Documenti di Didattica
Documenti di Professioni
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I. NATURE
II. FACTS
III. ISSUES/HELD/RATIONALE
I. NATURE
II. FACTS
III. ISSUES/HELD/RATIONALE
1
PARTNERSHIP, AGENCY AND TRUSTS - Case Digests
Prof. Ramon Quintin Claudio C. Allado
II. Partnership – E – Dissolution and Winding Up – Articles 1828 to 1842
recover the portion of the pond belonging to his predecessor before the completion
of the liquidation of the partnership
Doctrine Death of a partner dissolves a civil partnership. From then on, the partnership acquires
the legal status of a partnership in liquidation. Before this liquidation is made, it is
impossible to determine what rights or interests, if any, the deceased had, the
partnership bond having been dissolved. Thus the heir of the latter may not sustain an
action to recover his (deceased) share.
When the surviving partner required the heirs of the deceased partner to contribute
to the payment of the expenses of the industry, it may be construed as an attempt to
continue the partnership. However, when neither the said heirs collectively or
individually, took any action in response to that requirement, nor made any promise
to that effect, no new contract of partnership existed.
I. NATURE
APPEAL from a judgment of the CFI awarding Domingo ½ of the fishpond in question
II. FACTS
III. ISSUES-HELD-RATIONALE
Does Domingo have any right to maintain an action for the recovery of one-half of the said fish
pond? - NO.
2
PARTNERSHIP, AGENCY AND TRUSTS - Case Digests
Prof. Ramon Quintin Claudio C. Allado
II. Partnership – E – Dissolution and Winding Up – Articles 1828 to 1842
1. It was conclusively proved that a partnership was formed. Furthermore, the partnership
formed was civil in nature. It was likewise a particular partnership (Art. 1678).
a. Particular partnership, subject matter - the exploitation of the fish pond;
2. The fish pond does not include the land on which the fish pond was built;
a. It was not shown that Bearneza participated in the ownership of said land;
b. Dequilla had been paying, as exclusive owner of the fish pond, the land tax thereon;
3. The partnership was dissolved upon the death of Bearneza:
a. The partnership was not organized in the form of a mercantile partnership, thus, the
provisions of the Code of Commerce were not applicable (Art. 1670 CC);
b. Applicable provision - Art. 1700, subsection 3; NOT the exception established
thereon;
c. There was no stipulation on the continuance of the partnership (Art. 1704 CC);
d. Dequilla's act in requiring the heirs of Bearneza to contribute to the payment of the
expenses of exploitation of the fishing industry was an attempt to continue the
partnership. However, neither the said heirs collectively, nor the plaintiff individually,
took any action in response to that requirement, nor made any promise to that effect,
and therefore no new contract of partnership existed.
4. Upon dissolution, the partnership acquires the legal status of a partnership in liquidation. The
only rights inherited by her testamentary heir (Domingo), were those resulting from the said
liquidation in favor of the deceased partner, and nothing more. Before this liquidation is
made, it is impossible to determine what rights or interests, if any, the deceased had,
the partnership bond having been dissolved.
5. A community of property does not exist between the plaintiff and the defendant. It not
known whether the deceased still had any interest in the partnership property which could
have been transmitted by will to the plaintiff. Art. 395 not applicable.
Judgment modified.
3
PARTNERSHIP, AGENCY AND TRUSTS - Case Digests
Prof. Ramon Quintin Claudio C. Allado
II. Partnership – E – Dissolution and Winding Up – Articles 1828 to 1842
to the heirs. Citing Po Yeng Cheo v. Lim Ka Yam, it also held that the duty to liquidate
devolves upon the surviving member/s of the firm – NOT upon the legal
representatives of the deceased partner. This was affirmed by the SC, for the same
reasons.
Doctrine Action for accounting and liquidation of the partnership cannot be continued against
the heirs of the deceased partner.
I. NATURE
Appeal by Heirs of Lota from a resolution of CFI Batangas.
II. FACTS
a. 1918 - Partnership between Lota and Tolentino was entered to engage in general business in
Batangas
i. Tolentino as the Manager and Industrial Partner
ii. 1932 – Partnership was dissolved
b. 1937 – Lota filed an action against Tolentino
i. Lota’s Contention:
1. Tolentino rendered an annual accounting from 1918-1928; and refused to do
so from 1929 to 1937
ii. Prayer to the Court: For Tolentino to:
1. Render an accounting of his management of the partnership
2. Deliver to Lota his share in the assets of the partnership after the
liquidation has been approved by court.
iii. Tolentino’s Answer (Prayer for Dismissal):
1. Rendered yearly accounting and liquidation from 1918-1932
2. 1932 – partnership was dissolved and Tolentino delivered all the partnership
properties and assets to Lota.
c. 1938 – Lota died, therefore substituted by the administrator of his estate Solomon Lota
d. 1939 – Tolentino died
i. Court gave Solomon Lota 30 days to amend the complaint by substituting for the
Tolentino the administrator of his estate or his legal representative.
e. Jan 1941 – Complaint was dismissed for lack of prosecution
i. This decision was reconsidered and set-aside since on Mar 1941, Solomon Lota filed
a petition for the issuance of letters of administration to Tolentino’s spouse,
Marta for the purpose of substituting her for Tolentino
1. Petition was dismissed for failure of Marta (as administratix) to file a bond
and to take her oath
f. 1949 (almost 10 years after death of Tolentino) - Solomon Lota filed a motion to substitute
Tolentino by his heirs as defendant in his complaint.
g. CFI Ruling (quoted in full by the Court): DISMISSED
i. Duty to account died with Tolentino, extinguished upon his death and was
NOT shifted upon his heirs
1. His heirs have never been partners in the partnership between Lota and
Tolentino > hardly in a position to be called upon to effect an accounting of
the same
ii. Duty to liquidate devolved upon legal representative of Lota;
1. Po Yeng Cheo v. Lim Ka Yam (See Ratio for Notes Version)
“…when a member of a mercantile partnership dies, the duty of
liquidating its affairs devolves upon the surviving member, or members
of the firm, not upon the legal representative of the deceased
4
PARTNERSHIP, AGENCY AND TRUSTS - Case Digests
Prof. Ramon Quintin Claudio C. Allado
II. Partnership – E – Dissolution and Winding Up – Articles 1828 to 1842
III. ISSUES/HELD/RATIONALE
a. WON after the death of Tolentino, Lota’s action for accounting and liquidation of the
partnership may be continued against the heirs of Tolentino? NO
i. Po Yeng Cheo v. Lim Ka Yam
1. When a member of a (mercantile) partnership dies, the duty of liquidating its
affairs devolves upon the surviving member/s of the firm – NOT upon
the legal representatives of the deceased partner
a. Applicable to civil partnerships with the form of a commercial
association
2. Duty of surviving associates to take proper steps to settle affairs of the
firm, and any claims against the deceased partner or his estate;
a. by reason of:
i. Misappropriation of funds
ii. Damages from wrongful acts as manager
b. Should be prosecuted against his estate in administration
c. NOTE: When there is partnership property in possession of the
deceased partner, proper step is to make an application to court to
require the administrator of his estate to surrender the same.
ii. On Lack of Prosecution on part of Solomon Lota
1. Filing of Motion of Substitution more than 12 years after institution of the
complaint came too late > already called for the application of the rule
requiring dismissal for lack of prosecution
5
PARTNERSHIP, AGENCY AND TRUSTS - Case Digests
Prof. Ramon Quintin Claudio C. Allado
II. Partnership – E – Dissolution and Winding Up – Articles 1828 to 1842
FULL CASE NAME ANTONIO C. GOQUIOLAY and THE PARTNERSHIP "TAN SIN AN and
ANTONIO C. GOQUIOLAY, plaintiffs-appellants,
vs.
WASHINGTON Z. SYCIP, ET AL., defendants-appellees.
DOCKET NO. & DATE G.R. No. L-11840 July 26, 1960
PONENTE Reyes, J. B. L.
NATURE
SYNOPSIS Tan Sin An and Goquiolay entered into a partnership. Based on both the Articles of
Co-partnership and the General Power of Attorney executed by Goquiolay, Tan Sin An
is the managing partner and Goquiolay is just “a co-partner”. Tan Sin An bought 3
parcels of land in the partnership name and 46 parcels of land in his own name. (But
incomplete payments). When Tan Sin An died, his wife Kong Chai Pin took over. The
creditors (the vendors of the parcels of land) went after Kong Chai Pin. To be able to
pay, Kong Chai Pin sold the 49 lands to Washington Sycip and Betty Lee. Goquiolay
complained of this and said that the sale was invalid because it involved partnership
property and the sale was without his consent.
SC: When Tan Sin An died, his wife didn’t inherit the power to manage the
partnership, but Kong Chai Pin became considered a general partner. Because she was
considered a general partner, her acts with third persons can bind the partnership.
Hence, the sale of the land to Sycip and Lee was VALID. The presumption is that as
to third persons, each individual partner is an agent for the firm and that he has
authority to bind the firm in carrying on the partnership transactions. However,
this presumption is not general because the partners may object to the acts done
before they are legally binding. In this case, however, Goquiolay was not shown to
have objected to the sale. He only objected after the deed of conveyance was executed.
Additionally, the sale of the 49 parcels of land did not cause the dissolution of the
partnership even if no parcel of land was left to the partnership after. THIS IS
BECAUSE THE PURPOSE OF THE PARTNERSHIP WAS TO BUY AND SELL
LOTS (REAL ESTATE). The lands were not for display but were meant to be bought
and sold. Hence, the partnership was not dissolved by the sale.
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PARTNERSHIP, AGENCY AND TRUSTS - Case Digests
Prof. Ramon Quintin Claudio C. Allado
II. Partnership – E – Dissolution and Winding Up – Articles 1828 to 1842
FACTS
1. Tan Sin An and Antonio C. Goquiaolay enter into a GENERAL COMMERCIAL PARTNERSHIP under the
name “Tan Sin An and Antonio C. Goquilay”
a. Purpose: dealing in real estate
b. Capital: P18k from Goquiolay, P12k from Tan Sin An == TOTAL OF P30k
2. The two agreed upon in writing (in the Article of Co-partnership) that:
a. Tan Sin An is the sole managing partner, Goquiolay as co-partner
b. Tan Sin An as managing partner can delegate the management of the affairs of the partnership by
irrevocable power of attorney to any person, firm or corporation he may select upon such terms as
regards compensation as he may deem proper, and vest in such persons, firm or corporation full power
and authority, as the agent of the co-partnership and in his name, place and stead to do anything for it
or on his behalf which he as such managing and partner (sic) might do or cause to be done.
c. Goquiolay as co-partner has no voice or participation in the management of the affairs of the co-
partnership; but he may examine its accounts once every six (6) months at any time during ordinary
business hours, and in accordance with the provisions of the Code of Commerce.
d. Duration of partnership: 10 years
e. In the event of the death of any of the partners at any time before the expiration of said term, the co-
partnership shall not be dissolved but will have to be continued and the deceased partner shall be
represented by his heirs or assigns in said co-partnership
f. However, the partnership could be dissolved and its affairs liquidated at any time upon mutual
agreement in writing of the partners
3. Antonio Goquiolay executed a general power of attorney to this effect:
That besides the powers and duties granted the said Tan Sin An by the articles of co-partnership of said co-
partnership "Tan Sin An and Antonio Goquiolay", that said Tan Sin An should act as the Manager for said co-
partnership for the full period of the term for which said co-partnership was organized or until the whole period
that the said capital of P30,000.00 of the co-partnership should last, to carry on to the best advantage and interest
of the said co-partnership, to make and execute, sign, seal and deliver for the co-partnership, and in its name, all
bills, bonds, notes, specialties, and trust receipts or other instruments or documents in writing whatsoever kind
or nature which shall be necessary to the proper conduction of the said businesses, including the power to
mortgage and pledge real and personal properties, to secure the obligation of the co-partnership, to buy real or
personal properties for cash or upon such terms as he may deem advisable, to sell personal or real properties,
such as lands and buildings of the co-partnership in any manner he may deem advisable for the best interest of
said co-partnership, to borrow money on behalf of the co-partnership and to issue promissory notes for the
repayment thereof, to deposit the funds of the co-partnership in any local bank or elsewhere and to draw checks
against funds so deposited ... .
(Basically Goquiolay is giving the power to Tan Sin An to manage all the properties of the partnership, to enter into
mortgages, to borrow money, issue promissory notes, etc.)
4. The partnership (Tan Sin An and Goquiolay) purchased the three (3) parcels of land in Davao, assuming the
payment of a mortgage obligation of P25,000.00, payable to "La Urbana Sociedad Mutua de Construccion y
Prestamos" for a period of ten (10) years, with 10% interest per annum.
5. Another 46 parcels were purchased by Tan Sin An in his individual capacity, and he assumed payment of a
mortgage debt thereon for P35,000.00 with interest. The downpayment and the amortization were advanced by
Yutivo and Co., for the account of the purchasers.
6. The two separate obligations (#4 and #5) were consolidated in an instrument executed by the partnership and
Tan Sin An (the person), whereby the entire 49 lots were mortgaged in favor of the "Banco Hipotecario de
Filipinas" (as successor to "La Urbana") and the covenantors bound themselves to pay, jointly and severally, the
remaining balance of their unpaid accounts amounting to P52,282.80 within 8 years, with 8% annual interest,
payable in 96 equal monthly installments.
7. Tan Sin An died, leaving as surviving heirs his widow, Kong Chai Pin, and four minor children, namely: Tan L.
Cheng, Tan L. Hua, Tan C. Chiu and Tan K. Chuan. Kong Chai Pin (the wife) was appointed administratrix of
the intestate estate of Tan Sin An.
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PARTNERSHIP, AGENCY AND TRUSTS - Case Digests
Prof. Ramon Quintin Claudio C. Allado
II. Partnership – E – Dissolution and Winding Up – Articles 1828 to 1842
8.In the meantime, repeated demands for payment were made by the Banco Hipotecario on the partnership and
on Tan Sin An. In March, 1944, the defendant Sing Yee and Cuan, Co., Inc., upon request of defendant Yutivo
Sans Hardware Co., paid the remaining balance of the mortgage debt, and the mortgage was cancelled.
9. Yutivo Sons Hardware Co. and Sing Yee and Cuan Co., Inc. filed their claims in the intestate proceedings of Tan
Sin An for P62,415.91 and P54,310.13, respectively, as alleged obligations of the partnership "Tan Sin An and
Antonio C. Goquiolay" and Tan Sin An, for advances, interest and taxes paid in amortizing and discharging their
obligations to "La Urbana" and the "Banco Hipotecario".
LOWER COURT RULING
● CFI of Davao
10. Disclaiming knowledge of said claims at first, Kong Chai Pin later admitted the claims in her amended answer
and they were accordingly approved by the CFI of Davao. She filed a petition for authority to sell all the 49
parcels of land to Washington Z, Sycip and Betty Y. Lee, for the purpose of settling the aforesaid debts of Tan
Sin An and the partnership.
11. Sycip and Betty Lee executed in favor of the Insular Development Co., Inc. a deed of transfer covering the said
49 parcels of land.
12. Learning about the sale to Sycip and Lee, Goquiolay filed a petition in the intestate proceedings seeking to set
aside the order of the CFI of Davao approving the sale in so far as his interest over the parcels of land sold was
concerned.
13. CFI annulled the sale executed by the administratrix with respect to the 60% interest of Antonio Goquiolay over
the properties sold.
● CA
14. Kong Chai Pin appealed to the Court of Appeals, but the CA sent the case to the SC.
● SC
15. The SC set aside the orders of the CFI and remanded the case for a new trial, due to the non-inclusion
of indispensable parties. Thereafter, new pleadings were filed.
● Back to CFI of Davao
16. The second amended complaint in the case at bar prays, among other things:
a. for the annulment of the sale in favor of Washington Sycip and Betty Lee, and their subsequent
conveyance in favor of Insular Development Co., Inc., in so far as the three (3) lots owned by the
partnership are concerned.
17. CFI dismissed the complaint. Hence this appeal by Goquiolay.
a. Straight to the SC because the amount involved is more than P200,000
● ISSUE 1: WON Kong Chai Pin became the managing partner of the partnership upon the death of her
husband, Tan Sin An, by virtue of the articles of Partnership executed between Tan Sin An and
Antonio Goquiolay, and the general power of attorney granted by Antonio Goquiolay – NO. The CFI
erred in holding that the widow, Kong Chai Pin, succeeded her husband, Tan Sin An, in the sole management
of the partnership, upon the latter's death.
1. The Articles of Copartnership and GPA by Goquiolay did not give the power to manage the
partnership to Kong Chai Pin. What was only transferred to the heirs of Tan Sin An upon his death
was the interest to the partnership, NOT THE POWER TO MANAGE.
a. While the Articles of Co-Partnership (#2) and the power of attorney (#3) executed by Antonio
Goquiolay conferred upon Tan Sin An the exclusive management of the business, such power,
premised as it is upon trust and confidence, was a mere personal right that terminated upon Tan's
demise.
b. The provision in the articles stating that "in the event of death of any one of the partners within the
10-year term of the partnership, the deceased partner shall be represented by his heirs", could not
have referred to the managerial right given to Tan Sin An; more appropriately, it related to the
succession in the proprietary interest of each partner. The covenant that Antonio Goquiolay shall
have no voice or participation in the management of the partnership, being a limitation upon his right
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PARTNERSHIP, AGENCY AND TRUSTS - Case Digests
Prof. Ramon Quintin Claudio C. Allado
II. Partnership – E – Dissolution and Winding Up – Articles 1828 to 1842
as a general partner, must be held coextensive only with Tan's right to manage the affairs, the contrary
not being clearly apparent.
2. The heirs of Tan Sin An became individual partners with Goquiolay. In particular, Kong Chai Pin
became a general partner.
a. Upon the other hand, consonant with the articles of co-partnership providing for the continuation of
the firm notwithstanding the death of one of the partners, the heirs of the deceased, by never repudiating
or refusing to be bound under the said provision in the articles, became individual partners with
Antonio Goquiolay upon Tan's demise. The validity of like clauses in partnership agreements is
expressly sanctioned under Article 222 of the Code of Commerce.
b. Minority of the heirs is not a bar to the application of that clause in the articles of co-partnership.
c. Appellants argue, however, that since the "new" members' liability in the partnership was limited merely
to the value of the share or estate left by the deceased Tan Sin An, they became no more than limited
partners and, as such, were disqualified from the management of the business under Article 148 of the
Code of Commerce.
i. Although ordinarily, this effect follows from the continuance of the heirs in the partnership, it
was not so with respect to the widow Kong Chai Pin, who, by her affirmative actions,
manifested her intent to be bound by the partnership agreement not only as a limited but as a
general partner.
ii. Thus, she managed and retained possession of the partnership properties and was admittedly
deriving income therefrom up to and until the same were sold to Washington Sycip and Betty
Lee. In fact, by executing the deed of sale of the parcels of land in dispute in the name of the
partnership, she was acting no less than as a managing partner. Having thus preferred to act
as such, she could be held liable for the partnership debts and liabilities as a general partner,
beyond what she might have derived only from the estate of her deceased husband. By
allowing her to retain control of the firm's property from 1942 to 1949, plaintiff estopped
himself to deny her legal representation of the partnership, with the power to bind it by the
proper contracts.
● ISSUE 2: WON the consent of the other partners was necessary to perfect the sale of the partnership
properties to Washington Sycip and Betty Lee. – NO. Strangers dealing with a partnership have the right to
assume, in the absence of restrictive clauses in the co-partnership agreement, that every general partner has power
to bind the partnership, especially those partners acting with ostensible authority.
1. There is a general presumption that each individual partner is an agent for the firm and that he has
authority to bind the firm in carrying on the partnership transactions.
a. Third parties (in this case, Sycip and Lee) may rightfully assume that the contracting partner was duly
authorized to contract for and in behalf of the firm and that, furthermore, he would not ordinarily act
to the prejudice of his co-partners.
b. The regular course of business procedure does not require that each time a third person contracts with
one of the managing partners, he should inquire as to the latter's authority to do so, or that he should
first ascertain whether or not the other partners had given their consent thereto.
c. Article 130 of the same Code of Commerce provides that even if a new obligation was contracted
against the express will of one of the managing partners, "it shall not be annulled for such reason, and
it shall produce its effects without prejudice to the responsibility of the member or members who
contracted it, for the damages they may have caused to the common fund."
2. Despite the presumption (in #1), each one of the agents may oppose any act of the others before it has
become legally binding.
a. The records fail to disclose that appellant Goquiolay made any opposition to the sale of the partnership
realty to Washington Z. Sycip and Betty Lee; on the contrary, it appears that he (Goquiolay) only
interposed his objections after the deed of conveyance was executed and approved by the probate court,
and, consequently, his opposition came too late to be effective.
● ISSUE 3: WON the sale threw the partnership into dissolution – NO. That the partnership was left without
the real property it originally had will not work its dissolution, since the firm was not organized to exploit these
precise lots but to engage in buying and selling real estate, and "in general real estate agency and brokerage
business". Incidentally, it is to be noted that the payment of the solidary obligation of both the partnership and
the late Tan Sin An, leaves open the question of accounting and contribution between the co-debtors, that should
be ventilated separately.
9
PARTNERSHIP, AGENCY AND TRUSTS - Case Digests
Prof. Ramon Quintin Claudio C. Allado
II. Partnership – E – Dissolution and Winding Up – Articles 1828 to 1842
● ISSUE 4: WON the sale was only a device to ease Goquiolay out of the partnership – NO. Goquiolay has
not proven sufficiently that the sale was fraudulent.
1. There is complete failure of proof, moreover, that the price for which the properties were sold was
unreasonably low, or in any way unfair, since appellants presented no evidence of the market value of
the lots as of the time of their sale to appellees Sycip and Lee.
a. The alleged value of P31,056.58 in May of 1955 is no proof of the market value in 1949, specially
because in the interval, the new owners appear to have converted the land into a subdivision, which
they could not do without opening roads and otherwise improving the property at their own expense.
b. Upon the other hand, Kong Chai Pin hardly had any choice but to execute the questioned sale, as it
appears that the partnership had neither cash nor other properties with which to pay its obligations.
DISPOSITIVE
- CFI decision (in the remanded case) affirmed.
- Costs against Goquiolay.
Case Title Goquiolay v Sycip, 9 SCRA 663, Resolution of Motion for Reconsideration
Memory Aid
Full Case Name
Docket No. & Date
Ponente
Topic
Synopsis
Doctrine
I. NATURE
II. FACTS
III. ISSUES/HELD/RATIONALE
I. NATURE
II. FACTS
III. ISSUES/HELD/RATIONALE
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PARTNERSHIP, AGENCY AND TRUSTS - Case Digests
Prof. Ramon Quintin Claudio C. Allado
II. Partnership – E – Dissolution and Winding Up – Articles 1828 to 1842
I. NATURE
II. FACTS
III. ISSUES/HELD/RATIONALE
I. NATURE
II. FACTS
III. ISSUES/HELD/RATIONALE
I. NATURE
II. FACTS
III. ISSUES/HELD/RATIONALE
11
PARTNERSHIP, AGENCY AND TRUSTS - Case Digests
Prof. Ramon Quintin Claudio C. Allado
II. Partnership – E – Dissolution and Winding Up – Articles 1828 to 1842
I. NATURE
II. FACTS
III. ISSUES/HELD/RATIONALE
Case Title Laguna Transportation Co., Inc. v Social Security System, 107 Phil 833
Memory Aid
Full Case Name
Docket No. & Date
Ponente
Topic
Synopsis
Doctrine
I. NATURE
II. FACTS
III. ISSUES/HELD/RATIONALE
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PARTNERSHIP, AGENCY AND TRUSTS - Case Digests
Prof. Ramon Quintin Claudio C. Allado
II. Partnership – E – Dissolution and Winding Up – Articles 1828 to 1842
Doctrine
I. NATURE
II. FACTS
III. ISSUES/HELD/RATIONALE
I. NATURE
II. FACTS
III. ISSUES/HELD/RATIONALE
I. NATURE
II. FACTS
III. ISSUES/HELD/RATIONALE
13
PARTNERSHIP, AGENCY AND TRUSTS - Case Digests
Prof. Ramon Quintin Claudio C. Allado
II. Partnership – E – Dissolution and Winding Up – Articles 1828 to 1842
I. NATURE
II. FACTS
III. ISSUES/HELD/RATIONALE
I. NATURE
II. FACTS
III. ISSUES/HELD/RATIONALE
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