1.

Moran Jr vs CA
In February 1971, Isabelo Moran and Mariano Pecson entered into a partnership
agreement where they agreed to contribute P15k each for the purpose of printing 95k
posters of the delegates to the then 1971 Constitutional Commission. Moran shall be in
charge in managing the printing of the posters. It was further agreed that Pecson will receive
a commission of P1k a month starting from April 1971 to December 1971; that the
partnership is to be liquidated on December 15, 1971.
Pecson partially fulfilled his obligation to the partnership when he issued P10k in favor of the
partnership. He gave the P10k to Moran as the managing partner. Moran however did not
add anything and, instead, he only used P4k out of the P10k in printing 2,000 posters. He
only printed 2,000 posters because he felt that printing all 95k posters is a losing venture
because of the delay by the COMELEC in announcing the full delegates. All the posters were
sold for a total of P10k.
Pecson sued Moran. The trial court ordered Moran to pay Pecson damages. The Court of
Appeals affirmed the decision of the trial court but modified the same as it ordered Moran to
pay P47.5k for unrealized profit; P8k for Pecsons monthly commissions; P7k as return of
investment because the venture never took off; plus interest.
ISSUE: Whether or not the CA judgment is correct.
HELD: No. The award of P47.5k for unrealized profit is speculative. There is no evidence
whatsoever that the partnership between the Moran and Pecson would have been a
profitable venture (because base on the circumstances then i.e. the delay of the COMELEC
in proclaiming the candidates, profit is highly unlikely). In fact, it was a failure doomed from
the start. There is therefore no basis for the award of speculative damages in favor of
Pecson. Further, there is mutual breach in this case, Pecson only gave P10k instead of P15k
while Moran gave nothing at all.
As for the P8k monthly commission, this is without basis. The agreement does not state the
basis of the commission. The payment of the commission could only have been predicated
on relatively extravagant profits. The parties could not have intended the giving of a
commission inspite of loss or failure of the venture. Since the venture was a failure, Pecson
is not entitled to the P8k commission.
As for the P7k award as return for Pecsons investment, the CA erred in his ruling too.
Though the venture failed, it did took off the ground as evidenced by the 2,000 posters
printed. Hence, return of investment is not proper in this case. There are risks in any
business venture and the failure of the undertaking cannot entirely be blamed on the
managing partner alone, specially if the latter exercised his best business judgment, which
seems to be true in this case.
Moran must however return the unused P6k of Pecsons contribution to the partnership plus
P3k representing Pecsons profit share in the sale of the printed posters. Computation of P3k
profit share is as follows: (P10k profit from the sale of the 2,000 posters printed) (P4k
expense in printing the 2k posters) = (P6k profit); Profit 2 = P3k each.