TESTATE ESTATE OF LAZARO MOTA, deceased, ET AL., plaintiffs-appellants,
vs. SALVADOR SALVADOR SERRA, SER RA, defendant-appellee. VILLAMOR, J.:
FACTS: •
Ps and D entered into a contract of partnership for the construction & exploitation of a railroad line from the "San Isidro" and "Palma" centrals to the place knon as "!andon."
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#he oriinal capital stipulated as P$%,.
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It as covenanted that the parties should pa' this amount in e(ual parts & the plaintiffs ere entrusted ) the administration of the partnership.
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*oever, the areed capital of P$%, did not prove sufficient since the expenses reached P ++, +
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So D entered into a contract of sale ith enancio enancio /oncepcion, Phil. /. 0hitaker, and 1use2io 3. de 4u5uriaa, here2' he sold to the latter the estate and central knon as "Palma" ith its runnin 2usiness, all the improvements, machineries & 2uildins.
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6efore deliver' of the haciendato haciendato the purchasers, de 4u5uriaa renounced all his rihts under the contract of 7essrs. /oncepcion & 0hitaker.
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#his ave rise to the fact that /oncepcion, 0hitaker & Def executed another deed of absolute sale of the said "Palma" 1state for the amount of P$,%,$., of hich the vendor received at the time of executin the deed the amount of P8%,9$., & the 2alance as pa'a2le 2' installments in the form and manner stipulated in the contract.
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#he purchasers purchasers uaranteed uaranteed the unpaid 2alance of the purchase purchase price 2' a first & special special mortae in favor of the vendor upon the hacienda hacienda & the central ith all the improvements, 2uildins, machineries, and appurtenances then existin on the said hacienda. hacienda.
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7essrs. Phil. /. 0hitaker and enancio /oncepcion, in /lause of the deed, expressed aareness of contract of partnership and their illinness to su2roate themselves into the o2liations therefor.
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#hereafter, /oncepcion & 0hitaker also 2ouht from 7ota et al. the of the railroad line and the' areed that the partnership "Palma" and and "San Isidro," formed Isidro," formed 2eteen Serra & 7ota et al, should 2e totall' cancelled and of no force and effect hatever.
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#he price of this sale as P+;<,<++.$%, excludin an' amount hich the D miht 2e oin to the Ps.
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=f the purchase price of of the railroad, /oncepcion &0hitaker paid the sum of P8<,%88.8; onl'.
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So it results that the "*acienda Palma," ith the entire railroad >the su2?ect-matter of the contract of partnership 2eteen Ps and D@ 2ecame the propert' of 0hitaker & /oncepcion.
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*oever, 0hitaker & /oncepcion failed to pa' to the D a part of the purchase price >P<%,@, so the vendor)defendant, foreclosed the mortae upon the said hacienda, hacienda, hich as ad?udicated to him at the pu2lic sale held 2' the sheriff for the amount of P%,, and D put in possession thereof, includin hat as planted at the time, toether ith all the improvements made 2' 0hitaker &/oncepcion.
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Since D, 0hitaker & /oncepcion failed to pa' $)+ of the amount >P$$;,8.8@ expended 2' the Ps upon the construction of the railroad line,the la!nt!ffs instituted the resent act!on pra'in:
>$@ >+@
#hat the the deed of of Ae2ruar' Ae2ruar' $, $$ $$ >contrac >contractt of partnersh partnership@, ip@, 2e 2e declared declared valid and and 2indinB 2indinB that the defendant defendant 2e sentenced sentenced to pa' plaintiff plaintiffss the aforesaid aforesaid sum of P$$;,8 P$$;,8.8, .8, ith the the stipulated stipulated interest at $ per cent per annum annum 2einnin 2einnin June June 8, $+, until until full pa'ment thereof, ith the costs of of the present action.
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Defendant pointed out that he is no relieved from the o2liation 2ecause of the novation of the contract 2' the su2stitution of the de2tor ith the conformit' of the
creditorsB
TRIAL CO"RT CO"RT #$ruled !n fa%or of t&e defendant #he court a quo in quo in its decision held that there as a novation of the contract 2' the su2stitution of the de2tor, and therefore a2solved the defendant from the complaint ith costs aainst the plaintiffs. 0ith reard to the pra'er that the said contract 2e declared valid and 2indin, the court held that there as no a' of revivin the contract hich the parties themselves in interest had spontaneousl' and voluntaril' e xtinuished.
*ence, this petition for revie.
ISS"E:
0)! Defendant is exempt from his o2liation from the partnership on the round that the partnership as dissolvedC
Rul!n':
#he dissolution of a firm does not relieve an' of its mem2ers from lia2ilit' for existin o2liations, althouh it does save them from ne o2liations to hich the' have not expressl' or impliedl' assented, and an' of them ma' 2e dischared from old o2liations 2' novation or other form of release. A artners&! cont!nues, e%en after d!ssolut!on, for t&e urose of (!nd!n' u !ts affa!rs. t the termination of the o2?ect for hich it as created the partnership is extinuished, pendin the indin up of some incidents and o2liations of the partnership, 2ut in such case, the partnership ill 2e reputed as existin until the ?uridical relations arisin out of the contract are dissolved. A artners&! cannot be cons!dered as e)t!n'u!s&ed unt!l all t&e obl!'at!ons erta!n!n' to !t are fulf!lled.
