G.R. No. L-14084; February 16, 1920
GREGORIO JOAQUIN Y TUASON, ET AL., plaintiffs-appellants, vs. MAXIMO JOAQUIN, ET AL., defendants-appellees.

FACTS:
Maximo Joaquin was first married to Juana Bernardo, with whom he had five children. During this marriage, they acquired conjugal properties worth P1,800. Upon Juana’s death, her brother Simeon Bernardo demanded that Maximo deliver half of the P1,800 to Juana’s children. Instead, Maximo entered into an agreement with Simeon (acting on behalf of the minor children) to form a partnership using the P1,800 as capital, with half belonging to Maximo and half to the children, and profits to be divided equally. By the time Maximo married his second wife, Francisca Tuason, this capital had grown to P3,677. During the second marriage, which produced four children, the capital increased to P163,250. After Francisca’s death, the children from the second marriage sued for liquidation of Maximo’s properties. Maximo presented a liquidation plan allocating shares to himself and the children from both marriages based on the premise that the P3,677 brought into the second marriage was partnership capital between him and his children from the first marriage. The trial court approved this liquidation. The children from the second marriage appealed.

ISSUE:
Whether the liquidation presented by Maximo Joaquin, which treats the P3,677 brought into his second marriage as capital of a valid partnership between him and his children from his first marriage, is legally correct.

RULING:
Yes, the Supreme Court affirmed the trial court’s judgment approving the liquidation. The Court held:
1. The partnership between Maximo and his children from the first marriage was a limited partnership for the specific sum of P1,800, not a universal partnership.
2. Although Maximo, as surviving spouse, had a usufruct over the children’s share of the conjugal property from the first marriage, he validly renounced this usufruct by agreeing to form a partnership and share profits equally.
3. The initial partnership contract, entered into by Simeon Bernardo on behalf of the minor children, was voidable due to Simeon’s lack of legal representation. However, the contract was ratified by the children upon reaching majority age, as evidenced by their continued assistance in the partnership and their defense of its existence in the present case. This ratification cured the initial defect and validated the partnership from its inception.
4. The evidence clearly showed that the properties subject to liquidation originated from the P3,677 partnership capital and were the fruits of the joint efforts of the partners.
Therefore, the liquidation correctly allocated the assets among Maximo and the children from both marriages based on the valid partnership.