PEDRO MARTINEZ VS. ONG PONG CO AND ONG LAYG.R. No. L-5236, January 10, 1910

FACTS:Pedro Martinez (plaintiff) delivered Php.1,500.00 to Ong Pong Co and Ong Lay (defendants). Said amount was reflected in a private instrument where the plaintiff and defendants agreed that they are to invest the amount in a store, the profits or losses of which we are to divide with the former, in equal shares. The store business was a failure and the plaintiff demanded from the defendants either to render an accounting of the partnership as agreed to, or to refund him the Php.1,500.00. Ong Pong Co alleged in his defense that his co-defendant Ong Lay, now deceased, was the one who managed the business. He also alleged that nothing had resulted from the business venture save the loss of the capital of Php.1,500.00, to which the plaintiff agreed.

ISSUE: Upto what extent are partners liable?

HELD: The partners are liable jointly. The defendants acted as administrators and as such, they were obliged to render an accounting of the business. Since both failed in this aspect, they are obliged to return the capital. Article 1688 of the Civil Code (Article 1796 of the New Civil Code) which 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 does not apply to the case at bar since no other money than the one contributed by the plaintiff was involved. The court ruled that Ong Pong Co should pay Pedro Martinez the sum of Php.750.00 with the legal interest thereon, being liable jointly.