G.R. No. 28185 , December 29, 1928
NICANOR JACINTO, as administrator of the estate of the deceased Silvino Lim, plaintiff-appellee, vs. BERNARDO & CO., ET AL., defendants-appellants.

FACTS

1. Pedro Claudio and others organized a mercantile collective partnership named “Bernardo & Company.” Its articles allowed for *cuentas en participacion* (joint accounts).
2. Article 8 of the partnership agreement stipulated that a participant in a joint account could separate only after the annual balance was made, by giving written notice to the manager, and would be bound by the profits or losses shown in that balance.
3. Silverio Lim was admitted as a participant in a joint account. Upon his death, his daughter and sole heir, Josefa Lim de Barcelon, sought to withdraw his capital from the partnership.
4. After several verbal demands, Josefa sent a written letter of demand to the manager, Pedro Claudio, on April 17, 1925, formally requesting the withdrawal of her father’s capital. A follow-up letter was sent on May 25, 1925, which was acknowledged but not acted upon.
5. Nicanor Jacinto, as administrator of Silverio Lim’s estate, filed a lawsuit to recover the capital. The Court of First Instance ruled in favor of the plaintiff, awarding the amount shown as due in the partnership’s balance as of June 30, 1924.
6. The defendants appealed, arguing that: (a) the partnership was actually a *sociedad en comandita* and Silverio Lim was a *socio comanditario* whose capital could not be withdrawn until liquidation; and (b) the partnership was already in the process of liquidation at the time of the demand.

ISSUE

1. Whether the partnership was a *sociedad en comandita* and Silverio Lim a *socio comanditario*, precluding withdrawal of capital prior to liquidation.
2. Whether the plaintiff, having given notice of withdrawal, was entitled to recover the capital contribution, and if so, based on which annual balance.

RULING

1. On the Nature of the Partnership: The Supreme Court rejected the appellants’ new theory that the partnership was a *sociedad en comandita*. The Court noted that the partnership lacked essential features of a *comandita* and, more importantly, the defendants had expressly admitted in their answer that it was a collective partnership and that Silverio Lim was a participant in a joint account. The case was tried on that theory, and the change of front on appeal came too late.
2. On the Right to Withdraw and the Applicable Balance: The Court agreed with the trial court that upon giving proper notice of withdrawal, the plaintiff ceased to be a participant and became a creditor of the partnership. However, it modified the trial court’s decision regarding the amount recoverable.
* The trial court used the balance from June 30, 1924. The Supreme Court found this inequitable because the written demand for withdrawal was made in April and May 1925.
* The Court held that the notice of withdrawal remained effective and applicable to the subsequent annual balance. Therefore, the computation of the amount due should be based on the partnership’s financial condition as of June 30, 1925, which showed an amount due of P26,363.72.
* The Court rejected the defendants’ argument that the notice was ineffective for the 1925 balance because it was given before the balance was struck, noting the plaintiff’s continued insistence on withdrawal.

DISPOSITIVE PORTION:
The appealed judgment was MODIFIED. The plaintiff’s recovery was reduced to P26,363.72, with legal interest at 6% per annum from March 9, 1926 (the date of the complaint). In all other respects, the judgment was affirmed. Costs were imposed on the appellants.