Chapter 2 Case 5 and 17
Chapter 2 Case 5 and 17
17.
JOSE MACHUCA, plaintiff-appellee,
vs.
CHUIDIAN, BUENAVENTURA & CO., defendants-appellants.
G.R. No. 1011
It being understood that D. Jose Gervasio Garcia is to receive the 25 per cent
assigned to him, in the same form in which it may be obtained from said
partnership, whether in cash, credits, goods, movables or immovables, and on the
date when Messrs. Chuidian, Buenaventura & Co., in liquidation, shall have effected
the operations necessary in order to satisfy the credits and the share in the
partnership capital hereinbefore mentioned."
The plaintiff claims under Garcia by virtue of a subsequent assignment, which has
been notified to the liquidator of the partnership.
TRIAL COURT - The judgment of the court below goes beyond the relief asked by the
plaintiff in the complaint, the plaintiff being held entitled not only to have the credit
assigned him recorded in the books of the partnership but also to receive forthwith
25 per cent of an amount representing the share of D. Vicente Buenaventura in the
account-current at the time of the partition of his father's estate, with interest, the
payment of the 25 percent of Buenaventura's share in the capital to be postponed
till the termination of the liquidation. This point has not, however, been taken by
counsel, and we have therefore considered the case upon its merits.
ISSUE: WON Machucha is entitled to the relief prayed pending the liquidation of the
partnership?
HELD: NO
The construction of clause 19 of the partnership agreement, by which it was
stipulated that "upon the dissolution of the company, the pending obligations in
favor of outside parties should be satisfied, the funds of the minors Jose and
Francisco Chuidian [it does not appear what their interest in the partnership was or
when or how it was acquired] should be taken out, and afterwards the resulting
balance of the account-current of each one of those who had put in money
(imponentes) should be paid."
The construction of this clause is that it establishes a a basis for the final
adjustment of the affairs of the partnership; that that basis is that the liabilities to
noncompartners are to be first discharged; that the claims of the Chuidian minors
are to be next satisfied; and that what is due to the respective partners on account
of their advances to the firm is to be paid last of all, leaving the ultimate residue, of
course, if there be any, to be distributed, among the partners in the proportions in
which they may be entitled thereto.
Although in a sense the partners, being at the same time creditors, were "outside
parties," it is clear that a distinction is made in this clause between creditors who
were partners and creditors who were not partners, and that the expression
"outside parties" refers to the latter class.
Such being the basis upon which by agreement of the partners the assets of the
partnership are to be applied to the discharge of the various classes of the firm's
liabilities, it follows that D. Vicente Buenaventura, whose rights are those of his
father, is in no case entitled to receive any part of the assets until the creditors who
are nonpartners and the Chuidian minors are paid. Whatever rights he had either as
creditor or partner, he could only transfer subject to this condition. And it is clear,
from the language of the instrument under which the plaintiff claims, that this
conditional interest was all that D. Vicente Buenaventura ever intended to transfer.
By that instrument he undertakes to assign to Garcia not a present interest in the
assets of the partnership but an interest in whatever "may be obtained from the
liquidation of the partnership," which Garcia is to receive "in the same form in which
it may be obtained from said partnership," and "on the date when Messrs. Chuidian,
Buenaventura & Co., in liquidation, shall have effected the operations necessary in
order to satisfy" the claims of D. Vicente Buenaventura.
Upon this interpretation of the assignment, it becomes unnecessary to inquire
whether article 143 of the Code of Commerce, prohibiting a partner from
transferring his interest in the partnership without the consent of the other partners,
applies to partnerships in liquidation, as contended by the defendant. The
assignment by its terms is not to take effect until all the liabilities of the partnership
have been discharged and nothing remains to be done except to distribute the
assets, if there should be any, among the partners. Meanwhile the assignor,
Buenaventura, is to continue in the enjoyment of the rights and is to remain subject
to the liabilities of a partner as though no assignment had been made. In other
words, the assignment does not purport to transfer an interest in the partnership,
but only a future contingent right to 25 per cent of such portion of the ultimate
residue of the partnership property as the assignor may become entitled to receive
by virtue of his proportionate interest in the capital.
DISPOSITIVE: The plaintiff having acquired no rights under the assignment which
are now enforceable against the defendant, this action can not be maintained. The
liquidator of the defendant having been notified of the assignment, the plaintiff will
be entitled to receive from the assets of the partnership, if any remain, at the
termination of the liquidation, 25 per cent of D. Vicente's resulting interest, both as
partner and creditor. The judgment in this case should not affect the plaintiff's right
to bring another action against the partnership when the affairs of the same are
finally wound up. The proper judgment will be that the action be dismissed. The
judgment of the court below is reversed and the case is remanded to that court with
directions to enter a judgment of dismissal. So ordered.