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4#56!7 8" 97

lalnLlffs: C8LCC8lC l. C81LCA, 1CMAS C. uLL CAS1lLLC, !8., and
8Ln!AMln 1. 8ACC88C

uefendanL: CCu81 Cl ALALS, SLCu8l1lLS Anu LxCPAnCL
CCMMlSSlCn and !CACuln L. MlSA

onenLe: vlLug, !"

CASL: ALLy. Mlsa assoclaLed hlmself wlLh hereln plalnLlffs. Mlsa reslgned
from Lhe parLnershlp on Lhe ground LhaL parLnershlp has ceased Lo be
muLually saLlsfacLory", and as such asked for llquldaLlon of hls shares,
especlally ln connecLlon wlLh Lhe Lwo floors of Lhe bulldlng.

1he SLC hearlng offlcer ruled LhaL ALLy. Mlsa's reslgnaLlon dld noL
dlssolve Lhe parLnershlp, buL Lhls was reversed by SLC en banc on Lhe
ground LhaL Lhe parLnershlp was a parLnershlp aL wlll.

1he Supreme CourL ruled LhaL Lhe law flrm was a parLnershlp aL wlll
because Lhere was no speclflc duraLlon for lL. 1haL lL was consLlLuLed for
a purpose does noL change lLs characLer because under Lhe law.,
parLnershlps consLlLuLed for a purpose" are Lhose for a parLlcular
pro[ecL, and Lherefore sLlll for a perlod. 1he law flrm, belng a
parLnershlp aL wlll can Lherefore be dlssolved by reLlremenL of any one
of Lhe parLners. Such parLner ls noL llable for anyLhlng, unless hls
reLlremenL was of bad falLh. ln Lhls case, ALLy. Mlsa dld noL have bad
falLh and ls Lherefore noL llable for damages.

uCC18lnL: lor as long as Lhe reason for wlLhdrawal of a parLner ls noL
conLrary Lo Lhe dlcLaLes of [usLlce and falrness, nor for Lhe purpose of
unduly vlslLlng harm and damage upon Lhe parLnershlp, bad falLh
cannoL be sald Lo characLerlze Lhe acL. 8ad falLh, ln Lhe conLexL here
used, ls no dlfferenL from lLs normal concepL of a consclous and
lnLenLlonal deslgn Lo do a wrongful acL for a dlshonesL purpose or moral
obllqulLy.

:79;!#4<%=>
! !anuary 4, 1937 ! 8CSS, LAW8LnCL, SLLP and CA88ASCCSC
was duly reglsLered ln Lhe MercanLlle 8eglsLry
! AugusL 4, 1948 ! Lhe above-menLloned law flrm was
reconsLlLuLed wlLh Lhe SecurlLles and Lxchange Commlsslon on
1he SLC records show LhaL Lhere were several subsequenL
amendmenLs Lo Lhe arLlcles of parLnershlp.
! uecember 9, 1980 ! !oaquln L. Mlsa, !esus 8. 8lLo and Marlano
M. Lozada assoclaLed Lhemselves LogeLher, as senlor parLners
wlLh respondenLs Cregorlo l. CrLega, 1omas C. del CasLlllo, !r.,
and 8en[amln 8acorro, as [unlor parLners.
! lebruary 17, 1988 ! Mlsa wroLe respondenLs a leLLer whereby
he wlLhdraws from Lhe flrm of 8lLo, Mlsa and Lozada. AnoLher
leLLer ln Lhe same day sLaLed LhaL he would llke Lo meeL wlLh
Lhe parLners concernlng Lhe mechanlcs of llquldaLlon and hls
lnLeresL ln Lhe Lwo floors of Lhe bulldlng Lhey were occupylng.
! lebruary 19, 1988 ! Mlsa wroLe anoLher leLLer sLaLlng LhaL hls
reslgnaLlon ls based on Lhe facL LhaL Lhe parLnershlp has
ceased Lo be muLually saLlsfacLory"
! !une 30, 1988 ! Mlsa flled wlLh SLC's Commlsslon's SecurlLles
lnvesLlgaLlon and Clearlng ueparLmenL (SlCu) a peLlLlon for
dlssoluLlon and llquldaLlon of parLnershlp.
! March 31, 1989 ! Lhe hearlng offlcer held LhaL Mlsa's
wlLhdrawal dld noL dlssolve Lhe parLnershlp. 1he llquldaLlon wlll
be governed by Lhelr AgreemenL.
! SLC en banc ! reversed Lhe declslon of Lhe Pearlng Cfflcer and
held LhaL Lhe wlLhdrawal of ALLorney !oaquln L. Mlsa had
dlssolved Lhe parLnershlp of "8lLo, Mlsa & Lozada." 1he
Commlsslon ruled LhaL, belng a parLnershlp aL wlll, Lhe law flrm
could be dlssolved by any parLner aL anyLlme, such as by hls
wlLhdrawal Lherefrom, regardless of good falLh or bad falLh,
!"#$%&' )!*+$#*,-.) !$/ +*0,+, /."#,+, 12345 6 23478 !++&9 :;!<0.$ ;=.#+!


*!%-#>># !$$# "0+.#**#?
slnce no parLner can be forced Lo conLlnue ln Lhe parLnershlp
agalnsL hls wlll.
! CourL of Appeals ! afflrmed ln LoLo
o ALLorney !esus 8lLo and ALLorney Marlano Lozada boLh
dled, respecLlvely, SepLember 3,1991 and uecember
21,1991 durlng Lhe pendency of Lhe case wlLh CA.

?@@<6@ 54 :6 #6@4AB6=>
1. WheLher or noL Lhe CourL of Appeals has erred ln holdlng LhaL
Lhe parLnershlp of 8lLo, Mlsa & Lozada (now 8lLo, Lozada,
CrLega & CasLlllo) ls a parLnershlp aL wlll
2. WheLher or noL Lhe CourL of Appeals has erred ln holdlng LhaL
Lhe wlLhdrawal of prlvaLe respondenL dlssolved Lhe parLnershlp
regardless of hls good or bad falLh
3. WheLher or noL Lhe CourL of Appeals has erred ln holdlng LhaL
prlvaLe respondenL's demand for Lhe dlssoluLlon of Lhe
parLnershlp so LhaL he can geL a physlcal parLlLlon of parLnershlp
was noL made ln bad falLh

#6@4A<5?4%@ 7%= 7#!<C6%5@
?@@<6 ' ! WheLher or noL Lhe CourL of Appeals has erred ln holdlng
LhaL Lhe parLnershlp of 8lLo, Mlsa & Lozada (now 8lLo, Lozada, CrLega &
CasLlllo) ls a parLnershlp aL wlll ! nC. A parLnershlp LhaL does noL flx lLs
Lerm ls a parLnershlp aL wlll. 1he law flrm "8lLo, Mlsa & Lozada," and
now "8lLo, Lozada, CrLega and CasLlllo," ls lndeed such a parLnershlp.

Ma[or olnL 1: 1haL Lhe parLnershlp was a parLnershlp aL wlll ls proven
by Lhelr parLnershlp agreemenL.
Amended arLlcles of 19 AugusL 1948 does noL provlde for a
speclfled perlod or underLaklng. 1he "uu8A1lCn" clause slmply
sLaLes:
"3. uu8A1lCn. 1he parLnershlp shall conLlnue so long as
muLually saLlsfacLory and upon Lhe deaLh or legal lncapaclLy of
one of Lhe parLners, shall be conLlnued by Lhe survlvlng
parLners."

Ma[or olnL 2: 1he law flrm ls noL a parLnershlp wlLh a speclflc
underLaklng" even Lhough lL was consLlLuLed for a parLlcular purpose.
ApparenLly whaL Lhe law conLemplaLes, ls a speclflc underLaklng
or "pro[ecL" whlch has a deflnlLe or deflnable perlod of
compleLlon. 1hls ls noL Lhe case here.

?@@<6 * ! WheLher or noL Lhe CourL of Appeals has erred ln holdlng
LhaL Lhe wlLhdrawal of prlvaLe respondenL dlssolved Lhe parLnershlp
regardless of hls good or bad falLh ! nC.

Ma[or olnL 1: 1he blrLh and llfe of a parLnershlp aL wlll ls predlcaLed on
Lhe muLual deslre and consenL of Lhe parLners. 1he rlghL Lo choose wlLh
whom a person wlshes Lo assoclaLe hlmself ls Lhe very foundaLlon and
essence of LhaL parLnershlp.
Any one of Lhe parLners may, aL hls sole pleasure, dlcLaLe a
dlssoluLlon of Lhe parLnershlp aL wlll. Pe musL, however, acL ln
good falLh, noL LhaL Lhe aLLendance of bad falLh can prevenL Lhe
dlssoluLlon of Lhe parLnershlp buL LhaL lL can resulL ln a llablllLy
for damages.

Ma[or olnL 2: 1he llquldaLlon of Lhe asseLs of Lhe parLnershlp followlng
lLs dlssoluLlon ls governed by varlous provlslons of Lhe Clvll Code.
Powever, an agreemenL of Lhe parLners, llke any oLher conLracL, ls
blndlng among Lhem and normally Lakes precedence Lo Lhe exLenL
appllcable over Lhe Code's general provlslons.
ln Lhls case, Lhe parLles had an agreemenL concernlng
llquldaLlon upon dlssoluLlon of Lhe parLnershlp ! DEFEGFEDH ,2
7IJKLJL 7FMNO/JP &Q REFMKJFPHND"
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1he Lerm "reLlremenL" musL have been used ln Lhe arLlcles of
parLnershlp, ls used ln a generlc sense Lo mean Lhe dlssoclaLlon
by a parLner, lncluslve of reslgnaLlon or wlLhdrawal, from Lhe
parLnershlp LhaL Lhereby dlssolves lL.

?@@<6 1 ! WheLher or noL Lhe CourL of Appeals has erred ln holdlng
LhaL prlvaLe respondenL's demand for Lhe dlssoluLlon of Lhe parLnershlp
so LhaL he can geL a physlcal parLlLlon of parLnershlp was noL made ln
bad falLh ! nC. ALLy. Mlsa dld noL acL ln bad falLh.

Ma[or olnL 1:
ubllc respondenLs vlewed hls wlLhdrawal Lo have been spurred
by "lnLerpersonal confllcL" among Lhe parLners. lL would noL be
rlghL, we agree, Lo leL any of Lhe parLners remaln ln Lhe
parLnershlp under such an aLmosphere of anlmoslLy.

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