DIGESTED CASES

ON PARTNERSHIP
SUBMITTED BY:
Ranel De Lara
SUBMITTED TO:
Judge Ampuan

GREGORIO F. ORTEGA, TOMAS O. DEL CASTILLO, JR., and

BENJAMIN T. BACORRO, petitioners,

vs.
HON. COURT OF APPEALS, SECURITIES AND
COMMISSION and JOAQUIN L. MISA, respondents
G.R. No. 109248 July 3, 1995

EXCHANGE

FACTS:
Ortega, then a senior partner in the law firm Bito, Misa, and
Lozada withdrew from the said firm. He filed with SEC a petition for
dissolution and liquidation of the partnership. The SEC en banc ruled
that withdrawal of Misa from the firm had dissolved the partnership.
Since it is partnership at will, the law firm could be dissolved by any
partner at anytime, such as by withdrawal therefrom, regardless of
good faith or bad faith, since no partner can be forced to continue in
the partnership against his will.
ISSUE:
1. Whether or not the partnership of Bito, Lozada and Misa is a
partnership at will.
2. Whether or not withdrawal of Misa dissolved the partnership
regardless of good faith and bad faith.
RULING:
1. Yes. The partnership agreement of the firm provides that
[t]he partnership shall continue so long as mutually
satisfactory and upon the death or legal incapacity of one of
the partners, shall be continued by the surviving partners.
2. Yes. Any one of the partners may, at his sole pleasure, dictate
a dissolution of the partnership at will (e.g. by way of
withdrawal of a partner). He must, however, act in good faith,
not that the attendance of bad faith can prevent the
dissolution of the partnership but that it can result in a liability
for damages.
A partnership that does not fix its term is a partnership at will. It
can be dissolved
anytime since no partner can be forced to continue in the partnership
against his will. Doctrine of Delectus Personae allows them to have the
power, although not necessary a right to dissolve the partnership.

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.
G.R. No. 144214
July 14, 2003
FACTS:
In 1984, Villareal, Carmelito Jose and Jesus Jose formed a
partnership with a capital of P750,000for 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 In March 1987, respondents wrote a letter to petitioners
stating that they were no longer interested in continuing the
partnership and that they were accepting the latters offer to return
their capital contribution. This was left unheeded by the petitioners,
and by reason of which respondents filed a complaint in the RTC. RTC
ruled that the parties had voluntarily entered into a partnership, which
could be dissolved at any time, and this dissolution was showed by the
fact that petitioners stopped operating the restaurant. On appeal, CA
upheld RTCs decision that the partnership was dissolved and it added
that respondents had no right to demand the return of their capital
contribution. However since petitioners did not give the proper
accounting for the liquidation of the partnership, the CA took it upon
itself to compute their liabilities and the amount that is proper to the
respondent. The computation of which was:(capital of the partnership
outstanding obligation) / remaining partners =amount due to private
respondent.
ISSUE:
Whether or not petitioners are liable to respondents his share in
the partnership.
RULING:
No, respondents have no right to demand from petitioners but
partnership is liable instead. The partnership has a juridical personality
separate and distinct from that of each of the partners. Respondents
have no right to demand from petitioner the return of their equity
share. Since the capital was contributed to the partnership, not to
petitioners, it is the partnership that must refund the equity of the
retiring partners. However, before the partners can be paid their
shares, the creditors of the partnership must first be compensated.
Therefore, the exact amount of refund equivalent to respondents onethird share in the partnership cannot be determined until all the
partnership assets will have been liquidated and all partnership
creditors have been paid.
BENJAMIN YU, petitioner,
vs.
NATIONAL
LABOR
RELATIONS
COMMISSION
and
JADE
MOUNTAIN PRODUCTS COMPANY LIMITED, WILLY CO, RHODORA

D. BENDAL, LEA BENDAL, CHIU SHIAN JENG and CHEN HO-FU,

respondents.
G.R. No. 97212 June 30, 1993
FACTS:
Benjamin Yu used to be the Assistant General Manager of Jade
Mountain, a partnership engaged in marble quarrying and export
business. The majority of the founding partners sold their interests in
said partnership to Willy Co and Emmanuel Zapanta without Yus
knowledge. Said new partnership continued operating under the same
name and continued the businesss operations. However, it transferred
its main office from Makati to Mandaluyong. Said new partnership did
not anymore availed of the services of Yu. Thus, he filed a complaint
for illegal dismissal, recovery of unpaid wages and damages.
ISSUE:
Whether or not old partnership of YU and as Assistant General
Manager extinguished and replaced by new partnership.
RULING:
No. The legal consequences of dissolution of a partnership do
not, however, automatically result in the determination of the legal
personality of the old partnership. The legal effect of the changes in
the membership of the partnership was the dissolution of the old
partnership which had hired Yu in 1984 and the emergence of a new
firm composed of Willy Co and Emmanuel Zapanta in 1987. The new
partnership simply took over the business enterprise owned by the
preceding partnership, and continued using the old name of Jade
Mountain Products Company Limited, without winding up the business
affairs of the old partnership, paying off its debts, liquidating and
distributing its net assets, and then re-assembling the said assets or
most of them and opening a new business enterprise. Not only the
retiring partners but also the new partnership itself which continued
the business of the old, dissolved, one, are liable for the debts of the
preceding partnership.

LOURDES NAVARRO AND MENARDO NAVARRO, petitioners,

vs.
COURT OF APPEALS, JUDGE BETHEL KATALBAS-MOSCARDON,
Presiding Judge, Regional Trial Court of Bacolod City, Branch
52, Sixth Judicial Region and Spouses OLIVIA V. YANSON AND
RICARDO B. YANSON, respondents.
G.R. No. 101847 May 27, 1993
FACTS:
Private respondent Olivia V. Yanson and Petitioner Lourdes
Navarro were engaged in the business of Air Freight Service Agency.
Pursuant to the Agreement which they entered, they agreed to operate
the said Agency; It is the Private Respondent Olivia Yanson who
supplies the necessary equipment and money used in the operation of
the agency. Her brother in the person of Atty. Rodolfo Villaflores was
the manager thereof while petitioner Lourdes Navarro was the Cashier;
In compliance to her obligation as stated in their agreement, private
respondent brought into their business certain chattels or movables or
personal properties. However, those personal properties remain to be
registered in her name; Among the provisions stipulated in their
agreement is the equal sharing of whatever proceeds realized from
their business; However, sometime on July 23, 1976, private
respondent Olivia V. Yanson, in order for her to recovery the above
mentioned personal properties which she brought into their business,
filed a complaint against petitioner Lourdes Navarro for "Delivery of
Personal Properties With Damages and with an application for a writ of
replevin. Private respondents' application for a writ of replevin was
later approved/granted by the trial court. For her defense, petitioner
Navarro argue that she and private respondent Yanson actually formed
a verbal partnership which was engaged in the business of Air Freight
Service Agency. She contended that the decision sustaining the writ of
replevin is void since the properties belonging to the partnership do
not actually belong to any of the parties until the final disposition and
winding up of the partnership.
ISSUE:
Whether or not a partnership exists between the parties.
RULING:
No. Article 1767 of the New Civil Code defines the contract of
partnership: Art. 1767. By the contract of partnership two or more
persons bind themselves to contribute money, property, or industry to
a common fund, with the intention of dividing the proceeds among
themselves. A cursory examination of the evidences presented no
proof that a partnership, whether oral or written had been constituted.
In fact, those movables brought by the plaintiff for the use in the
operation of the business remain registered in her name. While there
may have been co-ownership or co-possession of some items and/or
any sharing of proceeds by way of advances received by both plaintiff
and the defendant, these are not indicative and supportive of the
existence of any partnership between them. Art. 1769 par. 2 provides:
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 Besides, the alleged

profit was a difference found after evaluating the assets and not arising
from the real operation of the business.

LILIBETH SUNGA-CHAN and CECILIA SUNGA, petitioners,

vs.
THE HONORABLE COURT OF APPEALS; THE HONORABLE
PRESIDING JUDGE, Regional Trial Court, Branch 11, Sindangan,
Zamboanga Del Norte; THE REGIONAL TRIAL COURT SHERIFF,
Branch 11, Sindangan, Zamboanga Del Norte; THE CLERK OF
COURT OF MANILA, as Ex-Officio Sheriff; and LAMBERTO T.
CHUA, respondents.
G.R. No. 164401
June 25, 2008
FACTS:
On June 22, 1992, respondent Lamberto T. Chua filed a complaint
against petitioners, Lilibeth Sunga Sunga Chan and Cecilia Sunga,
daughter and wife, respectively of the deceased Jacinto L. Sunga, for
winding up of Partnership Affairs, accounting, appraisal and recovery of
Shares and Damages with Writ of Preliminary Attachment with the
Regional Trial Court, Branch 11, Zamboanga del Norte.
Respondent alleged that in 1977, he verbally entered into a
partnership with Jacinto in the distribution of Shellane Liquefied
Petroleum Gas (LPG) in Manila with initial capital contribution of
Php100,000.00 each, with the intention that the profits would be
equally divided between them. For business convenience, respondent
and Jacinto agreed to register the business name of their partnership
SHELLITE GAS APPLIANCE CENTER under the name of Jacinto as sole
proprietorship.
ISSUE:
Whether or not respondent Lamberto Chua and Jacinto L. Sunga
has entered into a partnership.
RULING:
Yes. The court ruled that a partnership may be constituted in any
form, except where immovable property or real rights are contributed
thereto, in which case a public instrument shall be necessary. Also,
Article 1772 of the Civil Code requires that partnership with a capital of
Php3,000.00 or more must register with the Securities and Exchange
Commission, however this registration requirement is not mandatory.
Article 1768 of the Civil Code explicitly provides that the partnership
retains its juridical personality even if it fails register. The failure to
register the contract of partnership does not invalidate the same as
among the partners, so long as the contract has the essential
requisites, because the main purpose of registration is to give notice to
third parties, and it can be assumed that the members themselves
knew of the contents of their contract.

EMILIO EMNACE, petitioner,

vs.
COURT OF APPEALS, ESTATE OF VICENTE TABANAO, SHERWIN
TABANAO, VICENTE WILLIAM TABANAO, JANETTE TABANAO
DEPOSOY, VICENTA MAY TABANAO VARELA, ROSELA TABANAO
and VINCENT TABANAO, respondents.
G.R. No. 126334
November 23, 2001
FACTS:
Emilio Emnace, Jacinto Divinagracia and Vicente Tabanao formed
a partnership engaged in the fishing industry. In 1986, Jacinto decided
to leave the partnership hence they agreed to dissolve the partnership.
At that time, the partnership has an estimated asset amounting to
P30,000,000.00.
However, until the death of Vicente Tabanao in 1994, Emnace
never rendered an accounting either to Vicente or his heirs. Emnace
reneged on his promise to turn over Tabanaos share which is 1/3 of the
P30M. The heirs of Tabanao then sued Emnace. Emnace argued,
among others, that the heirs are barred by prescription hence they can
no longer demand an accounting. He contends that the partnership
was dissolved in 1986 and that was the time when Tabanaos (and his
heirs) right to inquire into the business affairs accrued; that said right
has expired in 1990 or 4 years after. So beyond 1990, they can no
longer inquire.
ISSUE:
Whether or not the heirs of Tabano are barred by prescription.
RULING:
No. Prescription has not run in this case, it has never begun. The
three final stages of partnership are: a) dissolution, b) winding up, and
c) termination. In this case, Emnace and his partners dissolved their
partnership but such did not perfect the dissolution because no
accounting took place. The partnership, although dissolved, continues
to exist and its legal personality is retained, at which time it completes
the winding up of its affairs, including the partitioning and distribution
of the net partnership assets to the partners. For as long as the
partnership exists, any of the partners (or legal representative in this
case the heirs of Tabanao) may demand an accounting of the
partnerships business. Prescription of the said right starts to run only

upon the dissolution of the partnership when the final accounting is

done.
When a final accounting is made, it is only then that prescription
begins to run. In the case at bar, no final accounting has been made,
and that is precisely what the heirs are seeking in their action before
the trial court, since Emnace has failed or refused to render an
accounting of the partnerships business and assets. Hence, the said
action is not barred by prescription.

JOSEFINA P. REALUBIT, Petitioner,

vs.
PROSENCIO D. JASO and EDEN G. JASO, Respondents.
G.R. No. 178782
September 21, 2011
FACTS:
On 17 March 1994, petitioner Josefina Realubit (Josefina) entered
into a Joint Venture Agreement with Francis Eric Amaury Biondo
(Biondo), a French national, for the operation of an ice manufacturing
business. With Josefina as the industrial partner and Biondo as the
capitalist partner, the parties agreed that they would each receive 40%
of the net profit, with the remaining 20% to be used for the payment of
the ice making machine which was purchased for the business.5 For
and in consideration of the sum of P500,000.00, however, Biondo
subsequently executed a Deed of Assignment dated 27 June 1997,
transferring all his rights and interests in the business in favor of
respondent Eden Jaso (Eden), the wife of respondent Prosencio Jaso.6
With Biondos eventual departure from the country, the Spouses Jaso
caused their lawyer to send Josefina a letter dated 19 February 1998,
apprising her of their acquisition of said Frenchmans share in the
business and formally demanding an accounting and inventory thereof
as well as the remittance of their portion of its profits.
ISSUE:
Whether or not the court may order Josefina Realubit as partner
in the joint ventureto render an accounting to one who is not a partner
in said joint venture.
RULING:
No. Generally understood to mean an organization formed for
some temporary purpose, a joint venture is likened to a particular
partnership or one which "has for its object determinate things, their
use or fruits, or a specific undertaking, or the exercise of a profession
or vocation."27 The rule is settled that joint ventures are governed by
the law on partnerships28 which are, in turn, based on mutual agency
or delectus personae.29 Insofar as a partners conveyance of the

entirety of his interest in the partnership is concerned, Article 1813 of

the Civil Code provides as follows:
Art. 1813. A conveyance by a partner of his whole interest in the
partnership does not itself dissolve the partnership, or, as against the
other partners in the absence of agreement, entitle the assignee,
during the continuance of the partnership, to interfere in the
management or administration of the partnership business or affairs,
or to require any information or account of partnership transactions, or
to inspect the partnership books; but it merely entitles the assignee to
receive in accordance with his contracts the profits to which the
assigning partners would otherwise be entitled. However, in case of
fraud in the management of the partnership, the assignee may avail
himself of the usual remedies.
In the case of dissolution of the partnership, the assignee is entitled to
receive his assignors interest and may require an account from the
date only of the last account agreed to by all the partners.

HEIRS OF JOSE LIM, represented by ELENITO LIM, Petitioners,

vs.
JULIET VILLA LIM, Respondent.
G.R. No. 172690
March 3, 2010
FACTS:
In 1980, the heirs of Jose Lim alleged that Jose Lim entered into a
partnership agreement with Jimmy Yu and Norberto Uy. The three
contributed P50,000.00 each and used the funds to purchase a truck to
start their trucking business. A year later however, Jose Lim died. The
eldest son of Jose Lim, Elfledo Lim, took over the trucking business and
under his management, the trucking business prospered. Elfledo was
able to but real properties in his name. From one truck, he increased it
to 9 trucks, all trucks were in his name however. He also acquired other
motor vehicles in his name.
In 1993, Norberto Uy was killed. In 1995, Elfledo Lim died of a heart
attack. Elfledos wife, Juliet Lim, took over the properties but she
intimated to Jimmy and the heirs of Norberto that she could not go on
with the business. So the properties in the partnership were divided
among them.
Now the other heirs of Jose Lim, represented by Elenito Lim, required
Juliet to do an accounting of all income, profits, and properties from the
estate of Elfledo Lim as they claimed that they are co-owners thereof.
Juliet refused hence they sued her.
The heirs of Jose Lim argued that Elfledo Lim acquired his properties
from the partnership that Jose Lim formed with Norberto and Jimmy. In
court, Jimmy Yu testified that Jose Lim was the partner and not Elfledo
Lim. The heirs testified that Elfledo was merely the driver of Jose Lim.
ISSUE:
Who is the partner between Jose lim and Elfledo Lim in a
partnership?
RULING:
It is Elfledo Lim based on the evidence presented regardless of
Jimmy Yus testimony in court that Jose Lim was the partner. If Jose Lim
was the partner, then the partnership would have been dissolved upon
his death (in fact, though the SC did not say so, I believe it should have
been dissolved upon Norbertos death in 1993). A partnership is
dissolved upon the death of the partner. Further, no evidence was
presented as to the articles of partnership or contract of partnership
between Jose, Norberto and Jimmy. Unfortunately, there is none in this
case, because the alleged partnership was never formally organized.
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.

Marsman Drysdale Land, INC., petitioner,

vs.
PHILIPPINE GEOANALYTICS, INC. AND GOTESCO PROPERTIES,
INC., respondents.
G.R. No. 183374. June 29, 2010.
FACTS:
Marsman Drysdale, Inc. (Marsman) and Gotesco Properties, Inc.
(Gotesco) entered into a joint venture agreement for the construction
and development of an office building on a land owned by Marsman.
They agreed on a 50-50 ratio on the proceeds of the project, but did
not agree on how losses would be divided. The joint venture engaged
the services of Philippine Geoanalytics, Inc. (PGI) to provide subsurface
soil exploration, seismic study and geotechnical engineering. PGI
completed its seismic study but failed to complete its subsurface soil
exploration because the area where drilling was to be made had not
been cleared. The building project was subsequently shelved due to
unfavorable economic conditions. PGI billed the joint venture for work
done, but was not paid despite its repeated demands. PGI, thus, filed a
collection case against Marsman and Gotesco. Marsman passed the
obligation to Gotesco because under the joint venture agreement,
Gotesco was solely liable for the monetary expenses of the project, and
Marsmans participation was limited to the land. Gotesco, on the other
hand, asserted that PGI had no cause of action against it as PGI had
yet to complete the services in its contract, and it was Marsmans
failure to clear the property of debris which prevented PGI from
completing its work.
ISSUE:
Whether or not a joint venture between Marsman and Gotesco is
a form of partnership.
RULING:
Yes. A joint venture being a form of partnership, it is to be
governed by the laws on partnership. Under the laws on partnership,
particularly Article 1797 of the Civil Code, the losses and profits shall
be distributed in accordance with the agreement; if only the share of
each partner in the profits has been agreed upon, the share of each in
the losses shall be in the same proportion. In the joint venture
agreement, Marsman and Gotesco agreed on a 50-50 ratio on the
proceeds of the project, but did not provide for the splitting of losses.
Applying Article 1797, the same ratio applies in splitting the obligationloss of the joint venture to PGI.
When there are two or more debtors, the obligation is presumed to be
joint unless the law or the obligation expressly states that the liability
is solidary, or unless the nature of the obligation requires solidary
liability (Articles 1207 and 1208, Civil Code). In this case, since solidary
liability was not required by law, or the contract, or by the nature of
the obligation, the obligation to PGI was presumed to be joint between
Marsman and Gotesco.

J. TIOSEJO INVESTMENT CORP., petitioner,

Vs.
SPOUSES BENJAMIN AND ELEANOR ANG, respondents.
G.R. No. 174149
FACTS:
On 28 December 1995 petitioner entered into a Joint
Venture Agreement (JVA) with Primetown Property Group,
Inc. (PPGI) for the development of a residential condominium
project to be known as The Meditel on the formers 9,502
square meter property along Samat St., Highway Hills,
Mandaluyong City. With petitioner contributing the same
property to the joint venture and PPGI undertaking to
develop the condominium, the JVA provided, among other
terms and conditions, that the developed units shall be
shared by the former and the latter at a ratio of 17%-83%,
respectively. While both parties were allowed, at their own
individual responsibility, to pre-sell the units pertaining to
them. PPGI further undertook to use all proceeds from the
pre-selling of its saleable units for the completion of the
Condominium Project. On 17 June 1996, the Housing and
Land Use Regulatory Board (HLURB) issued License to Sell
No. 96-06-2854 in favor of petitioner and PPGI as project
owners. By virtue of said license, PPGI executed Contract to
Sell No. 0212 with Spouses Benjamin and Eleanor Ang on 5
February 1997, over the 35.45-square meter condominium
unit denominated as Unit A-1006, for the agreed contract
price of P52,597.88 per square meter or a total
P2,077,334.25.[8] On the same date PPGI and respondents
also executed Contract to Sell No. 0214 over the 12.50
square meter parking space identified as Parking Slot No.
0405, for the stipulated consideration of P26,400.00 square
meters or a total of P313,500.

ISSUE:
Who are liable or the losses incurred by a joint venture
to a third person?
RULING:
Under Article 1824 of the Civil Code of the Philippines,
all partners are solidarily liable with the partnership for
everything chargeable to the partnership, including loss or
injury caused to a third person or penalties incurred due to
any wrongful act or omission of any partner acting in the
ordinary course of the business of the partnership or with the

authority of his co-partners. Whether innocent or guilty, all

the partners are solidarily liable with the partnership itself.

FEDERICO JARANTILLA, JR., Petitioner,

vs.
ANTONIETA JARANTILLA, BUENAVENTURA REMOTIGUE,
substituted by CYNTHIA REMOTIGUE, DOROTEO
JARANTILLA and TOMAS JARANTILLA, Respondents.
G.R. No. 154486
December 1, 2010
FACTS:
The present case stems from the complaintfiled by
Antonieta Jarantilla againstBuenaventura Remotigue, Cynthia
Remotigue, Federico Jarantilla, Jr., Doroteo Jarantilla
andTomas Jarantilla, for the accounting of the assets and
income of the co-ownership, for itspartition and the delivery
of her share corresponding to eight percent (8%), and for
damages. Antonieta claimed that in 1946, she had entered
into an agreement with the defendants toengage in business
through the execution of a document denominated as
"Acknowledgement of Participating Capital. Antonieta also
alleged that she had helped in the management of the
business they co-owned without receiving any salary.
Antonieta further claimed co-ownership of certain properties
(the subject real properties) in the name of the defendants
since the only way the defendants could have purchased
these properties were through the partnership as they had
no other source of income.
ISSUE:
Whether or not a partnership exists between the parties
subject to the Acknowledgement of Participating Capital.
RULING:
Yes, Under Article 1767 of the Civil Code, there are two
essential elements in a contract of partnership:
(a) an agreement to contribute money, property or industry
to a common fund; and (b) intent to divide the profits among
the contracting parties. The first element is undoubtedly
present in the case at bar, for, admittedly, all the parties in
this case have agreed to, and did contribute money and
property to a common fund. Hence, the issue narrows down
to their intent in acting as they did. They have admitted this
fact agreed to its veracity, and even submitted one common
documentary evidence to prove such partnership - the
Acknowledgement of Participating Capital.