BALAODAN, Fernando, Jr.

JD-3C

#25
MARTINEZ v. ONG PONG CO (PEDRO MARTINEZ vs. ONG PONG CO and ONG LAY)
G.R. No. L-5236 January 10, 1910

FACTS:
On the 12th of December, 1900, Pedro Martinez, plaintiff, delivered P1, 500 to the defendants,
Ong Pong Co and Ong Lay, who, in a private document, acknowledged that they had
received the same with the agreement, as stated by them, "that we are to invest the amount
in a store, the profits or losses of which we are to divide with the former, in equal shares." Later,
Martinez filed a complaint in order to compel the defendants to render him an accounting of
the partnership as agreed to, or else to refund him the P1, 500 that he had given them for the
said purpose. Ong Pong Co alone answered the complaint and admitted the fact of the
agreement and the delivery to him and to Ong Lay of the P1, 500. Ong Pong Co alleged that
Ong Lay, who was then deceased, was the one who had managed the business, and that
nothing had resulted therefrom but the loss of the capital of P1, 500, to which loss Martinez
agreed.

The CFI ordered Ong Pong Co to return to Martinez one-half of the said capital of P1, 500 plus
P90 as one-half of the profits, calculated at the rate of 12% per annum for the six months that
the store was supposed to have been open (total of P840) with legal interest of 6% until the full
payment, with costs. Ong Pong Co then assailed the decision of the CFI.

ISSUE:
Whether Martinez is entitled to the capital he contributed to the partnership.

RULING:
Yes. The fact that the defendants received certain capital from Martinez for the purpose of
organizing a company; they, according to the agreement, were to handle the said money and
invest it in a store which was the object of the association. They were the actual administrators
thereof, in the absence of a special agreement vesting in one sole person the management of
the business. As such, they were the agent of the company and incurred the liabilities peculiar
to every agent, among which is that of rendering account to the principal of their transactions,
and paying him everything they may have received by virtue of the mandatum. Neither Ong
Pong Co or Ong Lay has rendered such account; they are therefore obliged to refund the
money that they received for the purpose of establishing the store — the object of the
association. This was the principal pronouncement of the judgment.

Judgment appealed from is affirmed, provided, however, that the defendant Ong Pong Co
shall only pay Martinez the sum of P750 with the legal interest thereon at the rate of 6 per cent
per annum from the time of the filing of the complaint, and the costs.
#60
SISON V. MCQUIAD (SERGIO V. SISON, Plaintiff-Appellant, v. HELEN J. MCQUAID, Defendant-
Appellee.)
94 Phil. 201

FACTS:
Sison, the plaintiff, during the year 1938 lent to Mcquiad, the defendant, various sums of
money, aggregating P2, 210, to enable her to pay her obligation to the Bureau of Forestry and
to add to her capital in her lumber business. Mcquiad was not able to pay the loan in 1938, as
she had promised. She proposed to take in Sison as a partner in her lumber business. Sison was
to contribute to the partnership the said sum of P2,210 due him from defendant in addition to
his personal services. Sison agreed to Mcquiad’s proposal, as a result, a partnership was
formed between them, under the provisions of the Civil Code, in which they were to share
alike in the income or profits of the business, each to get one-half thereof.

Before the last World War, the partnership sold to the United States Army 230,000 board feet of
lumber for P13, 800, for the collection of which sum Mcquiad, as manager of the partnership,
filed the corresponding claim with the said army after the war. However, Mcquiad refused to
deliver half of it to Sison. Despite Sison’s repeated demands, Mcquiad persistently refused to
give him ½ of the proceeds or P6,900. Plaintiff brought an action in the CFI of Manila against
Mcquiad to pay him the sum of P6,900 plus damages and cost. Mcquiad filed a motion to
dismiss. Court dismissed the case on the ground of prescription.

ISSUE:
Whether Sison is entitled to recover a share in the proceeds of the sale.

RULING:
No, Sison has no cause of action.

Sison seeks to recover from Mcquiad one-half of the purchase price of lumber sold by the
partnership to the United States Army. But his complaint does not show why he should be
entitled to the sum he claims. It does not allege that there has been a liquidation of the
partnership business and the said sum has been found to be due him as his share of the profits.
The proceeds from the sale of a certain amount of lumber cannot be considered profits until
costs and expenses have been deducted. Moreover, the profits of a business cannot be
determined by taking into account the result of one particular transaction instead of all the
transactions had. Hence, the need for a general liquidation before a member of a partnership
may claim a specific sum as his share of the profits.