G.R. No. 45441 ; June 26, 1939
MORA ELECTRIC CO., INC., petitioner, vs. PAULINO MATIC and BENITA QUIOGUE VIUDA DE DEL ROSARIO, respondents.

FACTS

Paulino Matic obtained a concession from the City of Manila to provide a lighting system for cemeteries on All Saints’ Day 1934 for P8,733, with Luzon Surety Co. as guarantor. Matic transferred his rights to Benita Quiogue, who then contracted with Mora Electric Co., Inc. The contract stipulated that both parties would contribute necessary labor and materials, share profits after deducting expenses (including the P8,733 concession fee to be paid to the city), and report their respective expenses. The venture failed to yield expected profits. The concession fee remained unpaid, compelling Luzon Surety Co. to pay the city. Luzon Surety Co. then sued Matic and Quiogue for reimbursement. Matic and Quiogue, in turn, sued Mora Electric Co., Inc. to recover the P8,773 they were ordered to pay. The Court of Appeals affirmed the trial court’s judgment ordering Mora Electric Co., Inc. to pay Matic and Quiogue the amount (minus a partial payment), plus interest and attorney’s fees.

ISSUE

Whether Mora Electric Co., Inc. is liable to reimburse Matic and Quiogue for the concession fee paid on its behalf, and whether the issues of partnership liquidation and loss-sharing are pertinent to this action for reimbursement.

RULING

Yes, Mora Electric Co., Inc. is liable. The Court, bound by the factual finding of the Court of Appeals, held that Mora Electric Co., Inc. obligated itself under the contract to pay the concession fee to the City of Manila. Having breached this obligation, it must reimburse Matic and Quiogue, who were compelled to pay the amount. The claim for reimbursement is not an action for the liquidation of a partnership or the distribution of profits and losses. The matter pertains to Mora Electric Co., Inc.’s specific contractual duty to pay the concession fee, not to the settlement of overall partnership accounts. Since the parties had not submitted the required reports of expenses, a proper liquidation to determine profit or loss was not possible. The awarded interest and attorney’s fees constitute recoverable damages resulting from Mora Electric Co., Inc.’s breach. The judgment of the Court of Appeals was affirmed.