JOSE ORNUM and EMERENCIANo ORNUM, petitioners,

vs.
MARIANO, LASALA, et al., respondent.

G.R. No. L-47823 July 26, 1943

FACTS:

In 1908 Pedro Lasala, father of the respondents, and Emerenciano

Ornum formed a partnership, wherein Lasala is capitalist partner amounting
to ₱1,000 and Ornum as an industrial partner. The business was to be
conducted on province of Romblon.

In 1912, asked for the dissolution of the partnership because

partnership assets consisted of outstanding accounts and old stock of
merchandise. Ornum looked for new partners which is Jose Ornum. Upon
joining the new partnership, petitioners contributed ₱504.54 plus the
contribution of Pedro Lasala of ₱1,000.

Lasala’s children succeeded all the rights and interests in the

partnership after their father died. The partners did not know each other
personally although they were all native of Taal, Batangas.

There was no formal partnership agreement was created and executed.

But agreed that the petitioners were receive one-half of net gains and
Lasala’s share is the other one-half which will be divided in his children.

After twenty years of operating the business, it had grown the

partnership assets including profits, amounted to ₱44,618.67. The statement
of accounts were prepared by the petitioners periodically and sent to the
respondents who did not make any objection after checking out. Before the
last statement of accounts dated May 27,1932, the respondents had received
₱5,387.29 as share on profit. That was the last and final statement of
accounts after the respondents announced the desire to dissolve the
partnership. Pursuant to the request of respondents, the petitioners remitted
and paid them the amount corresponding to them but it was not signed.
However, the respondents filed a case praying for an accounting and final
liquidation of the partnership.

The Court of First Instance of Manila held that the last

statement of accounts prepared by the petitioners were approved and
accepted by the respondents because by virtue, the respondents lost their
right for further accounting report since they have received and accepted
their shares. The judgment was reversed by Court of Appeals wherein the
final statement of accounts was remained unsigned by the respondents,
therefore, it is disapproved.

ISSUE:
a) Whether or not the accounting stated in the letter including the last and
final statement of account was tacitly accepted by the petitioners as the
final liquidation and accounting of the assets of the partnership.
b) Are there really mistakes and misrepresentations made in the statement of
accounts made?
HELD:

a) Yes. Supreme Court stated that the last and final statement of accounts
had been approved by the respondents. After shares had been paid by the
petitioners and accepted by the respondents without any objection, the
approval of the statement of accounts was confirmed and its signing
thereby became a mere formality to be complied with by the respondents.
The refusal to sign, after receiving their shares, amounted to a waiver to
the formality in favor of the petitioners who has already performed their
obligation. This approval showed any right on the part of the respondents
to a further liquidation, unless the respondents can show that there was
fraud, deceit, error or mistake in said approval.
b) No. The petitioners did not appeal from the decision of the Court such
allegation in the Court of Appeals. There is no justifiable reason (fraud,
deceit, error or mistake) has been positively and unmistakably found by
the Court of Appeals so as to warrant the liquidations sought by the
respondents.