[G.R. No. 10029. July 15, 1918. ]
FAUSTINO LICHAUCO, Plaintiff-Appellant, v. JOSE DE GUZMAN, TOMAS DEL RIO, JUAN OLABARRIETA, RAMON SORIANO, and GREGORIO OLEGARIO, Defendants-Appellees.
Gibbs, McDonough & Blanco, for Appellant.
Gutierrez Repide & Socias and Eusebio Orense for appellees
1. JOINT ACCOUNT PARTNERSHIP; NECESSITY OF INSTRUMENT. — Pursuant to the laws inforce, in order that the existence of a joint account partnership may be proven in an action, it is indispensable that, among the other proofs recognized by law, the contract made by and between the parties be reduced to writing, as required by article 51 of the Code of Commerce, mentioned in article 240 of the same code — which latter article treats of this kind of partnerships — inasmuch as said article 51 provides that the testimony of witnesses shall not in itself generally be sufficient to prove the existence of a contract the subject-matter of which exceeds 1,600 pesetas (P300), but it must be supported by other evidence in writing. This provision is in accordance with article 1280 of the Civil Code, the last paragraph of which prescribes that contracts in which the amount of the prestations of one of the two contracting parties exceeds 1,500 pesetas must be reduced to writing, even though they be private.
2. ID.; ID. — When the record does not show that the existence of the alleged joint account partnership — the basis of the counter-claims made by the defendants — was duly proven by oral and documentary evidence, it is unquestionably proper to reverse the judgment that recognizes the existence and proof of such partnership, for the reason of insufficiency of evidence to sustain such findings by the court below.
3. CONTRACTS; PAYMENT OF INTEREST ON SUM FIXED BY JUDGMENT. — The obligation to pay interest on a sum fixed in a judgment begins from the date of the sentence, when so declared; for until the net amount of the debtor’s liability has been determined he cannot be considered to be in default in the fulfillment of his obligation to pay the debt and the interest thereon (Art. 1108 of the Civil Code, and decisions of the supreme court of Spain of November 19, 1869, February 27, 1901, and
D E C I S I O N
The following civil cases were filed in the Court of First Instance of this city:chanrob1es virtual 1aw library
No. 8883, brought by Faustino Lichauco against Jose de Guzman; No. 9213, by Tomas del Rio and Juan Olabarrieta against Faustino Lichauco; and No. 9217, by Ramon Soriano against Faustino Lichauco. As a result of the agreement had between the parties on February 8, 1912, said three cases Nos. 8883, 9213, and 9217 were joined into a single action.
In case No. 8883 counsel for Faustino Lichauco, by a written complaint filed in the Court of First Instance on August 26, 1911, alleged that the defendant Jose de Guzman, by virtue of a verbal order given by the plaintiff, took charge of the cattle, including carabaos, imported by the latter and intended for the slaughterhouse in Manila and for sale in the provinces; that the accounts which the defendant rendered to the plaintiff showed a balance of P90,000, and that Guzman employed said sum in his private business and refused to deliver it to the plaintiff in spite of the latter’s demands made upon him so to do. Plaintiff’s counsel therefore asked that judgment be rendered against the defendant for said sum, together with the legal interest thereon and the cost, and that, besides, an attachment be levied on his property.
By an order of November 11, 1911, the judgment in default rendered against the defendant was set aside and he was allowed a period of five days in which to answer the complaint.
The demurrer interposed by the defendant to the complaint having been overruled, on December 2 of the same year he answered the complaint, asking to be absolved therefrom, and, by means of a counterclaim, asked that the plaintiff be ordered to pay him P116,005.85, alleging that he, the defendant Guzman, had been engaged in the purchase and sale of cattle, including carabaos, since the American occupation and for many years prior thereto; that about the beginning of April, 1909, the plaintiff, to avoid his financial ruin, proposed to the defendant Guzman that he (Guzman), Ramon Soriano, Gregorio Olegario, Tomas del Rio, and Juan Olabarrieta enter into joint account agreement with the plaintiff, which they did on April 15 of the same year, they having met in the house situated at No. 115, Calle Anloague, Binondo; that said agreement was made under certain conditions among which it was stipulated that the business should be conducted in the name of the plaintiff Lichauco, under his management and responsibility; that for his personal services the plaintiff was not to be entitled to collect any salary or compensation whatever, except his share of the profits obtained; that the profits derived from the sale of the cattle to be imported in the plaintiff’s name and for the account of the joint account partnership should be distributed among the partners in the following proportion: Twenty-five per cent to Faustino Lichauco; 23 per cent to Jose de Guzman; 23 per cent to Ramon Soriano; 19 per cent to Gregorio Olegario; and 10 per cent to Tomas del Rio and Juan Olabarrieta; that from April 14, 1910, when said partnership commenced business, until December 31 of the same year, the sales of cattle, on the hoof or as meat, in the slaughterhouse produced P2,782,885, with a net profit of P360,460.75; that from January 1, 1911, to August 15, 1911, the sales of cattle produced P1,500,000, with a profit of P200,000; that, in accordance with the stipulations made of these amounts obtained during said two periods, the defendant was entitled, at the rate of 23 per cent, to the sum of P116,005, which sum the plaintiff, under futile pretexts, refused to pay him, notwithstanding the demands made upon him so to do.
In view of the answer and counterclaim presented by counsel for the defendant Jose de Guzman, the plaintiff amended his complaint — an amendment allowed by the court — alleging that during the first days of April, 1909, the plaintiff, Lichauco, in accordance with a verbal contract made with the five defendants, obligated himself to deliver to them for sale, on a net commission of P1.50 per head, all the cattle imported by the plaintiff, the defendants jointly and severally binding themselves to be responsible to the plaintiff for the total price of all the cattle delivered to them, after deducting the amount of the commission and the as he conveniently could, and that if it should be necessary expenses of management; that, pursuant to the contract, the plaintiff; that, between April 1909, and August, 1911, defendants monthly rendered accounts of the business to the plaintiff; that, between April 1909, and August, 1911, inclusive, the plaintiff delivered to the defendants for sale on commission and the latter sold, 44,736 head of cattle belonging to him, at the price of P2,637,245.16, after deducting all the expenses of management, as it so appears from the accounts rendered by the defendants; that, notwithstanding the demands made upon them by the plaintiff, the defendants had not settled their accounts and have delivered to the plaintiff only the sum of P2,521,302.52, leaving a balance of P48,838.64, which balance they had appropriated to themselves and consequently was owing to the plaintiff. The latter, therefore, asked that judgment be rendered whereby the defendants be ordered jointly and severally to pay him said sum of P48,838.64, together with the interest thereon and the costs, and denied each and all of the allegations of the counterclaim made by Guzman, not compatible with the facts above set forth.
Counsel for Gregorio Olegario, in answer to the second amended complaint, admitted the first allegation thereof and denied all the others not in conformity with or contrary to the allegations contained in his special defense, counter-claim, or cross-complaint, and set forth that the plaintiff, Lichauco, in order to avoid a ruinous competition in the cattle business, proposed to the defendants, during the first days of April, 1909, that they enter into a joint account agreement with him to carry on the business of the importation of cattle, including carabaos; that this proposition was accepted by the defendants and thus the partnership was formed; that it was stipulated that the competition that there was between them should cease and that they should unite against the powerful competition carried on by Barretto & Co. and Lack & Davis; that each one of the joint account partners was to bring in such amount of capital as he conveniently could, and that if it should be necessary said capital would be furnished by the plaintiff, Lichauco, and the defendant Soriano; that the plaintiff was to be the manager or administrator of the business and was to receive as remuneration 10 per cent was to be distributed among the five partners, as follows: 25 per cent to Faustino Lichauco, 23 per cent to Jose de Guzman, 23 per cent to Ramon Soriano, 19 per cent to Gregorio Olegario, and 10 per cent to Del Rio and Olabarreta; that, from April 14, 1909, when the partnership was organized and commenced to do business, until December 31, 1910, said firm obtained profits not less than P360,414.75, Philippine currency; that, from January 1, 1911, to January 31, 1912, the business produced a net profit of P126,729.14, and that, after deducting therefrom the plaintiff’s 10 per cent, the defendant Olegario, at the rate of 19 per cent, was entitled to P83,301.60; that as Olegario had received as part of said profit only P54, 366.82, there remained a balance in his favor of P28,934.78, which the plaintiff had refused and continued to refuse to pay, and that he also refused to render a proper account of the partnership affairs. Therefore said counsel prayed the court to absolve from the complaint the defendant P28,934.78, with legal interest thereon from the date of the defendant’s cross-complaint or counterclaim, and likewise to pay the costs. Counsel for the other defendant Ramon Soriano made allegations similar to those set forth day by Olegario in his answer to the second amended complaint, and added that, after deducting 10 per cent from said profits, 23 per cent thereof, according to the stipulations made, pertained to the defendant, Soriano, and amounted to P1,200,838.78; that the latter brought in and delivered to the plaintiff on different occasions, as partnership capital, the sum of P55,800; and that, notwithstanding the stipulations made, the plaintiff refused and continued to refuse to account for, and to deliver to the defendant, Soriano, his share of the profits of the business. Said counsel therefore asked (1) that his client be absolved from the complaint, and (2) that the plaintiff be ordered to pay P156,638.78, the sum of both amounts mentioned in paragraphs 9 and 10 of his answer, together with legal interest thereon and the costs.
Counsel for the defendants, Tomas del Rio and Juan Olabarrieta, answering the second amended complaint, made statements and allegations similar to those set forth by the other defendants. He added, however, that his clients had organized a mercantile firm, domiciled at No. 824 Calle Anloague and engaged in the importation of cattle from China and Borneo; that, from April 14, 1909, to December 31, 1910, the business of the sale of cattle, as meat or P2,782,685 with a profit of P360,414.75; that from January 1, 1911, to December 31 of the same year, a net profit of P126,729.14 was obtained; that after deducting from this profit the plaintiff’s 10 per cent share, there was owing to the defendants Del Rio and Olabarrieta 10 per cent of the balance, or P43,842.95, which sum these defendants had not received, and the plaintiff had been delaying its payment. Therefore counsel for Del Rio and Olabarrieta asked that his clients be absolved from the complaint, and that the plaintiff be ordered to pay the said sum of P43,842.95, with legal interest thereon from the date of their cross-complaint, and the costs.
The defendant Jose de Guzman, in answer to the second amended complaint, made statements and allegations similar to those advanced by his codefendants, and also added that, in accordance with the stipulations entered into, he was entitled, at the rate of 23 per cent of the profits obtained, to the sum of P100,838.78, and that, as he had received as part of said profits only the sum of P25,616.37, there still remained a balance in his favor of P75,222.41 which the plaintiff Lichauco had refused and continued to refuse to pay the defendant, notwithstanding the demands made upon him. Jose de Guzman therefore asked that he be absolved from the complaint, and that by his counterclaim the plaintiff be ordered to pay him P75,222.41, with legal interest thereon from the date of the defendants cross-complaint, and the costs.
Counsel for the defendant Jose de Guzman asked permission of the court to amend paragraphs 4 and 7 of his preceding answer, so that it should read as follows:jgc:chanrobles.com.ph
"On April 14, 1909, having met in the house situated at No. 115 Calle Anloague, the plaintiff Lichauco and the defendants Soriano, Guzman, Olegario, and Del Rio, the latter for himself and as the representative of Olabarrieta, organized a joint account partnership and stipulated that they should all contribute to the joint business their respective customers and cattle importation business and likewise the personal services that might be assigned to each partner, in order to sell here the largest possible number of cattle, including carabaos, and also for the purpose of ending the competition between them and unite against the competition carried on jointly by the powerful firms of Barretto and Lack & Davis; that, from April 14, 1909, when the partnership commenced business, until December 31 of the same year, the sales of cattle, as meat or on the hoof, produced the sum of P2,782,685 which left a net profit of P360,414.65."cralaw virtua1aw library
Counsel stated that the preceding amendment was based on the evidence; and notwithstanding the plaintiff’s opposition, it was, with exception, admitted by an order of August 23, 1913.
The plaintiff, in turn, asked by motion that he be permitted to amend the second amended complaint so as to make it conform to the facts proven at the trial. This motion was objected to by counsel for the defendants, and was denied by an order of October 14th of the same year. Exception to this ruling was taken by plaintiff’s counsel.
Upon a hearing of the case, after a joinder of cases Nos. 8883, 9213, and 9217, as stated in the beginning of this decision, evidence was adduced by the parties and, in accordance therewith, on February 13, 1914, judgment was rendered in which — holding that there existed between the plaintiff and the defendants a joint account partnership for the business of the purchase, importation, and sale of cattle, including carabaos, in the manner and conditions set forth by the defendants — the plaintiff, Faustino Lichauco, was ordered to pay to Ramon Soriano the sum of P36,800, with interest thereon at the rate of 6 per cent per annum from February 5, 1913; to pay severally P37,608.73 to the defendants Tomas del Rio and Juan Olabarrieta, likewise with interest thereon from December 21, 1911; to pay P14,499.56 to the other defendant, Jose de Guzman, with like interest from December 5, 1911; and likewise to pay P81,024.87 to the other defendants, Ramon Soriano and Gregorio Olegario, with like interest from December 22, 1911, without special finding as to costs. This judgment was modified by another of March 17 of the same year, 1914, in the sense that Faustino Lichauco was ordered to pay Ramon Soriano the sum of 20,000, with interest at 6 per cent per annum from February 5, 1913. The plaintiff was also ordered to pay to said Ramon Soriano and Gregorio Olegario the sum of P69,990.87, with interest at 6 per cent per annum from December 22, 1911. In this second judgment were reiterated the other findings contained in the previous one adverse to the plaintiff and favorable to the defendants, Del Rio, Olabarrieta, Guzman, and no special finding was made as to costs. Counsel for the plaintiff excepted to these judgments and moved for a new trial. His motion was denied, exception was entered by him, and, upon the filing of the proper bill of exceptions, the same was approved, certified, and forwarded to the clerk of this court.
The questions submitted to the decision of this court are three: The first consists in determining whether or not it is true that there was executed by and between the plaintiff and the defendants a joint account partnership contract in the form and conditions as stated by the latter, and whether this contract, notwithstanding that it was not set forth in any private or public instrument, was carried into effect and was observed by the parties from April 14, 1909, to August, 1911. Second. Whether or not it is true that the defendant Ramon Soriano, as a joint account partner, brought into the partnership and delivered to the plaintiff, Lichauco, in partial amounts, the sum of P55,800 according to the documents signed by the plaintiff, Exhibits 42 to 61. Third. Whether or not it is true that the sale of cattle, effected by some of the defendants, was made by them on a commission basis of P1.50 per head.
The plaintiff, Faustino Lichauco, denies that he executed with the defendants said contract organizing by common agreement the joint account partnership, and that any such contract existed during said period of two years and five months. He alleged that, as absolute owner of all the cattle the importation and sale of which during those years was the object of the business in which he was engaged, he merely delivered this stock, in various shares, to the defendants Jose de Guzman, Ramon Soriano, and Gregorio Olegario in order that they might sell the same on a commission basis of P1.50 per head of the animals sold; that the number of cattle belonging to him so sold on commission between the months of April, 1909, and August, 1911, amounted to 45,144, at a total price of P2,656,328.19, after deducting all the expenses incurred from the time the defendants received the cattle until the latter were sold, as shown by the monthly accounts rendered to the plaintiff by the defendants.
From the documentary and oral evidence, as a whole, adduced during the trial by the defendants, who are at the same time the plaintiffs in the counterclaim or cross-complaint, it is concluded that satisfactory proof has not been produced to show the existence of the alleged joint account partnership said to have been formed between the defendants and the plaintiff.
In fact, the defendant, Ramon Soriano, testified that on April 14, 1909, immediately after they had agreed upon the organization of said joint account partnership, in the meeting held by them on the date aforementioned, witness made a memorandum of the stipulations made and resolutions adopted by those present, although afterwards the plaintiff, Lichauco, would not sign it, saying that it would be dangerous to do so, inasmuch as witness was interested in the partnership which he, Soriano, and the other defendants had contracted with Lack & Davis.
If for this sole circumstance said memorandum was never signed and the partnership contract was never reduced to writing in even so much as a private instrument, there is of course ample reason to assert that the reason given by Soriano in his testimony is not true, because on April 14, 1909, the partnership agreed upon by the defendants with Lack & Davis was not yet in existence, and was stipulated and formed only on the 21st of May of that year; besides, Faustino Lichauco was not then, nor at any other time, a member of that partnership. So it is that the other defendant, Tomas del Rio, testified that the refusal of Lichauco to sign the partnership contract between himself and the defendants had nothing to do with the subsequent partnership formed with Lack & Davis, which testimony contradicts the statements made by Soriano.
It is to be noted that long before April 14, 1909, the date of the alleged partnership, Soriano and Lichauco had formed between themselves a joint account partnership which they took good care to have appear in a written contract, as well as the business in which they were to engage and the conditions of the contract, as may be seen by the document Exhibit A-I3. In the books and documents presented during the hearing of this case, the defendants Soriano always required of the plaintiff receipts or chits for even the unimportant sums which, on various occasions, he delivered to the latter. It is, therefore, very strange that, it being a question of the organization of a joint account partnership for the importation and sale of cattle the value thereof amounted to more than two and a half million pesos, the defendants should not have endeavored to have the conditions of the contract set forth, if not in a notarial document, at least in a private instrument. The aforementioned memorandum mentioned by Soriano, which, as he stated, contained the agreement made, together with the details and conditions of the joint account partnership contracted between themselves, was not presented or exhibited during the course of this suit.
Although all the cattle that were the subject matter of the business belonged to the plaintiff, Lichauco, nevertheless, in view of the great importance which, in case of success, it was expected the business would assume to the benefit of the partners, and of the considerable value of the cattle the sale of which the plaintiff managed, as shown by the respective claims and counterclaims made during the course of these proceedings, it is at first sight inexplicable why and for what reason the partnership contract was not made to appear in any kind of document whatever.
It was reasonable and just that from May 21, 1909, the defendants should have feared to violate said clause 18 of the partnership contract made with Lack & Davis; but after this partnership had ceased to exist, toward the end of the year 1910, it is not understood why and for what reason the existence of the other alleged partnership was not, together with the conditions stipulated, recorded in any document whatsoever, from January to August, 1911.
The plaintiff absolutely denied the existence of the joint account partnership on which the defendants’ counterclaims and cross-complaints are founded, and the conditions and other particulars concerning this alleged partnership are known only by the averments of the defendants themselves, in so far as regards the distribution of the profits, although there are some contradictions in respect to the remuneration which the manager was to receive, and to the amount of the capital which the defendants were to furnish.
Where it true that a joint account partnership had been covenanted between the plaintiff and the defendants, and that this suit should be decided on such a hypothesis, still no explanation whatsoever is found in the record as to why and for what reason it is stated in the very books kept by the defendants, Soriano, Olegario, and Guzman, that the cattle which they had been selling on commission from April, 1909, to August, 1911, belonged absolutely to the plaintiff Lichauco, while, were it true that the alleged partnership contract existed between the plaintiff and the defendants, and that the business belonged to this partnership, record should have been made in its books that the cattle sold by the defendants likewise belonged to the partnership.
It is a fact justified by the record that the defendants tried to establish an agency for the purchase and acquisition of cattle from Pnom Penh, Cochin China, for the purpose of entering into competition with the business managed by the plaintiff, Lichauco, as that competitive agency shipped to these Islands, on the steamship Binthuan, a lot of cattle consigned to the defendant Jose de Guzman, and if the latter, after Lichauco had discovered the fact, was obliged to turn over this shipment to Lichauco, and if the plaintiff took charge of the same, it was all due to the energetic action displayed by the plaintiff and to his threat to bring charges against Guzman, who was then owing the plaintiff a considerable sum which this defendant had employed in said purchase of cattle. In fact, in the Exhibit 56