GR 1147; (September, 1903) (Digest)
G.R. No. L-1147, September 24, 1903
ESCOLASTICO DUTERTE Y ROSALES, plaintiff-appellant, vs. FLORENTINO RALLOS, defendant-appellee.
FACTS:
The plaintiff, Escolastico Duterte y Rosales, filed a suit claiming that he, the defendant Florentino Rallos, and one Castro were partners in the management of a cockpit. The defendant denied the existence of such a partnership. The trial court found that no partnership existed and rendered judgment in favor of the defendant. The plaintiff moved for a new trial, which was denied, prompting this appeal. The Supreme Court reviewed the evidence, which included letters from the defendant to the plaintiff referring to their cockpit accounts and the plaintiff’s admission into the partnership, as well as monthly statements of accounts for the cockpit business showing the plaintiff’s share as one-third of the profits. The defendant testified that he gave the plaintiff and Castro a share of the profits merely as friends and not as partners, while Castro corroborated the defendant’s claim, stating he received money as a present for helping at the cockpit.
ISSUE:
Whether or not the trial court’s finding that no partnership existed between the plaintiff and the defendant is plainly and manifestly against the evidence.
RULING:
Yes. The Supreme Court held that the trial court’s finding of no partnership, at least up to September 1, 1901, was plainly and manifestly against the evidence. The Court based its conclusion on the defendant’s own documents: his letters to the plaintiff, one of which explicitly stated he admitted the plaintiff into the cockpit partnership, and the monthly statements of accounts showing the plaintiff’s one-third share of the profits. These, coupled with the plaintiff’s uncontradicted services and receipt of payments, clearly established an agreement to share profits, which under Article 1689 of the Civil Code implies a partnership where losses are shared in the same manner as gains in the absence of a contrary stipulation. The defense that payments were mere gifts to friends was deemed not credible. The Court also rejected the appellee’s argument regarding the non-joinder of Castro as a party, as such objection was waived for failure to demur. The judgment of the lower court was reversed, and the case was remanded for a new trial to determine the accounting between the parties.