Guidote v. Borja October 24, 1928 MAXIMO GUIDOTE, Guidote-appellant, !" #OMA$A %O#&A, a! ad'ini!tratri( o) t*e e!tate o) $arci!

o +anto!, decea!ed, %or,a-appellee" OSTRAND, J.: SUMMARY: +ur i in- partner a!.ed t*e reco er/ o) !u' o) 'one/ )ro' e!tate o) t*e decea!ed partner 0*o in turn pra/ed )or a )ull and co'plete accountin- o) t*e partner!*ip bu!ine!! !ince t*e !ur i in- partner )ailed to li1uidate t*e a))air! o) t*e partner!*ip and to render an account to t*e e!tate" T2 ordered t*e !ur i in- partner to render an account, *o0e er, *i! e idence, 0itne!!e!3 te!ti'on/ 0ere unreliable !*o0in- an intent to 'ulct decea!ed partner!*ip )or 49,555" T*u!, T2 ordered t*e e!tate o) t*e decea!ed partner to render an accountin-" In latter accountin-, t*e !ur i in- partner 0a! *eld liable )or a certain !u' 0*ic* t*e court ordered *i' to pa/" +ur i in- partner ar-ue! t*at *e cannot be liable )or certain !u' and t*at t*e decea!ed partner -enerall/ too. care o) t*e pa/'ent! and collection! o) t*e partner!*ip t*u! *i! le-al repre!entati e! 0ere under t*e obli-ation to render account! o) t*e operation! o) t*e partner!*ip" HELD: A! !ur i in- partner, *e *a! a dut/ to render t*e account, not t*e e!tate o) t*e decea!ed partner" 6*en *e )ailed to do !o, *e cannot ar-ue a-ain!t t*e accountin- rendered b/ t*e e!tate o) t*e decea!ed partner pro idin- )or *i! liabilit/" DOCTRINE: T*e deat* o) one o) t*e partner! di!!ol e! t*e partner!*ip, but t*at t*e li1uidation o) it! a))air! i! b/ la0 intru!ted, not to t*e e(ecutor! o) t*e decea!ed partner, but to t*e !ur i in- partner! or t*e li1uidator! appointed b/ t*e'" It i! t*e dut/ o) !ur i inpartner! to render an account o) t*e per)or'ance o) t*eir tru!t to t*e per!onal repre!entati e! o) t*e decea!ed partner, and to pa/ o er to t*e' t*e !*are o) !uc* decea!ed 'e'ber in t*e !urplu! o) )ir' propert/, 0*et*er it con!i!t! o) real or per!onal a!!et!" FACTS: &une 17, 19188 A partner!*ip *ad been )or'ed bet0een $arci!o +anto! 9 Mai(i'o Guidote under t*e na'e "Taller Sinukuan," in 0*ic* +anto! :decea!ed; 0a! t*e capitali!t partner and t*e Guidote t*e indu!trial partner April <, 19258 +anto! died lea in- t*e Guidote a! t*e !ur i in- partner Marc* 4, 19218 Guidote brou-*t an a tio! a"ai!#t t$e ad%i!i#tratri& o' t$e e#tate o) $arci!o +anto!, decea!ed, to reco er t*e !u' o) 49,7=4"14" o 4art o) 0*ic* 0a! !et (ro'it# due to Guidote in a partner!*ip bu!ine!! o #e!t o) t*e !u' con!i!tin- o) adva! e# alle-ed to *a e been 'ade to !aid partner!*ip b/ Guidote" %or,a ad'itted t*e e(i!tence o) t*e partner!*ip 9 in a cro!!-co'plaint and counter-clai' pra/ed t*at Guidote be ordered to re!der a! a ou!ti!" o' t$e (art!er#$i( )u#i!e## and to pa/ to t*e e!tate o) t*e decea!ed *+,-... a# !et (ro'it#- redit#- a!d (ro(ert/ pertainin- to !aid decea!ed" Guidote called !e eral 0itne!!e! and introduced a !o-called accountin- and a 'a!! o) docu'entar/ e idence con!i!tin- o) boo.!, bill!, and alle-ed ouc*er! o +aid docu'entar/ e idence 0a! !o *opele!!l/ and ine(tricabl/ con)u!ed t*at T2 could not con!ider it o) 'uc* probati e alue" TC8 Di!'i!!ed Guidote>! co'plaint and ab!ol ed %or,a" Ordered Guidote to render a )ull and co'plete accountin-, eri)ied b/ ouc*er!, o) t*e partner!*ip bu!ine!! )ro' &une 17, 1918, until +ept" 1, 1922" o Guidote 'ai0ed to 0i1uidate t$e a''air# o' t$e (art!er#$i( and to re!der a! a ou!t t*ereo) to t*e ad'ini!tratri( o) +anto!> e!tate" To t*i! deci!ion and order t*e Guidote dul/ e(cepted" Guidote t*ereupon rendered an account prepared b/ one To'a! Al)on!o, a public accountant" $u'erou! ob,ection! to !aid account 0ere pre!ented b/ t*e %or,a TC: Upon *earin-, di!appro ed t*e account and ordered t*at %or,a !ub'it to t*e court an accountin- o) t*e partner!*ip bu!ine!! )ro' t*e date o) t*e co''ence'ent o) t*e partner!*ip, &une 17, 1918, up to t*e ti'e t*e bu!ine!! 0a! clo!ed &an" 27, 19248 %or,a pre!ented an account and li1uidation prepared b/ a public accountant, +antia-o ?inda/a, !*o0in- a balance o) 429,588"97 in )a or o) t*e %or,a" Account 0a! !et do0n )or *earin- upon t*e 1ue!tion o) it! appro al or di!appro al b/ t*e court, at 0*ic* *earin- t*e %or,a introduced t*e public accountant 2o#e Turia!o Sa!tia"o to te!ti)/ a! to t*e re!ult! o) an audit 'ade b/ *i' o) t*e account! o) t*e partner!*ip" o @e *ad been a public accountant )or o er 25 /ear!, *a in- appeared in court a! !uc* on !e eral occa!ion! o @e *ad e(a'ined t*e e(*ibit! o))ered in e idence o) t*e ca!e b/ bot* partie! o @e *ad prepared a !eparate accountin- or li1uidation !i'ilar in re!ult! to t*at prepared b/ ?inda/a, but 0it* a )e0 di))erence! in t*e !u'! total o Ainancial !tatu! o) t*e partner!*ip 0a! a! )ollo0!8 Narciso Santos is a creditor of the Taller Sinukuan in the sum of P26, 2 .!": Aor *i! capital - 412,788"7=B Aor *i! credit - 15,=48"=5B Aor *i! !*are o) t*e pro)it! - =,5<8"5< #a$imo %uidote is a de&tor to the Taller Sinukuan in the sum of P26, 2 .!": Aor *i! debt - 429,588"97B ?e!! *i! !*are o) t*e pro)it! - =,5<8"5< In order to contradict t*e conclu!ion! o) ?inda/a and &o!e Turiano +antia-o, Guidote pre!ented To'a! Al)on!o and t*e boo..eeper, 4io Gaudier, a! 0itne!!e! in *i! )a or" TC: In re-ard to t*e c*aracter o) t*e te!ti'on/ o) t*e!e 0itne!!e!, T2 !aid t*e te!ti'on/ o) t*e!e t0o 0itne!!e! i! !o unreliable t*at t*e court can place no reliance t*ereon" o Al)on!o i! t*e !a'e public accountant 0*o )iled t*e li1uidation on be*al) o) Guidote, in relation to t*e partner!*ip bu!ine!!, 0*ic* li1uidation 0a! di!appro ed b/ T2 in it! deci!ion o) Au-" 25, 192=" o A0'o!#o: Guidote, a 'ere indu!trial partner, not0it*!tandin- *i! *a in- recei ed t*e !u' o) 421,<49"<1 on t*e ariou! ,ob! and contract! o) t*e 'Taller Sinukuan,' *ad actuall/ e(pended and paid 4<=,=<5"2C, o) 444,C15"<< in e(ce!! o) t*e -ro!! receipt! o) t*e bu!ine!!"

I'probable on it! )ace 9 'ateriall/ contradict! t*e alle-ation! o) Guidote>! co'plaint to t*e e))ect t*at t*e ad ance! 'ade b/ t*e Guidote onl/ to 42,51C"75" o Gaudier i! t*e !a'e boo..eeper 0*o prepared = entirel/ !eparate and di!tinct li1uidation )or t*e !a'e partner!*ip bu!ine!! all o) 0*ic* 0ere repeated b/ T2 in it! deci!ion! o) +ept" 1, 1922" Te!ti'on/ -i en b/ *i' at t*e la!t *earin- i! con)u!in-, contradictor/ and unreliable" o Ot*er 0itne!!e!8 2annot o erco'e t*e te!ti'on/ o) +antia-o C$ua C$a3: A)ter identi)/in- and te!ti)/in- a! to a certain e(*ibit !*o0n *i' b/ coun!el )or Guidote, !*o0ed t*at *e could neit*er read nor 0rite En-li!*, +pani!*, or Ta-alo C0aro Re/e#: A)ter po!iti el/ a!!urin- T2 t*at a certain e(*ibit tendered *i' )or identi)ication 0a! an ori-inal docu'ent, 0a! )orced to ad'it t*at it 0a! but a 'ere cop/" TC: 2onclu!ion! reac*ed b/ ?inda/a a! 'odi)ied b/ +antia-o 0ere ,u!t and correct" Ordered Guidote to pa/ t*e %or,a 42<,525"89 0it* le-al intere!t Aro' t*i! ,ud-'ent t*e Guidote appealed to t*i! court" ISSUES: 1" 6*et*er T2 erred in di!'i!!in- t*e Guidote>! co'plaint and orderin- *i' to pre!ent a li1uidation o) t*e operation! and account! o) t*e partner!*ip )or'ed 0it* t*e decea!ed $arci!o +anto!, )ro' t*e be-innin- o) t*e partner!*ip until +ept" 1, 1922D :$O; 2" 6*et*er T2 erred in appro in- t*e li1uidation 'ade b/ t*e public accountant ?inda/a, 0it* t*e 'odi)ication introduced b/ 0itne!! +antia-oD :$O; =" 6*et*er T2 erred in orderin- Guidote to pa/ to %or,a t*e !u' o) 42<,525"89D :$O; RATIO: I. Guidote: Di!'i!!al o) *i! co'plaint 0a! pre'ature" SC: +o'e 'erit !ince t*e better practice 0ould *a e been to let t*e co'plaint !tand until t*e re!ult o) t*e li1uidation o) t*e partner!*ip a))air! 0a! .no0n" %ut under t*e circu'!tance! o) t*i! ca!e no *ar' 0a! done b/ t*e di!'i!!al o) t*e co'plaint, and t*e error i! not re er!ible" Guidote: +anto!, up to t*e ti'e o) *i! deat*, -enerall/ too. care o) t*e pa/'ent! and collection! o) t*e partner!*ip, *i! le-al repre!entati e! 0ere under t*e obli-ation to render account! o) t*e operation! o) t*e partner!*ip, not0it*!tandin- t*e )act t*at Guidote 0a! in c*ar-e o) t*e bu!ine!! !ub!e1uent to t*e deat* o) +anto!" SC: 6it*out 'erit" 6a*l !" Donald!on +i'9 2o 8 T$e deat$ o' o!e o' t$e (art!er# di##o0ve# t$e (art!er#$i(- )ut t$at t$e 0i1uidatio! o' it# a''air# i# )/ 0a4 i!tru#ted- !ot to t$e e&e utor# o' t$e de ea#ed (art!er- )ut to t$e #urvivi!" (art!er# or t$e 0i1uidator# a((oi!ted )/ t$e% :citin- Art" 229 o) t*e 2ode o) 2o''erce and !ec!" <<4 and <<7 o) t*e 2ode o) 2i il 4rocedure;" +a'e rule i! laid do0n b/ +2 o) +pain in !entence o) Oct" 12, 18C5" II 5 III. T*e ot*er a!!i-n'ent! o) error *a e re)erence onl/ to 1ue!tion! o) )act in re-ard to 0*ic* t*e )indin-! o) T2 belo0 !ee' to be a! nearl/ correct a! po!!ible upon t*e e idence pre!ented" T*ere 'a/ be error! in t*e interpretation o) t*e account!, and it i! po!!ible t*at 42<,525"89 c*ar-ed a-ain!t Guidote i! e(ce!!i e, but t*e e idence pre!ented b/ *i' i! !o con)u!in- and unreliable a! to be practicall/ o) no 0ei-*t and cannot !er e a! a ba!i! )or a read,u!t'ent o) t*e account! prepared b/ t*e accountant ?inda/a and t*e apparentl/ reliable 0itne!!, &o!e Turiano +antia-o" 6e 0ould *a e been 'ore inclined to 1ue!tion t*e conclu!ion! o) ?inda/a and +antia-o i) t*e Guidote *ad !*o0n a di!po!ition to render an *one!t account o) t*e bu!ine!! and to e))ect a )air li1uidation o) t*e partner!*ip" In!tead o) doin- !o, *e *a! b/ 'ean! o) er/ 1ue!tionable, and apparentl/ )al!e, e idence !ou-*t to 'ulct *i! decea!ed partner>! e!tate to t*e e(tent o) o er 49,555" RULE FOR THE CONDUCT OF A SUR6I6ING *ARTNER :25 #" 2" ?", 155=;: In e1uit/, !ur i in- partner! are treated a# tru#tee# o' t$e re(re#e!tative# o' t$e de ea#ed (art!er, in re-ard to t*e intere!t o) t*e decea!ed partner in t*e )ir'" o A! a con!e1uence o) t*i! tru!tee!*ip, !ur i in- partner! are *eld in t*eir dealin-! 0it* t*e )ir' a!!et! and t*e repre!entati e! o) t*e decea!ed to t*at !i et/ o' dea0i!" a!d t$at #tri t!e## o' a ou!ta)i0it/ re1uired o) and incident to t*e po!ition o) one occup/in- a con)idential relation" o It i# t$e dut/ o' #urvivi!" (art!er# to re!der a! a ou!t o' t$e (er'or%a! e o' t$eir tru#t to t$e (er#o!a0 re(re#e!tative# o' t$e de ea#ed (art!er- a!d to (a/ over to t$e% t$e #$are o' #u $ de ea#ed %e%)er i! t$e #ur(0u# o' 'ir% (ro(ert/- 4$et$er it o!#i#t# o' rea0 or (er#o!a0 a##et#. CASE AT BAR: Guidote *a! co'pletel/ )ailed to ob!er e t*e rule 1uoted, and *e i! not in po!ition to co'plain i) *i! te!ti'on/ and t*at o) *i! 0itne!!e! i! di!credited" DIS*OSITI6E: T2 A))ir'ed"