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TAN SEN GUAN & CO. VS. PHILIPPINE TRUST CO. Facts: Plaintiff Tan Sen Guan & Co. secured a judgment for a sum of P21,426 against the Mindoro Sugar Co. of which the Philippine Trust is the trustee. The plaintiff entered into an agreement with the defendant Philippine Trust Co. wherein the former assigned, transferred, and sold to the latter the full amount of said judgment against Mindoro Sugar Co. together with all its rights thereto and the latter offered satisfactory consideration thereto. The agreement further stipulated that upon signing of the agreement, Phil Trust shall pay Tan Sen the sum of P5000; should the Mindoro Sugar be sold or its ownership be transferred, an additional P10,000 pesos will be paid to Tan Sen upon perfection of the sale; in case any other creditor of Mindoro Sugar obtains in the payment of his credit a greater proportion than the price paid to Tan Sen, the Phil Trust shall pay to the latter whatever sum may be necessary to be proportioned the claim of the creditor. However, if the Mindoro Sugar is sold to any person who does not pay anything to the creditors or pay them equal or less than 70 percent of their claim, or should the creditors obtain from other sources the payment of their claim equal to or less than 70 percent, the Phil Trust will only pay to Tan Senthe additional sum of P10,000 upon the sale or transfer of the Mindoro Sugar as above stated. The properties of Mindoro Sugar were later on sold at public auction to the Roman Catholic Archbishop of Manila and base on the agreement plaintiff Tan Sen brought suit against defendant Phil Trust for the sum of P10,000. Defendants argument: Only a portion of the Mindoro Sugars properties were sold. CFI: Absolved the defendant on two grounds: (a) in the contract, it was only bound as a trustee and not as an individual; (b) that it has not been proved that all the properties of the Mindoro Sugar had been sold. Issues: (1) W/N the defendant is not personally responsible for the claim of the plaintiff based on the deed of assignment because of having executed the same in its capacity as trustee of the properties of the Mindoro Sugar. (2) W/N all the properties of the Mindoro Sugar were sold at public auction to the Roman Catholic Archbishop of Manila. Held: SC reversed CFIs ruling. (1) The Phil Trust Company in its individual capacity is responsible for the contract as there was no express stipulation that the trust estate and not the trustee should be held liable on the contract in question. Not only is there no express stipulation that the trustee should not be held responsible but the Wherefore clause of the contract states the judgment was expressly assigned in favor of Phil Trust Company and not Phil Trust Company, the trustee. It therefore follows that appellant had a right to proceed directly against the Phil Trust on its contract and has no claim against either Mindoro Sugar or the trust estate. (2) Exhibit D (the certificate of sale to Roman Catholic Archbishop) shows that all properties to Phil Trust as Trustee were included in the sale. The only thing reserved from the sale was the standing crops, and it is reasonable to presume that they had also been sold between the date of the sale and the institution of this action. Where the real estate, the personal property including animals, and all the bills receivable are sold, it would be a forced construction of the contract of agreement to hold that the assets of the Mindoro Sugar Company had not been sold.
PHIL. AIR LINES, INC. VS. HEALD LUMBER CO. Facts: Lepanto Consolidated Mines chartered a helicopter belonging to plaintiff Phil. Air Lines to make a flight from its base at Nichols Field Airport to the formers camp at Manyakan Mountain Province. The helicopter, with Capt. Gabriel Hernandez and Lt. Rex Imperial on board, failed to reach the destination as it collided with defendants tramway steel cables resulting in its destruction and death of the officers. Plaintiff insured the helicopters and the officers who piloted the same for P80,000 and P20,000 respectively and as a result of the crash, the insurance companies paid to the plaintiff the total indemnity of P120,000. Plaintiff sustained additional damages totaling P103,347.82 which were not recovered by insurance. The plaintiff instituted this action against defendant Heald Lumber Company to recover the sum paid by the insurance company to the plaintiff and the additional damages which was not recovered from the insurance. Defendants argument: Plaintiff has no cause of action against defendant for if anyone should due defendant for its recovery, it will only be the insurance companies. Plaintiffs argument: It asserts that the claim of the said amount of P120,000 is on behalf and for the benefit of the insurers and shall be held by plaintiff in trust for the insurers. It is appellants theory that, inasmuch as the loss it has sustained exceeds the amount of the insurance paid to it by the insurers, the right to recover the entire loss from the wrongdoer remains with the insured and so the action must be brought in its own name as real party in interest. To the extent of the amount received by it as indemnity from the insurers, plaintiff would then be acting as a trustee for them. To support this contention, appellant cites American authorities. RTCs Ruling: The court ordered the plaintiff to amend its complaint to delete the first allegation that insurance companies have paid a portion of the plaintiffs damages, since the Court believes that the real parties in interest are the insurance companies concerned or bring in the insurance companies as parties plaintiff. And having manifested plaintiffs decision not to amend the complaint, such move of plaintiff amounts to a deletion of the portion objected to and so the complaint should be deemed limited to the additional damages. Issue: (1) W/N the plaintiff is not the real party in interest respecting the claim for P120,000.
CRISTOBAL VS. GOMEZ Facts: Epifanio Gomez owned a property which was sold in a pacto de retro sale to Luis Yangco redeemable in 5 years, although the period passed without redemption, the vendee conceded the vendor the privilege of repurchase. Gomez apply to a kinsman, Bibiano Baas, for assistance on a condition that he will let him have the money if his brother Marcelino Gomez and his sister Telesfora Gomez would make themselves responsible for the loan. The siblings agreed and Baas advance the sum of P7000 which was used to repurchase the property in the names of Marcelino and Telesfora.. A private partnership in participation was created between Marcelino and Telesfora and therein agreed that the capital of the partnership should consist of P7000 of which Marcelino was to supply the amount of P1500 and Telesora the sume of P5500. It was further agreed that the all the property to be redeemed shall be named to the two, that Marcelino should be its manager, that all the income, rent, produce of the property shall be applied exclusively to the amortization of the capital employed by the two parties with its corresponding interest and other incidental expenses and as soon as the capital employed, with its interest and other incidental expenses, shall have been covered, said properties shall be returned to Epifanio Gomez or his legitimate children. A year after Epifanios death, Telesfora wanted to free herself from the responsibility which she had assumed to Baas and conveyed to Marcelino her interest and share in the three properties previously redeemed from Yangco and both declared dissolved the partnership they created. With Marcelino as the sole debtor, Baas required him to execute a contract of sale of the three parcels with pacto de retro for the purpose of securing the indebtedness. Marcelino later on paid the sum in full satisfaction of the entire claim and received from Baas a reconveyance of the three
CARANTES VS. CA Facts: A proceeding for expropriation was commenced by the government for the construction of the Loakan Airport and a portion of Lot 44, which was originally owned by Mateo Carantes, was needed for the landing field. The lot was subdivided into Lots Nos. 44-a (the portion which the government sought to expropriate), 44-b, 44-c, 44-d and 44-e. Negotiations were also under way for the purchase by the government of lots 44-b and 44-c. When Mateo Carantes died, his son Maximino Carantes was appointed administrator of the estate and filed a project of partition of the remaining portion of Lot 44 wherein he listed as the heirs of Mateo Carantes who were entitled to inherit the estate, himself and his brothers and sisters. An Assignment of Right to Inheritance was executed by the children of Mateo and the heirs of Apung Carantes in favor of Maximino Carantes for a consideration of P1. Maximino sold to the government lots nos. 44-b and 44-c and divided the proceeds of the sale among himself and the other heirs of Mateo. The assignment of right to inheritance was registered by Maximino and the TCT in the names of the heirs was cancelled and a new one was issued in the name of Maximino Carantes as the sole owner of the remaining portions of lot 44. A complaint was instituted by the three children of Mateo and the heirs of Apung Carantes against Maximino praying that the deed of assignment be declared null and void and that the remaining portions of lot 44 be ordered partitioned into six equal shares and Maximino be accordingly ordered to execute the necessary deed of conveyance in favor of the other heirs. Plaintiffs argument: They executed the deed of assignment only because they were made to believe by Maximino that the said instrument embodied the understanding among parties that it merely authorized the defendant Maximino to convey portions of lot 44 to the government in their behalf to minimize expenses and facilitate the transaction and it was only when they secured a copy of the deed that they came to know that the same purported to assign in favor of Maximino their rights to inheritance from Mateo Carantes. Defendants argument: Filed a motion to dismiss. The plaintiffs cause of action is barred by the statute of limitations because the deed of assignment was recorded in the Registry of Property and that ownership over the property became vested in him by acquisitive prescription ten years from its registration in his name of Feb. 21, 1947.
MUNICIPALITY OF VICTORIAS VS. CA Facts: Norma Leuenberger, respondent, inherited a parcel of land from her grandmother, Simeona Vda. de Ditching in 1941. In 1963, she discovered that a part of the parcel of land was being used by petitioner Municipality of Victorias as a cemetery. By reason of the discovery, respondent wrote a letter to the Mayor of Victorias demanding payment of past rentals over the land used a cemetery and requesting delivery of the illegally occupied land by the petitioner. The Mayor replied that the municipality bought the land but however refused to show the papers concerning the sale. Apparently, the municipality failed to register the Deed of Sale of the lot in dispute. Respondent filed a complaint in the Court of First Instance of Negros Occidental for recovery of possession of the parcel of land occupied by the municipal cemetery. In its answer, petitioner Municipality alleged ownership of the lot having bought it from Simeona Vda. de Ditching sometime in 1934. The lower court decided in favor of the petitioner municipality. On appeal, petitioner presented an entry in the notarial register form the Bureau of Records Management in Manila of a notary public of a sale purporting to be that of the disputed parcel of land. Included within it are the parties to the sale, Vda. de Ditching, as the vendor and the Municipal Mayor of Victorias in 1934, as vendee. The Court of Appeals however claimed that this evidence is not a sufficient Deed of Sale. It therefore reversed the ruling of the CFI and ordered the petitioner to deliver the possession of the land in question to respondents. Issue: W/N the notary public of sale is sufficient to substantiate the municipalitys claim that it acquired the disputed land by means of a Deed of Sale. Yes. Held: The fact that the notary public of sale showed the nature of the instrument, the subject of the sale, the parties of the contract, the consideration and the date of sale, the Court held that it was a sufficient evidence of the Deed of Sale. Thus, when Norma inherited the land from her grandmother, a portion of it has already been sold by the latter to the Municipality of Victorias in 1934. Her registration of the parcel of land did not therefore transfer ownership but merely confirmed it. As the civil code provides, where the land is decreed in the name of a person through fraud or mistake, such person is by operation of law considered a trustee of an implied trust for the benefit of the persons from whom the property comes. Consequently, she only held the land in dispute in trust for the petitioner hence private respondent is in equity bound to reconvey the subject land to the cestui que trust, the Municipality of Victorias.
LAUREANO VS. STEVENSON Facts: In 1912, Felix Laureano sold to Eugenio Kilayco a piece of property situated in the City of Iloilo, and such land was then registered in the latters name. Adjoining such property was another property belonging to Laureano. When the cadastral survey was initiated in Iloilo in 1914, Kilayco made proper representations to confirm the title to his property. Thereafter, title was issued to him, but later, for some unknown reason, the certificate was ordered cancelled and a new one was issued. Then, presumably by mistake, the title was made to include not only Kilaycos property but property belonging to his neighbor, Laureano. The final decree to his effect was issued in 1916. Creditors of Kilayco, becoming aware of the existence of the title to the property, instituted actions and obtained writs of execution in May 1922. The sale of the property was set for October 1922. All the while, Laureano had done nothing to protect his interests in the property. However, he claims to have been absent in Spain at the time of the hearing in the cadastral case and to have known nothing of it. On June 1922, Laureano filed a case against Kilayco to obtain a judgment, declaring him to be the owner of the parcels of land mistakenly included in the latters title, and ordering the cancellation of the certificate of title theretofore issued in the name of Kilayco. Issue: When property is acquired through mistake, can the real owner recover such property by virtue of implied trust? Trial Court: Since the creditors were not parties to the action, the cancellation of the annotations on the certificate of title in favor of the creditors of Kilayco cannot be sustained.
HEIRS OF CANDELARIA VS. ROMERO Facts: Parties to this case are the heirs of Emilio Candelaria as plaintiff and Luisa Romero, and the heirs of Lucas as defendants. Emilio and Lucas Candelaria bought a lot on an installment basis. Lucas paid the first two installments but because of sickness which caused him to be bedridden, he sold his share to his brother Emilio who continued to pay the purchase price until the obligation to pay had been fully satisfied. The TCT was however issued under the name of Lucas. Nevertheless, Lucas acknowledges that he merely held the title in trust for his brother with the understanding that the necessary documents of transfer will be made later and this fact was known not only to him but also to the defendants. However upon his death, his heirs refused to reconvey the lot to plaintiff despite repeated demands. Plaintiff brought an action in the CFI for a complaint for reconveyance of real property. The lower court however dismissed the case on the ground that an express trust, and not an implied trust, was created and that the action had already prescribed. Issue: What kind of trust was created? Express or implied trust? Implied trust.
3.
Kilayco was, in effect, merely holding the title of the property in trust of Laureano. The creditors of Kilayco could acquire no higher or better right than Kilayco had in the property, which, in this case, was nothing. Hence, Laureano can rightfully recover the two parcels of land included in the title of Kilayco through mistake.
GONZALES v. IAC Facts: The land in dispute is registered in the name of Fausto Soy. In 1941, Fausto sold 253 sq. m. to Francisco Landingin. In 1954, pursuant to a Deed of Donation executed by Fausto, Antonio Soy (son of Fausto) and Gregoria Miranda (wife) sold 240 sq. m. to Juanito Gonzales and Coronacion Ganaden. In January 1960, Fausto sold another 240 sq. m. to Gonzales and Ganaden and two days later, a TCT was issued in favor of Gonzales, indicating his share as co-owner of 480 sq. m. and Fausto Soy, 240 sq. m. In 1965, Fausto sold another 140 sq. m. to the Gonzales and Ganaden. April 1965, Respondents Rosita Lopez, Gavino Cayabyab, Agueda and Felipa Ubando, Pedro Soriano, Teosidia Lopez and Federico Ballesteros (nieces and nephews of Fausto) filed the instant complaint for partition against Fausto Soy. On the same day they filed a notice of lis pendens and had it annotated on the OCT. Fausto answered and contested plaintiffs claims, asserting exclusive title in his name. Fausto countered that the questioned land was never registered in the names of his parents Eugenio and Ambrosia, and that he had been the registered owner of the premises since 1932. On the basis of evidence adduced ex-parte, the Trial Court held that respondents and Fausto were coowners of the lot and ordered the partition thereof. Parties were enjoined to partition amongst themselves and were to submit the same to the lower court for confirmation. Upon execution, the sheriff was unable to effect apportionment due to a 3rd party claim of Juanito and Coronacion Gonzales, stating that they were registered owners of 480 sq. m. of the disputed land. The sheriff noted the various
ADAZA V. CA Facts: In 1953, Victor Adaza Sr. executed a Deed of Donation, covering the disputed land in this case, located in Sinonok, Zamboanga del Norte in favor of Respondent Violeta. The land being disposable public land had been held and cultivated by Victor, Sr. With the help of her brother, Horacio, Violeta filed a homestead application over the land and a free patent was issued in 1956. An OCT was issued in 1960. In 1962, Violeta and husband, Lino obtained a loan from PNB by executing a mortgage on the land, while Homero Adaza, brother of Violeta remained administrator of the same.
ARMAMENTO V. GUERRERO
RAMOS v RAMOS Facts: Spouses Martin Ramos and Candida were survived by three legitimate children: Jose, Agustin and Granada. Martin was also survived by 7 natural children. A special proceeding was instituted for the settlement of the estate of said spouses. Rafael, brother of Martin was appointed administrator. A project of partition was submitted and the conjugal hereditary estate was appraised at P74,984.93. It consisted of 18 parcels of land, some head cattle and advances to the legitimate children. It was agreed in the project of partition that Jose and Agustin would pay the cash adjudications to their natural siblings. Only the sum of P 37, 492.46 of the P74k represented the estate of Martin. 1/3 thereof was the free portion out of which the shares of the natural children were to be taken: each would get P1,785.35. The project of partition as well as the intervention of Timoteo as guardian of the five minor heirs was approved by the court. Later on, Judge Nepomuceno asked the administrator to submit a report showing that the shares have been delivered to the heirs as required which the siblings acknowledged in a manifestation. The Himalayan cadastre (8 lots) involved in this case were registed in equal shares in the names of Joses widow, Gregoria and her daughter Granada. The Plaintiffs (natural children) contend that while they were growing up, they had been well supported by Jose and Agustin as they had been receiving their shares from the produce of the Haciendas in varied amounts over the years. Even after the death of Jose, Gregoria had continued giving them money but had stopped in 1951 by reason that lessee Lacson was not able to pay the lease rental. No accounting had ever been made to them by Jose nor Gregoria. Upon the survey of the land, they did not intervene, as Jose and Agustin promised that said lands shall be registered in the names of the heirs. They did not know that the intestate proceedings were instituted for the distribution of the estate of their father. Neither did they have any knowledge that a guardian was assigned to represent their minor siblings, considering that Modesto and Miguel who were claimed to be such were no longer minors at the time of the partition. They never received their share in the estate of their father. Plaintiffs later on discovered that the property had a Torrens title in the name of Gregoria and her daughter when Modestos children had inquired from the Register of Deeds. Petitioners now bring the present suit for the reconveyance of the subject parcels of land in their favor. Petitioners claim that in effect, Gregoria and daughter are holding their shares in trust which was denied by defendants. Defendants alledge res judicata and prescription. LOWER COURT: Dismissed the complaint on the basis of res judicata as their shares were already settled in the intestate proceedings. No deed of trust was alledged and proven.
VARSITY HILLS, INC v NAVARRO Facts: The present action began from a previous civil case wherein a petition was filed by herein respondents Mejia as heirs of Quintin Mejia and by Elpidio Tiburcio as assignee of a portion of the estate left by the latter as plaintiff against petitioners Tuason et. al. The complaint alleged that Quintin Mejia had obtained a Spanish title to the land and that he and his successors in interest had occupied the land without interruption until they were forcibly rejected therefrom and their houses demolished in 1934 through a writ of execution. In 1914, the defendants Tuason had obtained a decree of registration covering 35,403 hectares and that they had fraudulently and insidiously included plaintiffs
GERONA v DE GUZMAN Facts: Petitioner Gerona heirs are the legitimate children of Domingo Gerona and Placida de Guzman.
CALADIAO v VDA DE BLAS FACTS: Prudencio Limpin sold, ceded, and transferred to Simeon Blas an unregistered fishpond for the P4440 with the right to repurchase the property within one year from Sept. 30, 1932 and with the express stipulation that the sale would automatically become absolute and irrevocable if no repurchase was made within the agreed period. Maxima Santos, (Blas wife) took over upon the death of Blas and paid taxes until 1955. The fishpond together with the other properties was adjudicated to her by the court in an estate proceeding. Despite such, Limpin obtained a judicial registration of the fishpond in favor of his conjugal partnership with Caladiao and secured a new title in their names. A TCT was issued in the name of Caladiao when Limpin died. Unaware of such, Santos Vda de Blas applied for the registration of the fishpond which was adjudicated to her as it was proven that Limpin sold the property to Blas and had failed to repurchase the same. While this registration case was pending, Caladiao filed a complaint for the return of the fishpond and the annulment of the sale a retro executed by Limpin. This was however, dismissed. The court ordered an issuance of decree in favor of Vda de Blas but subsequently dismissed the proceedings in finding that the said fishpond was registered previously in favor of Limpin. Rosalina Santos substituted Maxima upon death. CFI: in favor of Santos, ordered reconveyance and was awarded P3000. CA: affirmed. Defendants claim that the action for reconveyance had prescribed as it was filed more than 20 years since Limpin had acquired a CTC in their name over the fishpond. SC: The existence of a decree of registration in favor of one party is no bar to an action to compel reconveyance of the property to the true owner, which is an action in personam, even if such action be instituted after the year fixed by Section 38 of the LRA as a limit to the review of the registration decree, provided it is shown that the registration is wrongful and the property sought to be reconveyed has not passed to an innocent third party holder for value. Limpin obtained the decree of registration fraudulently and in utter bad faith thus he and his heirs may be compelled to reconvey it to the true owner. The registration of the property did not annul the conveyance in favor of Blas and after the registration, the Limpins held the property in trust for the true owners. The application for registration was in bad faith, with the result that the certificate of title issued to Limpin in 1934 was in law issued to and held by him in behalf and in trust for the benefit of Blas. Under the old code of civil procedure, prescription does not apply to continuing and subsisting trusts; so that actions against a trustee to recover trust property held by him are imprescriptible. Actions for the
DIAZ, ET.AL. VS. GORRICHO AND AGUADO Facts: Spouses Francisco Diaz and Maria Sevilla owned two parcels of lots (Lots Nos. 1941 and 3073) in Cabanatuan. Sometime later, Francisco died, and the properties were left in the hands of her wife and three children. Sometime in 1935, the appellee Carmen Gorricho filed an action against Maria Sevilla and in connection therewith, a writ of attachment was issued upon the shares of the latter in the two parcels of land. Since Maria Sevilla failed to redeem it within one year, a final deed of sale in favor of Carmen Gorricho was issued. In the said deed, however, the sheriff conveyed to Gorricho the whole of the two parcels instead of only the half-interest of Maria Sevilla therein. Pursuant to the said deed, Carmen Gorricho obtained the titles of the two parcels of land in her name in the year 1937, and has been possessing the said lands as owner ever since. In 1952, the children of Maria Sevilla (who died a year before) filed an action against the respondents to compel the latter to execute in their favor a deed of reconveyance over an undivided one-half interest of the lots in question, which the respondents were allegedly holding in trust for them. The respondents raised the defense that the petitioners action has long prescribed. Issue: Do implied trust prescribe or may they be defeated by laches? Ruling of the CFI of Nueva Ecija: While a constructive trust in plaintiffs favor arose when Gorricho took advantage of the error of the provincial yepquestion and obtained title in herself, the action of the plaintiff was, however, barred by laches and prescription. Petitioners: The disputed property was acquired by Gorricho through an error of the provincial sheriff; that having been acquired through error, it was subject to an implied trust, as provided by Article 1456 of the New Civil Code; and therefore, since the trust is continuing and subsisting, the appellants may compel reconveyance of the property despite the lapse of time, specially because prescription does not run against titles registered under Article 496. Held: The petitioners are in error in believing that like express trusts, such constructive trusts may not be barred by lapse of time. The American law on trusts has always maintained a distinction between express trusts created by intention of parties, and the implied/constructive trusts that are exclusively created by law, the later not being trusts in their technical sense. The express trusts disable the trustee from acquiring for his own benefit the
EVANGELISTA, ET. AL. VS. COLLECTOR OF INTERNAL REVENUE, ET. AL. Facts: The petitioners borrowed from their father PhP59,140.00 which amount together with their personal monies was used by them for the purpose of buying and selling real properties. From 1943 to 1944, they bought 24 parcels of land (including the improvements thereon) on four different occasions. In 1945, they appointed their brother Simeon to manage their properties with full power to lease; to collect and receive rents; to issue receipts therefore; in default of such payment, to bring suits against the defaulting tenant; and to endorse and deposit all notes and checks for them. In 1948, their net rental income amounted to PhP12,615.35. On September 1954, the respondent Collector of Internal Revenue demanded the payment of (1) income tax on corporations, (2) real estate dealers fixed tax, and (3) corporation residence tax for the years 1945-1949, computed according to the assessments made on their properties. Because of this, the petitioners filed a case against the respondents in the Court of Tax Appeals, praying that the decision of the respondent contained in its letter of demand be reversed and that they be absolved from the payment of the taxes in question.
I.
As regards to the residence tax for corporations provided Sec. 2 of Commonwealth Act No. 4651, the terms corporation and partnership are used in both statutes with substantially the same meaning. Consequently, petitioners are subject, also, to the residence tax for corporations.
Entities liable to residence taxEvery corporation, no matter how created or Issue: Whether the petitioners are subject to the organized, whether domestic or resident tax on corporations, real estate dealers fixed tax, foreign, engaged in or doing business in the and corporation residence tax. Philippines shall pay an annual residence tax of five pesos and an annual additional tax, which Court of Tax Appeals: The petitioners are liable. in no case, shall exceed one thousand pesos, (No explanation for such in the case) in accordance with the following schedule: * * * Partnership & Agency | 2B 2008-2009
Real estate dealers include any person engaged in the business of buying, selling, exchanging, leasing, or renting property of his own account as principal and holding himself out as full ro part-time dealer in real estate or as an owner of rental property or properties rented or offered to rent for an aggregate amount of three thousand pesos or more a year. * * *
ESTANISLAO, JR. VS. COURT OF APPEALS Facts: The petitioner and private respondents are brothers and sisters who are co-owners of certain lots at the in Quezon City which were then being leased to SHELL. They agreed to open and operate a gas station thereat to be known as Estanislao Shell Service Station with an initial investment of PhP15,000.00 to be taken from the advance rentals due to them from SHELL for the occupancy of the said lots owned in common by them. A joint affidavit was executed by them on April 11, 1966. The respondents agreed to help their brother, petitioner therein, by allowing him to operate and manage the gasoline service station of the family. In order not to run counter to the companys policy of appointing only one dealer, it was agreed that petitioner would apply for the dealership. Respondent Remedios helped in co-managing the business with petitioner from May 1966 up to February 1967. On May 1966, the parties entered into an Additional Cash Pledge Agreement with SHELL wherein it was reiterated that the P15,000.00 advance rental shall be deposited with SHELL to cover advances of fuel to petitioner as dealer with a proviso that said agreement cancels and supersedes the Joint Affidavit.
IN THE MATTER OF THE PETITION FOR AUTHORITY TO CONTINUE USE OF THE FIRM NAME OZAETA, ROMULO, ETC. Facts: Two petitions were filed, one by the surviving partners of Atty. Herminio Ozaeta and the other by the surviving partners of Atty. Alexander Sycip praying that they be allowed to continue using the names of partners who had passed away in their firm names. Both petitions were consolidated. Petitioners Arguments: Under the law, a partnership is not prohibited from continuing its business under a firm name which includes the name of a deceased partner. In fact, art. 1840 of the civil code explicitly sanctions the practice. In regulating other professions, such as accountancy and engineering, the legislature has authorized the adoption of firm names without any restriction as to the use, in such firm name, of the name of the deceased partner, the legislative authorization given to those engaged in the practice of accountancy a profession requiring the same degree of trust and confidence in respect of clients as that implicit in the relationship of attorney and client to acquire and use a trade name, strongly indicates that there us no fundamental policy that is offended by the continued use by a firm of professionals of a firm name which included the name of a deceased partner, at least where such firm name has acquired the characteristics of a trade name The Canon of Professional Ethics are not transgressed by the continued use of the name of a deceased partner in the firm name of a law partnership as declared by Canon 33 adopted by American Bar Association declaring that The continued use of the name of a deceased or former partner when permissible by local custom, is not unethical, but care should be taken that no imposition or deception is practiced through this use. There is no possibility of imposition or deception because the deaths of their respective deceased partners were well publicized in all newspapers of general circulation for several days. No local custom prohibits the continued use of a deceased partners name in a professional firm name; and
Issue: Whether or not a firm name engaged in the legal profession should continue using the name of partners who had passed away. SC ruling: No. The use in partnership names of the names of deceased partners will run counter to Article 1825 of the CC which provides that names in a firm name of a partnership must either be those of living partners and, in the case of non partners, should be living persons who can be subjected to liability. In fact, art. 1825 prohibits a third person from including his name in the firm name under pain of assuming the liability of a partner. The heirs of a deceased partner in a law firm cannot be held liable as the old members to the creditors of a firm particularly where they are non-lawyers. With regard to art. 1840, it treats more of a commercial partnership with a good will to protect rather than a professional partnership, with no saleable good will but whose reputation depends on the personal qualifications of its individual members. Thus, it has been held that a saleable goodwill can exist only in a commercial partnership and cannot arise in a professional partnership consisting of lawyers. A partnership for the practice of law cannot be likened to partnerships formed by other professionals or for business. For one thing, the law on accountancy specifically allows the use of a trade name in connection with the practice of accountancy. A partnership for the practice of law is not a legal entity. It is a mere relationship or association for a particular purpose. It is not a partnership formed for the purpose of carrying in a trade or business or of holding property. Thus, it has been stated that the used of an assumed or trade name in law practice is improper. The right to practice law is not a natural or constitutional right but is in the nature of a privilege or franchise. It is limited to persons of good moral character with special qualifications duly ascertained and certified. The right does not only presuppose in its possessor integrity, legal standing and attainment but also the exercise of a special privilege, highly personal and partaking of the nature of a public trust. The continued use of a deceased or former partners name in the firm names of law partnerships not sanctioned by local custom due to the possibility of deception upon the public where the name of a deceased partner continues to be used. The possibility of deception upon the public, real or consequential, where the name of a deceased partner continues to be used cannot be ruled out. A person in search of legal counsel might be guided by the familiar ring of a distinguished name appearing in a firm title. In addition, theres no local custom within our jurisdiction that sanctions the practice of continued use of a deceased partners name. Courts take no judicial notice of custom. A local custom as a source of right cannot be considered by a court of justice unless such
BASTIDA VS. MENZI CO. Facts: Menzi Co. was organized in 1921 for the purpose of importing and selling general merchandise, including fertilizers and fertilizer ingredients. Sometime in November of that year, the plaintiff, who had had some experience in mixing and selling fertilizer, went to see Toehl, the manager of the sundries department of Menzi & Co. (through which the fertilizer business was carried out) and told him that he had a written contract with the Philippine Sugar Centrals Agency for 1,250 tons of mixed fertilizers, and that he could obtain other contracts, including one from Calamba Sugar Estates for 450 tons, but that he did not have the money to buy the ingredients to fill the order and carry on the business. He offered to assign to Menzi & Co. his contract with Phil Sugar Centrals Agency and to supervise the mixing of the fertilizer and to obtain other orders for 50 % of the net profit that Menzi & Co., Inc., might derive therefrom. J. M. Menzi (gen. manager of Menzi & Co.) accepted the offer. The agreement between the parties was verbal and was confirmed by the letter of Menzi to the plaintiff on January 10, 1922. Menzi & Co. continued to carry on its fertilizer business under this arrangement with the plaintiff. It ordered ingredients from the US and other countries, and the interest on the drafts for the purchase of these materials was charged to the business as a part of the cost of the materials. The mixed fertilizers were sold by Menzi & Co. between January 19 and April 1, 1922 under its Corona brand. Pursuant to the verbal agreement, the defendant corporation on April 27, 1922 entered into a written contract with the plaintiff, marked Exhibit A, which is the basis of the present action. Still, the fertilizer business as carried on in the same manner as it was prior to the written contract, but the net profit that the plaintiff herein shall get would only be 35%. The intervention of the plaintiff was limited to supervising the mixing of the fertilizers in the bodegas of Menzi. The trademarks used in the sale of the fertilizer were registered in the Bureau of Commerce & Industry in the name of Menzi & Co., Inc. and the fees were paid by that company. Prior to the expiration of the contract (April 27, 1927), the manager of Menzi notified the plaintiff that the contract for his services would not be renewed. Subsequently, when the contract expired, Menzi proceeded to liquidate the fertilizer business in question. The plaintiff refused to agree to this. It argued, among others, that the written contract entered into by the parties is a contract of general regular commercial partnership, wherein Menzi was the capitalist and the plaintiff the industrial partner. Issue: Is the relationship between the petitioner and Menzi that of partners?
OA VS. COMMSSIONER OF INTERNAL REVENUE Facts: Lorenzo Oa and his five children are the surviving heirs of Julia Buales. Lorenzo, the surviving spouse was appointed administrator of Julias estate. He submitted the project of partition which was approved by the court and since 3 of the 5 children were still minors, he was appointed by the court as guardian of said minors. Despite the approval of the project of partition, no attempt was made to divide the properties therein listed and remained under the management of Lorenzo who used said properties in business by leasing or selling them and investing the income derived therefrom and proceeds form the sales thereof in real properties and securities. Respondent CIR decided that petitioners formed an unregistered partnership and therefore subject to corporate tax pursuant to Sec. 24 of the Tax Code. Accordingly he assessed against the petitioners the amounts of P8,092.00 and P13.899.00 as corporate income taxes for 1955 and 1956 respectively. Petitioners protested against the assessment and asked for reconsideration which was denied. Petitioners Argument: Petitioners are considered as co owners of the properties inherited by them from the deceased Julia Buales and the profits derived from transactions involving the same, they cannot be considered as an unregistered partnership and cannot be subject to corporate tax.
LYONS VS. ROSENSTOCK Facts: During his lifetime, Henry Elser got engaged in the real estate business. Petitioner Lyons, on the other hand, joined Elser in some of his ventures and they equally divided profits gained from these. In 1919, Lyons needed to go back to the United States for a year and a half and by reason of which he executed a general power of attorney in favor of Elser, empowering the latter to manage and dispose the properties owned by them. In 1920, Elser was drawn to a piece of land, the San Juan Estate, and he perceived an opportunity to develop it into a suburban community. The Estate was offered by its owners for P570,000 with an initial payment of P150,000. In May 1920, Elser wrote a letter to Lyons inducing the latter to join him in this venture and to likewise supply the means necessary for the fulfillment of this project. In the meantime, Elser raised P120,000 from his own funds and loaned P50,000 from Uy Siolong to pay for the initial payment. However in order to obtain the loan he had to give a personal note signed by himself, by his other associates and by the Fidelity and Surety
FERNANDEZ VS. DE LA ROSA Facts: On the part of plaintiff Fernandez, he claims that he entered into a verbal agreement with defendant De la Rosa to form a partnership for the purchase of cascoes with the undertaking that the defendant will buy the cascoes and that each partner will furnish such amount as he could, while the profits will be divided proportionately. Plaintiff furnished P300 for casco No. 1515 and P825 for casco No. 2089, both of which were placed under the name of the defendant only. In April 1900, the parties undertook to draw up articles of their partnership for the purpose of embodying it in an authentic document. The agreement however did not materialize because defendant proposed articles which were materially different from their verbal agreement, and he was also unwilling to include casco No. 2089 in the partnership. Because the cascoes were under the management of the defendant, the plaintiff demanded an accounting over it to which the defendant refused claiming that no partnership existed between them. De la Rosa, on the other hand, admits that he desired to form a partnership with the plaintiff but denies that any agreement was ever consummated. Moreover, he denied receiving any money furnished
ROJAS VS. MAGLANA FACTS: Maglana and Rojas executed their Articles of Co-partnership called Eastcoast Development Enterpises which had an indefinite term of existence and was registered with the SEC and had a Timber License. One of the EDEs purposes was to apply or secure timber and/or private forest lands and to operate, develop and promote such forests rights and concessions. M shall manage the business affairs while R shall be the logging superintendent. All profits and losses shall be divided share and share alike between them. Later on, the two availed the services of Pahamotang as industrial partner and executed another articles of co-partnership with the latter. The purpose of this second partnership was to hold and secure renewal of timber license and the term of which was fixed to 30 years. Still later on, the three executed a conditional sale of interest in the partnership wherein M and R shall purchase the interest, share and participation in the partnership of P. It was also agreed that after payment of such including amount of loan secured by P in favor of the partnership, the two shall become owners of all equipment contributed by P. After this, the two continued the partnership without any written agreement or reconstitution of their articles of partnership. Subsequently, R entered into a management contract with CMS Estate Inc. M wrote him re: his contribution to the capital investments as well as his duties as logging superintendent. R replied that he will not be able to comply with both. M then told R that the latters share will just be 20% of the net profits. Such was the sharing from 1957 to 1959 without complaint or dispute. R took funds from the partnership more than his contribution. M notified R that he dissolved the partnership. R filed an action against M for the recovery of properties and accounting of the partnership and damages. CFI: the partnership of M and R is after P retired is one of de facto and at will; the sharing of profits and losses is on the basis of actual contributions; there is no evidence these properties were acquired by the
ANGELES VS SEC of JUSTICE Facts: Angeles spouses filed a criminal complaint of estafa against Mercado as they claim that M convinced them to enter into a contract of antichresis covering 8 parcels of land. Said contract was to last for 5 years with PHP210k as consideration. It was agreed that M was to administer the lands and complete the paperwork. After 3 years, the A spouses asked for an accounting. M explained that the land earned PHP46k + in 1993, trees bore no fruit in 1994 and had not given and accounting in 1995. Only after this demand had they discovered that M had put the contract of antichresis over the land under his and his spouses names. M insists that there exists an industrial partnership between him and his spouse as industrial partners and the A spouses as financiers. This had existed since 1991 before the contract of antichresis over the land. M used his earnings as part of the business capital which he entered into, under his name, in behalf of the A spouses. M attached bank receipts showing deposits in behalf of E. Angeles and contracts under his name for the A spouses. O. Angeles stated that there was a written industrial partnership agreement wherein capital would come from A spouses while profit would be divided evenly between M and the A spouses. PROVINCIAL PROSECUTION: dismissed estafa complaint On appeal to the SOJ, the A spouses insist that the document evidencing the contract of antichresis was executed in the name of the M spouses instead of the A spouses. This document alone proves Ms misappropriation of their PHP210k. SOJ: Dismissed appeal. A spouses failed to show sufficient proof that M deliberately deceived them in the antichresis transaction. The document alone in the name of the M spouses failed to convince the SOJ
ORTEGA VS CA FACTS: The law firm of R,L,S and C was duly registered in the Mercantile Registry and reconstituted with the SEC. There were several amendments to its articles of partnership. Respondent-Appellees senior and junior partners associated themselves together. Ortega informed them through a letter that he is retiring from the firm of Bito, Misa and Lozada regarding the liquidation of his participation in it. He later on filed with the SICD a petition for dissolution and liquidation of partnership. Hearing Officer: said withdrawal of O did not dissolve the law partnership and both parties to the case are enjoined to abide by the provisions of the Agreement re: the liquidation of the shares of any retiring or withdrawing partner. SEC: reversed the decision ruling that the withdrawal had in fact dissolved the partnership of BML as a partnership at will, the law firm can be dissolved by any partner at anytime by his withdrawal regardless
TORRES VS. COURT OF APPEALS Facts: Petitioners Antonia Torres and Emeteria Baring entered into a Joint Venture Agreement (JVA) with respondent Manuel Torres for the development of a parcel of land into a subdivision. The executed a Deed of Sale in favor of respondent, who had it registered in his name. Respondent mortgaged the property to Equitable and obtained a P40,000 loan to be used for the subdivision devt. Petitioners and Respondent agreed to share the proceeds form the sale of the subdivided lots. The project did not push through and the land was foreclosed. Petioners filed a criminal case of estafa against respondent and his wife, alleging that the project failed because of respondents lack of funds or means and skills and because respondent used the loan to fund his company, Universal Umbrella Co. Respondent alleged that that he used the loan to effect a survey over the lots, secure city council approval, construct curbs, roads and gutters and enter in to a contract with an engineering firm to build houses all at an expense of P85,000. Respondents were acquitted from the criminal case and petitioners filed the present civil case. The trial court dismissed the case, but the same, on appeal, was remanded for further proceedings. CA: Petitioners and Respondents had formed a partnership for the subdivision devt. They must bear the loss suffered by the partnership in the same proportion as their share in the profits stipulated in
PIONEER INSURANCE & SURETY CORP VS. CA Facts: Petitioner Jacob Lim, owner-operator of Southern Airlines (SAL) entered in to a contract with Japan Domestic Airlines (JDA) for the sale and purchase of 2 aircrafts and 1 set of spare parts for $109k to be paid in installments. Pioneer Insurance as surety executed and issued its surety bond in favor of JDA on behalf of its principal Lim for the balance. Border Machinery and Heavy Equip. Co. (BorMaHeCo), Francisco and Modesto Cervantes and Maglana gave some funds used in the purchase or aircrafts and spare parts as contribution to new corporation proposed by Lim to expand his airline business. They executed 2 indemnity agreements stipulating that the indemnitors principally agree and bind themselves solidarily to indemnify, hold and save Pioneer from damages, losses, costs, taxes,
LIM TONG LIM VS. PHILIPPINE FISHING GEAR INDUSTRIES INC FACTS: On behalf of Ocean Quest Fishing Corp Antonio Chua and Peter Yao entered into a contract with Phil. Fishing Gear (PFGI) for the purchase of fishing nets. They claimed they were engaged in a business venture with petitioner Lim who was not a signatory to the agreement. Chua and Yao failed to pay for the nets and floats. PFGI filed a collection suit against Chua, Yao and Lim as general partners alleging that Ocean Quest was nonexistent. Chua
CAMPOS RUEDA & CO. VS. PACIFIC COMMERCIAL CO. ET. AL. Facts: This case involves the application by the petitioner for a judicial decree adjudging itself insolvent. The limited partnership of Campos Rueda & Co. was, and is, indebted to Pacific Commercial Co., the Asiatic Petroleum Co. and the International
3. AGUILA, JR. VS. CA Facts: The petitioner herein is the manager of A.C. Aguila & Sons, Co., a partnership engaged in lending activities, while the private respondent and her late husband were the registered owners of a house and lot, covered by a transfer certificate of title. Sometime in 1991, the private respondent and A.C. Aguila & Sons, Co., represented by the petitioner, entered into a Memorandum of Agreement. In this agreement, a deed of absolute sale shall be executed by the private respondent in favor of A.C. Aguila & Sons, Co., giving the former an option to repurchase and obliging the same to deliver peacefully the possession of the property to A.C. Aguila & Sons, Co., within 15 days after the expiration of the said 90 days grace period. When the private respondent failed to redeem the property within the grace period, the petitioner
Held: The petition is meritorious. A real party in interest is one who would be benefited or injured by the judgment, or who is entitled to the avails of the suit. Moreover, under Article 1768 of the New Civil Code, a partnership has a juridical personality separate and distinct from that of each of the partners. The partners cannot be held liable for the obligations of the partnership unless it is shown that the legal fiction of a different juridical personality is being used for fraudulent, unfair, or illegal purposes. In this case, the private respondent ahs not shown that A.C. Aguila & Sons, Co., as a separate juridical entity, is being used for fraudulent, unfair or illegal purposes. Moreover, the title to the subject property is in the name of A.C. Aguila & Sons, Co. and the MOA was executed between the private respondent, with the consent of her husband, and A.C. Aguila & Sons, Co., represented by the petitioner. Hence, it is
Facts: Pedro Larin had an agreement to form a partnership and the divide the profits equally to Pedro Tarug, Eusebia Clarin, and Carlos De Guzman. Larin delivered to Tarug P172, as his contribution to the partnership, to buy and sell mangoes. Tarug, Clarin, and De Guzman were able to obtain P203 from the business of buying and selling mangoes but the three did not comply with the terms of the contract of delivering to Larin his half of the profits neither did they render him any account of the capital. Larin charged them with the crime of estafa but the provincial fiscal filed an information only against Eusebio Clarin in which the trial court sentenced the defendant to six months arresto mayor and return Pedro Larin P172 and P30.50 which is his share of the profits. The defendant appealed.
Facts: Petitioners Luzviminda Villareal, Carmelito Jose and Jesus Jose formed a partnership for the operation of a restaurant and catering business under the name Aquarius Food House and Catering Services. Villareal was appointed general manager while Carmelito Jose was the operations manager. Respondent Donaldo Ramirez joined as partner later on, his capital contribution of P250,000 was paid by his parents, respondents Cesar and Carmelita Ramirez. Jesus Jose decided to withdrew from the partnership and his capital contribution of P250,000 was refunded to him in cash by agreement of the partners. Without prior knowledge of respondents, petitioners closed down the restaurant due to increased rental and deposited the restaurants furniture and equipments to respondents house for storage. The respondent spouses wrote the petitioners that they no longer want to continue their partnership or in reopening the restaurant and that they were accepting the latters offer to return their capital contribution. Several demand letters were sent but the same were left unheeded. The spouses Ramirez filed a complaint for a collection of sum of money from petitioners.
RTCs Ruling: Ruled that parties had voluntarily entered into a partnership which could be dissolved at any time. Petitioners clearly intended to dissolve it when they stopped operating the restaurant and held them liable to pay respondent his capital contribution of P250,000, attorneys fee and cost of suit.
Issue: W/N a partner in a partnership may be charged with estafa. NO. CA Ruling: Although respondents had no right to demand the return of their capital contribution, the partnership was nonetheless dissolved when petitioners lost interest in continuing the restaurant business with them. Because petitioners never gave a proper accounting of the partnership accounts for liquidation purposes, and because no sufficient evidence was presented to show financial losses, the CA computed their liabilities, petitioners were made liable to respondents in the amount of P253,114.00.
Held: The failure on the part of the industrial partners to return to the capitalist partner the capital brought into the partnership by the latter is not an act constituting the crime of estafa as defined in the RPC. When Larin put the P172 into the partnership which her formed with Tarug et. al., he invested his capital in the risks or benefits of the business of the purchase and sale of mangoes, and, even though he had reserved the capital and conveyed only the usufruct of his money, it would not devolve upon one of his three partners to return the his capital to him, but upon the partnership of which he himself formed part, or if it were to be done by one of the three specifically, it would be Tarug, who according to the evidence was the person who received the money directly from Larin. The P172 having been received by the partnership, the business commenced and profits accrued, the action that lies with the partner who furnishes the capital for the recovery of his money is not a criminal action for estafa, but a civil one arising from the partnership contract for a liquidation of the partnership and a levy on its assets if there should be any.
Issue: W/N petitioners are liable to respondents for the latters share in the partnership and W/N the CAs computation as to the respondents share is correct.
Held: 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 the petitioners, it is the partnership that must refund the equity of the retiring partners. And since it is the partnership, as a separate and distinct entity, that must refund the shares of
EVANGELISTA & CO. VS. ABAD SANTOS Facts: A co - partnership was formed under the name of Evangelista & Co. Its articles of copartnership was later on amended to include Estrella Abad Santos (a judge in a City Court in Manila) as an industrial partner. She subsequently filed a suit against the partnership to pay her the share of the profits owing to her. She alleged that the partnership is paying dividends to the partners except her. The partners denied that Abad Santos was an industrial partner and that the articles of co partnership do not express the true agreement of the parties and that Abad Santos was a mere profit sharer, not a partner. Issue: W/N Abad Santos is a partner. Held: Yes, Abad Santos is a partner. The partners are estopped from denying the articles of partnership because they admitted its genuiness and due execution. Even if it were erroneous, they failed to assail it for 8 years. Such failure shows their assent to the said articles. In addition, the partners alleged that being a judge, she cannot be an industrial partner since industrial partners are not allowed to engage in another business or profession. The SC held that such allegation has no merit because Abad Santos complied with her obligation to the partnership. The partners also failed to exercise their right of exclusion for 9 years. This shows that the argument of engaging in another profession is a mere afterthought and that the partnership actually allowed Abad Santos to exercise her profession. (Please take note of Art. 1789 of Civil Code: An industrial partner cannot engage in business for himself, unless the partnership expressly permits him to do so; and if he should do so, the capitalist partners may either exclude him from the firm or avail themselves of the benefits which he may have obtained in violation of this provision, with a right to damages in either case.)
GOQUIOLAY, ET. AL. VS. SYCIP, ET. AL. Facts: Tan Sin An and Antonio Goquiolay entered into a general commercial partnership which was to last for 10 years for the purpose of dealing in real estate. The agreement lodged upon Tan Sin An the sole management of the partnership affairs and his co partner, Goquiolay, has no voice or participation in the management of the affairs of the co partnership. They further agreed upon that in the event of the death of any of the partners at any time before the expiration of the 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 the said co partnership. A general power of attorney (GPA) was executed by Goquiolay in favor of Tan Sin An which included buy, sell, alienate and convey properties of the partnership as well as obtain loans as he may deem advisable for the best interest of the co partnership. With the authority of the GPA, the partnership through Tan Sin An purchased 3 parcels of land which was mortgaged to La Urbana Sociedad and another 46 parcels of land which which were purchased by Tan Sin An in his individual capacity, and assumed mortgaged debt thereon. The downpayment for the 46 parcels of land was advanced by Yutivo and Co. The two separate obligations were consolidated in an instrument executed by the partnership and Tan Sin An, whereby the entire 49 lots were mortgaged in favor of the Banco Hipotecario de Filipinas (as successor to La Urbana). When Tan Sin An died, his wife Kong Chia Pin was appointed administratix of the intestate estate of her deceased husband. Repeated demands for payment were made by Banco Hipotecario on the partnership and on Tan Sin An which was initially paid by Yutivo and Co. and Sing Yee Cuan and Co. (at
Issue: W/N Idos violated BP 22? No Held: One of the elements of the offense penalized under BP 22 is the making, drawing and issuance of any check to apply for any account or for value. In this case Idos showed enough evidence that the check was to be funded from receivables to be collected and goods to be sold by the partnership. First, only one of the fours check were not encashed and second, even Alarilla himself admitted that there was no consideration for the issuance of the check. Hence the check in question was not issued for any debt of or any account due and payable by the petitioner. Moreover, Idos and Alarilla were still in the winding up of the affairs of the partnership hen the check was issued as evidenced by the fact that they still had to sell the goods on hand and collect the receivables from debtors. As provided by the Civil Code: winding-up is the process of settling business affairs after dissolution, i.e. collecting of assets previously demandable; termination is the point in time after all the partnership affairs have been wound up. Thus, since that partnership has not been terminated, the petitioner and private complainant remained as co-partners. The check was thus issued by the petitioner to complainant as would a partner to another and not as payment from a debtor to a creditor. Idos did not violate BP 22.
VILLAREAL VS. RAMIREZ Facts: In 1984, Villareal, Carmelito Jose and Jesus Jose formed a partnership with a capital of P750,000 for the operation of a restaurant and catering business. Respondent Ramirez joined as a partner in the business with the capital contribution of P250,000. In 1987, Jesus Jose withdrew from the partnership and within the same time, Villareal and Carmelito Jose, petitioners closed the business without prior knowledge of respondents.
CLAUDIO VS. ZANDUETA Facts: Petitioners Claudio, Goyena and Flores organized the Cotabato & Cagayan Mining Association (Association) together with the respondents Neuffer, Meyer, Skiles, Araneta and Cowper. The respondents in this case filed in CFI a civil case no. 51510 for the dissolution of the Association. One of their prayers was for the court to appoint a receiver to take charge of the properties of the association after its dissolution. The court thrugh Judge Zandueta granted the prayer of the respondents in civil case 51510 and appointed J.C. Cowper as a receiver even if the latter was not made a party to the case.
YU VS. NLRC Facts: Yu was formerly the Assistant General Manager of a registered partnership, Jade Mountain. The partnership was originally composed of Bendal siblings as general partners and others who were limited partners. The partnership business consisted of exploiting marble deposit found on the land of the Cruz spouses by virtue of a memorandum agreement. Yu was hired by virtue of a Partnership Resolution as Assistant General Manager with a monthly salary. He, however, only received half of his monthly salary since he had accepted the promise of the partners that the balance would be paid when the firm shall have secured additional operating funds from abroad. Yu managed the operations and finances of the business, had overall supervision of the workers at the marble quarry and took charge of the preparation of papers relation to the exportation of the firms products. Without knowledge of Yu, the general partners transferred their interests while some of the limited
AMES V. DOWNING (N.Y. Surr. Cit.) [TAKEN FROM CLV BLOG] Bautista quoted from the New York decision in Ames v. Downing, 1 Brad.
COMMISSIONER OF INTERNAL REVENUE VS. SUTER Facts: In 1947, A limited partnership, William J. Suter Morcoin Co., Ltd., was formed with William Suter as general partner, Julia Spirig and Gustav Carlson as limited partners, each contributing to the partnership. In 1948, Suter married Spirig and thereafter, Carlson sold his share in the partnership to Suter and his wife. The limited partnership had been filing its income tax returns (ITRs) as a corporation w/o objection from the CIR. Later in an assessment, the CIR consolidated the income of the firm and the individual incomes of partner-spouses resulting in a determination of a deficiency income tax against Suter. Suter protested and requested cancellation and withdrawal but was denied by the CIR. Suter appealed to the Court of Tax Appeals w/c reversed CIRs decision. Issues: (1) Should the corporate personality of the partnership be disregarded for income tax purposes since partner-spouses form a single taxable unit? (2)Was the partnership dissolved after the marriage of partner-spuses and subsequent sale of Carlson of his participation in the partnership? Held: CTA decision affirmed. The limited partnership was not a universal partnership but a particular one. A universal partnership requires either that the object of the association be all the present property of the partners, as contributed by them to the common fund, or else all that the partners may acquire by their industry or work during the existence of the partnership. In the instant case, all of the contributions were fixed sums of money and neither of them were industrial partners. Thus it was not a partnership that spouses were forbidden to enter under the 1889 Civil Code. The capital contributions of partner-spouses were separately owned and contributed by them before their marriage; and after they were joined in wedlock, such contributions remained their respective separate property under the Spanish Civil Code. Thus, the individual interest of each did not become common property of both after their marriage. In this case the limited partnership is not a mere business conduit of the partner-spouses; it was organized for legitimate business purposes, The change in its membership brought about by the marriage is not a ground for withdrawing the partnership from coverage under 24 of the tax code
JO CHUNG CANG vs. PACIFIC COMMERCIAL Co. Facts: In an insolvency proceedings of petitionerestablishment, Sociedad Mercantil, Teck Seing & Co., Ltd., creditors, Pacific Commercial and others filed a motion with the Court to declare the individual partners parties to the proceeding, for each to file an inventory, and for each to be adjudicated as insolvent debtors. Issue: What is the nature of the mercantile establishment, Teck Seing & Co., Ltd.?
Held: The contract of partnership established a general partnership. By process of elimination, Teck Seing & Co., Ltd. Is not a corporation nor an accidental partnership (joint account association). To establish a limited partnership, there must be, at least, one general partner and the name of at least one of the general partners must appear in the firm name. This requirement has not been fulfilled. Those who seek to avail themselves of the protection of laws permitting the creation of limited partnerships must the show a substantially full compliance with such laws. It must be noted that all the requirements of the Code have been met w/ the sole exception of that relating to the composition of the firm name. The legal intention deducible from the acts of the parties controls in determining the existence of a partnership. If they intend to do a thing w/c in law constitutes a partnership, they are partners although their very purpose was to avoid the creation of such relation. Here the intention of the persons making up, Teck Seing & Co., Ltd. Was to establish partnership w/c they erroneously denominated as a limited partnership.