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 by substituting the administrator or legal representative of the deceased defendant. 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, leading to the dismissal of the administration proceeding 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 the motion for substitution 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, not upon the legal representative of the deceased partner. Any claim for money or property due from the deceased partner should be prosecuted against his estate in administration, as outlined in Po Yeng Cheo vs. Lim Ka Yam. The action for accounting, being personal against the managing partner, was extinguished upon his death and could not be shifted to his heirs, who were never partners. Furthermore, the plaintiff’s inaction for almost ten years after the defendant’s death, and specifically for almost eight years after the issuance of letters of administration, constituted an unreasonable delay, warranting the application of laches and dismissal for failure to prosecute. The attempt to substitute the heirs, filed more than twelve years after the complaint, was deemed too late.