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JARANTILLA, JR. vs. JARANTILLA636 SCRA 299, G.R. No. 154486, December 1,
2010, Leonardo-De Castro, J.: pFACTS:
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 agreem
ent 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 thebusiness 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 waythe defendants could have purchased these properties were through the
partnership as theyhad no other source of income. The respondents did not deny the
existence and validity of the"Acknowledgement of Participating Capital" and in fact
used this as evidence to support their
claim that Antonietas 8% share was limited to the businesses enume
rated therein. The
respondents denied using the partnerships income to purcha
se the subject real properties.During the course of the trial at the RTC, petitioner
Federico Jarantilla, Jr., who was one of theoriginal defendants, entered into a
compromise agreement
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with Antonieta Jarantilla wherein
he supported Antonietas claims and asserted that he too was entitled to six percent
(6%) of thesupposed partnership in the same manner as Antonieta was.
ISSUE:
Whether or not the partnership subject of the Acknowledgement of Participating
Capitalfunded the subject real properties.
HELD:
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 undoubtedlypresent 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
. It is not denied that all the parties in this case have agreed to
contributecapital to a common fund to be able to later on share its profits. They have
admitted this fact,agreed to its veracity, and even submitted one common
documentary evidence to prove suchpartnership - the Acknowledgement of
Participating Capital. The petitioner himself claims hisshare to be 6%, as stated in the
Acknowledgement of Participating Capital. However, petitioner fails to realize that this
document specifically enumerated the businesses covered by thepartnership: Manila
Athletic Supply, Remotigue Trading in Iloilo City and Remotigue Trading inCotabato
City. Since there was a clear agreement that the capital the partners contributed
wentto the three businesses, then there is no reason to deviate from such agreement
and go beyondthe stipulations in the document. There is no evidence that the subject
real properties wereassets of the partnership referred to in the Acknowledgement of
Participating Capital. Petitiondenied.
VILLAREAL VS. RAMIREZ
G.R. No. 144214
July 14, 2003
FACTS: Villareal, C. Jose and J. Jose formed a partnership for the
operation of a restaurant and catering business under the name
Aquarius Food House and Catering Services, each contributing 250K.
Ramirez was later added, contributing 250K as well. After some time,
one of them (J. Jose) withdrew from the partnership; his capital
contribution was refunded to him in cash by agreement of the partners.
Without prior knowledge of respondents, petitioners closed down the
restaurant, allegedly because of increased rental. On March 1, 1987, The
respondent spouses wrote petitioners, saying that they were no longer
interested in continuing their partnership or in reopening the
restaurant, and that they were accepting the latters offer to return their
capital contribution. The repeated oral and written requests were,
however, left unheeded
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Before the RTC, respondents subsequently filed a Complaintfor the
collection of a sum of money from petitioners. the RTC ruled in favor of
the respondents, ordering petitioners to pay damages and AF and costs.
The CA sustained the lower courts decision, and made a computation on
the petitioners liability to respondents:
But the disposition is without prejudice to proper proceedings for the
accounting, the liquidation and the distribution of the remaining
partnership assets, if any
Eligio Estanislao, Jr. v. Court of Appeals ,REMEDIOS ESTANISLAO,
EMILIO and LEOCADIO SANTIAGO
FACTS:

Capital, at dissolution: **P1,000,000.00 Petitioner and private respondents are brothers and sisters who are
Less: liability to creditors 240,658.00 co-owners of certain lots at the corner of Annapolis and Aurora Blvd.,
Amount to be distributed to partners 759,342.00 Quezon City which were then being leased to the Shell Company of the
Over: Number of partners 3 Philippines Limited (SHELL). They agreed to open and operate a gas
Each partners share at dissolution 253,114.00 station thereat to be known as Estanislao Shell Service Station with an
initial investment of P15,000.00 to be taken from the advance rentals
** which is erroneous, as this is the capital at the BEGINNING of the due to them from SHELL for the occupancy of the said lots owned in
partnership common by them.

Hence this petition.
ISSUE: WON the CA computation was erroneous
HELD: We hold that respondents have no right to demand from
petitioners the return of their equity share.
YES
Generally, in the pursuit of a partnership business, its capital is either
increased by profits earned or decreased by losses sustained. It does not
remain static and unaffected by the changing fortunes of the business. In
the computation of the amount to be refunded to respondents, The CA
did not consider:
1. The omission of any provision for the depreciationof the furniture and
the equipment.
2. The amortization of the goodwill is not reflected
3. The capitalization amount paid by the partnership to J. Jose when he
withdrew from the partnership.
Because of the above-mentioned transactions, the partnership capital
was actually reduced.
On May 26, 1966, the parties herein entered into an Additional
Agreement with a proviso that said agreement cancels and
supersedes the original agreement executed by the co-owners.
For sometime, the petitioner submitted financial statements regarding
the operation of the business to private respondents, but thereafter
petitioner failed to render subsequent accounting.
A demand was made on petitioner:
to render an accounting of the profits;
to execute a public document embodying all the provisions of the
partnership agreement;
to pay the plaintiffs their lawful shares and participation in the net
profits of the business.
ISSUE:
IS A PARTNERSHIP a FORMED WHERE MEMBERS OF THE SAME
FAMILY BIND THEMSELVES TO CONTRIBUTE MONEY TO A COMMON
FUND WITH THE INTENTION OF DIVIDING THE PROFITS AMONG
THEMSELVES?
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HELD:
YES. The Joint Affidavit of April 11, 1966 (Exhibit A), clearly stipulated
by the members of the same family that the P15,000.00 advance rental
due to them from SHELL shall augment their "capital investment" in
the operation of the gasoline station.
other evidence in the record:
Petitioner submitted to private respondents periodic accounting of the
business.
Petitioner gave a written authority to private respondent Remedios
Estanislao, his sister, to examine and audit the books of their "common
business" (aming negosyo).
Respondent Remedios assisted in the running of the business.
Aurelio Litonjua Jr vs Eduardo Litonjua Sr. et al
Business Organization Partnership, Agency, Trust Partnership, how
formed
Aurelio and Eduardo are brothers. In 1973, Aurelio alleged that Eduardo
entered into a contract of partnership with him. Aurelio showed as
evidence a letter sent to him by Eduardo that the latter is allowing
Aurelio to manage their family business (if Eduardos away) and in
exchange thereof he will be giving Aurelio P1 million or 10% equity,
whichever is higher. A memorandum was subsequently made for the
said partnership agreement. The memorandum this time stated that in
exchange of Aurelio, who just got married, retaining his share in the
family business (movie theatres, shipping and land development) and
some other immovable properties, he will be given P1 Million or 10%
equity in all these businesses and those to be subsequently acquired by
them whichever is greater.
In 1992 however, the relationship between the brothers went sour. And
so Aurelio demanded an accounting and the liquidation of his share in
the partnership. Eduardo did not heed and so Aurelio sued Eduardo.
ISSUE: Whether or not there exists a partnership.
HELD: No. The partnership is void and legally nonexistent. The
documentary evidence presented by Aurelio, i.e. the letter from Eduardo
and the Memorandum, did not prove partnership.
The 1973 letter from Eduardo on its face, contains typewritten entries,
personal in tone, but is unsigned and undated. As an unsigned document,
there can be no quibbling that said letter does not meet the public
instrumentation requirements exacted under Article 1771 (how
partnership is constituted) of the Civil Code. Moreover, being unsigned
and doubtless referring to a partnership involving more than P3,000.00
in money or property, said letter cannot be presented for notarization,
let alone registered with the Securities and Exchange Commission (SEC),
as called for under the Article 1772 (capitalization of a partnership) of
the Code. And inasmuch as the inventory requirement under the
succeeding Article 1773 goes into the matter of validity when
immovable property is contributed to the partnership, the next logical
point of inquiry turns on the nature of Aurelios contribution, if any, to
the supposed partnership.
The Memorandum is also not a proof of the partnership for the same is
not a public instrument and again, no inventory was made of the
immovable property and no inventory was attached to the
Memorandum. Article 1773 of the Civil Code requires that if immovable
property is contributed to the partnership an inventory shall be had and
attached to the contract.
PASCUAL v. Commissioner of InternalRevenue #10 BUSORG
G.R. No. 78133 October 18, 1988
GANCAYCO, J.:
FACTS:
On June 22, 1965, petitioners bought two (2)parcels of land from
Santiago Bernardino, et al.and on May 28, 1966, they bought
anotherthree (3) parcels of land from Juan Roque. Thefirst two parcels of
land were sold by petitionersin 1968 to Marenir Development
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Corporation,while the three parcels of land were sold bypetitioners to
Erlinda Reyes and Maria Samsonon March 19,1970. Petitioner realized a
netprofit in the sale made in 1968 in the amount of P165, 224.70, while
they realized a net profit of P60,000 in the sale made in 1970.
Thecorresponding capital gains taxes were paid bypetitioners in 1973
and 1974 .Respondent Commissioner informed petitionersthat in the
years 1968 and 1970, petitioners asco-owners in the real estate
transactions formedan unregistered partnership or joint venturetaxable
as a corporation under Section 20(b)and its income was subject to the
taxesprescribed under Section 24, both of theNational Internal Revenue
Code; that theunregistered partnership was subject tocorporate income
tax as distinguished fromprofits derived from the partnership by
themwhich is subject to individual income tax.
ISSUE:
Whether petitioners formed an unregisteredpartnership subject to
corporate income tax(partnership vs. co-ownership)
RULING:
Article 1769 of the new Civil Code lays down therule for determining
when a transaction shouldbe deemed a partnership or a co-
ownership.Said article paragraphs 2 and 3, provides:(2) Co-ownership
or co-possession does not itself establish a partnership, whether such
co-ownersor co-possessors do or do not share any profitsmade by the
use of the property; (3) Thesharing of gross returns does not of
itself establish a partnership, whether or not thepersons sharing them
have a joint or commonright or interest in any property from which
thereturns are derived;The sharing of returns does not in itself establish
a partnership whether or not thepersons sharing therein have a joint or
commonright or interest in the property. There must bea clear intent to
form a partnership, theexistence of a juridical personality different
fromthe individual partners, and the freedom of eachparty to transfer or
assign the whole property.In the present case, there is clear evidence
of co-ownership between the petitioners. There isno adequate basis to
support the propositionthat they thereby formed an
unregisteredpartnership. The two isolated transactionswhereby they
purchased properties and sold thesame a few years thereafter did not
therebymake them partners. They shared in the grossprofits as co-
owners and paid their capital gainstaxes on their net profits and availed
of the taxamnesty thereby. Under the circumstances, theycannot be
considered to have formed anunregistered partnership which is thereby
liablefor corporate income tax, as the respondentcommissioner
proposes. And even assuming for the sake of argumentthat such
unregistered partnership appears tohave been formed, since there is no
suchexisting unregistered partnership with a distinctpersonality nor
with assets that can be heldliable for said deficiency corporate income
tax,then petitioners can be held individually liable aspartners for this
unpaid obligation of thepartnership.
G.R. No. 159333 July 31, 2006
ARSENIO T. MENDIOLA,
petitioner,vs.
COURT OF APPEALS, NATIONAL LABOR RELATIONS COMMISSION, PACIFIC
FORESTRESOURCES, PHILS., INC. and/or CELLMARK AB,
respondents.
PUNO,
J
.:
Facts:Petitioner Mendiola (ATM) entered into a Side Agreement with Pacfor (USA)
who will set up arepresentative office in the Philippines. They named said office as
Pacfor Phils in whichpetitioner i
s president. In the agreement, petitioners
base
salary and the companys overhead
expenditures shall be borne by the representative office and shall be funded by
Pacfor/ATMbeing equally owned on 50-50 equity by ATM and Pacfor-USA.The Side
Agreement was later amended through a Revised Operating and Profit Sharing
Agreement where petitioners salary was increased. However, both
agreements s
how that theoperational expens
es will be borne by the representative office and funded by all parties asequal
partners, while the profits and commissions will
be shared among them.
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Years later, petitioner wrote Pacfors VP for Asia seeking confirmation of his 50%
equity ofPacfor Phils to which Pacfors President replied that petitioner is not a part
-owner, his officebeing just a representative office
, a the
oretical company with the purpose of dividing theincome 50-50.
He even stressed that the
petitioner knew of this arrangement from beginning,having been the one to propose
to them the setting up of a representative office, instead of abranch office, to save on
taxes.Issue:Whether or not a partnership or co-ownership exists between the
parties.Held:Petitioner is an employee of Pacfor and no partnership or co-ownership
exists between theparties.In a partnership, the members become co-owners of what
is contributed to the firm capital andof all property that may be acquired thereby and
through the efforts of the members. Theproperty or stock of the partnership forms a
community of goods, a common fund, in which eachparty has a proprietary interest. In
fact, the New Civil Code regards a partner as a co-owner ofspecific partnership
property. Each partner possesses a joint interest in the whole of partnershipproperty.
If the relation does not have this feature, it is not one of partnership.This essential
element, the community of interest, or co-ownership of, or joint interest inpartnership
property is absent in the relations between petitioner and private respondent
Pacfor.Petitioner is not a part-owner of Pacfor Phils. Pacfor's President established this
fact when hesaid that Pacfor Phils. is simply a "theoretical company" for the purpose of
dividing the income50-50. He stressed that petitioner knew of this arrangement from
the very start, having been theone to propose to private respondent Pacfor the setting
up of a representative office, and "not a
branch office" in the Philippines to save on taxes. Thus, the parties in this case, merely
sharedprofits. This alone does not make a partnership.Besides, a corporation cannot
become a member of a partnership in the absence of expressauthorization by statute
or charter. This doctrine is based on the following considerations: (1)that the mutual
agency between the partners, whereby the corporation would be bound by theacts of
persons who are not its duly appointed and authorized agents and officers, would
beinconsistent with the policy of the law that the corporation shall manage its own
affairsseparately and exclusively; and, (2) that such an arrangement would
improperly allow corporateproperty to become subject to risks not contemplated by
the stockholders when they originallyinvested in the corporation. No such
authorization has been proved in the case at bar.
UASON v BOLANOSFacts:
Tuason & Co. filed an action to recover possesion of registered land
against the defendant Bolanos. However thecomplaint also states that
the plaintiff is represented by its Managing Partner Gregorio Araneta,
Inc., another corporationhence, it was the contention of the defendant
that the case should be dismissed on the ground that it was not brought
bythe real party in interest.
Ruling:
The SC ruled that a corporation may be represented by another person,
natural or juridical. It was also held by theSC that although a corporation
has no power to enter into a partnership, it may nevertheless enter into
a joint venture withanother where the nature of that venture is in line
with the business authorized by its charter
TUASON VS. BOLANOSGR. No. L-4935. May 28, 195495 Phil. 106CASE DIGEST
Facts:
Plaintiffs complaint against defendant was to recover possession of a registered land.
In
the complaint, the plaintiff is represented by its Managing Partner, Gregorio Araneta,
Inc.,another corporation. Defendant, in his answer, sets up prescription and title in
himself thru"open, continuous, exclusive and public and notorious possession under
claim of ownership,adverse to the entire world by defendant and his predecessors in
interest" from "timeimmemorial". After trial, the lower court rendered judgment for
plaintiff, declaring defendant tobe without any right to the land in question and
ordering him to restore possession thereof toplaintiff and to pay the latter a monthly
rent. Defendant appealed directly to the Supreme Courtand contended, among others,
that Gregorio Araneta, Inc. can not act as managing partner for plaintiff on the theory
that it is illegal for two corporations to enter into a partnershipIssue:Whether or not a
corporation may enter into a joint venture with another corporation.Ruling:It is true
that the complaint states that the plaintiff is "represented herein by its
ManagingPartner Gregorio Araneta, Inc.", another corporation, but there is nothing
against onecorporation being represented by another person, natural or juridical, in a
suit in court. Thecontention that Gregorio Araneta, Inc. cannot act as managing partner
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for plaintiff on the theorythat it is illegal for two corporations to enter into a
partnership is without merit, for the true rule isthat
"though a corporation has no power to enter into a partnership, it may nevertheless
enter into a joint venture with another where the nature of that venture is
in line with the businessauthorized by its charter."
(Wyoming-Indiana Oil Gas Co. vs. Weston, 80 A. L. R., 1043, citing 2.Fletcher Cyc. of
Corp., 1082.). There is nothing in the record to indicate that the venture inwhich
plaintiff is represented by Gregorio Araneta, Inc. as "its managing partner" is not in
linewith the corporate business of either of them.
Primelink properties v lazatin
We agree with the CA ruling that petitionerPrimelink and respondents
entered into a joint venture asevidenced by their JVA which, under the
Courts ruling in
Aurbach
, is a form of partnership, and as such is to be governedby the laws on
partnership.
When the RTC rescinded theJVA on complaint of respondents based on
the evidence on recordthat petitioners willfully and persistently
committed a breach of the JVA, the court thereby dissolved/cancelled
the partnership.With the rescission of the JVA on account of
petitionersfraudulent acts, all authority of any partner to act for
thepartnership is terminated except so far as may be necessary towind
up the partnership affairs or to complete transactions begunbut not yet
finished. On dissolution, the partnership is notterminated but continues
until the winding up of partnershipaffairs is completed. Winding up
means the administration of theassets of the partnership for the purpose
of terminating the business and discharging the obligations of
thepartnership.
The transfer of the possession of the parcels of land and the
improvements thereon to respondentswas only for a specific purpose:
the winding up of partnershipaffairs, and the partition and distribution
of the net partnershipassets as provided by law. After all, Article 1836 of
the New CivilCode provides that unless otherwise agreed by the parties
in theirJVA, respondents have the right to wind up the
partnershipaffairs: Art. 1836. Unless otherwise agreed, the partners
whohave not wrongfully dissolved the partnership or the
legalrepresentative of the last surviving partner, not insolvent, has
theright to wind up the partnership affairs, provided, however, thatany
partner, his legal representative or his assignee, upon causeshown, may
obtain winding up by the court.
Until the partnership accounts aredetermined, it cannot be ascertained
how much any of the partiesis entitled to, if at all.
It must be stressed, too, that althoughrespondents acquired
possession of the lands and theimprovements thereon, the said lands
and improvementsremained partnership property, subject to the rights
andobligations of the parties,
inter se
, of the creditors and of thirdparties under Articles 1837 and 1838 of the
New Civil Code, andsubject to the outcome of the settlement of the
accounts betweenthe parties as provided in Article 1839 of the New Civil
Code,absent any agreement of the parties in their JVA to the
contrary.Until the partnership accounts are determined, it cannot
beascertained how much any of the parties is entitled to, if at all. Itwas
thus premature for petitioner Primelink to be demandingthat it be
indemnified for the value of the improvements on theparcels of land
owned by the joint venture/partnership. Notably,the JVA of the parties
does not contain any provision designatingany party to wind up the
affairs of the partnership.
PETITION for review on certiorari of the decision andresolution of the Court of
Appeals.
Heirs of Tan Eng Kee vs Court of Appeals
Business Organization Partnership, Agency, Trust Periodic Accounting
Profit Sharing
Benguet Lumber has been around even before World War II but during
the war, its stocks were confiscated by the Japanese. After the war, the
brothers Tan Eng Lay and Tan Eng Kee pooled their resources in order
to revive the business. In 1981, Tan Eng Lay caused the conversion of
Benguet Lumber into a corporation called Benguet Lumber and
Hardware Company, with him and his family as the incorporators. In
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1983, Tan Eng Kee died. Thereafter, the heirs of Tan Eng Kee demanded
for an accounting and the liquidation of the partnership.
Tan Eng Lay denied that there was a partnership between him and his
brother. He said that Tan Eng Kee was merely an employee of Benguet
Lumber. He showed evidence consisting of Tan Eng Kees payroll; his SSS
as an employee and Benguet Lumber being the employee. As a result of
the presentation of said evidence, the heirs of Tan Eng Kee filed a
criminal case against Tan Eng Lay for allegedly fabricating those
evidence. Said criminal case was however dismissed for lack of evidence.
ISSUE: Whether or not Tan Eng Kee is a partner.
HELD: No. There was no certificate of partnership between the brothers.
The heirs were not able to show what was the agreement between the
brothers as to the sharing of profits. All they presented were
circumstantial evidence which in no way proved partnership.
It is obvious that there was no partnership whatsoever. Except for a
firm name, there was no firm account, no firm letterheads submitted as
evidence, no certificate of partnership, no agreement as to profits and
losses, and no time fixed for the duration of the partnership. There was
even no attempt to submit an accounting corresponding to the period
after the war until Kees death in 1984. It had no business book, no
written account nor any memorandum for that matter and no license
mentioning the existence of a partnership.
In fact, Tan Eng Lay was able to show evidence that Benguet Lumber is a
sole proprietorship. He registered the same as such in 1954; that Kee
was just an employee based on the latters payroll and SSS coverage, and
other records indicating Tan Eng Lay as the proprietor.
Also, the business definitely amounted to more P3,000.00 hence if there
was a partnership, it should have been made in a public instrument.
But the business was started after the war (1945) prior to the publication
of the New Civil Code in 1950?
Even so, nothing prevented the parties from complying with this
requirement.
Also, the Supreme Court emphasized that for 40 years, Tan Eng Kee
never asked for an accounting. The essence of a partnership is that the
partners share in the profits and losses. Each has the right to demand an
accounting as long as the partnership exists. Even if it can be speculated
that a scenario wherein if excellent relations exist among the partners
at the start of the business and all the partners are more interested in
seeing the firm grow rather than get immediate returns, a deferment of
sharing in the profits is perfectly plausible. But in the situation in the
case at bar, the deferment, if any, had gone on too long to be plausible. A
person is presumed to take ordinary care of his concerns. A demand for
periodic accounting is evidence of a partnership which Kee never did.
The Supreme Court also noted:
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 which the returns are derived;
(4) The receipt by a person of a share of the profits of a business is 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 installment 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.
VICENTE SY v. CA, GR No. 142293, 2003-02-27
Facts:
Sometime in 1958, private respondent Jaime Sahot[5] started working
as a truck helper for petitioners' family-owned trucking business named
Vicente Sy Trucking. In 1965, he became a truck driver of the same
family business, renamed T. Paulino Trucking
Service, later 6B's Trucking Corporation in 1985, and thereafter known
as SBT Trucking Corporation since 1994. Throughout all these changes
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in names and for 36 years, private respondent continuously served the
trucking business of petitioners.
In April 1994, Sahot was already 59 years old. He had been incurring
absences as he was suffering from various ailments.
He inquired about his medical and retirement... benefits with the Social
Security System (SSS)... but discovered that his premium payments had
not been remitted by his employer.
Sahot had filed a week-long leave sometime in May 1994.
he was medically examined and treated for EOR, presleyopia,
hypertensive retinopathy
HPM, UTI,... Osteoarthritis... nd heart enlargemen... an
On said grounds
SBT Trucking Service management told him to file a formal request for
extension of his leave.
Sahot applied for extension of his leave for the whole month of June,
1994. It was at this time when petitioners allegedly threatened to
terminate his employment should he refuse to go back to work.
Sahot found himself in a dilemma. He was facing dismissal if he refused
to work, But he could not retire on pension because petitioners never
paid his correct SSS premiums.
They carried out their threat and dismissed him from work, effective
June 30, 1994. He ended up sick, jobless and penniless.
On September 13, 1994, Sahot filed with the NLRC NCR Arbitration
Branch, a complaint for illegal dismissal,... He prayed for the recovery of
separation pay and attorneys fees... against... herein petitioners.
or their part, petitioners admitted they had a trucking business in the
1950s but denied employing helpers and drivers. They contend that
private respondent was not illegally dismissed as a driver because he
was in fact petitioner's industrial partner.
The NLRC NCR Arbitration Branch, through Labor Arbiter Ariel Cadiente
Santos, ruled that there was no illegal dismissal in Sahot's case.
On appeal, the National Labor Relations Commission modified the
judgment of the Labor Arbiter. It declared that private respondent was
an employee, not an industrial partner, since the start.
Private respondent Sahot did not abandon his job but his employment
was terminated on... account of his illness, pursuant to Article 284
Petitioners assailed the decision of the NLRC before the Court of
Appeals.
the appellate court affirmed with modification the judgment of the
NLRC. It held that private respondent was indeed an employee of
petitioners since 1958.
Hence, the instant petition
Issues:
Whether or not an employer-employee relationship existed between
petitioners and respondent Sahot;
Ruling:
Article 1767[21] of the Civil Code states that in a 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 profits
among themselves
Not one of these circumstances is present in this case. No written
agreement exists to prove the partnership between the parties. Private
respondent did not contribute money, property or industry for the
purpose of engaging in the supposed business. There is no... proof that
he was receiving a share in the profits as a matter of course, during the
period when the trucking business was under operation. Neither is there
any proof that he had actively participated in the management,
administration and adoption of policies of the business.
Thus, the NLRC and the CA did not err in reversing the finding of the
Labor Arbiter that private respondent was an industrial partner from
1958 to 1994.
Principles:
Article 1767[21] of the Civil Code states that in a 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 profits
among themselves.[2
Cesar Lirio, doing business under the name Celkor Ad Sonicmix, v.
Wilmer Genovia G.R. No. 167757 November 23, 2011 PERALTA, J. Facts:
Respondent Genovia was hired by petitioner Lirio as manager in his
recording studio, Celkor. He was employed to manage and operate
Celkor and to promote the recording studios services. A few days after
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respondent started working, petitioner asked him to compose and
arrange songs for the album of his daughter, a former ABS-CBN talent.
For this project, the respondent was assured compensation separate
from his salary as studio manager. He then finished the composition of
the songs and the album was recorded. He also worked on the
promotion of the album. When the respondent asked for his
compensation, the petitioner told him that he is entitled to only 20% of
the net profit, and not of the gross sales of the album, and that the salary
he receives as studio manager would be deducted from the said 20% net
profit share. When the respondent insisted on a more proper
compensation, the petitioner terminated his services. The respondent
filed a complaint for illegal dismissal. The petitioner asserts that because
of their agreement on the sharing of profits, his relationship with the
respondent is one of an informal partnership, not an employer-employee
relationship. Both of them contributed money, property or industry to
the project with the intention of dividing the profit among themselves.
Issue: Whether or not their relationship was that of an employer and
employee, or a partnership. Held: The relationship between the
petitioner and respondent was that of an employer and employee, not a
partnership. The claim of partnership was not supported by any written
agreement. The requisites of an employer-employee relationship were
met. In the payroll presented by the respondent, there were deductions
from his wages for his absence from work, which negates the
petitioners claim that the wages were advances for respondents work
in the partnership.
Josefina Realubit v. Eden and Prosencio Jaso G.R. No. 178782 September
21, 2011 PEREZ, J. Facts: Petitioner entered into a Joint Venture
Agreement with one Francis Biondo, a French national, for the operation
of an ice manufacturing business. Petitioner was designated industrial
partner and Biondo was capitalist partner. Subsequently, Biondo
executed a Deed of Assignment, transferring all his rights and interests
in the business in favor of respondent Eden Jaso. The spouses Jaso sent
petitioner a letter demanding an accounting and inventory of the
partnership, and remittance of their portion of the profits. Petitioner
failed to heed their demand, alleging that the joint venture with Biondo
had already ceased operations, and the present business was under a
single proprietorship. Respondents filed a suit for specific performance,
accounting, and dissolution of the joint venture. Issue: Whether or not
respondent, as assignee of the partner Biondo, may order petitioner to
render an accounting of the joint venture. Held: No. A joint venture is
generally understood to mean an organization formed for some
temporary purpose. It is likened to a 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. Article 1813 provides: (t)he
transfer by a partner of his partnership interest does not make the
assignee of such interest a partner of the firm, nor entitle the assignee to
interfere in the management of the partnership business or to receive
anything except the assignee's profits. The assignment does not purport
to transfer an interest in the partnership, but only a future contingent
right to a portion of the ultimate residue as the assignor may become
entitled to receive by virtue of his proportionate interest in the capital.
Although respondent did not become partner as a consequence of the
assignment of rights, however, her prayer for dissolution of the joint
venture may be granted conformably with the right granted to the
purchaser of a partners interest under Article 1813.
G.R. No. L-35469 March 17, 1932
E. S. LYONS vs. C. W. ROSENSTOCK,Executor of the Estate of Henry W.
Elser, deceasedFACTS:
Henry W. Elser was engaged in buying, selling, and administering real
estate. E. S.Lyons joined with him, the profits being shared by the two in
equal parts.Lyons, whose regular vocation was that of a missionary or
missionary agent, of theMethodist Episcopal Church, went on leave to
the United States and was gone for nearly a year and a half. Elser made
written statements showing that Lyons was, atthat time, half owner with
Elser of three particular pieces of real property. Concurrentlywith this
act Lyons execute in favor of Elser a general power of attorney
empoweringhim to manage and dispose of said properties at will and to
represent Lyons fully andamply, to the mutual advantage of both.The
attention of Elser was drawn to a piece of land, referred to as the San
10
JuanEstate. He obtained the loan of P50,000 to complete the amount
needed for the firstpayment on the San Juan Estate. The lender insisted
that he should procure thesignature of the Fidelity & Surety Co. on the
note to be given for said loan. Elser mortgaged to the Fidelity & Surety
Co. the equity of redemption in the property ownedby himself and Lyons
on Carriedo Street to secure the liability thus assumed by it.The case for
the plaintiff supposes that, when Elser placed a mortgage for
P50,000upon the equity of redemption in the Carriedo property, Lyons,
as half owner of saidproperty, became, as it were, involuntarily the
owner of an undivided interest in theproperty acquired partly by that
money; and it is insisted for him that, in considerationof this fact, he is
entitled to the four hundred forty-six and two-thirds shares of J.
K.Pickering & Company, with the earnings thereon, as claimed in his
complaint.
ISSUE:
Whether there was a general relation of partnership.
RULING
: petitioners
NO,
The position of the appellant is, in our opinion, untenable. If Elser
hadused any money actually belonging to Lyons in this deal, he would
under article 1724of the Civil Code and article 264 of the Code of
Commerce, be obligated to payinterest upon the money so applied to his
own use. Under the law prevailing in this jurisdiction a trust
does not ordinarily attach with respect to property acquired by aperson
who uses money belonging to another (Martinez vs. Martinez, 1 Phil.,
647;Enriquez vs. Olaguer, 25 Phil., 641.). Of course, if an actual relation
of partnershiphad existed in the money used, the case might be different;
and much emphasis islaid in the appellant's brief upon the relation of
partnership which, it is claimed,existed. But there was clearly no general
relation of partnership, under article 1678 of the Civil Code. It is
clear that Elser, in buying the San Juan Estate, was not acting for any
partnership composed of himself and Lyons, and the law cannot be
distorted intoa proposition which would make Lyons a participant in
this deal contrary to hisexpress determination.It seems to be supposed
that the doctrines of equity worked out in the jurisprudenceof England
and the United States with reference to trust supply a basis for this
action.The doctrines referred to operate, however, only where money
belonging to oneperson is used by another for the acquisition of
property which should belong to both;and it takes but little discernment
to see that the situation here involved is not one for the application of
that doctrine, for no money belonging to Lyons or any
partnershipcomposed of Elser and Lyons was in fact used by Elser in the
purchase of the SanJuan Estate. Of course, if any damage had been
caused to Lyons by the placing of the mortgage upon the equity of
redemption in the Carriedo property, Elser's estatewould be liable for
such damage. But it is evident that Lyons was not prejudice by thatact.
Evangelista v CIR
Facts:
Herein petitioners seek a review of CTAs decision holding them liable
for income tax, real estate dealers tax and residence tax. As stipulated,
borrowed from their father a certain sum for the purpose of buying real
properties.Within February 1943 to April 1994, they have bought
parcels of land from differentpersons, the management of said
properties was charged to their brother Simeonevidenced by a
document. These properties were then leased or rented to
varioustenants.On September 1954, CIR demanded the payment of
income tax on
corporations; real estate dealers fixed tax, and corporation residence tax
to which the
petitioners seek to be absolved from such payment.
Issue: Whether petitioners are subject to the tax on
corporations.Ruling:The Court ruled that with respect to the tax on
corporations, the issue hinges
on the meaning of the terms corporation and partnership as used in
Section 24
(provides that a tax shall be levied on every corporation no matter how
created or organized except general co-partnerships) and 84 (provides
11
that the term corporationincludes among others, partnership) of the
NIRC. Pursuant to Article 1767, NCC(provides for the concept of
partnership), its essential elements are: (a) an agreementto contribute
money, property or industry to a common fund; and (b) intent to
dividethe profits among the contracting parties.It is of the opinion of the
Court that the first element is undoubtedly present for petitioners have
agreed to, and did, contribute money and property to a common fund. As
to the second element, the Court fully satisfied that their purpose was to
engage in
real estate transactions for monetary gain and then divide the same
amongthemselves as indicated by the following circumstances:1. The
common fund was not something they found already in existence nor a
property inherited by them pro indiviso. It was created purposely,
jointlyborrowing a substantial portion thereof in order to establish said
commonfund;2. They invested the same not merely in one transaction,
but in a series of transactions. The number of lots acquired and
transactions undertake isstrongly indicative of a pattern or common
design that was not limited tothe conservation and preservation of
the aforementioned common fund or even of the property acquired. In
other words, one cannot but perceive acharacter of habitually peculiar to
business transactions engaged in thepurpose of gain;
3. Said properties were not devoted to residential purposes, or to
other personal uses, of petitioners but were leased separately to
severalpersons;
4. They were under the management of one person where the
affairsrelative to said properties have been handled as if the same
belonged toa corporation or business and enterprise operated for profit;
5. Existed for more than ten years, or, to be exact, over fifteen
years, sincethe first property was acquired, and over twelve years, since
SimeonEvangelista became the manager;
6. Petitioners have not testified or introduced any evidence, either on
their purpose in creating the set up already adverted to, or on the causes
for itscontinued existence
The collective effect of these circumstances is such as to leave no room
for doubt onthe existence of said intent in petitioners herein.
Also, petitioners argument that their being mere co
-owners did not create aseparate legal entity was rejected because,
according to the Court, the tax in questionis one imposed upon
"corporations", which, strictly speaking, are distinct and differentfrom
"partnerships". When the NIRC includes "partnerships" among the
entitiessubject to the tax on "corporations", said Code must allude,
therefore, to organizationswhich are not necessarily "partnerships", in
the technical sense of the term. Thequalifying expression found in
Section 24 and 84(b) clearly indicates that a jointventure need not be
undertaken in any of the standard forms, or in conformity with theusual
requirements of the law on partnerships, in order that one could be
deemedconstituted for purposes of the tax on corporations. Accordingly,
the lawmaker couldnot have regarded that personality as a condition
essential to the existence of thepartnerships therein referred to. For
purposes of the tax on corporations, NIRCincludes these partnerships -
with the exception only of duly registered general copartnerships -
within the purview of the term "corporation." It is, therefore, clear that
petitioners herein constitute a partnership, insofar as said Code is
concerned and aresubject to the income tax for corporations. As regards
the residence of tax for corporations (Section 2 of CA No. 465), itis
analogous to that of section 24 and 84 (b) of the NIRC. It is apparent that
the terms"corporation" and "partnership" are used in both statutes with
substantially the samemeaning. Consequently, petitioners are subject,
also, to the residence tax for corporations.Finally, on the issues of being
liable for real estate dealers tax, they are also
liable for the same because the records show that they have habitually
engaged inleasing said properties whose yearly gross rentals exceeds
P3,000.00 a year.
FERNANDEZ vs. DE LA ROSA
G.R. No. 413
February 2, 1903
12
FACTS: Fernandez alleges that in January, 1900, he entered into a verbal
agreement with Dela Rosa to form a partnership for the purchase of
cascoes and the carrying on of the business of letting the same for hire in
Manila, and Dela Rosa is to buy the cascoes and each partner to furnish
for that purpose such amount of money as he could, the profits to be
divided proportionately; Fernandez furnished Dela Rosa sums to
purchase and repair cascoes, the latter taking the titles in his own name;
that in April the parties undertook to draw up articles of partnership for
the purpose of embodying the same in an authentic document, but that
the defendant having proposed a draft of such articles which differed
materially from the terms of the earlier verbal agreement, and being
unwillingly to include the 2nd casco in the partnership, they were unable
to come to any understanding and no written agreement was executed;
that the defendant having in the meantime had the control and
management of the two cascoes, the plaintiff made a demand for an
accounting upon him, which the defendant refused to render, denying
the existence of the partnership altogether.
Dela Rosa admits that the project of forming a partnership in the casco
business in which he was already engaged to some extent individually
was discussed between himself and the plaintiff in January, 1900, but he
denies that any agreement was ever consummated. He denies that the
plaintiff furnished any money in January, 1900, for the purchase of the
first casco, or for repairs on the same, but claims that he borrowed 300
pesos on his individual account in January from the bakery firm,
consisting of the plaintiff, Marcos Angulo, and Antonio Angulo. The 825
pesos, which he admits he received from the Fernandez March 5, he
claims was for the purchase of the first casco, which he alleged was
bought March 12, and he alleges that he never received anything from
the defendant toward the purchase of the 2nd casco. He claims to have
paid, exclusive of repairs, 1,200 pesos for the first casco and 2,000 pesos
for the second one.
ISSUE:
(1) Did a partnership exist between the parties?
(2) If such partnership existed, was it terminated as a result of the act of
the defendant in receiving back the 1,125 pesos?
HELD:
(1) Partnership is a contract by which two or more persons bind
themselves to contribute money, property, or industry to a common
fund, with the intention of dividing the profits among themselves. (Civil
Code, art. 1665.)
The essential points upon which the minds of the parties must meet in a
contract of partnership are, therefore, (1) mutual contribution to a
common stock, and (2) a joint interest in the profits. If the contract
contains these two elements the partnership relation results, and the
law itself fixes the incidents of this relation if the parties fail to do so.
(Civil Code, secs. 1689, 1695.)
We have found as a fact that money was furnished by the plaintiff and
received by the defendant with the understanding that it was to be used
for the purchase of the cascoes in question. This establishes the first
element of the contract, namely, mutual contribution to a common stock.
The second element, namely, the intention to share profits, appears to be
an unavoidable deduction from the fact of the purchase of the cascoes in
common, in the absence of any other explanation of the object of the
parties in making the purchase in that form, and, it may be added, in
view of the admitted fact that prior to the purchase of the first casco the
formation of a partnership had been a subject of negotiation between
them.
It is thus apparent that a complete and perfect contract of partnership
was entered into by the parties. This contract, it is true, might have been
subject to a suspensive condition, postponing its operation until an
agreement was reached as to the respective participation of the partners
in the profits, the character of the partnership as collective or en
comandita, and other details, but although it is asserted by counsel for
the defendant that such was the case, there is little or nothing in the
record to support this claim, and that fact that the defendant did actually
go on and purchase the boat, as it would seem, before any attempt had
been made to formulate partnership articles, strongly discountenances
the theory.
The execution of a written agreement was not necessary in order to give
efficacy to the verbal contract of partnership as a civil contract, the
contributions of the partners not having been in the form of immovables
or rights in immovables. (Civil Code, art. 1667.) The special provision
13
cited, requiring the execution of a public writing in the single case
mentioned and dispensing with all formal requirements in other cases,
renders inapplicable to this species of contract the general provisions of
article 1280 of the Civil Code.
2) The remaining question is as to the legal effect of the acceptance by
the plaintiff of the money returned to him by the defendant after the
definitive failure of the attempt to agree upon partnership articles. The
amount returned fell short, in our view of the facts, of that which the
plaintiff had contributed to the capital of the partnership, since it did not
include the sum which he had furnished for the repairs of casco No.
1515. Moreover, it is quite possible, as claimed by the plaintiff, that a
profit may have been realized from the business during the period in
which the defendant have been administering it prior to the return of the
money, and if so he still retained that sum in his hands. For these
reasons the acceptance of the money by the plaintiff did not have the
effect of terminating the legal existence of the partnership by converting
it into a societas leonina, as claimed by counsel for the defendant.
The result is that we hold and declare that a partnership was formed
between the parties in January, 1900, the existence of which the
defendant is bound to recognize; that cascoes No. 1515 and 2089
constitute partnership property, and that the plaintiff is entitled to an
accounting of the defendants administration of such property, and of the
profits derived therefrom. This declaration does not involve an
adjudication as to any disputed items of the partnership account.
G.R. No. 5837 September 15, 1911
CATALINO GALLEMIT,
plaintiff-appellant,vs.
CEFERINO TABILIRAN,
defendant-appellee.
FACTS:
-
plaintiff he alleged that the plaintiff and the defendant, while residents
of the municipality of Dapitan, hadacquired, in joint tenancy, in or about the
month of January, 1904, a parcel of land from its srcinal owner, LuiGanong, under a
verbal, civil contract of partnership, for the price of P44; that it was stipulated that each
of thesaid purchasers should pay one-half of the price, or P22, and that an equal
division should be made between themof the land thus purchased, situate in the place
called Tangian, of the barrio of Dohinob, municipality of Dapitan,sub-district of the
same name, Moro Province, and bounded on the north and east by the Tangian river,
on thesouth and west by government forests, and containing 19.968 square meters,
approximately, planted with 200abaca plants; that,-
notwithstanding the demands he had repeatedly made upon the defendant to divide
the said land, the latter, afterhaving promised him on several occasions that he would
make such partition, finally refused, without good reason,and still continued to refuse
to divide the land and, moreover,
-
without the knowledge and consent of the plaintiff, defendant gathered the abaca
crops of the years 1904, 1905 and1906, produced on the land in question, and
extracted the hemp therefrom in the amount of about 12
arrobas
toeach crop, he being the sole beneficiary of the fiber obtained,-
and, that since the year 1904, up to the time of the complaint, he alone had been paying
the taxes on the land,without the defendant's having contributed to their payment.-
the court rendered judgment by absolving the defendant from the complaint.
ISSUE:
-
was there a contract of partnership?
HELD:
-
Considering the terms of the claim made by the plaintiff and those of the defendant's
answer, and the relation offacts contained in the judgment appealed from, it does not
appear that any contract of partnership whatever wasmade between them for the
purposes expressed in article 1665 of the Civil Code, for the sole transaction
14
performed by them was the acquisition jointly by mutual agreement of the
land in question, since it was undivided, under thecondition that they each
should pay one-half of the price thereof and that the property so acquired should
bedivided between the two purchasers; and as, under this title, the plaintiff and the
defendant are the co-owners of thesaid land, the partition or division of such property
held in joint tenancy must of course be allowed, and the present possessor of the
land has no right to deny the plaintiff's claim on grounds or reasons
unsupported by proof
GATCHALIAN VS. COMISSIONER OF INTERNAL REVENUE67 Phil.
666. April 29, 1939.J. Imperial.FACTS:
Gatchalian and company contributed money in order to purchaseone
sweepstakes ticket valued at two pesos (P2) from one of the
dulyauthorized agents of the National Charity Sweepstakes Office, and
thesame was registered under the same name. The ticket consequently
wonone of the third prizes with the amount of P50,000. Gatchalian
andcompany then cashed the prize check against the Philippine
NationalBank. Gatchalian was required to file the corresponding income
taxreturn covering the prize won. The defendant had an assessment
againstGatchalian and company requesting that the payment of the sum
ofP1,499 to the deputy provincial treasurer in Bulacan. The
plaintiffs,through their respective counsels, requested the exemption
from the payment of the income tax but were denied.Due to failure of
payment of the tax demanded, a warrant ofdistraint and levy against the
property of the plaintiffs was made. Toavoid embarrassment, the
plaintiffs paid under protest a sum of P601 as part of the tax and
penalties to the municipal treasurer and requested thatthey be allowed
to pay under protest the remaining balance in monthlyinstallments. The
request was granted by the defendant with the conditionthat the
plaintiffs file the usual bond secured by two solvent persons toguarantee
prompt payment of each installment as it becomes due. Beforethe first
installment was due, the plaintiff's formally protested against
the payment of the sum of P601 but the defendant overruled the protest
anddenied the refund. Due to failure of the plaintiff's to pay the
installmentsin accordance to the bond filed by them, the defendant
ordered themunicipal treasurer to execute within five days the warrant
of distraint
and levy against the plaintiffs. In order to avoid further embarrassment
and annoyance, the plaintiff's paid under protest the sum of
P1,260representing the unpaid balance of the income tax and
penaltiesdemanded by defendant. A claim for the refund of the total sum
ofP1,863.44 paid under protest by them but that defendant refused and
still
refuses to refund the said amount notwithstanding the plaintiffs
demand,
hence this appeal.
ISSUE:
Whether or not the plaintiffs formed partnership hence liable forincome
tax
HELD:
Yes, a partnership of a civil nature was formed. The appealeddecision is
affirmed, with the costs of the instance to the plaintiffappellants.
RATIO DECIDENDI:
Under Article 1767 of the Civil Code, by contract of partnershiptwo or
more persons bind themselves to contribute money, property,
orindustry to a common fund, with the intention of dividing the
profitsamong themselves. In the instant case, the plaintiffs organized
a partnership of a civil nature because each of them put up money to buy
asweepstakes ticket for the sole purpose of dividing equally the
prizewhich they may win, as they did in fact in the amount of P50,000.
The partnership was not only formed, but upon the organization thereof
andthe winning of the prize, Jose Gatchalian personally appeared in
theoffice of the Philippine Charity Sweepstakes, in his capacity as co-
partner, as such collection the prize, the office issued the check forP50,0
00 in favor of Jose Gatchalian and company, and the said partner, inthe
same capacity, collected the said check. All these circumstances repelthe
idea that the plaintiffs organized and formed a community of
propertyonly.
15
August 28, 1959 ROSARIO U. YULO, assisted by her husband JOSE C.
YULO, vs. YANG CHIAO SENG, #3
FACTS: Defendant Yang Chiao Seng proposed to the palintiff Mrs.
Rosario U. Yulo the formation of a partnership between them to run and
operate a theatre on the premises occupied by former Cine Oro. The
principal conditions of the offer are (1) that Yang Chiao Seng guarantees
Mrs. Yulo a monthly participation of P3,000, (2) that the partnership
shall be for a period of two years and six months, with the condition that
if the land is expropriated or rendered impracticable for the business,
Mrs. Yulo's right of lease is terminated by the owner, then the
partnership shall be terminated ; among others Pursuant to the above
offer, they executed a partnership agreement establishing the "Yang &
Company, Limited," The capital is fixed at P100,000, P80,000 of which is
to be furnished by Yang Chiao Seng and P20,000, by Mrs. Yulo. All gains
and profits are to be distributed pro rata. The share of Mrs. Yulo in the
capital was never contributed. The land on which the theatre was
constructed was leased by plaintiff Mrs. Yulo from Emilia Carrion Santa
Marina and Maria Carrion Santa Marina for an indefinite period of time.
But on April 12, 1949, the owners notified Mrs. Yulo of the owner's
desire to cancel the contract of lease . The Municipal Court of Manila
rendered judgment ordering the ejectment of Mrs. Yulo and Mr. Yang.
Mrs. Yulo demanded from Yang Chiao Seng her share in the profits of the
business for the period Dec. 11949 to dec. 1950. Yang answered that he
had to suspend the payment (of the rentals) because of the pendency of
the ejectment suit by the owners of the land against Mrs. Yulo. Thus, he
was retaining the rentals to make good to the landowners the rentals
due from Mrs. Yulo in arrears Mrs. Yulo instituted this action alleging the
existence of a partnership between them and that the defendant Yang
Chiao Seng has refused to pay her share .In answer to the complaint,
defendant alleges that the real agreement between the plaintiff and the
defendant was one of lease and not of partnership;
ISSUE: What was the contract entered into, one of partnership or
sublease?
RULING: We have gone over the evidence and we fully agree with the
conclusion of the trial court that the agreement was a sublease, not a
partnership. The following are the requisites of partnership: (1) two or
more persons who bind themselves to contribute money, property, or
industry to a common fund; (2) intention on the part of the partners to
divide the profits among themselves. (Art. 1767, Civil Code.). In the first
place, plaintiff did not furnish the supposed P20,000 capital. In the
second place, she did not furnish any help or intervention in the
management of the theatre. In the third place, it does not appear that she
has ever demanded from defendant any accounting of the expenses and
earnings of the business. Were she really a partner, her first concern
should have been to find out how the business was progressing, She was
absolutely silent with respect to any of the acts that a partner should
have done; all that she did was to receive her share of P3,000 a month,
which can not be interpreted in any manner than a payment for the use
of the premises which she had leased from the owners. Plaintiff claims
the sum of P41,000 as representing her share or participation in the
business from December, 1949. But the original letter of the defendant,
expressly states that the agreement between the plaintiff and the
defendant was to end upon the termination of the right of the plaintiff to
the lease. Plaintiff's right having terminated in July, 1949, the
partnership agreement or the agreement for her to receive a
participation of P3,000 automatically ceased as of said date.
19.) DAN FUE LEUNG,petitioner, vs. HON. INTERMEDIATE APPELLATE
COURT and LEUNG YIU, respondents. G.R. No. 70926 January 31,
1989GUTIERREZ, FACTS: The petitioner asks for the reversal of the
decision of the then Intermediate Appellate Court in AC- G.R. No. CV-
00881 which affirmed the decision of the then Court of First Instance of
Manila, Branch II in Civil Case No. 116725 declaring privater espondent
Leung Yiu a partner of petitioner Dan Fue Leung in the business of Sun
Wah Panciteria and ordering the petitioner to pay to the private
respondent his share in the annual profits of the said restaurant. This
case srcinated from a complaint filed by respondent Leung Yiu with the
then Court of First Instance of Manila, BranchII to recover the sum
equivalent to twenty-two percent (22%) of the annual profits derived
from the operation of Sun Wah Panciteria since October, 1955 from
petitioner Dan Fue Leung. The Sun Wah Panciteria, a restaurant, located
at Florentino Torres Street, Sta. Cruz, Manila, was established sometime
in October, 1955. It was registered as a single proprietorship and its
16
licenses and permits were issued to and in favor of petitioner Dan Fue
Leung as the sole proprietor. Respondent Leung Yiu adduced evidence
during the trial of the case to show that Sun Wah Panciteria was actually
a partnership and that he was one of the partners having contributed
P4,000.00to its initial establishment. The private respondents evidence
is summarized as follows: About the time the Sun Wah Panciteria started
to become operational, the private respondent gave P4,000.00 as his
contribution to the partnership. This is evidenced by a receipt wherein
the petitioner acknowledged his acceptance of theP4,000.00 by affixing
his signature thereto. Furthermore, the private respondent received
from the petitioner the amount of P12,000.00 covered by the latter's
Equitable Banking Corporation Check from the profits of the operation
of the restaurant for the year 1974. The petitioner denied having
received from the private respondent the amount of P4,000.00. He
contested and impugned the genuineness of the receipt. His evidence is
summarized as follows: The petitioner did not receive any contribution
at the time he started the Sun Wah Panciteria. He used his savings from
his salaries as an employee at Camp Stotsenberg in Clark Field and later
as waiter at the Toho Restaurant amounting to a little more than
P2,000.00 as capital in establishing Sun Wah Panciteria. Petitioner
presented various government licenses andpermits showing the Sun
Wah Panciteria was and still is a single proprietorship solely owned and
operated by himself alone. Fue Leung also flatly denied having issued to
the private respondent the receipt (Exhibit G) and the Equitable Banking
Corporation's Check No. 13389470 B in the amount of P12,000.00
(Exhibit B). ISSUE: WON Private respondent is a partner of the petitioner
in Sun Wah Panciteria? HELD: The private respondent is a partner of the
petitioner in Sun Wah Panciteria. The requisites of a partnership which
are 1)two or more persons bind themselves to contribute money,
property, or industry to a common fund; and 2) intention on the part of
the partners to divide the profits among themselves (Article 1767, Civil
Code; Yulo v. Yang Chiao Cheng, 106 Phil.110)-have been established. As
stated by the respondent, a partner shares not only in profits but also in
the losses of the firm. If excellent relations exist among the partners at
the start of business and all the partners are more interested in seeing
the firm grow rather than get immediate returns, a deferment of sharing
in the profits is perfectly plausible. It would be incorrect to state that if a
partner does not assert his rights anytime within ten years from the
start of operations, such rights are irretrievably lost. The private
respondent's cause of action is premised upon the failure of the
petitioner to give him the agreed profits in the operation of Sun Wah
Panciteria. In effect the private respondent was asking for an accounting
of his interests in the partnership. It is Article 1842 of the Civil Code in
conjunction with Articles 1144 and 1155 which is applicable. Article
1842 states: The right to an account of his interest shall accrue to any
partner, or his legal representative as against the winding up partners or
the surviving partners or the person or partnership continuing the
business, atthe date of dissolution, in the absence or any agreement to
the contrary. Regarding the prescriptive period within which the private
respondent may demand an accounting, Articles 1806, 1807, and1809
show that the right to demand an accounting exists as long as the
partnership exists. Prescription begins to run only upon the dissolution
of the partnership when the final accounting is done. Considering the
facts of this case, the Court may decree a dissolution of the partnership
under Article 1831 of the Civil Code which, in part, provides: Art. 1831.
On application by or for a partner the court shall decree a dissolution
whenever: xxx xxx xxx (3) A partner has been guilty of such conduct as
tends to affect prejudicially the carrying on of the business; (4) A partner
willfully or persistently commits a breach of the partnership agreement,
or otherwise so conducts himself in matters relating to the partnership
business that it is not reasonably practicable tocarry on the business in
partnership with him; xxx xxx xxx (6) Other circumstances render a
dissolution equitable There shall be a liquidation and winding up of
partnership affairs, return of capital, and other incidents of dissolution
because the continuation of the partnership has become inequitable.
31.) Ortega vs. CA245 SCRA 529FACTS:
Joaquin L. Misa. He also asked for an appointment of a receiver to
take over the assets of the dissolved partnership and to take charge of
the winding up of itsaffairs.
Issue:
17

W/N the CA erred in holding that the withdrawal of private

respondentdissolved the partnership regardless of his good or bad faith.
HELD:

The birth and life of a partnership at will is predicated on the mutual

desireand consent of the partners. The right to choose with whom a
person wishesto associate himself is the foundation and essence of
partnership.

Its continued existence is, in turn, dependent on the mutual resolve,

along
with each partners capability to give it, and the absence of a cause for
dissolution provided by law itself. Verily, any one of the partners may, at
hissole pleasure, dictate dissolution of the partnership at will. He must
however,act in good faith not that the attendance of bad faith can
prevent thedissolution of the partnership at will.