Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 30286 September 12, 1929
M. TEAGUE, plaintiff-appellant,
vs.
H. MARTIN, J. T. MADDY and L.H. GOLUCKE, defendants-appellees.
Abad Santos, Camu and Delgado, for appellant.
J.W. Ferrier for appellees.
STATEMENT
Plaintiff alleges that about December 23, 1926, he and the defendants formed a partnership for the operation of a fish business and similar commercial transactions, which by mutual contest was called "Malangpaya Fish Co," with a capital of P35,000, of which plaintiff paid P25,000, the defendant Martin P5,000, P2,500, and Golucke P2,500. That as such partnership, they agreed to share in the profits and losses of the business in proportion to the amount of capital which each contributed. That the plaintiff was named the general manager to take charge of the business, with full power to do and perform all acts necessary to carry out of the purposes of the partnership. That there was no agreement as to the duration of the partnership. That plaintiff wants to dissolve it, but that the defendants refused to do so. A statement marked Exhibit A, which purports to be a cash book, is made a part of the complaint. That the partnership purchased and now owns a lighter called Lapu-Lapu, and a motorship called Barracuda, and other properties. That the lighter and the motorship are in the possession of the defendants who are making use of them, to the damage and prejudice of the plaintiff, for any damage which plaintiff may sustain. That it is for the best interest of the parties to have a receiver appointed pending this litigation, to take possession of the properties, and he prays that the Philippine Trust Company be appointed receiver, and for judgment dissolving the partnership, with costs.
Each of the defendants filed a separate answer, but the same nature, in which they admit that about December 10, 1926, the plaintiff and the defendants formed a partnership for the purpose of the equipment of the Manila Fish Co., Inc., and the conduct of a fish business. That the terms of the partnership were never evidenced by a truth and in fact, the partnership was formed under a written plan, of which each member received a copy and to which all agreed. That by its terms the amount of the capital was P45,000, of which the plaintiff agreed to contribute P35,000. That P20,000 of the capital was to be used for the purchase of the equipment of the Manila Fish Co., Inc. and the balance placed to the checking account o the new company.
It is then alleged that "the new owners agree to duties as follows:
Capt. Maddy will have charger of the Barracuda and the navigating of the same. Salary P300 per month.
Mr. Martin will have charge of the southern station, cold stores, commissary and procuring fish. Salary P300 per month.
Mr. Teague will have charge of selling fish in Manila and purchasing supplies. No salary until business is on paying basis, then the same as Maddy or Martin.
The principal office shall be in Manila, each party doing any business shall keep books showing plainly all transactions, the books shall be available at all time for inspections of any member of the partnership.
If Mr. Martin or Mr. Maddy wishes at some future time to repurchase a larger share in the business Teague agrees to sell part of his shares to each on the basis double the amount originally invested by each or ten thousand to Martin and five thousand to Maddy.
This offer will expire after two years.
That no charge was ever made in the terms of said agreement of copartnership as set forth above except that it was later agreed among the partners that the business of the partnership should be conducted under the trade name "Malangpaya Fish Company."
That as shown by the foregoing quoted agreement the agreed capital of the copartnership was P45,000 and not P35,000 as stated in the third paragraph of plaintiff's amended complaint, and the plaintiff herein, M. Teague, bound himself and agreed to contribute to the said copartnership the sum of P35,000 and not the sum of P25,000 as stated in the third paragraph of his said amended complaint.
Defendant Martin specificaly denies the "plaintiff was named general manager of the partnership," and alleged "that all the duties and powers of the said plaintiff were specifically set forth in the above quoted written agreement and that no further or additional powers were ever given the said plaintiff." But he admits the purchase of the motorship Barracuda, by the partnership. He denies that Exhibit A is a true or correct statement of the cash received and paid out by or on behalf of the partnership, or that the partnership over purchased or that it now owns the lighter Lapu-Lapu, "And/ or any other properties" as mentioned in said ninth paragraph, except such motorship and a smoke in the house," or that the defendants are making use of any of the properties of the partnership, to the damage and prejudice of the plaintiff, or that they do not have any visible means to answer for any damages, and alleges that at the time of the filing of the complaint, partnership in cold storage, of the value of P6,000, for which he has never accounted on the books of the partnership or mentioned in the complaint, and defendant prays that plaintiff's complaint be dismissed, and that he be ordered and required to render an accounting , and to pay to partnership the balance of his unpaid subscription amounting to P10,000.
In his answer the defendant Maddy claimed and asserted that there is due and owing him from the plaintiff P1,385.53, with legal interest, and in his amended answer, the defendant Martin prays for judgment for P615.49.
To all which the plaintiff made a general and specific denial.
Upon such issues the lower court on April 30, 1928, rendered the following judgment:
In view of the foregoing considerations, the court decrees:
That the partnership, existing among the parties in this suit, is hereby declared dissolved; that all the existing properties of the said partnership are ordered to be sold at public auction; and that all the proceeds and other unexpended funds of the partnership be used, first, to pay he P529.48 tax to the Government of the Philippine Islands; second, to pay debts owing to third persons; third, to reimburse the partners for their advances and salaries due; and lastly, to return to the partners the amounts they contributed to the capital of the association and any other remaining such to be distributed proportionately among them as profits:
That the plaintiff immediately render a true and proper account of all the money due to and received by him for the partnership.
That the barge Lapu-Lapu as well as the Ford truck No. T-3019 and adding machine belong exclusively to the plaintiff, M. Teague, but the said plaintiff must return to and reimburse the partnership the sum of P14,032.26 taken from its funds for the purchase and equipment of the said barge Lapu-Lapu; and also to return the sum of P1,230 and P228 used for buying the Ford truck and adding machine, respectively:
That the sum of P,1512.03 be paid to the defendant, J. T. Maddy, and the sum of P615.49 be paid to defendant, H. Martin, for their advances and their unpaid salaries, with legal interest from October 27, 1927, until paid; that the plaintiff pay the costs of this action.
So ordered.
May 16, 1928, plaintiff filed a motion praying for an order "directing the court's stenographic notes taken by them of the evidence presented in the present case, as soon as possible." This motion was denied on May 19th, and on May 16th, the court denied the plaintiff's motion for reconsideration. To all of which exceptions were duly taken.
June 7, 1928, plaintiff filed a petition praying, for the reasons therein stated, that the decision of the court in the case be set aside, and that the parties be permitted to again present their testimony and to have the case decided upon its merits. To which objections were duly made, and on June 28, 1928, the court denied plaintiff's motion for a new trial. To which exceptions were duly taken, and on July 10, 1928, the plaintiff filed a motion in which he prayed that the period for the appeal interposed by the plaintiff be suspended, and that the order of June 28, 1928, be set aside, "and that another be entered ordering the re-taking of the evidence in this case." To which objections were also filed and later overruled, from all of which the plaintiff appealed and assigns the following errors:
I. The trial court erred in not having confined itself, in the determination of this case, to the question as to whether or not it is proper to dissolve the partnership and to liquidate its assets, for all other issues raised by appellees are incidental with the process of liquidation provided for by law.
II. The trial court erred in not resolving the primary and most important question at issue in his case, namely, whether or not the appellant M. Teague was the manager of the unregistered partnership Malangpaya Fish Company.
III. The trial court erred in holding that the appellant had no authority to buy the Lapu-Lapu, the Ford truck and the adding machine without the consent of his copartners, for in accordance with article 131 of the Code of Commerce the managing partner of a partnership can make purchases for the partnership without the knowledge and/or consent of his copartners.
IV. The trial court erred in holding that the Lapu-Lapu, the Ford truck and the adding machine purchased by appellant, as manager of the Malangpaya Fish Company, for and with funds of the partnership, do not form part of the assets of the partnership.
V. The trial court erred in requiring the appellant to pay to the partnership the sum of P14,032.26, purchase price, cost of repairs and equipment of the barge Lapu-Lapu; P1,230 purchase price of the adding machine, for these properties were purchased for and they form part of the assets of the partnership.
VI. The trial court erred in disapproving appellant's claim for salary and expenses incurred by him for and in connection with the partnership's business.
VII. The trial court erred in approving the claims of appellees J.T. Maddy and H. Martin and in requiring the appellant to pay them the sum of P1,512.03 and P615.49 respectively.
VIII. The trial court erred in not taking cognizance of appellant's claim for reimbursement for advances made by him for the partnerships, as shown in the statement attached to the complaint marked Exhibit A, in which there is a balance in his favor and against the partnership amounting to over P16,000.
X. Lastly, considering the irregularities committed, the disappearance of the stenographic notes for a considerable length of time, during which time changes in the testimonies of the witnesses could have been made and the impossibility of having an accurate and complete transcript of the stenographic notes, the trial court erred in denying appellant's petition for the retaking of the evidence in this case.
JOHNS, J.:
By their respective pleadings, all parties agreed that there was a partnership between them, which appears at one time to have done a good business. In legal effect, plaintiff asked for its dissolution and the appointment of a receiver pendente lite. The defendants did not object to the dissolution of the partnership, but prayed for an accounting with the plaintiff. It was upon such issues that the evidence was taken and the case tried. Hence, there is no merit in the first in the first assignment of error. Complaint is made that the lower court did not specifically decide as to whether or not the plaintiff was the manager of the unregistered partnership. But upon that question the lower court, in legal effect, followed and approved the contention of the defendants that the duties of each partners were specified and defined in the "plans for formation of a limited partnership," in which it is stated that Captain Maddy would have charge of the Barracuda and its navigation, with a salary of P300 per month, and that Martin would have charge of the southern station, cold stores, commisary and procuring fish, with a salary of P300 per month, and that the plaintiff would have charge of selling fish in Manila and purchasing supplies, without salary until such time as the business is placed on a paying basis, when his salary would be the same as that of Maddy and Martin, and that the principal office of the partnership "shall keep books showing plainly all transactions," which shall be available at all time for inspection of any of the members.
It will thus be noted that the powers and duties of Maddy Martin, and the plaintiff are specifically defined, and that each of them was more or less the general manager in his particular part of the business. That is to say, that Maddy's power and duties are confined and limited to the charge of the Barracuda and its navigation, and Martin's to the southern station, cold stores, commissary and procuring fish, and that plaintiff's powers and duties are confined and limited to "selling fish in Manila and the purchase of supplies." In the selling of fish, plaintiff received a substantial amount of money which he deposited to the credit of the company signed by him as manager, but it appears that was a requirement which the bank made in the ordinary course of business, as to who was authorized to sign checks for the partnership; otherwise, it would not cash the checks.
In the final analysis, the important question in this case is the ownership of the Lapu-Lapu, the Ford truck, and the adding machine. The proof is conclusive that they were purchased by the plaintiff and paid for him from and out of the money of the partnership. That at the time of their purchase, the Lapu-Lapu was purchased in the name of the plaintiff, and that he personally had it registered in the customs house in his own name, for which he made an affidavit that he was its owner. After the purchase, he also had the Ford truck registered in his won name. His contention that this was done as a matter of convenience is not tenable. The record shows that when the partnership purchased the Barracuda, it was registered in the customs house in the name of the partnership, and that it was a very simple process to have it so registered.
Without making a detailed analysis of the evidence, we agree with the trial court that the Lapu-Lapu, the Ford truck, and the adding machine were purchased by the plaintiff and paid for out of the funds of the partnership, and that by his own actions and conduct, and the taking of the title in his own name, he is now estopped to claim or assert that they are not his property or that they are the property of the company. Again, under his powers and duties as specified in the tentative, unsigned written agreement, his authority was confined and limited to the "selling of fish in Manila and the purchase of supplies." It must be conceded that, standing alone, the power to sell fish and purchase supplies does not carry with it or imply the authority to purchase the Lapu-Lapu, or the Ford truck, or the adding machine. From which it must follow that he had no authority to purchase the lighter Lapu-Lapu, the Ford truck, or the adding machine, as neither of them can be construed as supplies for the partnership business. While it is true that the tentative agreement was never personally signed by any member of the firm, the trial court found as a fact, and that finding is sustained by the evidence, that this unsigned agreement was acted upon and accepted by all parties as the basis of the partnership. It was upon that theory that the lower court allowed the defendant s Maddy and Martin a salary of P300 per month and the money which each of them paid out and advanced in the discharged of their respective duties, and denied any salary to the plaintiff, for the simple reason that the business was never on a paying basis.
Much could be said about this division of powers, and that Maddy and Martin's duties were confined and limited to the catching and procuring of fish, which were then shipped to the plaintiff who sold them on the Manila market and received the proceeds of the sales. In other words, Maddy and Martin were supplying the fish to plaintiff who sold them under an agreement that he would account for the money.
Upon the question of accounting, his testimony as to the entries which he made and how he kept the books of the partnership is very interesting:
Q. Then this salary does not take into consideration the fact that you claim the company is very badly in debt? —
A. Well, I put the salary in there.
Q. I am asking you if that is true? —
A. I do not think I will decide that, I think it will be decided by the court.
Q. I will ask you to answer the question? —
A. You asked me my opinion and I said that I am entitled to it.
xxx xxx xxx
I am not on trial as a bookkeeper; if my lawyers won't object to the question I will object myself; I am not on trial as a bookkeeper; I keep my books any way I want to, put in what I want to, and I leave out anything I don't choose to put in, —
xxx xxx xxx
Q. You have your own bookkeeping? —
A. Well, I run my business to suit myself, I put in the books what I want to, and I leave out what I want to, and I have a quarter of a million pesos to show for it, —
xxx xxx xxx
Q. Did you not say that you paid yourself a salary in August because you made a profit? —
A. Yes. This profit was made counting the stock on hand and equipment on hand, but as far as cash to pay this balance, I did not have it. when I wanted a salary I just took it. I ran things to suit myself.
xxx xxx xxx
Q. In other words in going against these partners you are going to tax them for the services of your attorney? —
A. You are mistaken; I am not against them. I paid this out for filing this complaint and if the honorable court strikes it out, all right. I think it was a just charge. When I want to sue them the Company can pay for my suit.
Q. Would you have any objection to their asking for their attorney's fees from the company as partners also in the business? —
A. Yes.
Q. You would object to your partners having their attorney's fees here paid out of the copartnership like you have had yours paid? —
A. Yes, that is the way I do my business.
To say the least, this kind of evidence does not appeal to the court. This case has been bitterly contested, and there is much feeling between the parties and even their respective attorneys. Be that as it may, we are clearly of the opinion that the findings of the lower court upon questions of fact are well sustained by the evidence. Plaintiff's case was tried on the theory that the partnership was the owner of the property in question, and no claim was made for the use of the Lapu-Lapu, and it appears that P14,032.26 of the partnership money was used in its purchase, overhauling, expenses and repairs. That in truth and in fact the partnership had the use and benefit of the Lapu-Lapu in its business from sometime in May until the receiver was appointed on November 11, 1927, or a period of about six months, and that the partnership has never paid anything for its use. it is true that there is no testimony as to the value of such use, but the cost of the Lapu-Lapu and the time of its use and the purpose for which it was used, all appear in the record. For such reason, in the interest of justice, plaintiff should be compensated for the reasonable value of the time which the partnership made use of the Lapu-Lapu.
All things considered, we are of the opinion that P2,000 is a reasonable, amount which the plaintiff should receive for its use.
In all things and respects, the judgment of the lower court as to the merits is affirmed, with the modification only that P2,000 shall be deducted from the amount of the judgment which was awarded against the plaintiff, such deduction to be made for and on account of such use of the Lapu-Lapu by the partnership, with costs against the appellant. So ordered.
Avanceña, C.J., Street, Villamor, Romualdez and Villa-Real, JJ. concur.
Johnson, J., reserves his vote.
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