GR 413; (Febuary, 1903) (Digest)
G.R. No. 413 : February 2, 1903
JOSE FERNANDEZ, plaintiff-appellant, vs. FRANCISCO DE LA ROSA, defendant-appellee.
FACTS:
Plaintiff Jose Fernandez alleged that in January 1900, he entered into a verbal partnership agreement with defendant Francisco de la Rosa for the purchase and operation of cascoes (barges) for hire in Manila. Each partner was to contribute funds for the purchases, with profits to be divided proportionately. Fernandez claimed he contributed ₱300 for the purchase of Casco No. 1515 in January and an additional ₱825 for the purchase of Casco No. 2089 in March, with both titles taken in De la Rosa’s name. When the parties later attempted to draft formal articles of partnership, they failed to agree on terms, and De la Rosa denied the partnership’s existence. De la Rosa later returned ₱1,125 to Fernandez but refused to render an accounting. Fernandez filed an action seeking a declaration of the partnership’s existence, recognition of his interest in the cascoes, and an accounting. The trial court ruled in favor of De la Rosa, prompting Fernandez’s appeal.
ISSUE:
1. Whether a partnership existed between Fernandez and De la Rosa based on their transactions.
2. If a partnership existed, whether it was terminated by De la Rosa’s return of the ₱1,125 to Fernandez.
RULING:
The Supreme Court reversed the trial court’s decision.
1. On the Existence of a Partnership: The Court found that a partnership was indeed constituted. The essential elements of a partnership under Article 1665 of the Civil Codemutual contribution to a common fund and a joint interest in the profitswere present. The evidence established that Fernandez contributed money specifically for the joint purchase of the two cascoes, which De la Rosa accepted and used for that purpose. The failure of the parties to later agree on formal written articles or on minor details of their agreement did not negate the existence of the essential contract, which could be formed in any manner under Article 1667 of the Civil Code. The law implies the incidents of the partnership relation, including the distribution of profits and losses, where the parties have not expressly stipulated them.
The case was remanded for further proceedings consistent with the ruling, specifically for the defendant to render an accounting of his administration of the partnership property and business.