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    Villareal vs. Ramirez

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    maggi
    This case involves a dispute over the return of capital contributions to a partnership. The Supreme Court ruled that: 1) Respondents did not have the right to demand return of their equity share from the petitioners personally, as the capital was contributed to the partnership entity; 2) the exact amount owed could not be determined until partnership assets were liquidated and creditors paid; and 3) the CA's computation of the amount owed was erroneous. The case was remanded for proper proceedings to account for, liquidate, and distribute any remaining partnership assets.

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    Villareal vs. Ramirez

    Uploaded by

    maggi
    66 views2 pages
    This case involves a dispute over the return of capital contributions to a partnership. The Supreme Court ruled that: 1) Respondents did not have the right to demand return of their equity share from the petitioners personally, as the capital was contributed to the partnership entity; 2) the exact amount owed could not be determined until partnership assets were liquidated and creditors paid; and 3) the CA's computation of the amount owed was erroneous. The case was remanded for proper proceedings to account for, liquidate, and distribute any remaining partnership assets.

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    3. Villareal vs. Ramirez

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    This case involves a dispute over the return of capital contributions to a partnership. The Supreme Court ruled that: 1) Respondents did not have the right to demand return of their equity share from the petitioners personally, as the capital was contributed to the partnership entity; 2) the exact amount owed could not be determined until partnership assets were liquidated and creditors paid; and 3) the CA's computation of the amount owed was erroneous. The case was remanded for proper proceedings to account for, liquidate, and distribute any remaining partnership assets.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    66 views2 pages

    Villareal vs. Ramirez

    Uploaded by

    maggi
    This case involves a dispute over the return of capital contributions to a partnership. The Supreme Court ruled that: 1) Respondents did not have the right to demand return of their equity share from the petitioners personally, as the capital was contributed to the partnership entity; 2) the exact amount owed could not be determined until partnership assets were liquidated and creditors paid; and 3) the CA's computation of the amount owed was erroneous. The case was remanded for proper proceedings to account for, liquidate, and distribute any remaining partnership assets.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    of 2

    Villareal vs.

    Ramirez
    G.R. No. 144214; July 14, 2003

    A share in a partnership can be returned only after the completion of the latter’s dissolution,
    liquidation, and winding up of the business.

    This is a petition for review on certiorari of the decision and resolution of the Court of Appeals.

    Facts:
    Luzviminda Villareal, Jesus Jose, and Carmelito Jose formed a partnership. They funded a
    capital for the operation of the restaurant and catering business under the name “Aquarius Food
    House and Catering Services,” which amounted to Php 750,000. Carmelito was appointed as the
    operations manager, while Villareal served as the general manager. On September 5, 1984,
    Donaldo Ramirez (respondent) joined the partnership and contributed a capital amounting to
    Php250,000, which was paid by his parents. In January 1987, Jesus Jose withdrew from the
    partnership and his capital contribution amounting to Php 250,000 was refunded to him.

    During that same month, without prior knowledge of the respondents, the petitioners
    closed down the restaurant allegedly because of increased rental. On March 1, 1987, the
    respondent spouses conveyed to the petitioners that they were no longer interested in
    continuing their partnership or in reopening the restaurant, and that they were accepting the
    latter’s offer to return their capital contribution. After some time, the respondent wrote the
    petitioners a letter reiterating the request for the return of their one-third share in the equity of
    the partnership. However, both written and oral requests were ignored.

    The respondents filed before the RTC a claim for a sum of money from the petitioners,
    contending that they had already expressed a desire to withdraw from said partnership.

    RTC – Decision was rendered in favor of the respondents and against the petitioners, ordering
    the petitioners to pay jointly and severally the amount of Php250,000 as actual damages, Php
    30,000 for attorney’s fees, and costs of suit.
    Note: RTC held that the parties voluntarily entered into a partnership which could be
    dissolved at any time. Petitioners clearly intended to dissolve it when they stopped operating the
    restaurant.

    CA - Decision of the RTC is SET ASIDE and NULLIFIED to make way for the new decision ordering
    the petitioners solidarily to pay and reimburse to the respondents the amount of Php 253, 114.00
    (Php 759,342 yung remaining capital ng partnership, divided into three shares kaya nakuha yung
    Php 253, 114.00).
    Note: CA held that although respondents had no right to demand the return of their
    capital contribution, the partnership was nonetheless dissolved when petitioners lost interest in
    continuing the restaurant.

    Issues:
    1. WON petitioners are liable to respondents for the latter’s share in the partnership;
    2. Whether the CA’s computation of Php 253, 114 as respondents’ share is correct;
    3. Whether the CA was correct in not assessing costs.

    Ruling:
    1. No. Respondents have no right to demand from the petitioners the return of their equity
    share. Except as managers of the partnership, the petitioners did not personally hold its
    equity or assets. “The partnership has a juridical personality separate and distinct from
    that of each of the partners.” As such, since the capital was contributed to the partnership
    and not to the petitioners, it is the partnership that must refund the equity of the retiring
    parties.
    2. No. Before the partners can be paid their respective shares, the creditors of the
    partnership must first be compensated. After that, whatever is left of the partnership
    assets becomes available for the payment of the partners’ shares. As such, in the present
    case, the exact amount to be refunded to the respondents cannot be determined until all
    the partnership assets have been liquidated. CA’s computation should thus be considered
    erroneous.
    3. Yes. As a rule, costs are adjudged against the losing party. However, the courts also have
    the discretion “for special reasons” to decide otherwise. When a decision of the lower
    court is reversed, the higher court normally does not award costs, because the losing
    party relied on the lower court’s judgment. As such, unless it is shown to be capricious,
    award for costs shall not be disturbed by a reviewing tribunal.

    The Petition is GRANTED, and the assailed decision and resolution of the CA is SET ASIDE. This
    disposition is without prejudice to proper proceedings for the accounting, the liquidation and
    the distribution of the remaining partnership assets, if any. No pronouncement as to costs.

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