December 10, 1990 - Paras, C.J.

including amount of loan secured by Pahamotang in favor of
the partnership, the two shall become owners of all equipment

contributed by Pahamotang. After this, the two continued the
partnership without any written agreement or reconstitution of
theirEDE.
articles
of partnership.
SUMMARY: Maglana and Rojas executed their articles of co-partnership called
It had
an indefinite term, was registered with
the SEC, and had a Timer License. Later, Agustin Pahamitang became an
industrial
Subsequently,
partner
Rojas
andentered
anotherinto
articles
a management
of co-partnership
contract with
was executed. The term of the second co-partnership was fixed to 30 years. After
three wrote
executed
conditional
sale
of
CMS some
Estatetime,
Inc. the
Maglana
himaregarding
his
contribution
interest in the partnership where Magalana and Rojas shall purchase the interest,
share, and
participation
of Pahamotang.
It was
to the capital
investments
as well
as his duties
as logging
agreed that, after payment of such including the loan secured by Pahamotang,
the two shall
owners
of not
all equipment
superintendent.
Rojas become
replied that
he will
be able to comply
contributed by Pahamotang. The two continued the partnership without any
written
or reconstitution
of the
the latters
articles share
of
with
both.agreement
Maglana then
told Rojas that
will
partnership. Subsequently, Rojas entered into a contarct with CMS Estate. Maglana
reminded
him profits.
of his contribution
to sharing
the capital
just be 20%
of the net
Such was the
from 1957
investments and his duties to the partnership. Rojas said he would not be able
to comply.
Maglana
told or
Rojas
that the
latter
is only
to 1959
without
complaint
dispute.
Rojas
took
funds from
entitled to 20% of the profits, which was the sharing from 1957-1959 without
Rojas more
took funds
the partnership
whichnotified
thedispute.
partnership
than from
his contribution.
Maglana
was more than his share. Maglana notified Rojas that he had dissolved the partnership.
Rojas
filed anthe
action
against Magallana.
Rojas that he
dissolved
partnership.
Rojas filedThe
an action
CFI ruled that the partnership of the two after Pahamotang left was one
de facto
and at
The SC of
said
that it was
against
Maglana
forwill.
the recovery
properties
and not,
accounting
considering that the first partnership was never dissolved. With regard to
issue of unilateral
dissolution, the SC held that
of the
the partnership
and damages.
Maglana had the power to do so.
CFI RULING:
o The partnership of Maglana and Rojas after
DOCTRINE: Under Article 1830, par. 2 of the Civil Code, even if there is a specified
term, one partner
can
cause
its facto
dissolution
Pahamotang
retired is
one
of de
and atbywill; the
expressly withdrawing even before the expiration of the period, with or without sharing
justifiable
is not
of cause.
profits Of
andcourse,
losses ifisthe
on cause
the basis
of actual
justified or no cause was given, the withdrawing partner is liable for damages but contributions;
in no case can he be compelled to remain in the
firm. With his withdrawal, the number of members is decreased, hence, the dissolution.
And
in whatever
he maywere
viewacquired
the
o there is no
evidence
theseway
properties
by
situation, the conclusion is inevitable that Rojas and Maglana shall be guided in thethe
liquidation
of
the
partnership
by
the
provisions
partnership funds thus it should not belong to it;
of its duly registered Articles of Co-Partnership; that is, all profits and losses of
partnership
shalltobe
divided "share
andofshare
o the
neither
is entitled
damages;
the letter
Maglana in
alike" between the partners.
effect dissolved the partnership;
o sale of forest concession is valid and binding and should
FACTS:
be considered as Maglanas contribution;
Maglana and Rojas executed their Articles of Co-partnership
o Rojas must pay or turn over to the partnership the
called Eastcoast Development Enterpises (EDE) which had
profits he received from CMS and pay his personal
an indefinite term of existence and was registered with the
account to the partnership;
SEC and had a Timber License. One of the EDEs purposes was
o Maglana must be paid 85k which he shouldve received
to apply or secure timber and/or private forest lands and to
but was not paid to him and must be considered as his
operate, develop and promote such forests rights and
contribution
concessions. Maglana shall manage the business affairs while
Rojas shall be the logging superintendent. All profits and losses
shall be divided share and share alike between them.
RULING: PREMISES CONSIDERED, the assailed decision of the
Later on, the two availed the services of Agustin Pahamotang
Court of First Instance of Davao, Branch III, is hereby MODIFIED
as industrial partner and executed another articles of coin the sense that the duly registered partnership of Eastcoast
partnership with the latter. The purpose of this second
Development Enterprises continued to exist until liquidated and
partnership was to hold and secure renewal of timber license
that the sharing basis of the partners should be on share and
and the term of which was fixed to 30 years.
share alike as provided for in its Articles of Partnership, in
The three executed a conditional sale of interest in the
accordance with the computation of the commissioners. We also
partnership wherein Maglana and Rojas shall purchase the
hereby AFFIRM the decision of the trial court in all other respects.
interest, share and participation in the partnership of
Pahamotang. It was also agreed that after payment of such
ROJAS v. MAGLANA
December 10, 1990|Paras, C.J. |
Digester: Alexis Bea
WHETHER OR NOT THE PARTNERSHIP CARRIED ON

AFTER THE SECOND PARTNERSHIP WAS A DE FACTO
PARTNERSHIP AND AT WILLNO
There was no intention to dissolve the first partnership upon
the constitution of the second as everything else was the same
except for the fact that they took in an industrial partner:
o they pursued the same purposes, the capital
contributions call for the same amounts, all subsequent
renewals of Timber License were secured in favor of the
first partnership, all businesses were carried out under
the registered articles.
For all intents and purposes therefore, the First Articles of
Partnership were only amended, in the form of Supplementary
Articles of Co-Partnership.
On the other hand, there is no dispute that the second
partnership was dissolved by common consent. Said dissolution
did not affect the first partnership which continued to exist.
Significantly, Maglana and Rojas agreed to purchase the
interest, share and participation in the second partnership of
Pahamotang and that thereafter, the two (Maglana and Rojas)
became the owners of equipment contributed by Pahamotang.
Maglana even reminded Rojas of his obligation to contribute
either in cash or in equipment, to the capital investment of the
partnership as well as his obligation to perform his duties as
logging superintendent. This reminder cannot refer to any
other but to the provisions of the duly registered Articles of CoPartnership.
WHETHER OR NOT MAGLANA MAY UNILATERALLY
DISSOLVE THE PARTNERSHIPYES
As there are only two parties when Maglana notified Rojas that
he dissolved the partnership, it is in effect a notice of
withdrawal.
Under Article 1830, par. 2 of the Civil Code, even if there is a
specified term, one partner can cause its dissolution by
expressly withdrawing even before the expiration of the
period, with or without justifiable cause.
Of course, if the cause is not justified or no cause was given,
the withdrawing partner is liable for damages but in no case
can he be compelled to remain in the firm.
With his withdrawal, the number of members is decreased,
hence, the dissolution.
And in whatever way he may view the situation, the conclusion
is inevitable that Rojas and Maglana shall be guided in the
liquidation of the partnership by the provisions of its duly
registered Articles of Co-Partnership; that is, all profits and
losses of the partnership shall be divided "share and share
alike" between the partners.
But an accounting must first be made and which in fact was
ordered by the trial court and accomplished by the
commissioners appointed for the purpose.
According to the Commissioners report, Rojas is not entitled
to any profits as he failed to give the amount he had
undertaken to contribute thus, had become a debtor of the
partnership. Maglana cannot be liable for damages as Rojas
abandoned the partnership thru his acts and also took funds in
an amount more than his contribution

December 10, 1990 - Paras, C.J.

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December 10, 1990 - Paras, C.J.

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including amount of loan secured by Pahamotang in favor of

the partnership, the two shall become owners of all equipment

WHETHER OR NOT THE PARTNERSHIP CARRIED ON

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