Walter Jackson vs Paul Blum

G.R. No. 26 – 1 Phil. 4 – Civil Law – Partnership – Dissolution – Assignment of Assets – Partner Becomes Co-owner 

A certain Evans and a certain Whaley formed a partnership at will, Evans & Whaley. The firm became indebted to Paul Blum. Eventually, the firm was dissolved. Evans, on his own, is indebted to Jackson. To pay off his debt, Evans transferred all of his interest in the partnership property to Jackson. Meanwhile, said partnership property was not yet liquidated and it’s still in the possession of Whaley – who is also the agent of Blum. Jackson, now having the property rights of Evans, then asked for a liquidation of the partnership property. Meanwhile still, In consideration of the firm’s (Evans & Whaley) indebtedness to Blum, Whaley turned over the property to  Blum.

ISSUE: Whether or not Jackson has the right to ask for liquidation.

HELD: Yes. After the dissolution of the firm, Evans and Whaley became co-owners of the partnership property. And as co-owners, neither of them are required to remain in the co-ownership community. Hence, Evans can validly assign his interest to Jackson. Jackson then acquires the rights of Evans hence he can ask for a liquidation. An exception to this, the Supreme Court notes, is that when personal rights are involved.

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