G.R. No. L-6304 December 29, 1953
SERGIO V. SISON, plaintiff-appellant, vs. HELEN J. MCQUAID, defendant-appellee.

FACTS

On March 28, 1951, plaintiff Sergio V. Sison filed an action against defendant Helen J. McQuaid in the Court of First Instance of Manila. He alleged that in 1938, defendant borrowed from him various sums aggregating P2,210, acknowledged in a document dated November 10, 1938. As defendant could not repay the loan, she proposed to take plaintiff as a partner in her lumber business, with plaintiff contributing the P2,210 due him and his personal services. Plaintiff agreed, forming a partnership under the Civil Code where they would share income or profits equally. Plaintiff rendered services without compensation from June 15, 1938, to December 1941. Before World War II, the partnership sold 230,000 board feet of lumber to the United States Army for P13,800. After the war, defendant, as manager, filed and collected the claim for the full amount but refused to deliver plaintiff’s one-half share of P6,900. Plaintiff prayed for judgment declaring the partnership’s existence and ordering defendant to pay him P6,900, plus damages and costs. Defendant moved to dismiss on grounds of prescription, the Statute of Frauds, and failure to state a cause of action. The trial court sustained the prescription ground and dismissed the case. Plaintiff appealed to the Court of Appeals, which certified the case to the Supreme Court as it involved only questions of law.

ISSUE

Whether the complaint states a cause of action for recovery of a specific sum as a share in partnership profits.

RULING

No, the complaint states no cause of action. The Supreme Court found the trial court’s reliance on prescription untenable, as the complaint’s allegations did not clearly establish when the cause of action accrued, making prescription indeterminable on a motion to dismiss based solely on the complaint’s face. However, the order of dismissal was affirmed on the ground that the complaint failed to state a cause of action. The complaint sought recovery of one-half of the lumber sale proceeds but did not allege that a liquidation of the partnership business had occurred, establishing that sum as plaintiff’s share of the profits. The proceeds from a single sale cannot be considered profits until costs and expenses are deducted, and profits cannot be determined from one transaction alone without considering all partnership transactions. Thus, a general liquidation is necessary before a partner may claim a specific sum as profit share. The dismissal is affirmed on this ground, without prejudice to plaintiff filing an action for accounting or liquidation. No costs were awarded.