G.R. No.

L-49982 April 27, 1988

ELIGIO ESTANISLAO, JR., petitioner,
vs.
THE HONORABLE COURT OF APPEALS, REMEDIOS ESTANISLAO, EMILIO and LEOCADIO SANTIAGO,
respondents.
GANCAYCO, J .:

Facts:
Petitioner Estanislao & private respondents are siblings. They co-own a lot which was leased by SHELL.
The family has agreed through a joint affidavit that they will open and operate Estanislao Shell Service
and that it will be operated and managed solely by the petitioner to keep with SHELLs policy of
appointing only one dealer. Said affidavit also stipulates that the advanced rental of Php 15, 0000.00
from SHELL shall be used to augment their capital investment in the operation of the gasoline station
and that said rental shall be credited until the monthly rentals accumulate to Php15, 000.00.

Subsequently, the parties entered into another agreement entitled Additional Cash Pledge Agreement
assigning to SHELL the same Php 15, 000.00 advance rentals that shall be credited until the monthly
rentals accumulate to Php 15, 000.00 which the private respondents have agreed to consider as cash
deposit of petitioner to SHELL to increase his credit limit as dealer. This subsequent agreement stated
that it cancels and supersedes the joint affidavit earlier made.

For some time, petitioner submitted financial statements pertaining to their business operation but later
failed to render subsequent accounting. Hence, the complaint of private respondents praying among
others that they be paid of their lawful shares and participation in the net profits of the business.

Issue:
Whether or not a partnership exists between members of the same family arising from their joint
ownership of certain properties.

Held:
What the subsequent agreement cancels and supersedes is the duplication of reference to the Php15,
000.00 advance rentals and not the partnership agreement they had in the joint affidavit. SHELL is a
signatory to said subsequent agreement and it will go against its policy if in the agreement it should
state that that the business is not a sole proprietorship of the petitioner but a partnership with the
private respondents.

The parties formed a partnership when they bound themselves to contribute money to a common fund
with the intention of dividing the profits among themselves. The petitioners sole dealership was a result
of SHELLs policy and the understanding of the parties of having only one dealer of the SHELL products.