G.R. No. L-32502, March 18, 1903
DUHART FRERES Y CIE. vs. ERNESTO MACIAS Y CONTADOR and E. MACIAS COMMISSION IMPEX CO.

FACTS

The plaintiffs, Pedro Duhart and Eugenio Duhart (sole collective partners of the partnership “Duhart Freres & Cie.”), entered into a contract (Exhibit A) with defendant Ernesto Macias. The contract established an agency under the name “E. Macias Commission Impex Co., Ltd.” for the distribution of the plaintiffs’ products. The plaintiffs filed a complaint for rescission of the contract, alleging that Macias violated its terms by failing to open a required banking credit, pay for orders, send monthly statements, keep accounts, and forward balances and inventories. The trial court rescinded the contract, ordered Macias to pay the plaintiffs P5,919.11 with interest, and directed him to render a detailed account of the agency’s business. The defendants appealed, arguing that the contract was a joint-account partnership, not an agency, and that the plaintiffs had no right to sue in their personal names.

ISSUE

1. Whether the amendment of the complaint to name the individual partners as plaintiffs instead of the partnership invalidated a previously issued writ of attachment.
2. Whether the contract (Exhibit A) constituted a contract of agency or a joint-account partnership.
3. Whether the defendants violated the contract, justifying its rescission and the award of damages.
4. Whether the order for Macias to render an accounting was proper despite the monetary award.

RULING

1. On the amendment and attachment: The Supreme Court held that the amendment substituting the individual partners for the partnership did not constitute a substantial change in the party plaintiff. The partnership and its sole collective partners are essentially the same entity. Therefore, the writ of attachment issued in favor of the partnership remained valid and enforceable for the benefit of the partners. This issue had already been resolved in a prior certiorari proceeding ( G.R. No. 28895 ).

2. On the nature of the contract: The Court ruled that the contract was one of agency, not a joint-account partnership. A joint-account partnership requires an agreement on capital contribution and is confined to specific transactions, free from formalities. In contrast, the contract explicitly created an “agency,” limited the agent’s compensation to commissions, and did not stipulate any capital contribution from Macias. The contract’s terms aligned with the definition of a commercial agency under Article 244 of the Code of Commerce.

3. On rescission and damages: The Court found that Macias violated multiple clauses of the contract (VIII, XI, XII, and XIII), including failing to open the required banking credit, pay for orders, and maintain proper accounts. These breaches justified rescission under Clause XIX of the contract. The trial court’s award of P5,919.11 was upheld, as no sufficient reason was presented to overturn its factual findings.

4. On the order to render an accounting: The Court affirmed the order for Macias to render a detailed account of the agency’s business. This is a consequence of rescission and a general obligation of an agent under Article 1720 of the Civil Code. The monetary award and dismissal of the counterclaim did not preclude this order, as they did not encompass all transactions of the agency.

The appealed judgment was affirmed in its entirety, with costs against the defendants.