G.R. No. L-3518 February 29, 1952
URBANO LOTA (Substituted by SOLOMON LOTA in his capacity as Administrator of the Estate of URBANO LOTA), plaintiff-appellant, vs. BENIGNO TOLENTINO, defendant-appellee.

FACTS

On March 3, 1937, Urbano Lota filed an action against Benigno Tolentino for accounting and liquidation of their partnership, formed in 1918, wherein Tolentino was the industrial and managing partner. Lota alleged that while Tolentino rendered annual accountings from 1918 to 1928, he refused to do so from 1929 to 1937. Tolentino, in his answer, claimed he was the industrial partner, rendered accountings until 1932, and that the partnership was dissolved in 1932 with all assets delivered to Lota. Urbano Lota died in 1938 and was substituted by the administrator of his estate, Solomon Lota, on September 28, 1939. The defendant Benigno Tolentino died on November 22, 1939. On January 9, 1940, the court gave plaintiff 30 days to amend the complaint to substitute the deceased defendant’s administrator or legal representative. The case was dismissed for lack of prosecution on January 28, 1941, but this was reconsidered upon plaintiff’s showing that he had initiated administration proceedings for Tolentino’s estate. Letters of administration were issued to Tolentino’s surviving spouse, Marta Sadiasa, on August 8, 1941, but she failed to qualify (by filing a bond and taking her oath), leading to the dismissal of the administration proceedings on January 3, 1949. It was only on April 6, 1949, that plaintiff filed a motion to substitute the deceased defendant with his heirs. The lower court denied this motion and dismissed the case.

ISSUE

Whether, after the death of the defendant Benigno Tolentino, the plaintiff’s action for accounting and liquidation of the partnership may be continued against Tolentino’s heirs.

RULING

No. The Supreme Court affirmed the lower court’s resolution denying substitution and dismissing the case. The Court held that upon the death of a partner, the duty of liquidating the partnership affairs devolves upon the surviving partner(s), not upon the legal representative of the deceased partner, as established in Po Yeng Cheo vs. Lim Ka Yam. Since the plaintiff (Lota) died before the defendant (Tolentino), the duty to liquidate fell upon Lota’s legal representative. Any claim for money or property due from the deceased partner should be prosecuted against his estate in the course of administration proceedings, not through a direct action for accounting against his heirs. The heirs, who were never partners, are not in a position to effect an accounting of the partnership. Furthermore, the plaintiff’s inaction for almost ten years after the defendant’s death (and nearly eight years after letters of administration were issued) constituted laches and failure to prosecute the action diligently. The motion for substitution filed in 1949 was deemed too late.