Aldecoa v Warner, Barnes August 6, 1910 ALDECOA & CO.,plaintiff-appellant, CO.,plaintiff-appellant, vs. WARNER, BARNE & CO., L!D.,"efen"ant-appellee. L!D.,"efen"ant-appellee. TORRES, J.: DOCTRINE: #t DOCTRINE: #t is a $ule %f la gene$all' gene$all' %(se$ve" %(se$ve" t)at )e )% ta*es +)a$ge %f t)e anageent anageent %f an%t)e$s an%t)e$s p$%pe$t' p$%pe$t',, is (%un" (%un" ie"iatel' t)e$eafte$ t% $en"e$ a++%unts +%ve$ing )is t$ansa+ti%ns an" t)at it is ala's t% (e un"e$st%%" t)at all a++%unts $en"e$e" ust (e "ul' su(stantiate" (' v%u+)e$s. FACTS: /laintiff Al"e+%a & C% is a $egula$ +%lle+tive e$+antile ass%+iati%n %$ganie" in R/, R/, $egiste$e" in e$+antile $egist$', an" at p$esent in liui"ati%n Defen"ant Wa$ne$, Ba$nes & C%., Ltd . is a 2%int st%+* e$+antile fi$ %$ganie" in Englan", $egiste$e" in t)e e$+antile $egist$' %f 3anila, an" )as "%ne an" is s till "%ing (usiness in R/. Wa$ne$ Lt". a+ui$e" t)e (usiness %f Wa$ne$, Wa$ne$, Ba$nes & C%. & assue" all its ass ets, lia(ilities & %(ligati%ns. o Wa$ne$ C%. is in t)e (usiness %f pu$+)asing )ep in t)e pue(l%s %f Legaspi an" !a(a+%, !a(a+%, Al(a' f%$ t)e pu$p%se %f ($inging it t% 3anila t% sell it f%$ e4p%$tati%n Al"e+%a (e+ae inte$este" in t)e sai" (usiness %f Wa$ne$ C% & f%$e" a joint-account a joint-account artners!i 5 artners!i 5 it ag$eeing t% s)a$e euall' in t)e gains an" l%sses. ept. 6, 19078 Al"e+%as legal $ep$esentative in liui"ati%n file" a etition "or #anda#us in #anda#us in C:# 3anila against Wa$ne$, Ba$nes & C%., Lt". +%n+e$ning t)e $en"e$ing %f a++%unts pe$taining t% t)e anageent %f t)e (usiness %f a 2%int-a++%unt pa$tne$s)ip . o $RA%ER: Wa$ne$ $RA%ER: Wa$ne$ $en"e$ a++%unting +%$$e+t its e$$%$s & %issi%ns %n a++%unt $en"e$e" pa' sus n%t +$e"ite" t% Al"e+%a an" f%$ $it %f an"aus t% fi4 te$ 5n 5+ 5+ Wa$ne$ Lt" is t% liui"ate t)e (usiness & sell t)e p$%pe$ties "ist$i(uting t)e p$%+ee"s (eteen t)e Bot! a&ree t!at8 t!at8 /a$tne$s)ip as esta(lis)e" t)$%ug) ve$(al ag$eeent )e$e(' t)e' s)%ul" s)a$e euall' t)e p$%fits an" l%sses %f t)e (usiness %f gat)e$ing an" st%$ing )ep in Al(a' an" selling it in 3anila f%$ e4p%$tati%n, an" t)at Wa$ne$, Ba$nes & C%., Lt"., as t)e anage$ %f t)e sai" 2%int-a++%unt pa$tne$s)ip. Disa&ree#ent 'et( t!e arties: :#R!. Date )en t)e pa$tne$s)ip as f%$e" an" (egan (usiness in Al(a' ;A8 De+. 1, 1<9< W8 =une >0, 1<99? o ECOND. W)et)e$ W)et)e$ t)e anaging fi$ "i" $en"e$ a++%unts, a++%unts, "ul' ve$ifie" (' v%u+)e$s, v%u+)e$s, %f its anageent anageent f$% t)e "ate %f t)e o %$ganiati%n %f t)e pa$tne$s)ip o !@#RD. W)et)e$ W)et)e$ e$$%$s an" %issi%ns, %issi%ns, p$e2u"i+ial p$e2u"i+ial t% Al"e+%a Al"e+%a & C%., e4ist in t)e pa$tne$s)ip pa$tne$s)ip (%%*s an" in its a++%unts, an" )et)e$, in t)e anageent %f t)e sai" (usiness, f$au"ulent a+ts e$e + %itte", als% t% Al"e+%as in2u$' an", :OR!@. W)et)e$ W)et)e$ t)e pa$tne$s)ip pa$tne$s)ip p$%pe$t' p$%pe$t' s)%ul" (e in+lu"e" in+lu"e" in t)e liui"ati%n liui"ati%n %f t)e sai" (usiness an" in t)e a++%unts o appe$taining t% t)e 'ea$ 190>, )en t)e e4isten+e %f t)e pa$tne$s)ip +ae t% an en". FIRST( DATE $ARTNERS)I$ WAS FOR*ED De+. 1, 1<9<8 Al"e+%a (e+ae inte$este" in t )e sai" (usiness %f Wa$ne$ C% & f %$e" a 2%int-a++%unt pa$tne$s)ip 5 it Alt)%ug) ent$ies s)% t)e pa$tne$s)ip t% )ave +%en+e" %n =une >0, 1<99, its %pe$ati%ns s)%ul" )ave +%en+e" an" "i" +%en+e %n De+. 1, 1<9<, %n )i+) "ate t)e 2%int-a++%unt pa$tne$s)ip +%en+e". SECOND: NON-RENDERIN+ OF ACCONTS Wa$ne$ Lt" is t)e su++ess%$ t% all t)e $ig)ts an" %(ligati%ns %f Wa$ne$ C%, a%ng )i+) is t)at %f (eing past & +u$$ent anage$ %f t)e sai" 2%int-a++%unt pa$tne$s)ip an" is o'li&ed to render accounts suorted ' roo"s, and to li.uidate t!e 'usiness As anage$, it negle+te" t % + %pl' it) its "ut' es pe+iall' p$es+ $i(e" in Art( /01 o" t!e Code o" Co##erce. Co##erce . #ts "ut' is in)e$ent t% its p%siti%n as anage$ %f t)e 2%int-a++%unt pa$tne$s)ip, )i+) is t)at %f $en"e$ing an a++%unt it) v%u+)e$s, #n spite %f t)e "ean" a"e up%n it, Wa$ne$ Lt" "i" n%t $en"e$ a++%unt a++%unt an" )as als% e4p$essl' "enie" t)e $ig)t %f Al"e+%a t% e4aine e4aine t)e v%u+)e$s, +%ntenting itself it) f%$a$"ing +%pies %f t)e ent$ies in its (%%*s, )i+) ent$ies +%ntain e$$%$s an" %issi%ns ;"is+usse" in t)$ee? T)IRD( ERRORS 2 O*ISSIONS, FRAD3ENT ACTS 3anage$s & gene$al pa$tne$s %f Wa$ne$ C%., a$e als% e(e$s & "i$e+t%$s %f Wa$ne$ Lt"., an" a$e t)e sae %nes )% a"itte" Al"e+%a as a pa$ti+ipant pa$ti+ipant in %f t)e (usiness. (usiness. !)e' unlafull', unlafull', ali+i%usl', ali+i%usl', an" +$iinall' +$iinall' +%nspi$e" +%nspi$e" it) t)e pe$s%ns pe$s%ns )% e$e anaging anaging t)e +%e$+ial fi$ %f Al"e+%a f$% 1<99 t% 190>, t% "ef$au" t)e latte$ %f its inte$est in t)e sai" 2%int-a++%unt pa$tne$s)ip. !)e' (%ug)t t)e silen+e %f sai" anage$s it) $espe+t t% t)e %pe$ati%ns %f t)e 2%int-a++%unt pa$tne$s)ip "u$ing De+. 1, 1<9<, t% =une, >0, 1<99, an" als% it) $espe+t t% t)e e$$%$s an" %issi%ns in t)e a++%unts $elating t% t)e se+%n" se. %f 1<99, an" t)%se $elating t% 1900 t% 190>. ai" f$au"ulent a+ts e$e n%t *n%n t% t)e pa$tne$s %f Al"e+%a until its anage$s, in +%llusi%n it) t)e anage$s %f Wa$ne$, )a" +ease" t% )%l" t)ei$ p%siti%ns, until afte$ t)e >1st %f De+., 1906, B' $eas%n %f t)is +%nspi$a+' t% "ef$au" Al"e+%a, Wa$ne$ )ave (een (enefite". #t +ann%t f%$ulate its +lais it) e4a+tness until Wa$ne$ Lt". $en"e$s $en"e$s an a++%unt, a++%panie" (' v%u+)e$s sin+e t)e$e a' (e g$eate$ e$$%$s f%un" if v%u+)e$s e$e t% (e e4aine" E$$%$s an" %issi%ns f%un" in t)e ent$ies %f t)e (%%*s *ept (' Wa$ne$ Lt" as anage$ %f t)e 2%int-a++%unt pa$tne$s)ip a$e as f%ll%s8 o ;a-d ? =ul' 10 De+. De+. 6, 1<99 De+. De+. >1, 1<99 Ap$. Ap$. >0, 1900 =an. =an. >1, 1901 8 Wa$ne$ Wa$ne$ Lt". +lai +lai pu$+)ase pu$+)ase %f )ep (ut (ut "% n%t give t)e p$i+e $e+eive" f$% t)e sale t)e$e%f an" e$el' +$e"it it at a +e$tain pes%s a pi+ul ;e4. 1> pes%s5 pi+ul?, )en t)e ave$age a$*et p$i+e at t)at tie as )ig)e$ ;e4. 16 pes%s5pi+ul? t)us in2u$ing Al"e+%a t% +e$tain a%unts as "iffe$en+e o (e? (e? /$%fit f$% t)e p$essing %f )ep $ealie" in 3anila as %itte" (' Wa$ne$ Lt" in t)e a++%unts a++%unts in2u$ing Al"e+%a in t)e su %f /19,0<.1 o (f ? Outstan"ing a++%unts a$e "e(ite" in t)e su %f /,10.>6, )ile %nl' /,769. a$e +$e"ite" ;g ? 19008 n"ul' in+lu"e" an ite %f net a++%unt )i+) s)%ul" (e st$i+*en %ut, as it "%es n%t pe$tain t% t)is (usiness. @alf %f su o s)%ul" (e +$e"ite" t% Al"e+%a o ;h? De+. 6, 1<998 Wa$ne$ Lt". "e"u+te" f$% t)e p$%fits an insu$an+e p$eiu 5+ is %(taine" in +%llusi%n 5 Al"e+%as anage$s in2u$ing Al"e+%a o ;i ? De+. >1, 190>8 A +apital %f /0* ($%ug)t in (' Al"e+%a 5+ (ea$s F inte$est as un"ul' +$e"ite" t% t)e 2%int-a++%unt •
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; j) De+. >1, 1908 Al"e+%a +)a$ge" it) 6 %nt)s inte$est f%$ allege" l%sses 5+ as in+%$$e+t sin+e a++%unts s)% n% l%sses, (ut p$%fits ;*? :%$ ent$ies in 190 & 190>, Wa$ne$ Lt"., $%te a l%e$ p$i+e t% ualit' ites 5+ )as )ig)e$ p$i+es f%$ 5+ ust (e +$e"ite" o t% Al"e+%a Gave "corriente buenaH ;+u$$ent g%%"?, t% t)e g$a"e )i+) as +lassifie" as "abaca suerior H ;supe$i%$ )ep? /$i+e %f "corriente ordinario" ;+u$$ent %$"ina$'?, t% t)e )ep a$*e" as "corriente buena" ;+u$$ent g%%"? /$i+e %f "segunda suerior" ;se+%n" supe$i%$?, t% )at is "corrienteH %$ H+u$$ent,H o ;! ? !%tal +%st %f p$%pe$ties ;instea" %f +as) +apital? ($%ug)t ( ' Wa$ne$ Lt" ;!%tal8 /<6,00.? is %itte" f$% t)e a++%unts. /1*8 1 galvanie"-i$%n-$%%fe" a$e)%use, it) )ep p$ess 1 )%use %f st$%ng ate$ials an" t)e l%t %n )i+) it stan"s, in !a(a+%, /.*8 1 sall a$e)%use %f st$%ng ate$ials, in !a(a+%, %$t) /*8 1 a$e)%use %f st$%ng ate$ials, it) p$ess an%t)e$ a$e)%use %f st$%ng ate$ials an" 1 )%uses %f st$%ng ate$ials, t%get)e$ it) t)e l%ts %n )i+) t)e' a$e (uilt. /0*8 a$e)%uses it) > )ep p$esses, an" 1 )%use %f st$%ng ate$ials, it) t)ei$ +%$$esp%n"ing l%ts FORT)( 3I4IDATION !)e %pe$ati%ns )aving (een +l%se" %n De+. >1, 190>, Wa$ne$ Lt"., )as n%t $ealie" up%n t)e assets %f t)e fi$ (' selling t)e p$%pe$t' )i+) +%nstitutes its +apital. #t $efuses t% fu$nis) Al"e+%a t)e "%+uents $eui$e" f%$ t)ei$ e4ainati%n an" ve$ifi+ati%n, an" als% $efuses t% $ealie t)e fi$ assets (' selling t)e a$e)%uses, )%uses, an" %t)e$ p$%pe$t' )i+) +%nstitute t)e +apital /RAIER8 :%$ C%u$t %$"e$ Wa$ne$ Lt". t%: o Ren"e$ t% t)e +%u$t an a++%unt, a++%panie" (' inv%i+es, $e+eipts, an" v%u+)e$s %f t)e Al(a' (usiness, (eginning De+. 1, 1<9<, t)e "ate %n )i+) t)e pa$tne$s)ip as f%$e", an" +%$$e+ting in it t)e e$$%$s an" %issi%ns o Wa$ne$ Lt". t% +$e"it an" pa' Al"e+%a t)e sus allege" t% (e "ue t% Al"e+%a up%n t)e sus %itte" an" f%$ t)e "iffe$en+e (eteen t)e a%unts in+%$$e+tl' "e(ite" an" +$e"ite", f$% t)e $espe+tive "ates %n )i+) t)e' s)%ul" appea$, if +%$$e+tl' ente$e" o Afte$ a++%unts )ave (een $en"e$e" an" "is+usse", 2u"gent (e ente$e" f%$ an' (alan+e )i+) a' appea$ in fav%$ %f t)e Al"e+%a in+lu"ing t)e sus +laie" /RAIER8 :%$ $it %f an"aus t% fi4 a te$ it)in )i+) Wa$ne$ Lt". is t% liui"ate t)e (usiness, selling t)e p$%pe$ties af%$eenti%ne" an" "ist$i(uting t)e p$%+ee"s (eteen t )e Warner5s A#ended Ans6er 6it! Counterclai# =%int-a++%unt pa$tne$s)ip as f%$e" (eteen t)e %n 7une 18, 9;; 5 ag$eeent t)at %f t)e $esults, )et)e$ l%sses %$ gains, appe$taine" t% Al"e+%a. #t a"its t)at Jsai" (usiness +%ntinue" un"e$ t)e anageent %f Wa$ne$, as anage$ %f t)e sai" 2%int-a++%unt pa$tne$s)ip, until De+. >1, 190>. @%eve$, it "enies all t)e %t)e$ allegati%ns + %ntaine" in t)e sai" pa$ag$ap)s. De"enses: :#R!. Du$ing t)e pe$i%" t)at t)e sai" 2%int-a++%unt pa$tne$s)ip e4iste", Wa$ne$, $en"e$e" t% Al"e+%a 2ust an" t$ue a++%unts %f its o t$ansa+ti%ns as anage$ %f t)e sai" pa$tne$s)ip, )i+) a++%unts )ave (een app$%ve" (' t)e Al"e+%a, it) t)e e4+epti%n %f t)%se in 190>, an" as t% t)e latte$, t)at t)e sae e$e %(2e+te" t% (' Al"e+%a fi$ s%lel' up%n t)e g$%un"s enti%ne" in +lause ;*?, )i+) %(2e+ti%ns a$e )%ll' unf%un"e". ECOND. 3%$e t)an 'ea$s )ave e4pi$e" (eteen t)e tie t)e allege" $ig)t %f a+ti%n a++$ue" t% Al"e+%a an" t)e "ate %f t)e o filing %f t)e +%plaint. $raer: A(s%lve" f$% t)e +%plaint, it) t)e +%sts against Al"e+%a Wa$ne$ Lt". %ve" f%$ a "isissal %f t)e +ase CFI ;De+. 6 1908 Disisse" +%plaint it) $espe+t t% t)e petiti%n f%$ t)e $en"e$ing %f an a++%unt, ve$ifie" (' inv%i+es et+., pe$taining t% t)e pe$i%" +%p$ise" "ro# t!e 'e&innin& o" t!e 'usiness to Dec( 19, 9;8/ #t )%eve$, %pene" t)e n" pe$i%" %f t)e t$ial it) $espe+t t% t)e a++%unt f%$ t)e 6!ole ear 9;81 o Al"e+%a file" a $itten e4+epti%n an" ann%un+e" )is intenti%n t% f%$a$" t)$%ug) $egula$ +)annels, a (ill %f e4+epti%ns o #t als% %ve" f%$ a ne t$ial %n t)e g$%un" t)at t)e evi"en+e "i" n%t 2ustif' t)e 2u"gent $en"e$e", )i+) as %penl' an" anifestl' +%nt$a$' t% t)e eig)t %f t)e evi"en+e an" t% la C:# "enie" %ti%n t% )i+) e4+epti%n as ta*en (' Al"e+%a !)us, Al"e+%a "ul' file" a p$%pe$ (ill %f e4+epti%ns )i+) as +e$tifie" t% an" f%$a$"e" t% C, t%get)e$ it) all t)e "%+uenta$' an" %$al evi"en+e p$%"u+e" at t)e t$ial. ISSE: W)et)e$ Al"e+%a is entitle" t% a $it %f an"aus against Wa$ne$ t% $en"e$ a++%unting %n t)ei$ 2%int a++%unt pa$tne$s)ip, +%$$e+t its e$$%$s & %issi%ns %n a++%unts $en"e$e", pa' sus n%t +$e"ite" t% Al"e+%a an" t% liui"ate t)e (usiness & sell t)e p$%pe$ties "ist$i(uting t)e p$%+ee"s (eteen t)eK ;E$$%$s %n t)e a++%unts, f$au" (' anage$s, & a+uisiti%n %f p$%pe$t' ust fi$st (e p$%ve" as t% $en"e$ing a++%unts as+e$tain fi$st "ate )en pa$tne$s)ip +%en+e" (ut t)at (et. =une >0, 1<99 t% De+. >1, 190 )as (een $en"e$e"? RATIO: The resent state of this cause resu!ting fro the rendering of #$% judgent a&es it iossib!e for S# to decide in a fina! anner the 'arious issues brought u and contro'erted b the !itigants, for, though it be granted as ro'ed that arner Ltd has in fact rendered accounts ertaining to the ears fro June *+, , to /ec. *, +0, as found in the said judgent, there sti!! reain to be decided the four oints or 1uestions of fact before secified. in effe+t, it ill still )ave t% $ean" t% C:# f%$ fin"ing %f fa+ts (ut it ill "e+i"e as t% t)e issuesM FIRST( Date 6!en t!e artners!i 6as "or#ed and 'e&an 'usiness in Al'a Aldecoa: /a$tne$s)ip as +%en+e", %$ as f%$e", %n De+. 1, 1<9<, Warner 3td(8 #t "i" n%t $e(ut evi"en+e su(itte" (' Al"e+%a alt)%ug) it ave$$e" t)at t)e 2%int-a++%unt pa$tne$s)ip (egan %n =une >0, 1<99 SC: Wa$ne$ Lt". )as n%t p$%ve" its ave$ent. #f %n+e $ean"e" t% C:#, Wa$ne$ s)all still n%t %ffe$ p$%%f it)in su+) pe$i%" as t)e +%u$t a' see fit, it ill (e p$%pe$ t% fin" in a++%$"an+e it) t)e value %f t)e evi"en+e a""u+e" (' Al"e+%a an" t% a"vise Wa$ne$ Lt". t% $en"e$, it)in a fi4e" pe$i%", a++%unts, ve$ifie" (' v%u+)e$s, %f t)e anageent %f t)e pa$tne$s)ip (usiness an" pe$taining t% t)e 7 %s. f$% De+. 1, 1<9<, t% =une 9, 1<99 #n vie %f t)e evi"en+e a""u+e" (' Al"e+%a, if Wa$ne$ Lt". "%es n%t p$%"u+e %t)e$ evi"en+e in $e(uttal, t)e' ust, f%$ s%e $eas%n, (e e4p$essl' $e2e+te" in t)e 2u"gent, if t)e' a$e n%t t% (e ta*en int% a++%unt in $ea+)ing t)e +%n+lusi%ns %$ in +%nsi"e$ing t)e +ase up%n t)e e$its. o
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SECOND( W!et!er t!e #ana&in& "ir# did render accounts, dul veri"ied ' vouc!ers, o" its #ana&e#ent "ro# t!e date o" t!e or&ani
0, 1<99, t% De+. >1, 190, inasu+) as t)e ve$' evi"en+e int$%"u+e" (' Al"e+%a s)%e" t)at t)e sai" a++%unts )a" (een $en"e$e" an" e$e aroved ' it o App$%val seen in t)e +%nte4t %f its %n lette$s ;=ul' 7, 1907 & :e(. 19, 190>? Al"e+%a is n%t entitle" an" )as n% $ig)t %f a+ti%n t% +%pel Wa$ne$ Lt". t% $en"e$ a++%unts ertaining to that eriod , t)e' )aving al$ea"' (een $en"e$e" an" "ul' app$%ve". )e 6!o ta=es c!ar&e o" t!e #ana&e#ent o" anot!er>s roert, is 'ound i##ediatel t!erea"ter to r ender accounts coverin& !i s transactions? and t!at it is al6as to 'e understood t!at all accounts rendered #ust 'e dul su'stantiated ' vouc!ers( CASE AT BAR: B%t) litigating pa$ties a"it t)at Wa$ne$ Lt"., as t)e anage$ %f t)e (usiness %f t)e 2%int-a++%unt pa$tne$s)ip f%$e". !)us, it is unuesti%na(le t)at it as an" is Wa$ne$ Lt"s "ut' t% $en"e$ a++%unts %f t)e anageent %f t)e (usiness, as it artia!! )as "%ne. Alt)%ug) Wa$ne$ Lt". )as n%t p$%ve", as it shou!d ha'e done, t)at it +%plie" it) its "ut' %f $en"e$ing a++%unts %f its anageent, sin+e t)e lette$s t)eselves e4)i(ite" (' Al"e+%a, an" "ul' aut)enti+ate" as (eing $itten (' t)e latte$, p$%ve t)at Wa$ne$ Lt". "i" $en"e$ a++%unts f$% =une >0, 1<99, t% De+. >1, 190, n% legal $eas%n e4ists f%$ n%t a++epting C:#s fin"ing t)at it !ad 'een roved t!at accounts 6ere rendered ertainin& to t!e eriod #entioned and t!at t!e said accounts 6ere aroved ' t!e Aldecoa( Al"e+%as a+ts, in a++epting an" app$%ving a++%unts t )at e$e $en"e$e" t% it an" )i+) %nl' (egin it) =une >0, 1<99, ipl' t)at it ag$ee" t% t)e +lai a"e (' Wa$ne$ Lt". t)at t)e pa$tne$s)ip +%en+e" %n t)e sai" "ate B! EEN O, %n+e t)at it is p$%ve" t)at t)e a+tual "ate %n )i+) t)e pa$tne$s)ip as f%$e" as De+. 1, 1<9<, an" t)at it is n%t s)%n t)at Wa$ne$ Lt". )as $en"e$e" a++%unts +%$$esp%n"ing t% t)e 7 %nt)s su(seuent t% t)e sai" "ate, t)e a++eptati%n an" app$%val %f a++%unts $en"e$e" sin+e =une 0, 1<99, does not e@cuse nor release t!e #ana&er o" t!e artners!i, Warner 3td(, "ro# co#lin& 6it! its un.uestiona'le dut o" renderin& accounts coverin& t!e a"oresaid seven #ont!s( !)e p$esupti%n ust (e sustaine" until p$%%f t% t)e +%nt$a$' is p$esente". 3%$e%ve$, t)e app$%val %f a++%unts f$% =une >0, 1<99, t% De+. >1, 190, DOE NO! #3/LI t)at t)e sai" app$%ve" a++%unts +%p$ise t)%se pe$taining t% t)e 7 %nt)s ;De+. 1, 1<9< t% =une 9, 1<99?, (e+ause Wa$ne$ Lt", t)e a++%untant, "enies t)at t)e pa$tne$s)ip +%en+e" %n De+. 1st ;ave$$ing t)at it as =une >0, 1<99?. On Wa$ne$ Lt"s $en"e$ing t)%se a++%unts, it is t% (e resu#ed t!at it did so "ro# t!e date 6!ic! it avers as t)at %f t)e f%$ati%n %f t)e pa$tne$s)ip an" t)e (eginning %f t)e (usiness, an" it is t)e$ef%$e evi"ent t)at it !as not rendered accounts ertainin& to t!e #ont!s #entioned( T)IRD( Errors and o#issions, rejudicial to Aldecoa 2 Co in t!e artners!i 'oo=s and in its accounts, and "raudulent acts 6ere co##itted in #ana&e#ent o" t!e said 'usiness, On+e t)e a++%unts $en"e$e" (' Wa$ne$ Lt"., )ave (een app$%ve", Al"e+%a is not entitled afte$a$"s t% +lai a $evisi%n %f t)e sae, NLE it s)%s t)at t)e$e as f$au", "e+eit, e$$%$, %$ ista*e in t)e app$%val %f t)e sai" a++%unts. n"e$ t)is )'p%t)esis, Al"e+%a & C%. a$e strictl o'li&ed to rove t!e errors, o#issions, and "raudulent acts att$i(ute" t% Wa$ne$ Lt"., in +%nne+ti%n it) t)e a++%unts al$ea"' $en"e$e", an" app$%ve" (' t)e, in %$"e$ t)at t)e sae a' (e $evise" in a++%$"an+e it) la an" t)e 2u$isp$u"en+e %f t)e +%u$ts. ;/ast%$ 's. Ni+asi%? !)e app$%val %f an a++%unt "%es n%t p$event its su(seuent $evisi%n, %$ at least its +%$$e+ti%n, if it is p$%ve" in a satisfa+t %$' anne$ t)at t)e$e as deceit and "raud or error and o#ission in it. ;A$ts. 16, 166, Civil C%"e.? La >0, title 11, t) /a$ti"a8 HThat is recise! 2hat 2e sa shou!d be obser'ed, in a!! other accounts that en a&e aong these!'es, in connection 2ith the things 2hich be!ong to the. 3ot2ithstanding that the a ac&no2!edge the sett!eent of the accounts bet2een the and roise ne'er to bring the u again, if it be known in truth that he who gave the account or had the things in his keeping, concealed anything deceitfully, or committed other fraud against those who have a share in such thing, then neither the suit, nor such previous status and promise shall avail; o On the contrar, 2e sa that the a sue hi to coe! hi to reed the deceit he coitted against the, and to a a!! the daages and !osses that ha'e accrued to the b reason thereof4 ro'ided, ho2e'er, he esecia!! sha!! not ha'e reaired the deceit that he coitted." CASE AT BAR: #t "%es n%t atte$ t)at t)e a++%unts pe$taining t% t)e 'ea$s +%p$ise" (eteen =une >0, 1<99, an" De+. >1, 190, a' )ave (een app$%ve" (' Al"e+%a. W!enever Aldeco s!all succeed in rovin& t!at t!ere 6as error, o#ission, "raud, or deceit in t!ese accounts, t!e #a 'e dul revised, accordin& to la6. FORT)( W!et!er t!e artners!i roert s!ould 'e included in t!e li.uidation o" t!e said 'usiness and in t!e accounts aertainin& to t!e ear 9;81, 6!en t!e e@istence o" t!e artners!i ca#e to an end( Wa$ne$ Lt". ag$ees t)at Al"e+%a )as n%t 'et app$%ve" t)e a++%unts t)at t)e f%$e$ $en"e$e", pe$taining t% 190>, t)e last 'ea$ %f t)e e4isten+e %f t)e 2%int-a++%unt pa$tne$s)ip. !)us, C:# p$%vi"e" t)at t)e t$ial s)%ul" +%ntinue it) $espe+t t% t)e sai" a++%unts in %$"e$ t)at Al"e+%a ig)t a*e su+) %(2e+ti%ns an" st ateents in $ega$" t% t)e sae as )e "eee" p$%pe$, an" a""u+e t)e evi"en+e +%n"u+ive t% p$%ve )is +lai, in a++ %$"an+e it) la. It is one o" t!e duties o" t!e #ana&er o" a joint-account artners!i, to li.uidate t!e assets t!at "or# t!e co##on roert, and to state t!e result o'tained t!ere"ro# in t!e "inal renderin& o" t!e accounts 6!ic! !e is to resent at t!e conclusion o" t!e artners!i( A$t. > %f t)e C%"e %f C%e$+e8 H!)e liui"ati%n s)all (e effe+te" (' t)e anage$, an" afte $ t)e t$ansa+ti%ns )ave (een +%n+lu"e" )e s)all $en"e$ a p$%pe$ a++%unt %f its $esults.H CASE AT BAR: /a$tne$s)ip )e$ein +%n+lu"e" its t$ansa+ti%ns %n De+. >1, 190>. Wa$ne$ Lt"., t)e anage$ %f t)e pa$tne$s)ip, in "e+la$ing t)e pa$tne$s)ips t$ansa+ti%ns +%n+lu"e" an" in $en"e$ing "ul' ve$ifie" a++%unts %f its $esults, o6es t!e dut to include t!erein t!e roert and e""ects 'elon&in& to t!e artners!i in co##on( C %f pain appl'ing t)e e$+antile +%"e ;1<70?8 H#n +ase %f t)e liui"ati%n %f a +%pan' %f t)is *in" ;"en%inate" 2%int-a++%unt pa$tne$s)ip?, inasu+) as t)e sale %f t)e fi$ assets is ne+essa$il' un+e$tain an" eventual, +%nsi"e$ing t)e g$eate$ %$ lesse$ selling p$i+e t)at a' (e %(taine" f$% t)e p$%pe$t' an" effe+ts )i+) +%p$ise su+) assets, t)e p$i+e $e+eive" s)%ul" (e all%tte" in t)e sae p$%p%$ti%n as t)at fi4e" in t)e +%nt$a+t f%$ t)e "ivisi%n %f t)e p$%fits an" l%sses, f%$ %t)e$ise %ne %f t)e pa$tne$s %ul" (e (enefite" t% t)e "et$ient an" l%ss %f )is +%pa$tne$s.H N% pe$s%n s)%ul" en$i+) )iself $%ngfull' at t)e e4pense %f an%t)e$. •
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CONC3SION: )%ul" it (e "ul' an" full' p$%ve" t)at Wa$ne$ Lt". a+ui$e" $ealt' in t)e nae an" at t)e e4pense %f t)e 2%int-a++%unt pa$tne$s)ip, it is 2ust t)at, in liui"ating t)e p$%pe$t' %f +%%n %ne$s)ip, su+) $ealt' s)%ul" (e "ivi"e" (eteen t)e pa$tne$s in t)e sae anne$ as e$e t)e p$%fits an" l%sses "u$ing t)e e4isten+e %f t)e (usiness, f$% t)e (eginning %f t)e pa$tne$s)ip t% t)e "ate %f its "iss%luti%n. DIS$OSITIE: C:# et asi"e. !)is +ause s)all (e $etu$ne" t% C:#, a++%panie" (' a +e$tifie" +%p' %f t)is "e+isi%n, f%$ t)e )%l"ing %f a ne t$ial f%$ t)e pu$p%se %f a final "e+isi%n %f all t)e uesti%ns inv%lve" in t)is litigati%n. /u$p%se8 :#R!. Wa$ne$ a"vise" t)at it ust, it)in a fi4e" pe$i%", $en"e$ an a++%unt, ve$ifie" (' v%u+)e$s, %f its anageent %f t)e (usiness %f t)e 2%int-a++%unt pa$tne$s)ip. o A++%unting s)%ul" (e f$% De+. 1, 1<9<, t% =une 9, 1<99, an" t% t)e 1 %nt)s %f 190> #: f%un" t )at pa$tne$s)ip +%en+e" %n De+. 1, 1<9< as allege" (' Al"e+%a OR A++%unting $est$i+te" t% 1 %nt)s %f 190>, in t)e a++%unts %f )i+) last pe$i%" ust (e in+lu"e" all t)e p$%pe$t' t)at is f%un" t % o (el%ng t% t)e sai" pa$tne$s)ip #: p$%ven t)at pa$tne$s)ip (egan %n =une >0, 1<99 ECOND. #n t)e e4ainati%n %f t)e a++%unts t)at a' (e f%un" t% )ave (een $en"e$e", t)e pa$ties a' allege an" p$%ve fa+ts +%n"u+ive t% t)ei$ $evisi%n %$ app$%val (esi"es availing t)eselves %f t)e evi"en+e al$ea"' a""u+e" at t$ial. !@#RD. Wit) $espe+t t% t)e a++%unts f$% =une >0, 1<99, t% De+. >1, 190, al$ea"' app$%ve", C:# s)all p$%+ee" in a++%$"an+e it) la, "ul' +%nsi"e$ing t)e e$$%$s, %issi%ns, ista*es an" f$au"ulent %$ "e+eitful a+ts t)at )ave (een allege" %$ a' spe+ifi+all' (e allege" in $e2e+ting t)e sai" app$%ve" a++%unts, as ell as t)e evi"en+e int$%"u+e" (' (%t) pa$ties, an" it s)all (e +a$eful t% "e+i"e in its final 2u"gent all t)e issues $aise" (eteen t)e pa$ties in t)e +%u$se %f t)is litigati%n an" t% p$%vi"e su+) $ee"ies as a$e p$%pe$ in $ega$" t% t)ei$ $espe+tive +lais. •
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