Eduardo B. Baguio, et al. vs. Alberto O. Co

[SEC-SICD * CASE NO. 2797. August 13, 1990.] EDUARDO B. BAGUIO, ET AL. , petitioners , vs . ALBERTO O. CO , respondent . D E C I S I O N This is an action for accounting, recovery of net profits and damages. The parties herein are the limited partners of a real estate firm under the name of Daystar Real Estate Services, Ltd. The said firm started business operation sometime in January 1984. Under the provisions of the articles of partnership, the said firm will engage and act as a real estate broker and the proceeds or net profit of which shall be divided equally among the four (4) partners. Defendant Alberto O. Co assumes the position of General Manager while plaintiffs Eduardo B. Baguio and Joaquin B. Baluyot act as the assistant and business operation supervisor, respectively. Plaintiffs alleged that during the operation of the business from its inception, up to April 1984, the partnership had earned and realized a net profit in the amount of FORTY THOUSAND (P40,000.00) PESOS, more or less, which every net profit the parties have agreed to divide among themselves quarterly; that the firm had, likewise, an expected income upon final take out of the loan from the Pag-IBIG Fund thru the originating bank, the Urban Bank of Makati of the firm's clients in the minimum amount of P250,000.00; that sometime in April 1984, plaintiff Joaquin Baluyot was made to stop working with the firm by the defendant for unknown reason and without just and valid cause, and by reason of which, the said plaintiff caused to send a letter demanding accounting of the partnership's proceeds; that plaintiff Eduardo B. Baguio was also made to stop performing his functions in the partnership by the defendant sometime in September 1984 and was forced not to report anymore for office; that defendant refused and failed to give unto plaintiff Joaquin B. Baluyot the royalty commission due the latter which he derived by reason of his functions in the partnership in the amount of P9,757.12 and likewise failed to give to plaintiff Eduardo B. Baguio the overriding commission in the amount of P5,000.00 more or less, despite repeated demands; that defendant received all the equity payments made by the clients to the partnership since the start of the operation, and still at present failed to render an accounting of the same despite demands to do so; that defendant has the full control and management of the operation of the partnership and he is the only one enjoying the profits and proceeds of the business operation to the prejudice and damage of the plaintiffs; that plaintiffs made several demands upon the defendant to give them their due shares but defendant refused and failed and still continue to refuse and fail to satisfy plaintiffs' demand. Defendant filed a motion to dismiss the complaint, the resolution of which however was deferred until after the trial on the merits. Thereupon, defendant filed his answer and alleged as special and affirmative defenses that the partnership never operated due to the lack of necessary licenses to enable it to operate, which licenses were to be secured by the plaintiffs; that the amounts claimed by the plaintiffs are illusory and speculative considering that there was no actual operation to speak of; that the said amounts, if true, would rightfully belong to the defendant by virtue of his being the contractor of the house built on the real estate allegedly sold; that the alleged acts of termination is nothing more than the acts of the plaintiffs when the defendant confronted them, as to the requirements of licensing, a condition precedent to the operation of the alleged partnership; that the unanswered attempts of the plaintiffs to require the defendant to submit an accounting is superfluous, there being no business operation of the alleged partnership; that any and all losses or damages claimed by the plaintiffs are of their own making, the instant complaint having no basis in law. Hearings were conducted wherein the plaintiffs presented and formally offered their documentary evidence which were admitted. On the other hand, the defendant failed to present his evidence notwithstanding sufficient time and opportunity to do so. Upon motion of counsel for plaintiff Joaquin Baluyot, defendant was declared to have waived his right to present evidence and the case was submitted for decision in the Order dated September 6, 1989. The evidence adduced by the plaintiffs clearly established their entitlement to an accounting and recovery of the equivalent amount of the net profits of the partnership. Upon the other hand, since respondent was declared to have waived his right to present evidence, for all legal intents and purposes defendant have no evidence at all and the evidence for the plaintiffs remain unrebutted. WHEREFORE, judgment is hereby rendered as follows: 1. Directing the defendant to render an accounting of the equity payments paid to the partnership; 2. Ordering the defendant to pay each of the plaintiffs the sum equivalent to 25% of the net profits of the partnership with legal interest thereon; and to pay the plaintiffs the sum of P8,000.00 representing attorney's fees. No pronouncement as to costs. SO ORDERED. (SGD.) ENRIQUE L FLORES, JR., Hearing Officer