Tocao vs. Court of Appeals G.R. No. 127405.

October 4, 2000

Facts: Private Respondent Anay sued petitioners Tocao and Belo for a sum of money with damages, which the former averred were due her as an implied business partner in a marketing enterprise ran by the latter called Geminesse Enterprise, and from which the respondent had been unilaterally and unjustly expelled on 9 October 1987. Petitioner Tocao answered by asseverating that her business was registered as a single proprietorship and that no partnership had in fact existed due to the absence of any memoranda or written instrument to prove the same. Petitioner Tocao further alleged that Anay was in fact merely an employee in said business while petitioner Belo raised that he was neither privy to the agreement between Tocao and Anay nor liable as a partner, being a mere guarantor of Geminesse Enterprise. These defenses did not lie. Petitioner Tocao, estopped by her deeds inter alia, had belied the veracity of her defense in that she had accorded respondent Anay administrative control and supervisory authority in the sales and marketing aspect of the business. Moreover, respondent Anay derived remuneration from the profits of the business in the same manner as and to an amount commensurate with, that of petitioner Tocao. In view of these, the trial court ruled in favor of respondent Anay. The CA sustained the ruling of the RTC of Makati, hence this petition for review on certiorari. Issue: Whether or not an implied partnership existed between private respondent and petitioner Held: Yes. Since a contract of partnership is consensual, an oral contract of partnership is as good as a written one; where no immovable property or real rights are contributed thereto as per Articles 1769, 1771 & 1772 of the NCC. The best evidence of the existence of a partnership, which is in the winding up stage though not as yet terminated, is the unsold goods and uncollected receivables. While it is true that the receipt of a percentage of net profits constitutes only prima facie evidence that the recipient is a partner in the business as per Article 1769(4) of the NCC, the facts controvert an employer-employee relationship between the parties. Private respondent had a voice in the management of the affairs of the cookware distributorship, including selection of people who would constitute the

administrative staff and sales force. Moreover, petitioner Tocao admitted that, like her, respondent Anay received only commissions, other allowances and not a fixed salary. A disagreement between the partners does not ipso facto, abrogate the partnership; it exists until dissolved in the manner prescribed by law. An unjustified dissolution by a partner can therefore subject him to action for damages because by the mutual agency that arises in a partnership, the doctrine of delectus personae choice of a person, allows the partners to have the power, although not necessarily the right to dissolve the partnership motu proprio. Even though Anay was unilaterally excluded by Tocao, the partnership was not ipso facto deemed terminated thereby. Rather, it would have subsisted until the winding up of the business was completed. The Supreme Court denied the petition and ordered the dissolution, winding up and liquidation of the partnership pursuant to the pertinent provisions of the Civil Code