The lighting system for Manila cemeteries on All Souls’ Day in 1934 was managed by Matic with permission from Manila City. The agreed payment of P8,773 had to be secured by Luzon Surety Co. Quiogue was authorized by Matic to negotiate a contract with Mora Electric Co., Inc. for the materials and labor required for installation. Both Matic and Quiogue were responsible for paying P8,773 to the City of Manila, which would be deducted from the payment received from Mora Electric.
Due to the business's failure, the City did not receive payment for the debt owed. Luzon Surety had to intervene and cover this amount, leading them to sue Matic and Quiogue for its recovery. Likewise, both respondents took legal action against Mora in order to collect the outstanding amount of P8,773.
The CFI and the Court
...of Appeals ruled that Mora Electric must pay the amount along with interest. Subsequently, Mora filed a petition for review on certiorari.
According to its contract with Matic and Quiogue, W/N Mora Electric is obligated to make payments to the City of Manila.
The court held that Mora Electric is liable.
The Court of Appeals has decided that the petitioner needs to reimburse Matic and Quiogue for a payment made on behalf of the City of Manila. Nevertheless, the petitioner contends that their agreement with Quiogue constituted a civil partnership and asserts that Quiogue should also share in covering the payment. The petitioner refers to provisions in the Civil Code concerning the distribution of profits and losses in partnerships. However, it is important to note that this particular issue does not
pertain to dissolving the partnership or dividing profits and losses.
The petitioner, being a co-partner, had a contractual obligation to pay the City of Manila a certain amount of money as agreed with Quiogue. This payment is not considered as profit or loss but rather an essential payment. Regrettably, the petitioner's violation had adverse effects on both respondents. Assessing the financial condition of the partnership is challenging because neither party has provided a financial report that outlines the business's income or expenses.
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