LAW ______ (SUBJECT)

Agno, Balando, Fernandez, Homol, Lordan, Maningas, Manalastas, Mejia, Nana, Sollegue

AGENCY

CASE TITLE Martinez v. Ong Pong Co

FULL CASE NAME PEDRO MARTINEZ, plaintiff-appellee, vs. ONG PONG CO and ONG
LAY, defendants. ONG PONG CO., appellant.

DOCKET NO. & DATE G.R. No. L-5236 | January 10, 1910

PONENTE Arellano, C. J.

TOPIC

NATURE Appeal from the decision of the CFI ordering Ong Pong Co to pay P840 to Pedro
Martinez.

DOCTRINE

SYNOPSIS Pedro Martinez gave Ong Pong Co and Ong Lay P1,500 which is to be invested in a
store. They agreed that the profits and losses are to be divided among them equally.
Eventually, the 2 Ongs were not able to render accounting to Pedro, so Pedro filed a
complaint against them. Later, Ong Lay died, leaving only Ong Pong Co. The CFI
ordered Ong Pong Co to pay P840 (750 for the half of the initial investment, and 90
for the possible profits). Issue is W/N profits should have been included and W/N the
2 Ongs have joint liability. NO, the profit should not have been included, and YES, the
2 Ongs have joint liability. Ong Pong Co must pay P750.

FACTS

 December 12, 1900 – Pedro Martinez delivered P1,500 to Ong Pong Co and Ong Lay. The latter acknowledged
that they received the money (in a private document). Said money (in the agreement) is said to be invested by
Ong Pong Co and Ong Lay in a store, the profits and losses of which are to be divided with Pedro in equal
shares.
 April 25, 1907 – Pedro filed a complaint to compel the Ongs to render him an accounting of the partnership or
else to refund him the P1,500.
o Ong Pong Co alone appeared. He admitted of the delivery of the money, BUT he alleged that Ong Lay
(who already died RIP) was the one who managed the business. Also, nothing had resulted from said
business except the loss of the P1,500.

LOWER COURT RULING

● CFI
○ The judge ordered Ong Pong Co to return to Pedro ½ of the P1,500 (which is P750) PLUS P90 (1/2
of the profits calculated at the rate of 12 per cent per annum for the six months that the store was
supposed to have been open).
■ ALL IN ALL == Ong Pong Co must return P840 with legal interest at 6% per annum from
when the business was terminated (same date when Ong Pong Co should have returned the
same amount to Pedro).
○ Hence this appeal by Ong Pong Co.

1
LAW ______ (SUBJECT)
Agno, Balando, Fernandez, Homol, Lordan, Maningas, Manalastas, Mejia, Nana, Sollegue

ISSUES/RATIO/HELD

● ISSUE 1: WON the CFI erred in not considering that the reason for the closing of the store is the
ejectment of the premises occupied by it – NO. The ejectment is not important (lmao).
○ The fact that the store was closed by virtue of ejectment proceedings is of no importance for the effects
of the suit. The whole action is based upon the fact that the Ongs received certain capital from Pedro
for the purpose of organizing a company; they, according to the agreement, were to handle the said
money and invest it in a store which was the object of the association; they, in the absence of a special
agreement vesting in one sole person the management of the business, were the actual administrators
thereof; as such administrators they were the agent of the company and incurred the liabilities peculiar
to every agent, among which is that of rendering account to the principal of their transactions, and
paying him everything they may have received by virtue of the mandatum. Neither of them has rendered
such account nor proven the losses referred to by Ong Pong Co; they are therefore obliged to refund
the money that they received for the purpose of establishing the said store — the object of the
association.

● ISSUE 2: WON the CFI erred in not considering the losses – NO. There is no evidence that the entire
capital or any part thereof was lost.
○ It is no evidence of such loss to aver, without proof, that the effects of the store were ejected. Even
though this were proven, it could not be inferred therefrom that the ejectment was due to the fact that
no rents were paid, and that the rent was not paid on account of the loss of the capital belonging to the
enterprise.

● ISSUE 3: WON the CFI erred in holding that there should have been profits – YES. There was no proof
that there had been profits, nor is it possible to estimate them.
○ The finding of the court below is based on the statements of Ong Pong Co, to the effect that "there
were some profits, but not large ones." The SC, however, does not find that the amount thereof has
been proven, nor deem it possible to estimate them to be a certain sum, and for a given period of
time; hence, it cannot admit the estimate, made in the judgment, of 12 per cent per annum for the
period of six months.

● ISSUE 4: WON the CFI erred in applying Art 1138 of the CC – NO. (In the Old Civil Code, Art 1138 is
the definition of a solidary/joint obligation). The two Ongs in this case have joint liability to Pedro Martinez.
○ In this case, the partner who acted as agent in receiving money for a given purpose (for which he
made no accounting) failed his obligation. Such agent is responsible only for the losses which, by a
violation of the provisions of the law, he incurred. This being an obligation to pay in cash, there are
no other losses than the legal interest, which interest is not due except from the time of the judicial
demand, or, in the present case, from the filing of the complaint.
○ Article 1688 is not applicable in this case, in so far as it provides "that the partnership is liable to every
partner for the amounts he may have disbursed on account of the same and for the proper interest,"
for the reason that no other money than that contributed is involved.
○ As in the partnership there were two administrators or agents liable for the above-named amount,
Article 1138 of the Civil Code has been invoked. This provision deals with debts of a partnership
where the obligation is not a joint one, as is likewise provided by article 1723 of said code with respect
to the liability of two or more agents with respect to the return of the money that they received from
their principal. Therefore, the other errors assigned have not been committed.

● ISSUE 5 & 6: WON the CFI erred in holding that the capital ought to have yielded profits, and that
the profits should be calculated at 12% per annum – See Issue 3.
● ISSUE 7: WON the CFI erred in the findings of the ejectment – See Issue 1.

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LAW ______ (SUBJECT)
Agno, Balando, Fernandez, Homol, Lordan, Maningas, Manalastas, Mejia, Nana, Sollegue

DISPOSITIVE
- Judgment appealed from is affirmed with modification.
o Ong Pong Co shall only pay P750 with the legal interest thereon at the rate of 6 per cent per annum
from the time of the filing of the complaint, and the costs, without special ruling as to the costs of this
instance.