a
contract of partnership with Mota et al, as owners of San
Isidro Central, for the construction of a railroad line. In said
agreement, they stipulated that expenses will be borne by
both parties 50-50 although expenses will be initially for the
account of Mota et. al. Subsequently however, Serra sold
Palma to Whitaker & Concepcion, the latter expressing
awareness of above contract and willingness to subrogate
themselves into the obligations therefor. Thereafter,
Concepcion & Whitaker also bought from Mota et al. the of
the railroad line and they agreed that the partnership
"Palma" and "San Isidro," formed between Serra & Mota et
al, should be dissolved upon the execution of the contract.
Serra being unable to pay his obligation under the contract of
partnership (1/2 of the expenses), Mota et. al. instituted an
action for collection. As defense, Serra alleged that at the
termination of the partnership between them, his obligation
therein has been extinguished. HELD: Serra is still liable to the
partnership.
DOCTRINE: The dissolution of a firm does not relieve any of
its members from liability for existing obligations, although it
does save them from new obligations to which they have not
expressly or impliedly assented, and any of them may be
discharged from old obligations by novation or other form of
release. A partnership continues, even after dissolution, for
the purpose of winding up its affairs. At the termination of
the object for which it was created the partnership is
extinguished, pending the winding up of some incidents and
obligations of the partnership, but in such case, the
partnership will be reputed as existing until the juridical
relations arising out of the contract are dissolved. A
partnership cannot be considered as extinguished until all
the obligations pertaining to it are fulfilled.
FACTS:
Feb. 1, 1919: Defendant Salvador Serra, Lazaro Mota,
now deceased, and Juan J. Vidaurrazaga for himself and
in behalf of his brother, Felix and Dionisio Vidaurrazaga,
entered into a contract of partnership for the
construction and exploitation of a railroad line of about
10 kms. from the "San Isidro" and "Palma" centrals to the
place known as "Nandong."
Original capital stipulated: P150,000 to be paid by parties in
equal parts. Mota et. al. were entrusted with the
administration of the partnership.
Mota et al owns "San Isidro" Central while Serra owns
Palma Central.
The expenses until the termination of which shall be for the
account of the "San Isidro" Central (Mota et al)
o of expenses shall be borne by the "Palma"
Central (Serra) with the obligation to reimburse
Mota et al within 5 years with interest at the rate
of 10% p.a.
The agreed capital (P150k) however, did not prove
sufficient, as the expenses up to May 15, 1920, had
reached P226,092.92
Jan. 29, 1920: Serra entered into a contract of sale with
Venancio Concepcion, Phil. C. Whitaker, and Eusebio R.
de Luzuriaga,
o Serra sold the estate and central known as "Palma"
with its running business, as well as all the
improvements, machineries and buildings, real and
personal properties, rights, choses in action and
interests, including the sugar plantation of the
harvest year of 1920 to 1921, covering all his
property
o They were willing to assume the Serra's obligation
to Mota et al
o Contract, par. 5: xxx The vendee hereby obligates
himself to respect the aforesaid contract (Contract
of Partnership) and all obligations arising
therefrom.
Before the delivery to the purchasers of
the hacienda thus sold, Luzuriaga renounced all his rights
under the contract of sale in favor of Concepcion &
Whitaker.
July 17, 1920: Thus, Concepcion, Whitaker & Serra
executed another deed of absolute sale of the said
"Palma" Estate for P1,695,961.90.
o Serra received at the time of executing the deed and
the balance was payable by installments in the form
and manner stipulated in the contract.
o Purchasers guaranteed the unpaid balance of the
purchase price by a first and special mortgage in
favor of Serra upon the hacienda and the central
with all the improvements, buildings, machineries,
 and appurtenances then existing on the
said hacienda.
o Clause 6 of the deed: Whitaker & Concepcion state
that they are aware of the contract that Serra has
with the proprietors of the "San Isidro" Central and
hereby obligate themselves to respect the said
contract and subrogate themselves into the rights
and obligations thereunder. They also bind
themselves to comply with all the contracts
heretofore entered by the vendor with the
customers, coparceners on shares and employees.
Jan. 8, 1921: Concepcion & Whitaker bought from Mota
et al. the of the railroad line pertaining to the latter,
executing a Contract of Sale.
o Price: P237,722.15, excluding any amount which
Serra might be owing to Mota et al. Of the
purchase price, Concepcion & Whitaker paid
P47,544.43 only.
o They agreed that the partnership "Palma" and
"San Isidro," formed by the agreement of Feb.
1, 1919 should be dissolved upon the execution
of the contract, and that the said partnership
agreement should be totally cancelled and of
no force and effect whatever.
Thus, "Hacienda Palma," with the entire railroad, the
subject-matter of the contract of partnership between
Mota et al. and Serra, became the property of Whitaker
& Concepcion.
Whitaker & Concepcion having failed to pay to Serra a
part of the purchase price (P750,000), Serra, foreclosed
the mortgage upon the said hacienda.
o It was adjudicated to him at the public sale for
P500,000. He was put in possession including what
was planted at the time, together with all the
improvements made by Whitaker & Concepcion.
Since Serra failed to pay of the amount expended by
Mota et al. upon the construction of the railroad line
(P113,046.46), as well as Whitaker & Concepcion, Mota
et al. instituted the present action. PRAYER:
o (1) That the deed of Feb. 1, 1919 (Contract of
Partnership) be declared valid and binding;
o (2) That after the execution of the said document,
Serra improved economically so as to be able to pay
Mota et al. the amount owed, but that he refused to
pay either in part or in whole the said amount
notwithstanding the several demands made on him
for the purpose; and
o (3) Serra be sentenced to pay Mota et al.
P113,046.46, with the stipulated interest at 10% p.a.
Serra set up three special defenses:
o (1) The novation of the contract by the substitution
of the debtor with the conformity of the creditors;
o (2) the confusion of the rights of the creditor and
debtor; and
o (3) the extinguishment of the contract (Contract of
partnership)
TC: Absolved Serra from the complaint.
There was a novation of the contract by the substitution of
the debtor. Whitaker & Concepcion, upon purchasing the
"Palma" Central, were subrogated in the place of the Serra in
all his rights and obligations under the contract relating to the
railroad line existing between "Palma" and "San Isidro"
centrals and Mota et al. agreed to this subrogation
As to the prayer that contract of partnership be declared
valid and binding, there was no way of reviving the contract
which the parties themselves in interest had spontaneously
and voluntarily extinguished thru the Contract of Sale bet.
Concepcion, Whitaker & Mota et al. on of the railroad
Mota et al. appealed to SC.
ISSUE: Whether Serra cannot be held liable to pay Mota et.
al. a part of the cost of the construction of the railroad line
stipulated in the contract of partnership by reason of the
dissolution of the partnership? (NO, Serra is liable)
RATIO:
NOVATION
Serra: By the substitution of the debtor with the consent
of the creditor, the obligation of Serra to pay his
obligation under the contract of partnership was
extinguished since there was a novation of the contract
SC: There was no novation. There was none intended;
Mota et. al have not expressly consented to the
substitution of Serra.
It should be noted that in order to give novation its legal
effect, the law requires that the creditor should consent
to the substitution of a new debtor. This consent must be
given expressly for the reason that, since novation
extinguishes the personality of the first debtor who is to
be substituted by new one, it implies on the part of the
creditor a waiver of the right that he had before the
novation which waiver must be express
The fact that Phil. C. Whitaker and Venancio Concepcion
were willing to assume the Serra's obligation to Mota et
al. is of no avail, if the latter have not expressly
consented to the substitution of the first debtor.
Letter presented as proof of alleged consent of Mota et.
al to the substitution of Whitaker & Concepcion only
shows that they asked the two to be their new partners
(not substituted). It is natural that Mota et al. should
have done this. Still, there was nothing to show the
express consent, the manifest and deliberate intention of
Estate of Mota et al. to exempt Serra from his obligation
and to transfer it to his successors in interest, Whitaker &
Concepcion.
 o Serra transferred his hacienda to C. Whitaker &
Concepcion and made it known to Mota et al.
that the new owners would hold themselves
liable for the cost of constructing the said
railroad line. Mota et al. could not prevent the
Serra from selling to them his "Hacienda Palma"
with the rights that he had over the railroad in
question.
o Serra ceased to be a partner in said line and,
therefore, Mota et al. had to take the vendees
as their new partners.
o Mota et al. had to come to an understanding
with the new owners of the "Hacienda Palma" in
connection with the railroad line "Palma-San
Isidro-Nandong."
Mota et al. were not a party to the Contract of Sale
between Serra, Whittaker, Concepcion & Luzuriaga. No
stipulation whereby the obligation of the Serra was
novated with the consent of the creditor
MERGING OF DEBTOR & CREDITOR
Serra: There was a merger of the rights of debtor and
creditor, whereby the fulfillment of the obligation
became extinguished.
Debt of Serra was transferred to Whitaker & Concepcion by
the Contract of Sale bet. Serra, Whittaker, Concepcion &
Luzuriaga.
These in turn acquired the credit of the Testate Estate of
Lazaro Mota et al. by virtue of the debt (Contract of Sale on
of the railroad); thus the rights of the debtor and creditor
were merged in one person.
SC: No. The rights and titles which Mota et al. sold to
Whitaker & Concepcion refer only to one-half of the railroad
line. The credit which they had against Serra for of the cost
of construction of the said line was not included in the sale
contained in the Contract of Sale on of the railroad.
That Mota et al. sold their rights and titles over of the line,
is evident from the very Contract of Sale. The purchasers,
Whitaker and Concepcion, to secure the payment of the
price, executed a mortgage in favor of Mota et al. on the
same rights and titles that they had bought and also upon
what they had purchased from Serra.
In other words, Whitaker & Concepcion mortgaged unto
Mota et al. what they had bought from Mota et al. and also
what they had bought from Serra.
The rights and titles transferred by Mota et al. to Whitaker &
Concepcion were only those they had over the other half of
the railroad line.
No novation of the contract between Mota et al. and Serra,
as regards the obligation of the latter to pay the former of
the cost of the construction of the said railroad line, and since
Mota et al. did not include in the sale, evidenced by Contract
of Sale, the credit that they had against the Serra.
That the obligation of the Serra became extinguished by the
merger of the rights of creditor and debtor by the purchase of
Whitaker and Concepcion is wholly untenable.
TERMINATION OF PARTNERSHIP
By virtue of the Contract of Sale on of the railroad, the
Testate Estate of Lazaro Mota et al. and Phil. C. Whitaker and
Venancio Concepcion, by common consent, decided to
dissolve the partnership between "Hacienda Palma" and
"Hacienda San Isidro," thus cancelling the contract of
partnership of February 1, 1919.
TC: By the termination of the partnership, as shown by the
Contract of Sale bet. Concepcion, Whitaker & Mota et al, no
legal rights can be derived therefrom.
Serra: Mota et al. cannot enforce any right arising out of that
contract of partnership, which has been annulled, such as the
right to claim now a part of the cost of the construction of the
railroad line stipulated in that contract.
SC: Serra's contention signifies that any person, who has
contracted a valid obligation with a partnership, is exempt
from complying with his obligation by the mere fact of the
dissolution of the partnership. Serra's contention is
untenable.
The dissolution of a partnership must not be understood in
the absolute and strict sense so that at the termination of
the object for which it was created the partnership is
extinguished, pending the winding up of some incidents and
obligations of the partnership, but in such case, the
partnership will be reputed as existing until the juridical
relations arising out of the contract are dissolved.
SC of Spain (Feb. 6, 1903): Upheld this doctrine
FACTS: There was a partnership formed between several
persons to purchase some lands sold by the state. The
partnership paid the purchase price and distributed
among its members the lands so acquired.
o After the lapse of some time, one of the partners
instituted an action in the court of Badajoz, praying
that he be accepted as a partner with the same
rights and obligations as the others, for the reason
that he had not been allowed all that he had a right
to.
o The court granted the petition, which judgment was
affirmed by the Audiencia de Caceres.
o From that decision, the other partner sued out a writ
of error
There is infringement of the Civil Code since all
contracts are reputed consummated and therefore
extinguished, when the contracting parties fulfill all
the obligations arising therefrom
By the payment of the money and the granting and
distribution of the lands without any opposition, the
juridical relations between the contracting parties
 become extinguished and none of the parties has
any right of action under the contract.
HELD: Denied the writ. Some corrections and liquidations
asked by the actor were still pending. The articles cited were
not infringed because a partnership cannot be considered as
extinguished until all the obligations pertaining to it are
fulfilled. (11 Manresa, page 312.)
30 Cyc., page 659: The dissolution of a firm does not relieve
any of its members from liability for existing obligations,
although it does save them from new obligations to which
they have not expressly or impliedly assented, and any of
them may be discharged from old obligations by novation of
other form of release. It is often said that a partnership
continues, even after dissolution, for the purpose of winding
up its affairs
INTEREST
Serra: As in the articles of partnership on Feb. 1, 1919, it
was agreed that Serra would put up of the cost of the
railroad line within 5 years from Feb. 1, 1919, with
interest at 10% p.a. Present action is premature since,
from the execution of the contract until the date of the
complaint (Oct. 25, 1922), the 5 years, within which the
Serra could pay his part of the cost of the construction of
the line, had not yet elapsed.
SC: Mora et.al and the successors in interest of the
Serra, by mutual consent, dissolved the partnership on
June 16, 1920, cancelling the contract of partnership to
all of which Serra consented as evidenced by his
allegations in his answer. Thus, there is no reason for
waiting for the expiration of 5 years which the parties
themselves had seen fit to stipulate. The provisions of
Art. 113, regarding the fulfillment of pure obligations,
must be applied in this case.
DISPOSITIVE: Judgment appealed from Reversed. Serra is
indebted to Testate Estate of Lazaro Mota, et al., for
P113,046.46 with the agreed interest @ 10% p.a. from the
date of the filing of the complaint.
24. DR. SIMEON S. CLARIDADES vs. VICENTE C. MERCADER
May 14, 1966 G.R.No. L-20341
Facts:Petitioner, Dr. Simeon S. Claridades brought this action
against Vicente C. Mercader and Perfecto Fernandez for the
dissolution of a partnership allegedly existing between them
and an accounting of the operation of the partnership,
particularly a fishpond located in Sta. Cruz, Marinduque,
which was the main asset of the partnership, from September
1954, as well as to recover moral and exemplary damages, in
addition to attorney's fees and costs.
In their answer the defendants admitted the existence of the
partnership and alleged that its operation had been so far
unproductive. By way of special defense, they alleged, also,
that there is an impending auction sale of said fishpond due
to delinquency in the payment of taxes owing to lack of funds
and plaintiff's failure to contribute what is due from him.
Defendants, likewise, set up a counter-claim for damages, by
reason of the institution of this action, and for attorney's fees
and costs.
Subsequently, Guillermo Reyes was allowed to intervene for
the purpose of recovering a sum of money allegedly due him
for services rendered as foreman of said fishpond, plus
damages. Later, one Armando Asuncion succeeded in
intervening as the alleged assignee of the interest of
defendant. Mercader in said partnership and fishpond.
Thereafter, on plaintiff's motion, the lower court appointed a
receiver of the fishpond. Upon the other hand, Alfredo
Zulueta and his wife Yap Leding sought permission to
intervene, still later, alleging that they are the owners of said
fishpond, having bought one-half ()of it from Benito
Regencia, who, in turn, had acquired it from Asuncion, who
had purchased the fishpond from defendant Mercader, and
the other half having been assigned to him directly by
Asuncion.
Despite plaintiff's opposition thereto, said permission was
granted in an order dated February 8, 1962, which, likewise
gave the Zuluetas ten (10) days within which to file such
pleading as they may deem necessary for the protection of
their rights. Soon thereafter, or on February 12, 1962, the
Zuluetas filed a motion to dismiss upon the ground that the
complaint states no cause of action; that venue has been
improperly laid; and that plaintiff complaint is moot and
academic. Acting upon the motion, on March 2, 1962, the
lower court granted the same upon the ground of improper
venue. A reconsideration of this order having been denied,
plaintiff and intervenor Reyes have interposed the present
appeal.
Issue: WON this action should have been instituted, not in the
Court of First Instance of Bulacan, but in that of Marinduque,
where the aforementioned fishpond is located.
Ruling: Bulacan, This is obviously a personal action, which
may be brought in the place of residence of either the
plaintiff or the defendants. Since plaintiff is a resident of
Bulacan, he had the right to bring the action in the court of
first instance of that province. What is more, although
defendants Fernandez and Mercader reside in Marinduque,
they did not object to the venue. In other words, they waived
whatever rights they had, if any, to question it.
The fact that plaintiff prays for the sale of the assets of the
partnership, including the fishpond in question, did not
change the nature or character of action, such sale being
merely a necessary incident of the liquidation of the
partnership, which should precede and/or is part of its
process of dissolution. Neither plaintiff's complaint nor the
answer filed by defendants Fernandez and Mercader
questioned the title to said property or the possession
thereof.
Again, the situation was not changed materially by the
Intervention either of Asuncion or of the Zuluetas, for, as
alleged successors to the interest Mercader in the fishpond,
they, at best, stepped into his shoes. Again, the nature of an
action is determined by the allegations of the complaint. At
any rate, since the venue was properly laid when the
complaint was filed, said venue cannot, subsequently,
become improper in consequence of issues later raised by
any of the intervenors. The court having legally acquired
authority to hear and decide the case, it cannot be divested
of that authority by said intervenors. "An intervention cannot
alter the nature of the action and the issues joined by the
original parties thereto
Issue:
25. GREGORIO F. ORTEGA, TOMAS O. DEL CASTILLO, JR., and
BENJAMIN T. BACORRO, petitioners,
vs.
HON. COURT OF APPEALS, SECURITIES AND EXCHANGE
COMMISSION and JOAQUIN L. MISA,respondents.
Ruling:
FACTS:
The law firm of ROSS, LAWRENCE, SELPH and
CARRASCOSO was duly registered in the Mercantile
Registry and reconstituted with the Securities and
Exchange Commission
there were several subsequent amendments to the
articles of partnership
until it eventually became BITO, MISA & LOZADA as
senior partners
and respondents Ortega, Del Castillo and Bacorro as
junior partners
later on PT wrong RS informing them of his resignation
saying that the partnership ceased to be mutually
satisfactory
subsequently PT filed a petition for dissolution and
liquidation of partnership
decision was rendered in favor of RS enjoining parties to
abide by the provisions of agreement concerning
liquidation held that pship is for specific undertaking,
not one at will
SEC reversed decision held withdrawal of Atty. Misa
dissolved pship: BEING a pship at will, the law firm could
be dissolved by any partner at anytime, such as by his
withdrawal therefrom, regardless of good faith or bad
faith, since no partner can be forced to continue in the
partnership against his will
Misa asked for appointment of receiver
During pendency of appeal, ATTY. Bito and Lozada both
DIED
CA affirmed in toto, HELD: (a) that Atty. Misa's
withdrawal from the partnership had changed the
relation of the parties and inevitably caused the
dissolution of the partnership; (b) that such withdrawal
was not in bad faith; (c) that the liquidation should be to
the extent of Attorney Misa's interest or participation in
the partnership which could be computed and paid in
the manner stipulated in the partnership agreement; (d)
that the case should be remanded to the SEC Hearing
Officer for the corresponding determination of the value
of Attorney Misa's share in the partnership assets; and
(e) that the appointment of a receiver was unnecessary
as no sufficient proof had been shown to indicate that
the partnership assets were in any such danger of being
lost, removed or materially impaired.
1) WON Pship at will? YES
2) WON withdrawal of Misa dissolved pship regardless
of good or bad faith?
3) WON Misas demand for dissolution of pship so that
he can get physical partition of pship was not made
in BF?
1. YES, PSHIP AT WILL. Duration: The partnership shall
continue so long as mutually satisfactory and upon
the death or legal incapacity of one of the partners,
shall be continued by the surviving partners.
2. BF ONLY RESULTS IN LIABILITY FOR DAMAGES. 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 4but that it can result in a liability for
damages.
The dissolution of a partnership is the change in the
relation of the parties caused by any partner ceasing
to be associated in the carrying on, as might be
distinguished from the winding up of, the
business. 8 Upon its dissolution, the partnership
continues and its legal personality is retained until
 the complete winding up of its business culminating
in its termination.
The term "retirement" must have been used in the
articles, as we so hold, in a generic sense to mean
the dissociation by a partner, inclusive of resignation
or withdrawal, from the partnership that thereby
dissolves it.
3. DID NOT ACT IN BF. In view of the interpersonal
conflict, court held that it would not be right to let
partners remain in pship under such atmosphere of
animosity, and against their will. For as long as
reasons for withdrawal is not contrary to dictates of
justice and fairness, bad faith cannot be said to
characterize the act. There must be a conscious and
intentional design to do a wrongful act or a
dishonest purpose or moral obliquity.
26. PRIMELINK PROPERTIES AND DEVELOPMENT
CORPORATION and RAFAELITO W. LOPEZ, Petitioners,
vs.
MA. CLARITA T. LAZATIN-MAGAT, JOSE SERAFIN T. LAZATIN,
JAIME TEODORO T. LAZATIN and JOSE MARCOS T.
LAZATIN, Respondents.
partnership is dissolved, as in this case when the trial court
rescinded the joint venture agreement, the innocent party
has the right to wind up the partnership affairs.
With the rescission of the JVA on account of
petitioners fraudulent acts, all authority of any partner to act
for the partnership is terminated except so far as may be
necessary to wind up the partnership affairs or to complete
transactions begun but not yet finished. On dissolution, the
partnership is not terminated but continues until the winding
up of partnership affairs is completed. Winding up means the
administration of the assets of the partnership for the
purpose of terminating the business and discharging the
obligations of the partnership.
It must be stressed, too, that although the Lazatins acquired
possession of the lands and the improvements thereon, the
said lands and improvements remained partnership property,
subject to the rights and obligations of the parties, inter se, of
the creditors and of third parties and subject to the outcome
of the settlement of the accounts between the parties,
absent any agreement of the parties in their JVA to the
contrary (here no agreement in the JVA as to winding
up). Until the partnership accounts are determined, it cannot
be ascertained how much any of the parties is entitled to, if
at all.

In 1994, Primelink Properties and the Lazatin siblings entered

into a joint venture agreement whereby the Lazatins shall
contribute a huge parcel of land and Primelink shall develop
the same into a subdivision. For 4 years however, Primelink
failed to develop the said land. So in 1998, the Lazatins filed a
complaint to rescind the joint venture agreement with prayer
for preliminary injunction. In said case, Primelink was
declared in default or failing to file an answer and for asking
multiple motions for extension. The trial court eventually
ruled in favor of the Lazatins and it ordered Primelink to
return the possession of said land to the Lazatins as well as
some improvements which Primelink had so far over the
property without the Lazatins paying for said improvements.
This decision was affirmed by the Court of Appeals. Primelink
is now assailing the order; that turning over improvements to
the Lazatins without reimbursement is unjust; that the
Lazatins did not ask the properties to be placed under their
possession but they merely asked for rescission.
ISSUE: Whether or not the improvements made by Primelink
should also be turned over under the possession of the
Lazatins.
HELD: Yes. In the first place, even though the Lazatins did
specifically pray for possession the same (placing of
improvements under their possession) is incidental in the
relief they prayed for. They are therefore entitled possession
over the parcel of land plus the improvements made thereon
made by Primelink.
In this jurisdiction, joint ventures are governed by the laws of
partnership. Under the laws of partnership, when a