Ortega v. CA

Facts:

The law firm of ROSS, LAWRENCE, SELPH and CARRASCOSO was duly registered in the Mercantile Registry on 4 January 1937 and reconstituted with the Securities and Exchange Commission on 4 August 1948. The SEC records show that there were several subsequent amendments to the articles of partnership to change the firm name. On 19 December 1980, Joaquin L. Misa, Jesus B. Bito, and Mariano M. Lozada associated themselves together, as senior partners with Gregorio F. Ortega, Tomas O. del Castillo, Jr., and Benjamin Bacorro, as junior partners. On February 17, 1988, petitioner-appellant wrote the respondents-appellees a letter stating his withdrawal and retirement from the firm of Bito, Misa and Lozada and requested to make proper liquidation including his interest to the two floors of the building.

The petitioner led with this Commission's Securities Investigation and Clearing Department (SICD) a petition for dissolution and liquidation of partnership which resulted to respondents-appellees filing their opposition. The Hearing Officer held that the withdrawal of Atty. Misa had dissolved the partnership of Bito, Misa and Lozada. A Motion for Reconsideration was sought but during the pendency of the case in the CA, Bito and Lozada died which prompted Misa to renew his application for receivership.

Issues:

Whether or not CA has erred in holding that the partnership of Bito, Misa & Lozada is a partnership at will;

Whether or not CA has erred in holding that the withdrawal of private respondent dissolved the partnership regardless of his good or bad faith; and

Whether or not CA has erred in holding that private respondent's demand for the dissolution of the partnership so that he can get a physical partition of partnership was not made in bad faith.

Held:

The birth and life of a partnership at will is predicated on the mutual desire and consent of the partners. The right to choose with whom a person wishes to associate himself is the very foundation and essence of that partnership. Its continued existence is, in turn, dependent on the constancy of that mutual resolve, along with each partner's capability to give it, and the absence of a cause for dissolution provided by the law itself. Any one of the partners may, at his sole pleasure, dictate a dissolution of the partnership at will.

Neither would the presence of a period for its specific duration or the statement of a particular purpose for its creation prevent the dissolution of any partnership by an act or will of a partner. Among partners, mutual agency arises and the doctrine of delectus personae allows them to have the power, although not necessarily the right, to dissolve the partnership.

The Court we accord to the CA and the respondent Commission on their common factual finding, that Attorney Misa did not act in bad faith. Public respondents viewed his withdrawal to have been spurred by "interpersonal conflict" among the partners. It would not be right to let any of the partners remain in the partnership under such an atmosphere of animosity; certainly, not against their will. For as long as the reason for withdrawal of a partner is not contrary to the dictates of justice and fairness, nor for the purpose of unduly visiting harm and damage upon the partnership, bad faith cannot be said to characterize the act.