Sugo v. Green
REITERATIONFacts
The Antecedents: Plaintiffs T. Sugo and K. Shibata (appellees) filed an action against defendants George Green, et al. (appellants) to recover damages for breach of contract. On March 16, 1904, the defendants contracted with the U.S. Army for the construction of sixty-five buildings at Fort McKinley. On April 20, 1904, the plaintiffs contracted with the defendants to furnish all masonry, carpentry, and roofing work for fifteen of these buildings, known as lieutenants' quarters. The defendants were to supply all necessary materials and deliver them to the building sites. The plaintiffs were to complete the work within eight months from April 20, 1904, with a forfeiture clause for delays, except for delays caused by the transportation of building materials. The defendants were to pay plaintiffs 1,400 Mexican pesos per building. Procedural History: The defendants were prohibited from continuing their contract with the U.S. Army on January 4, 1905, which consequently prohibited the plaintiffs from continuing their subcontract. The plaintiffs claimed they could have completed the contract within the stipulated period had the defendants furnished materials as needed. The trial court found that the plaintiffs were hindered and delayed by the defendants' failure to supply necessary materials, as evidenced by a letter from the defendants acknowledging weather-related transportation issues and granting more time. The court found that 64% of the work was completed, entitling the plaintiffs to recover the full contract amount for the performed work, less amounts already paid. The lower court awarded plaintiffs 13,440 pesos, representing 64% of the total contract value of 21,000 pesos, minus payments of 9,989.25 pesos, leaving a balance of 3,450.75 pesos. The Petition: The defendants appealed the decision of the Court of First Instance of Manila.
Issue(s)
Whether the court erred in proceeding with the action after the death of one of the plaintiff partners without the intervention of a personal representative. Whether the plaintiffs are entitled to recover the full amount for the portion of the contract performed, given the defendants' breach.
Ruling
The Supreme Court affirmed the judgment of the lower court, holding that the surviving partners, as representatives of the partnership, have the right to continue the action without the intervention of the personal representative of the deceased partner. The Court also affirmed the lower court's finding that the plaintiffs were entitled to recover the full amount for the part of the contract actually performed, less amounts already paid, due to the defendants' breach.
Ratio Decidendi
On the issue of proceeding with the action after a partner's death: The Court held that Section 119 of the Code of Procedure in Civil Actions does not apply to actions commenced by a partnership where one partner dies during the pendency of the action. The Court reasoned that under Article 229 of the Code of Commerce, surviving partners, as representatives of the partnership, have the legal standing to continue such an action to its termination. This is consistent with established jurisprudence, such as the ruling in Wahl vs. Donaldson Sim and Co., which supports the continuation of partnership actions by surviving partners. Therefore, the lower court did not err in proceeding with the case without appointing a personal representative for the deceased partner. On the entitlement to recovery for performed work: The Court affirmed the lower court's finding that the defendants breached the contract by failing to supply necessary materials as required. The evidence, including a letter from the defendants acknowledging delays due to transportation issues, clearly showed that the plaintiffs were hindered and delayed in their performance. The Court found that the plaintiffs made every reasonable effort to comply with their contract. As the breach was caused by the defendants, they must respond in damages. The lower court's calculation of 64% completion and the corresponding award of 13,440 pesos, representing the value of the performed work less payments made, was supported by the evidence and the court's factual findings. The Court reiterated that it is bound by the lower court's findings of fact when there is no manifest evidence to the contrary, citing De la Rama vs. De la Rama.
Main Doctrine
A partnership may continue an action to a termination without the intervention of the personal representative of a deceased partner, where the action was commenced by the partnership.