G.R. No. 144214. July 14, 2003. * LUZVIMINDA J. VILLAREAL, DIOGENES VILLAREAL and CARMELITO JOSE, petitioners, vs. DONALDO EFREN C. RAMIREZ and Spouses CESAR G. RAMIREZ, JR. and CARMELITA C. RAMIREZ, respondents.

Corporation Law; Partnership; Since the capital was contributed to the partnership, not to petitioners, it is the partnership that must refund the equity of the retiring partners.— We hold that respondents have no right to demand from petitioners the return of their equity share. Except as managers of the partnership, petitioners did not personally hold its equity or assets. “The partnership has a juridical personality separate and distinct from that of each of the partners.” Since the capital was contributed to the partnership, not to petitioners, it is the partnership that must refund the equity of the retiring partners. Same; Same; Before the partners can be paid their shares, the creditors of the partnership must first be compensated.—Since it is the partnership, as a separate and distinct entity, that must refund the shares of the partners, the amount to be refunded is necessarily limited to its total resources. In other words, it can only pay out what it has in its coffers, which consists of all its assets. However, before the partners can be paid their shares, the creditors of the partnership must first be compensated. After all the creditors have been paid, whatever is left of the partnership assets becomes available for the payment of the partners’ shares. Same; Same; Contracts; Courts have no power to relieve the parties from obligations they have voluntarily assumed, simply because their contracts turn out to be disastrous deals or unwise investments.—It is a long established doctrine that the law does not relieve parties from the effects of unwise, foolish or disastrous contracts they have entered into with all the required formalities and with full awareness of what they were doing. Courts have no power to relieve them from obligations they have voluntarily assumed, simply because their contracts turn out to be disastrous deals or unwise investments.