Manguiob v. Arcangel

G.R. No. 152262 (February 15, 2012)

Facts:

On May 3, 1994, Felimon Manguiob and Alejandra Velasco formed a partnership named Baculin Enterprises, aimed at engaging in the purchase and sale of agricultural and forest products, as well as operating a general merchandise store in Baculin, Baganga, Davao Oriental. Velasco contributed the capital, including the necessary warehouse and store, while Manguiob, as the industrial partner, managed the operations. The partnership ceased operations and was considered dissolved on September 14, 1994.

On December 12, 1994, Velasco filed a complaint against Manguiob in the Regional Trial Court (RTC) of Davao City, alleging that despite the partnership's apparent success, the actual cash on hand did not reflect profitability. Velasco claimed that an audit revealed a net profit of P252,673.50, entitling her to 60% of this amount, or P151,604.10. She also sought the return of P203,156.30, representing the balance of her P320,000 capital investment, as Manguiob had only returned P116,843.20. Velasco accused Manguiob of bad faith for using partnership funds for his own business before the partnership was officially dissolved.

In his answer, Manguiob denied receiving P320,000, asserting that Velasco only contributed P200,000. He contended that he did not possess the partnership's cash and that Velasco had received the proceeds from sales. He also claimed that the audit was not based on the records he provided.

The parties later submitted a Partial Stipulation of Facts and Statement of Issues to the RTC, which included the establishment of the partnership, its dissolution, and the financial records of sales and purchases.

On March 5, 1999, the RTC ruled in favor of Velasco, ordering Manguiob to pay her P498,245.52, which included her capital contribution and her share of the profits. Manguiob appealed this decision to the Court of Appeals, which modified the RTC's ruling regarding the amount due and the interest rate.

Legal Issues:

1. What was the capital contribution of Velasco to the partnership?
2. How much of the proceeds from the sales of copra were returned to Manguiob?
3. What was the net profit realized by the partnership during its operation?
4. Are the parties entitled to their respective claims for damages?
5. Should the value of non-cash assets be considered in determining the amount Manguiob owes Velasco?

Arguments:

• Petitioner (Manguiob):

  • Argued that the RTC erred in its computation of the amounts owed to Velasco, particularly regarding the capital contribution and the net income of the partnership.
  • Contended that the non-cash assets valued at P215,559.06 should be deducted from the amount he was ordered to pay Velasco.
  • Claimed that the interest rate imposed was not supported by a written stipulation and that the award of attorney's fees was unwarranted.

• Respondent (Velasco):

  • Asserted that the RTC's findings regarding her capital contribution and the partnership's profits were supported by evidence.
  • Argued that Manguiob's claims regarding the non-cash assets were not substantiated during the trial and should not be considered on appeal.
  • Maintained that the lower courts correctly computed the amounts due to her.

Court's Decision and Legal Reasoning:

The Supreme Court affirmed the Court of Appeals' decision with modifications. It upheld the findings of both lower courts that a partnership existed and was dissolved on September 14, 1994. The Court confirmed Velasco's capital contribution of P400,000 and her entitlement to 60% of the partnership's net profit of P191,999.98, amounting to P115,199.92.

The Court found that Velasco had retained P116,954.40 from the sales of copra, which was correctly accounted for in the RTC's computation. The final amount due to Velasco was determined to be P398,245.52, after adjusting for the amounts retained.

The Court ruled that the issue regarding the non-cash assets was a question of fact, which could not be resolved in a Rule 45 petition, as it required a review of evidence not presented during the trial. The Court emphasized that issues not raised in the trial court cannot be considered on appeal.

Significant Legal Principles Established:

1. The distinction between questions of law and questions of fact is crucial in appellate proceedings; the Supreme Court does not re-evaluate factual evidence.
2. Issues not timely raised in the trial court are barred by estoppel and cannot be considered on appeal.
3. The proper computation of partnership profits and capital contributions must be supported by clear and convincing evidence.