Pecson and Moran entered into an agreeme nt for the printing of posters featuring the dele gates of the 1971 Constitutional Convention o
That 95k posters were supposed to be printed and sold at P2/each
o
That each would contribute P15k
o
That Moran will supervise the work, while Pecson would rec eive a P1k monthly commission
Pecson gave Moran P10k for which the latter issued a receipt
Only 2k posters were printed, but each was sold for P5 o
Moran then executed 2 promissory notes in favor of Pecson
Pecson then filed an action for the r ecovery of a sum of money for the return of his P10k contribution, payment of his share in the profits that the partnership would have earned
TC: each party is entitled to rescind re scind the contract since both failed to fulfill their respective promises (Moran – the printing of the 95k posters; Pecson – the P15k contribution)
CA: Moran must pay Pecson, among others, the amount of expected profits and the latter’ s
commission in the partnership Issue:
WON Moran is obliged to give Pecson the amount of expected profits from their partnership.
Held:
No, he is not.
Rule: when a partner who has undertaken t o contribute a sum of money fails to do so, he becomes a debtor of the partnership for whatever he may have promised to contribute (Art. 1786) and for interests and damages from the time he should have complied with his obligations (Art. 1788)
Being a contract of partnership, each partner must share in the profits and losses of the venture, for that is the essence of o f partnership. o
Even in the assurance of the ot her partner that they would earn a huge amount of profits, in the absence of fraud, the other cannot claim a right to recover the highly speculative profits
o
In the present case, the fantastic nature of expected profits is obvious that various factors need to be considered
o
The failure of COMELEC to proclaim all 320 candidates of the Constitutional Convention on time was a major factor in Moran’s decision not to go o n with the printing of all
95,000 posters
o
Hidden risks in any business venture have to be considered
However, as it was shown that Pecson gave money to Moran (P10k) which the latter used to print the first batch of posters, and since these posters were sold and profits were realized from such sale, Pecson is entitled to recover his share of such profits
