336 Phil. 321
FRANCISCO, J.:
"Plaintiff-appellee Cesar Cordero and defendant appellant Leopoldo Alicbusan were partners in the operation of Baby's Canteen located in the Philtranco terminal in Pasay City. Under the terms of their partnership agreement, Cordero assumed the position of Managing Partner of the venture while Alicbusan took care of accounting, records keeping and other comptrollership functions (Exhibit '1'). The partnership was to exist for a fixed term, between July 1981 up to July 1984. However, on expiration of the said period both Cordero and appellant Alicbusan continued their relationship under the original term.'1. That the total purchase price shall be TWO HUNDRED FIFTY THOUSAND (P250,000.00) PESOS, Philippine Currency with a downpayment of P50,000.00 which the VENDEE/TRANSFEREE shall pay upon the signing of this agreement;
"On May 11, 1990, plaintiff Cordero instituted Civil Case No. 7322 with the court below for collection for various sums totalling P209,497.36 which was later increased to P309,581.51 in a supplemental complaint (pp. 87-88, Rollo). The claim arose from an arrangement whereby employees of Philtranco were allowed to buy goods and other items from Baby's Canteen on credit which payments were subsequently deducted by Philtranco from the employees' salaries. The total amount was then remitted by Philtranco fifteen days later.
"According to plaintiff-appellee Cordero, the remittances of salary deductions for the months of February, March, April up to May 15, 1990 were withheld by Philtranco on the instigation of herein appellant Leopoldo Alicbusan as President of said company (p. 88, Record). Plaintiff-appellee Cordero averred that the withholding of the remittances to Baby's Canteen was motivated by bad faith on the part of appellant Alicbusan because of business differences arising from another partnership operation between plaintiff and appellant in Sariaya, Quezon (TSN, August 24, 1990, p. 7).
"Additionally, in his supplemental complaint dated 29 June, 1990, plaintiff contended that defendant, in retaliation of (sic) appellee's filing of the original complaint and in order to harass the latter, served notice of termination of lease of a stall leased by plaintiff's wife (Stall No. 6) at the Philtranco Terminal in Malibay, Pasay City (p. 70, Record). According to plaintiff Cordero, all the other leaseholders of stalls in the terminal were not served notice of termination which showed that plaintiff's wife was being singled out, in bad faith.
"In response, defendant Alicbusan averred that he transferred all his rights and interests over Baby's Canteen for the sum of Two Hundred and Fifty Thousand Pesos (P250,000.00) as evidenced by a Deed of Sale and Transfer of Right (Record, p. 40) between the parties on April 5, 1989. Under the said deed, plaintiff-appellee Cordero bound himself to pay under the following terms:
"However, according to appellant Alicbusan, both parties subsequently agreed to forego the P50,000.00 downpayment under an amended schedule in which Cordero obligated himself to pay increased and accelerated installment payments (Record, p. 40). These payments totalling P90,500.00 were made between the 8th day of May, 1989 and November 24, 1989 in various amounts. According to appellant, plaintiff Cordero stopped paying his installment payments after this period in spite of several demands by the defendant (p. 41, Record)."[2]In its decision dated February 7, 1991, the Regional Trial Court of Pasay City ruled in favor of private respondents Cordero and Baby's Canteen, upholding the continued existence of a partnership between respondent Cordero and petitioner, and ordered as follows:
"IN VIEW OF THE FOREGOING, this Court orders:a) the defendant Philtranco to pay the plaintiffs the following amounts:
"x x x The fact of the matter is that the terms enumerated under the deed of sale were never complied with. Plaintiff Cordero never paid the Fifty Thousand Peso downpayment and defendant has adduced no evidence to show that the installments which plaintiff-appellee was supposed to have paid under the terms of the agreement were ever paid or tendered.Finally, on the propriety of the award of moral damages, we find no reason to set aside the same considering that both the Court of Appeals and the trial court found that petitioner acted in gross and evident bad faith in exercising his power and influence as president of Philtranco and caused the withholding of the remittances due to Baby's Canteen from Philtranco.[8] The award of attorney's fees is also in order as a consequence of petitioner's unjust refusal to settle private respondents' just and lawful claim which constrained the latter to litigate in court.
"The Deed of Sale and Transfer of Rights dated the 5th of April, 1989 stipulates the following terms and conditions: 1. a total purchase price of TWO HUNDRED AND FIFTY THOUSAND PESOS (P250,000.00); 2. Downpayment of FIFTY THOUSAND PESOS (P50,000.00); 3. Twenty monthly installments at P10,000.00 per month, payable through post-dated checks, the first installment due within the first five days of May and the succeeding installments being due within the first five days of every month thereafter until the balance shall have been fully paid (Exhibit 'G') In spite of the express conditions of sale, none of these were met and no post-dated checks were advanced. Instead, a series of checks of varying amounts - not TEN THOUSAND PESOS (P10,000.00) as stipulated in the disputed deed of sale - were issued by herein appellee, which the court below found to be dividends from the partnership profits. These checks were issued up to the fifth of January, 1990, long after both parties agreed to the alleged sale (p. 74, Rollo).
"These events, together with the defendant's apparent performance of his comptrollership functions after the deed was signed, militiate against the defendant's contention that the partnership was terminated on the 5th of April 1989. Based on the evidence at hand, defendant Alicbusan continued to oversee and check daily sales reports and vouchers. He was the approving authority as far as check vouchers were concerned. Furthermore, the evidence shows that he subsequently delegated this function to his wife (Exh. 'H', 'H-1'; Exh. 'I', 'I-1'; Exh. 'J'). An Audit Report (Exh. 'N') carries notations and suggestions by defendant Alicbusan, which attached balance sheet dated June 30, 1989 lists the Partner's capital as P42,362.00 each for LCA (identified as Leopoldo Alicbusan, see TSN, Aug. 24, 1990, p. 120) and CSC (identified as Cesar C. Cordero, herein plaintiff, ibid), for a total partnership capital of P84,724.00. During this time, the defendant did not object to his inclusion in the report as a partner of Baby's Canteen, which he would have if the sale were not simulated."[7]