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ALDECOA & CO. vs. WARNER BARNES & CO. 16 PHIL 423 - Digest

Aldecoa & Co. filed a lawsuit against Warner Barnes & Co. Ltd. alleging that they unlawfully conspired to defraud Aldecoa of its interest in a joint-account partnership between the two companies from 1899 to 1903. The partnership involved Warner Barnes purchasing hemp in Albay province and selling it in Manila for export. The court ruled that any partnership property should be included in the liquidation of the business. Following Spanish legal precedent, the court found that uncertain sales of partnership assets in liquidation should be divided in the same proportion as profits and losses during the partnership. If real estate was acquired for the partnership, it too should be divided proportionally between the partners. The

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115 views2 pages

ALDECOA & CO. vs. WARNER BARNES & CO. 16 PHIL 423 - Digest

Aldecoa & Co. filed a lawsuit against Warner Barnes & Co. Ltd. alleging that they unlawfully conspired to defraud Aldecoa of its interest in a joint-account partnership between the two companies from 1899 to 1903. The partnership involved Warner Barnes purchasing hemp in Albay province and selling it in Manila for export. The court ruled that any partnership property should be included in the liquidation of the business. Following Spanish legal precedent, the court found that uncertain sales of partnership assets in liquidation should be divided in the same proportion as profits and losses during the partnership. If real estate was acquired for the partnership, it too should be divided proportionally between the partners. The

Uploaded by

Michelle Lim
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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ALDECOA & CO. vs. WARNER BARNES & CO.

LTD
LIQUIDATION

August 6, 1910 G.R. No. 5242 TORRES, J.

FACTS

Aldecoa & Co. filed suit against Warner, Barnes & Co Ltd. for, unlawfully, maliciously, and criminally conspired
with the persons who were managing the commercial firm of Aldecoa & Co. during the years 1899, 1900, 1901,
1902, and 1903, to defraud the latter of its interest in the said joint-account partnership, buying the silence of the
said managers with respect to the operations of the joint-account partnership during the time comprised between
the 1st of December, 1898, and the 30th of June, 1899, and also with respect to the errors and omissions in the
accounts relating to the second semester of 1899, and those relating to 1900, 1901, 1902, and 1903.

Aldecoa & Co. alleged that prior to December 1, 1898, Warner, Barnes & Co. were conducting a business in
Albay, the principal object of which was the purchase of hemp in the pueblos of Legaspi and Tabaco for the
purpose of bringing it to Manila, here to sell it for exportation, and that on the said date of December 1, 1898, the
plaintiff company became interested in the said business of Warner, Barnes & Co., in Albay and formed therewith
a joint-account partnership whereby Aldecoa & Co., were to share equally in the gains and losses of the business
in Albay; that the defendant is the successor to all the rights and obligations of Warner, Barnes & Co., among
which is that of being manager of the said joint-account partnership with Aldecoa & Co., that the defendant acted,
and continues to act as such manager, and is obliged to render accounts supported by proofs, and to liquidate the
business, which defendant not only has not done, in spite of the demand made upon it, but it has expressly denied
the right of plaintiff to examine the vouchers, contenting itself with forwarding copies of the entries in its books,
which entries contain errors and omissions that hereinafter will be mentioned.

ISSUE

Whether or not the partnership property should be included in the liquidation of the said business?

RULING

Yes, the partnership property should be included in the liquidation of the said business. It is a recognized fact, and
one admitted by both parties, that the partnership herein concerned concluded its transactions on December 31,
1903; wherefore the firm of Warner, Barnes & Co., Ltd., the manager of the partnership, in declaring the latter’s
transactions concluded and in rendering duly verified accounts of its results, owes the duty to include therein the
property and effects belonging to the partnership in common. This rule was established by the supreme court of
Spain in applying a similar precept of the mercantile code, in its decision on an appeal in cassation of the 1st of
July, 1870, setting up the following doctrine:

"In case of the liquidation of a company of this kind (denominated joint-account partnership), inasmuch as the
sale of the firm assets is necessarily uncertain and eventual, consideration the greater or lesser selling price that
may be obtained from the property and effects which comprise such assets, the price received should be allotted in
the same proportion as that fixed in the contract for the division of the profits and losses, for otherwise one of the
partners would be benefited to the detriment and loss of his copartners."

This doctrine is perfectly legal and in accord with justice, as no person should enrich himself wrongfully at the
expense of another; and, in the case under review, should it be duly and fully proved that the managing firm
acquired realty in the name and at the expense of the joint-account partnership with the plaintiff firm, it is just
that, in liquidating the property of common ownership, such realty should be divided between the partners in the
same manner as were the profits and losses during the existence of the business, from the beginning of the
partnership to the date of its dissolution.
FALLO

Wherefore, and in accordance with section 496 of the Code of Civil Procedure, a new trial should be held for the
purpose of a final decision of all the questions involved in this litigation, and accordingly the judgment appealed
from is set aside and this cause shall be returned to the court below. So ordered.

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