Encarnacion Magalona v. Juan Pesayco

Summary

This 1934 Supreme Court case involved a partnership dispute over a fishing business venture in Antique Province. Three partners formed an oral agreement to catch and sell fish fry, with defendant Pesayco as manager. Despite successfully operating the business and generating P2,925 in profits from selling 975,000 semillas de bañgus, Pesayco failed to account for these earnings to his partners. The Supreme Court affirmed the trial court's decision requiring Pesayco to account for the full P2,925 to the partnership. Significantly, the Court established that oral partnership agreements are legally valid under Civil Code Article 1667, rejecting arguments that written agreements are mandatory for all partnerships. The case reinforces partnership accounting obligations and the enforceability of oral commercial agreements in Philippine jurisprudence.