G.R. No. 47823 ; July 26, 1943
JOSE ORNUM and EMERENCIANA ORNUM, petitioners, vs. MARIANO LASALA, et al., respondents.

FACTS

The respondents (Lasala group) and petitioners (Jose and Emerenciana Ornum) were partners. The partnership originated in 1908 between Pedro Lasala (father of respondents, as capitalist) and Emerenciano Ornum (as industrial partner). In 1912, the petitioners replaced Emerenciano Ornum, contributing P505.54 as capital, joining Pedro Lasala’s capital of P1,000 (the appraised value of the prior partnership’s assets). The petitioners acted as industrial/managing partners in Romblon. Profits were split: one-half of net gains went to the petitioners as industrial partners; the other half was divided among all partners in proportion to their capital contributions. Partners periodically reinvested their profit shares as additional capital. Over twenty years, the business grew to a total value of P44,618.67. The petitioners periodically sent statements of account to the respondents, who never objected. Before the final statement, respondents had received P5,387.29 in profits. On May 27, 1932, after respondents expressed a desire to dissolve the partnership, the petitioners prepared a final statement of accounts showing the net amounts due to each partner after deducting sums previously withdrawn. On July 19, 1932, Father Mariano Lasala (respondents’ spokesman) wrote to the petitioners, stating their need to withdraw capital and profits due to a large obligation, requesting payment by the end of July 1932, and promising to sign the balance (the final statement) once they received the money. The petitioners then remitted the amounts specified in the final statement to the respondents, who accepted the payment but did not sign the statement. Subsequently, the respondents filed a complaint for accounting and final liquidation. The Court of First Instance ruled for the petitioners, holding the final statement was tacitly approved. The Court of Appeals reversed, holding the statement was not final because it remained unsigned by the respondents.

ISSUE

Whether the final statement of accounts prepared by the petitioners was approved by the respondents, thereby precluding their right to a further accounting and liquidation.

RULING

Yes. The Supreme Court reversed the decision of the Court of Appeals and reinstated the judgment of the Court of First Instance. The final statement of accounts was approved by the respondents. This approval resulted from: (1) the respondents’ failure to object to the statement; (2) their promise in Father Mariano Lasala’s letter to sign it upon receipt of their shares; and (3) their subsequent acceptance of the payment of those shares without reservation. The signing of the statement then became a mere formality, and the respondents’ refusal to sign after receiving payment constituted a waiver of that formality in the petitioners’ favor. Such approval precludes a further liquidation unless fraud, deceit, error, or mistake is shown. The Court of Appeals made no finding of fraud. Its suggestion of possible mistakes was based merely on the parties’ allegations (including a withdrawn counterclaim by the petitioners alleging an overpayment) and was not a positive finding of fact sufficient to justify a revision. Therefore, the respondents are not entitled to a further accounting.