G.R. No. L-5837; May 31, 1954
CRISTOBAL BONNEVIE, ET AL., plaintiffs-appellants, vs. JAIME HERNANDEZ, defendant-appellee.

FACTS

Prior to January 1947, plaintiffs and others formed an unincorporated syndicate or secret partnership to acquire the Manila Electric Co. (Meralco) properties in certain Bicol provinces, intending to incorporate later. Defendant Jaime Hernandez was later taken in to facilitate the purchase. Using partnership funds, defendant bought the properties for P122,000, payable in installments, with a penalty clause for forfeiture upon default. The partnership assumed control after the sale. In April 1947, several partners, including plaintiffs and Judge Jaime Reyes, fearing business failure and potential further assessments, desired to withdraw. A resolution was approved allowing their withdrawal and reimbursement of their contributions. Plaintiffs and Judge Reyes withdrew on April 10, 1947, and were reimbursed the next day, with both parties admitting the partnership was then dissolved. The remaining members proceeded to incorporate the Bicol Electric Company. Defendant formally assigned the Meralco properties to the corporation, giving them a book value of P365,000, in return for which the corporation issued shares totaling P225,000 face value and assumed the unpaid balance to Meralco. The corporation later prospered. In 1949, plaintiffs sued defendant to recover P115,312.50 as their alleged share in the profits from this assignment, estimated by them at P225,000.

ISSUE

Whether plaintiffs, after their withdrawal from the partnership and reimbursement of their contributions, are entitled to a share in the alleged profits from the subsequent assignment of partnership assets to the newly formed corporation.

RULING

No. The Supreme Court affirmed the dismissal of the complaint. First, the alleged profit from the assignment was more apparent than real. The assignment was made in payment for stock subscriptions, not for cash, and the real value of the shares depended on the corporation’s net assets, which at the time were negative as the company owed P82,000 and was “in the red.” Second, even assuming a profit was made, defendant could not be held liable for plaintiffs’ share. The evidence did not establish defendant as the managing partner obligated to liquidate; the partnership had a designated general manager. More importantly, upon dissolution, a settlement was agreed upon and executed: the withdrawing partners, including plaintiffs, were reimbursed their investments with the clear understanding they would have no further interest in the partnership or its subsequent transactions. Their acceptance of reimbursement constituted a final settlement of all their rights in the dissolved partnership, precluding any later claim to profits.