EUFEMIA EVANGELISTA, MANUELA EVANGELISTA, and FRANCISCA EVANGELISTA, petitioners, vs.

THE
+++++++++COLLECTOR OF INTERNAL REVENUE and THE COURT OF TAX APPEALS, respondents.G.R. No.
L-9996, October 15, 1957

Facts:Petitioners borrowed sum of money from their father and together with their own personal funds
they used said money to buy several real properties. They then appointed their brother (Simeon) as
manager of the said real properties with powers and authority to sell, lease or rent out said properties
to third persons. They realized rental income from the said properties for the period 1945-1949.

On September 24, 1954 respondent Collector of Internal Revenue demanded the payment of income tax
on corporations, real estate dealer's fixed tax and corporation residence tax for the years 1945-1949.
The letter of demand and corresponding assessments were delivered to petitioners on December 3,
1954, whereupon they instituted the present case in the Court of Tax Appeals, with a prayer that "the
decision of the respondent contained in his letter of demand dated September 24, 1954" be reversed,
and that they be absolved from the payment of the taxes in question. CTA denied their petition and
subsequent MR and New Trials were denied. Hence this petition.

Issue: Whether or not petitioners have formed a partnership and consequently, are subject to the tax on
corporations provided for in section 24 of Commonwealth Act. No. 466, otherwise known as the
National Internal Revenue Code, as well as to the residence tax for corporations and the real estate
dealers fixed tax.

Held: YES. The essential elements of a partnership are two, namely: (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,
petitioners have agreed to, and did, contribute money and property to a common fund. Upon
consideration of all the facts and circumstances surrounding the case, we are fully satisfied that their
purpose was to engage in real estate transactions for monetary gain and then divide the same among
themselves, because of the following observations, among others: (1) Said common fund was not
something they found already in existence;(2) They invested the same, not merely in one transaction,
but in a series of transactions;(3) The aforesaid lots were not devoted to residential purposes, or to
other personal uses, of petitioners herein.

Although, taken singly, they might not suffice to establish the intent necessary to constitute a
partnership, the collective effect of these circumstances is such as to leave no room for doubt on the
existence of said intent in petitioners herein.

For purposes of the tax on corporations, our National Internal Revenue Code, includes these
partnerships with the exception only of duly registered general copartnerships within the purview
of the term "corporation." It is, therefore, clear to our mind that petitioners herein constitute a
partnership, insofar as said Code is concerned and are subject to the income tax for corporations.

Lim Tong Lim vs Philippine Fishing Gear Industries, Inc.

It was established that Lim Tong Lim requested Peter Yao to engage in commercial fishing with
him and one Antonio Chua. The three agreed to purchase two fishing boats but since they do
not have the money they borrowed from one Jesus Lim (brother of Lim Tong Lim). They again
borrowed money and they agreed to purchase fishing nets and other fishing equipments. Now,
Yao and Chua represented themselves as acting in behalf of Ocean Quest Fishing
Corporation (OQFC) they contracted with Philippine Fishing Gear Industries (PFGI) for the
purchase of fishing nets amounting to more than P500k.

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They were however unable to pay PFGI and so they were sued in their own names because
apparently OQFC is a non-existent corporation. Chua admitted liability and asked for some time
to pay. Yao waived his rights. Lim Tong Lim however argued that hes not liable because he
was not aware that Chua and Yao represented themselves as a corporation; that the two acted
without his knowledge and consent.
ISSUE: Whether or not Lim Tong Lim is liable.
HELD: Yes. From the factual findings of both lower courts, it is clear that Chua, Yao and Lim
had decided to engage in a fishing business, which they started by buying boats worth P3.35
million, financed by a loan secured from Jesus Lim. In their Compromise Agreement, they
subsequently revealed their intention to pay the loan with the proceeds of the sale of the boats,
and to divide equally among them the excess or loss. These boats, the purchase and the repair
of which were financed with borrowed money, fell under the term common fund under Article
1767. The contribution to such fund need not be cash or fixed assets; it could be an intangible
like credit or industry. That the parties agreed that any loss or profit from the sale and operation
of the boats would be divided equally among them also shows that they had indeed formed a
partnership.
Lim Tong Lim cannot argue that the principle of corporation by estoppels can only be imputed to
Yao and Chua. Unquestionably, Lim Tong Lim benefited from the use of the nets found in his
boats, the boat which has earlier been proven to be an asset of the partnership. Lim, Chua and
Yao decided to form a corporation. Although it was never legally formed for unknown reasons,
this fact alone does not preclude the liabilities of the three as contracting parties in
representation of it. Clearly, under the law on estoppel, those acting on behalf of a corporation
and those benefited by it, knowing it to be without valid existence, are held liable as general
partners.

ROGER V. NAVARRO vs. HON. JOSE L. ESCOBIDO

Posted on March 28, 2013 by winnieclaire

FACTS: Respondent Karen T. Go filed two complaints before the RTC for replevin and/or sum
of money with damages against Navarro. In these complaints, Karen Go prayed that the RTC
issue writs of replevin for the seizure of two (2) motor vehicles in Navarros possession. In his
Answers, Navarro alleged as a special affirmative defense that the two complaints stated no
cause of action, since Karen Go was not a party to the Lease Agreements with Option to
Purchase (collectively, the lease agreements) the actionable documents on which the
complaints were based. RTC dismissed the case but set aside the dismissal on the presumption
that Glenn Gos (husband) leasing business is a conjugal property and thus ordered Karen Go
to file a motion for the inclusion of Glenn Go as co-plaintiff as per Rule 4, Section 3 of the Rules
of Court. Navarro filed a petition for certiorari with the CA. According to Navarro, a complaint
which failed to state a cause of action could not be converted into one with a cause of action by
mere amendment or supplemental pleading. CA denied petition.
ISSUE: Whether or not Karen Go is a real party in interest.
HELD: YES. Karen Go is the registered owner of the business name Kargo Enterprises, as the
registered owner of Kargo Enterprises, Karen Go is the party who will directly benefit from or be
injured by a judgment in this case. Thus, contrary to Navarros contention, Karen Go is the real
party-in-interest, and it is legally incorrect to say that her Complaint does not state a cause of
action because her name did not appear in the Lease Agreement that her husband signed in
behalf of Kargo Enterprises.
Glenn and Karen Go are effectively co-owners of Kargo Enterprises and the properties
registered under this name; hence, both have an equal right to seek possession of these
properties. Therefore, only one of the co-owners, namely the co-owner who filed the suit for the
recovery of the co-owned property, is an indispensable party thereto. The other co-owners are
not indispensable parties. They are not even necessary parties, for a complete relief can be
accorded in the suit even without their participation, since the suit is presumed to have been
filed for the benefit of all co-owners.
We hold that since Glenn Go is not strictly an indispensable party in the action to recover
possession of the leased vehicles, he only needs to be impleaded as a pro-forma party to the
suit, based on Section 4, Rule 4 of the Rules, which states:
Section 4.Spouses as parties. Husband and wife shall sue or be sued jointly, except as
provided by law.

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Even assuming that Glenn Go is an indispensable party to the action, misjoinder or non-joinder
of indispensable parties in a complaint is not a ground for dismissal of action as per Rule 3,
Section 11 of the Rules of Court