CRISTOBAL BONNEVIE, ET AL., Plaintiffs-Appellants, vs. JAIME HERNANDEZ, Defendant-Appellee. G.R. No. L-5837 Facts

71. CRISTOBAL BONNEVIE, ET AL., plaintiffs-appellants, vs. JAIME HERNANDEZ, defendant-appellee.
G.R. No. L-5837
FACTS:
 This is an action for the recovery of the sum of P115,312.50, with interests, as plaintiffs' alleged
share in the profits of a partnership. Plaintiffs with other associates formed a syndicate or secret
partnership for the purpose of acquiring the plants, franchises and other properties of the
Manila Electric Co. — hereinafter called the Meralco.
 No formal articles were drawn for it was the purpose of the members to incorporate once the
deal had been consummated. But in the meantime, they elected Pedro Serranzana and David
Serrano general manager and secretary-treasurer, respectively, of the partnership.
 Negotiation for the purchase was commenced, but as it made no headway, defendant was
taken in as a member of the partnership so that he could push the deal through, and to that
end he was given the necessary power of attorney. Using partnership funds, defendant was
able to buy the Meralco properties.
 The members of the partnership proceeded with the formation of the proposed corporation,
apportioning among themselves its shares of stock in proportion to their respective
contributions to the capital of the partnership and their individual efforts in bringing about the
acquisition of the Meralco properties.
 But before the incorporation papers could be perfected, several partners, not satisfied with the
way matters were being run and fearful that the venture might prove a failure because the
business was not going well and there was a possibility of their being assessed more than their
original investments when the time came to meet the two installments of the unpaid purchase
price, expressed their desire to withdraw from the partnership and get back the money they
had invested therein.
 In accordance to the meeting held, Judge Reyes presented a resolution to the effect that
those partners who did not want to remain in the association should be allowed to withdraw
and get back their contributions.
 The resolution was approved, with the herein plaintiffs voting affirmatively, and on that same
day plaintiffs and Judge Reyes withdrew from the partnership, and, as admitted by both
parties, the partnership was then dissolved. In accordance with the terms of the resolution, the
withdrawing partners were, on the following day, reimbursed their respective contributions to
the partnership fund.
 Following the dissolution of the partnership, the members who preferred to remain in the
business went ahead with the formation of the corporation, taking in new associates as
stockholders. And defendant, on his part, in fullfilment of his trust, made a formal assignment of
the Meralco properties to the treasurer of the corporation, giving them a book value of
P365,000, in return for which the corporation issued, to the various subscribers to its capital stock,
shares of stock of the total face value of P225,000 and assumed the obligation of paying what
was still due the Meralco on the purchase price. The new corporation was named "Bicol Electric
Company."
 Two years from their withdrawal from the partnership, when the corporate business was already
in a prosperous condition, plaintiffs brought the present suit against Jaime Hernandez, claiming
a share in the profit the latter is supposed to have made from the assignment of the Meralco
properties to the corporation,
ISSUE: W/N THE PLAINTIFFS HAVE CAUSE OF ACTION IN CLAIMING A SHARE?

RULING:
 We find no merit in the petition. In the first place, the profit alleged to have been realized from
the assignment of the Meralco properties to the new corporation, the Bicol Electric Company,
is more apparent than real.
 It is true that the value set for those properties in the deed of assignment was P365,000 when
the acquisition price was only P122,000. But one should not jump to the conclusion that a profit,
consisting of the difference between the two sums was really made out of the transaction, for
the assignment was not made for cash but in payment for subscriptions to shares of stock in the
assignee, and while those shares had a total face value of P225,000, this is not necessarily their
real worth. Needless to say, the real value of the shares of stock of a corporation depends upon
the value of its assets over and above its liabilities. It does not appear that the Bicol Electric
Company had any assets other than those acquired from the Meralco.
 In the second place, assuming that the assignment actually brought profit to the partnership,
it is hard to see how defendant could be made to answer for plaintiffs' alleged share thereof.
It does not appear that plaintiffs have ever asked for a liquidation, and as will presently be
explained no liquidation was called for because when plaintiffs withdrew from the partnership
the understanding was that after they had been reimbursed their investment, they were no
longer to have any further interest in the partnership or its assets and liabilities. Moreover, the
stipulation of facts made at the hearing does not bear out the claim that defendant was the
managing partner of the partnership, for if there appears that the partnership had its general
manager in the person of Pedro Serranzana, who upon the formation of the new corporation
also became its vice-president and general manager.
 As a general rule, when a partner retires from the firm, he is entitled to the payment of what
may be due him after a liquidation. But certainly no liquidation is necessary where there is
already a settlement or an agreement as to what the retiring partner shall receive. In the instant
case, it appears that a settlement was agreed upon on the very day the partnership was
dissolved. For when plaintiffs and Judge Jaime Reyes withdrew from the partnership on that
day they did so as agreed to by all the partners, subject to the only condition that they were
to be repaid their contributions or investments within three days from said date. And this
condition was fulfilled when on the following day they were reimbursed the respective amounts
due them pursuant to the agreement.
 As testified to by Judge Reyes, one of the withdrawing partners, it was clearly understood that
upon their withdrawal and return to them of their investment they would have nothing more to
do with the association. It must, therefore, have been the intention or understanding of the
parties that the withdrawing partners were relinquishing all their rights and interest in the
partnership upon the return to them of their investment.
 And, indeed, if the agreement was that the withdrawing partners were still to have
participation in the subsequent transactions of the partnership so that they would have a share
not only in the profits but also in the losses, it is not likely that their investment would have been
returned to them
 It is, therefore, our conclusion that the acceptance by the withdrawing partners, including the
plaintiffs, of their investment in the instant case was understood and intended by all the parties
as a final settlement of whatever rights or claim the withdrawing partners might have in the
dissolved partnership. Such being the case they are now precluded from claiming any share in
the alleged profits, should there be any, at the time of the dissolution.

CRISTOBAL BONNEVIE, ET AL., Plaintiffs-Appellants, vs. JAIME HERNANDEZ, Defendant-Appellee. G.R. No. L-5837 Facts

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71. CRISTOBAL BONNEVIE, ET AL., plaintiffs-appellants, vs. JAIME HERNANDEZ, defendant-appellee.

G.R. No. L-5837

ISSUE: W/N THE PLAINTIFFS HAVE CAUSE OF ACTION IN CLAIMING A SHARE?

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