PDIC v.

BIR (Concurrence & Preference of Credit)

Heirs of Jose Lim v. Juliet Villa Lim (Partnership)

Concurrence & Preference of Credit

PHILIPPINE DEPOSIT INSURANCE CORPORATION v. BUREAU OF INTERNAL REVENUE G.R. No. 172892, June 13, 2013 FACTS: The Monetary Board of the Bangko Sentral ng Pilipinas (BSP) prohibited the Rural Bank of Tuba (Benguet), Inc. (RBTI) from doing business in the Philippines, placed it under receivership and designated the Philippine Deposit Insurance Corporation (PDIC) as receiver. PDIC conducted an evaluation of RBTIs financial condition and determined that RBTI remained insolvent. Thus, the Monetary Board issued Resolution No. 675 dated June 6, 1997 directing PDIC to proceed with the liquidation of RBTI. As an incident of the proceedings, the Bureau of Internal Revenue (BIR) intervened as one of the creditors of RBTI. The trial court found merit in the BIRs motion and granted it. ISSUE: whether Section 52(C) of the Tax Code of 1997 applies to banks ordered placed under liquidation by the Monetary Board, that is, whether a bank placed under liquidation has to secure a tax clearance from the BIR before the project of distribution of the assets of the bank can be approved by the liquidation court.

HELD: Section 52(C) of the Tax Code of 1997 is not applicable to banks ordered placed under liquidation by the Monetary Board,16 and a tax clearance is not a prerequisite to the approval of the project of distribution of the assets of a bank under liquidation by the PDIC. Thus, this Court has held that the RTC, acting as liquidation court under Section 30 of the New Central Bank Act, commits grave abuse of discretion in ordering the PDIC, as liquidator of a bank ordered closed by the Monetary Board, to first secure a tax clearance from the appropriate BIR Regional Office, and holding in abeyance the approval of the project of distribution of the assets of the closed bank by virtue thereof. The position of the BIR, insisting on prior compliance with the tax clearance requirement as a condition for the approval of the project of distribution of the assets of a bank under liquidation, is contrary to both the letter and intent of the law on liquidation of banks by the PDIC. In this connection, the relevant portion of Section 30 of the New Central Bank Act provides:

(2) convert the assets of the institution to money, dispose of the same to creditors and other parties, for the purpose of paying the debts of such institution in accordance with the rules on concurrence and preference of credit under the Civil Code of the Philippines and he may, in the name of the institution, and with the assistance of counsel as he may retain, institute such actions as may be necessary to collect and recover accounts and assets of, or defend any action against, the institution. The assets of an institution under receivership or liquidation shall be deemed in custodia legis in the hands of the receiver and shall, from the moment the institution was placed under such receivership or liquidation, be exempt from any order of garnishment, levy, attachment, or execution.

Partnership

HEIRS OF JOSE LIM vs. JULIET VILLA LIM G.R. No. 172690 March 3, 2010 FACTS: Petitioners are the heirs of the late Jose Lim (Jose). They filed a Complaint for Partition, Accounting and Damages against respondent Juliet Villa Lim (respondent), widow of the late Elfledo Lim (Elfledo), who was the eldest son of Jose and Cresencia. Petitioners alleged that Jose, together with his friends Jimmy and Norberto formed a partnership to engage in the trucking business with a contribution of P50K each; Jose managed the operations of this trucking business until his death; that thereafter, Jose's heirs, including Elfledo, and partners agreed to continue the business under the management of Elfledo; that the shares in the partnership profits and income that formed part of the estate of Jose were held in trust by Elfledo, with petitioners' authority for Elfledo to use, purchase or acquire properties using said funds; that, at that time, Elfledo was a fresh commerce graduate serving as his fathers driver in the trucking business; that he was never a partner or an investor in the business and merely supervised the purchase of additional trucks using the income from the trucking business of the partners; Elfledo died, leaving respondent as his sole surviving heir; that respondent took over the administration of the aforementioned properties, which belonged to the estate of Jose, without their consent and approval; that they are coowners of the properties, petitioners required respondent to submit an accounting of all income, profits and rentals received from the estate of Elfledo, and to surrender the administration thereof, but Respondent refused. Respondent claimed that Elfledo was himself a partner of Norberto and Jimmy; that Jose gave Elfledo P50K as the latter's capital in an informal partnership with Jimmy and Norberto; that the partnership only had one truck; but through the efforts of Elfledo, the business flourished; other than this trucking business; that when Jose died, he left no known assets, and the partnership with Jimmy and Norberto ceased upon his demise; that these are conjugal partnership properties; and thus, she had the right to refuse to render an accounting for the income or profits of their own business. ISSUE: Is Alfredo a partner in the partnership? HELD: Yes. Art. 1769. In determining whether a partnership exists, these rules shall apply: (1) Except as provided by Article 1825, persons who are not partners as to each other are not partners as to third persons;

(2) Co-ownership or co-possession does not of itself establish a partnership, whether such co-owners or co-possessors do or do not share any profits made by the use of the property; (3) The sharing of gross returns does not of itself establish a partnership, whether or not the persons sharing them have a joint or common right or interest in any property from which the returns are derived; (4) The receipt by a person of a share of the profits of a business is a prima facie evidence that he is a partner in the business, but no such inference shall be drawn if such profits were received in payment: (a) As a debt by installments or otherwise; (b) As wages of an employee or rent to a landlord; (c) As an annuity to a widow or representative of a deceased partner; (d) As interest on a loan, though the amount of payment vary with the profits of the business; (e) As the consideration for the sale of a goodwill of a business or other property by installments or otherwise. Applying the legal provision to the facts of this case, the following circumstances tend to prove that Elfledo was himself the partner of Jimmy and Norberto: 1) Cresencia testified that Jose gave Elfledo P50,000.00, as share in the partnership, on a date that coincided with the payment of the initial capital in the partnership; (2) Elfledo ran the affairs of the partnership, wielding absolute control, power and authority, without any intervention or opposition whatsoever from any of petitioners herein; (3) all of the properties, particularly the nine trucks of the partnership, were registered in the name of Elfledo; (4) Jimmy testified that Elfledo did not receive wages or salaries from the partnership, indicating that what he actually received were shares of the profits of the business; and (5) none of the petitioners, as heirs of Jose, the alleged partner, demanded periodic accounting from Elfledo during his lifetime. As repeatedly stressed in Heirs of Tan Eng Kee, a demand for periodic accounting is evidence of a partnership. Furthermore, petitioners failed to adduce any evidence to show that the real and personal properties acquired and registered in the names of Elfledo and respondent formed part of the estate of Jose, having been derived from Jose's alleged partnership with Jimmy and Norberto. They failed to refute respondent's claim that Elfledo and respondent engaged in other businesses. Edison even admitted that Elfledo also sold Interwood lumber as a sideline. Petitioners could not offer any credible evidence other than their bare assertions. Thus, we apply the basic rule of evidence that between documentary and oral evidence, the former carries more weight.