Rojas vs. Maglana, G.R. No. 30616, December 10, 1990 DIGESTED

ROJAS VS. MAGLANA FACTS: Maglana and Rojas executed their Articles of Co-partnership called “Eastcoast Development Enterpises” which had an indefinite term of existence and was registered with the SEC and had a Timber License. One of the EDE’s purposes was to apply or secure timber and/or private forest lands and to operate, develop and promote such forests rights and concessions. M shall manage the business affairs while R shall be the logging superintendent. All profits and losses shall be divided share and share alike between them. Later on, the two availed the services of Pahamotang as industrial partner and executed another articles of co-partnership with the latter. The purpose of this second partnership was to hold and secure renewal of timber license and the term of which was fixed to 30 years. Still later on, the three executed a conditional sale of interest in the partnership wherein M and R shall purchase the interest, share and participation in the partnership of P. It was also agreed that after payment of such including amount of loan secured by P in favor of the partnership, the two shall become owners of all equipment contributed by P. After this, the two continued the partnership without any written agreement or reconstitution of their articles of partnership. Subsequently, R entered into a management contract with CMS Estate Inc. M wrote him re: his contribution to the capital investments as well as his duties as logging superintendent. R replied that he will not be able to comply with both. M then told R that the latter’s share will just be 20% of the net profits. Such was the sharing from 1957 to 1959 without complaint or dispute. R took funds from the partnership more than his contribution. M notified R that he dissolved the partnership. R filed an action against M for the recovery of properties and accounting of the partnership and damages. CFI: the partnership of M and R is after P retired is one of de facto and at will; the sharing of profits and losses is on the basis of actual

contributions; there is no evidence these properties were acquired by the partnership funds thus it should not belong to it; neither is entitled to damages; the letter of M in effect dissolved the partnership; sale of forest concession is valid and binding and should be considered as M’s contribution; R must pay or turn over to the partnership the profits he received from CMS and pay his personal account to the partnership; M must be paid 85k which he should’ve received but was not paid to him and must be considered as his contribution. ISSUE: what is the nature of the partnership and legal relationship of M-R after P retired from the second partnership? May M unilaterally dissolve the partnership? SC: 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: 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. M and R agreed to purchase the interest, share and participation of P and after, they became owners of the equipment contributed by P. Both considered themselves as partners as per their letters. It is not a partnership de facto or at will as it was existing and duly registered. The letter of M dissolving the partnership is in effect a notice of withdrawal and may be done by expressly withdrawing even before expiration of the period with or without justifiable cause. As to the liquidation of the partnership it shall be divided “share and share alike” after an accounting has been made. R 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. M cannot be liable for damages as R abandoned the partnership thru his acts and also took funds in an amount more than his contribution.