MANILA MEMORIAL PARK CEMETERY, INC., petitioner, vs. PEDRO L. LINSANGAN,

MANILA MEMORIAL PARK CEMETERY, INC., petitioner, vs. PEDRO L. LINSANGAN, respondent. G.R. No. 151319 November 22, 2004

FACTS:

 

 Florencia Baluyot offered Atty. Pedro L. Linsangan a lot called Garden State at the Holy Cross Memorial Park owned by petitioner (MMPCI). According to Baluyot, a former owner of a memorial lot under Contract No. 25012 was no longer interested in acquiring the lot and had opted to sell his rights subject to reimbursement of the amounts he already paid. The contract was for P95,000.00. Baluyot reassured Atty. Linsangan that once reimbursement is made to the former buyer, the contract would be transferred to him. Atty. Linsangan agreed and gave Baluyot P35,295.00 representing the amount to be reimbursed to the original buyer and to complete the down payment to MMPCI. Baluyot issued handwritten and typewritten receipts for these payments. Baluyot verbally advised Atty. Linsangan that Contract No. 28660 was cancelled for reasons the latter could not explain, and presented to him another proposal for the purchase of an equivalent property. He refused the new proposal and insisted that Baluyot and MMPCI honor their undertaking. For the alleged failure of MMPCI and Baluyot to conform to their agreement, Atty. Linsangan filed a Complaint for Breach of Contract and Damages against the former. For its part, MMPCI alleged that Contract No. 28660 was cancelled conformably with the terms of the contract because of non-payment of arrearages. MMPCI stated that Baluyot was not an agent but an independent contractor, and as such was not authorized to represent MMPCI or to use its name except as to the extent expressly stated in the Agency Manager Agreement.

 

ISSUE: Whether or not a contract of agency exists between Baluyot and MMPCI.

 

RULING: NO. The acts of an agent beyond the scope of his authority do not bind the principal, unless he ratifies them, expressly or impliedly. Only the principal can ratify; the agent cannot ratify his own unauthorized acts. Moreover, the principal must have knowledge of the acts he is to ratify. No ratification can be implied in the instant case. Atty. Linsangan failed to show that MMPCI had knowledge of the arrangement. As far as MMPCI is concerned, the contract price was P132,250.00, as stated in the Offer to Purchase signed by Atty. Linsangan and MMPCI's authorized officer. Likewise, this Court does not find favor in the Court of Appeals' findings that "the authority of defendant Baluyot may not have been expressly conferred upon her; however, the same may have been derived impliedly by habit or custom which may have been an accepted practice in their company in a long period of time." A perusal of the records of the case fails to show any indication that there was such a habit or custom in MMPCI that allows its agents to enter into agreements for lower prices of its interment spaces, nor to assume a portion of the purchase price of the interment spaces sold at such lower price. No evidence was ever presented to this effect.

LOPEZ v. CA

LOPEZ v. CA G.R. No. 157784 December 16, 2008 Ponente: TINGA

FACTS:

On 23 March 1968, Juliana executed a notarial will,whereby she expressed that she wished to constitute a trust fund for her paraphernal properties, denominated as Fideicomiso de Juliana Lopez Manzano (Fideicomiso), to be administered by her husband. If her husband were to die or renounce the obligation, her nephew, Enrique Lopez, was to become administrator and executor of the Fideicomiso. Two-thirds (2/3) of the income from rentals over these properties were to answer for the education of deserving but needy honor students, while one-third 1/3 was to shoulder the expenses and fees of the administrator. As to her conjugal properties, Juliana bequeathed the portion that she could legally dispose to her husband, and after his death, said properties were to pass to her biznietos or great grandchildren. Juliana initiated the probate of her will five (5) days after its execution, but she died on 12 August 1968, before the petition for probate could be heard. The petition was pursued instead in Special Proceedings (S.P.) No. 706 by her husband, Jose, who was the designated executor in the will. On 7 October 1968, the Court of First Instance, Branch 3, Balayan,Batangas, acting as probate court, admitted the will to probate and issued the letters testamentary to Jose. Jose then submitted an inventory of Juliana’s real and personal properties with their appraised values, which was approved by the probate court. Thereafter, Jose filed a Report dated 16 August 1969, which included a proposed project of partition. Jose proceeded to offer a project of partition.Then, Jose listed those properties which he alleged were registered in both his and Juliana’s names, totaling 13 parcels in all. The disputed properties consisting of six (6) parcels, all located in Balayan, Batangas, were included in said list. On 25 August 1969, the probate court issued an order approving the project of partition. As to the properties to be constituted into the Fideicomiso, the probate court ordered that the certificates of title thereto be cancelled, and, in lieu thereof, new certificates be issued in favor of Jose as trustee of the Fideicomiso covering one-half (1/2) of the properties listed under paragraph 14 of the project of partition; and regarding the other half, to be registered in the name of Jose as heir of Juliana. The properties which Jose had alleged as registered in his and Juliana’s names, including the disputed lots, were adjudicated to Jose as heir, subject to the condition that Jose would settle the obligations charged on these properties. The probate court, thus, directed that new certificates of title be issued in favor of Jose as the registered owner thereof in its Order dated 15 September 1969. On even date, the certificates of title of the disputed properties were issued in the name of Jose. The Fideicomiso was constituted in S.P No. 706 encompassing one-half (1/2) of the Abra de Ilog lot on Mindoro, the 1/6 portion of the lot in Antorcha St. in Balayan, Batangas and all other properties inherited ab intestato by Juliana from her sister, Clemencia, in accordance with the order of the probate court in S.P. No. 706. The disputed lands were excluded from the trust. Jose died on 22 July 1980, leaving a holographic will disposing of the disputed properties to respondents. The will was allowed probate on 20 December 1983 in S.P. No. 2675 before the RTC of Pasay City. Pursuant to Jose’s will, the RTC ordered on 20 December 1983 the transfer of the disputed properties to the respondents as the heirs of Jose. Consequently, the certificates of title of the disputed properties were cancelled and new ones issued in the names of respondents. Petitioner’s father, Enrique Lopez, also assumed the trusteeship of Juliana’s estate. On 30 August 1984, the RTC of Batangas, Branch 9 appointed petitioner as trustee of Juliana’s estate in S.P. No. 706. On 11 December 1984, petitioner instituted an action for reconveyance of parcels of land with sum of money before the RTC of Balayan, Batangas against respondents. The complaint essentially alleged that Jose was able to register in his name the disputed properties, which were the paraphernal properties of Juliana, either during their conjugal union or in the course of the performance of his duties as executor of the testate estate of Juliana and that upon the death of Jose, the disputed properties were included in the inventory as if they formed part of Jose’s estate when in fact Jose was holding them only in trust for the trust estate of Juliana. The RCT dismissed the petition on the ground of prescription. The CA denied the appeals filed by both parties. Hence, this petition.

 

ISSUE: Whether an implied trust was constituted over the disputed properties when Jose, the trustee, registered them in his name.

 

HELD:

 

The disputed properties were excluded from the Fideicomiso at the outset. Jose registered the disputed properties in his name partly as his conjugal share and partly as his inheritance from his wife Juliana, which is the complete reverse of the claim of the petitioner, as the new trustee, that the properties are intended for the beneficiaries of the Fideicomiso. Furthermore, the exclusion of the disputed properties from the Fideicomiso was approved by the probate court and, subsequently, by the trial court having jurisdiction over the Fideicomiso. The registration of the disputed properties in the name of Jose was actually pursuant to a court order. The apparent mistake in the adjudication of the disputed properties to Jose created a mere implied trust of the constructive variety in favor of the beneficiaries of the Fideicomiso.

Prats v. Court of Appeals

Prats v. Court of Appeals G.R. No. L-39822, January 31, 1978, Fernandez, J.

 

Facts:

 

In 1968, Antonio Prats, under the name of “ Philippine Real Estate Exchange” instituted against Alfonso Doronilla and PNB a case to recover a sum of money and damages. Doronilla had for sometime tried to sell his 300 ha land and he had designated several agents for that purpose at one time. He offered the property to the Social Security System but was unable to consummate the sale. Subsequently he gave a written authority in writing to Prats to negotiate the sale of the property. Such authorization was published by Prats in the Manila Times. The parties agreed that Prats will be entitled to 10% commission and if he will be able to sell it over its price, the excess shall be credited to the latter plus his commission. Thereafter, Prats negotiated the land to the SSS. SSS invited Doronilla for a conference but the latter declined and instead instructed that the former should deal with Prats directly. Doronilla had received the full payment from SSS. When Prats demanded from him his professional fees as real estate broker, Doronilla refused to pay. Doronilla alleged that Prats had no right to demand the payment not rendered according to their agreement and that the authority extended to Prats had expired prior to the closing of the sale..

 

Issue: Whether petitioner was the efficient procuring cause in bringing about the sale of respondent’s land to the SSS.

 

Ruling:

 

The Supreme Court ruled that Prats was not the efficient procuring cause of the sale. It was not categorical that it was through Prats efforts that meeting with the SSS official to close the sale took place. The court concluded that the meeting took place independently because the SSS had manifested disinterest in Prats intervention. However, in equity, the court noted that Prats had diligently taken steps to bring back together Doronilla and SSS. Prats efforts somehow were instrumental in bringing them together again and finally consummating the sale although such finalization was after the expiration of Prats extended exclusive authority. Doronilla was ordered to pay Prats for his efforts and assistance in the transaction

Singsong v. Isabela Sawmill

Singsong v. Isabela Sawmill G.R. No. L-27343, February 28, 1979, Fernandez, J.

Facts: In 1951, defendants entered into a contract of partnership under the firm name “Isabela Sawmill”. In 1956 the plaintiff sold to the partnership a motor truck and two tractors. The partnership was not able to pay their whole balance even after demand was made. One of the partners withdrew from the partnership but instead of terminating the said partnership it was continued by the two remaining partners under the same firm name. Plaintiffs also seek the annulment of the assignment of right with chattel mortgage entered into by the withdrawing partner and the remaining partners. The appellants contend that the chattel mortgage may no longer be nullified because it had been judicially approved and said chattel mortgage had been judicially foreclosed.

 

Issue: Whether the withdrawal of one of the partners dissolved the partnership.

 

Ruling:

 

 It does not appear that the withdrawal of the partner was not published in the newspapers. The appellees and the public in general had a right to expect that whatever, credit they extended to the remaining partners could be enforced against the properties of the partnership. The withdrawing partner cannot be relieved from her liability to the creditor of the partnership due to her own fault by not insisting on the liquidation of the partnership. Though she had acted in good faith, the appellees also acted in good faith in extending credit to the partnership. Where one of two innocent persons must suffer, that person who gave occasion for the damages to be caused must bear the consequences. Technically, the partnership was dissolved by the withdrawal of one of the partners. Through her acts of entering into a memorandum with the remaining partners misled the creditors that they were doing business with the partnership. Hence, from the order of the lower court ordering the withdrawing partner to pay the plaintiffs, she is thus entitled for reimbursement from the remaining partners.

Soncuya v. de Luna

Soncuya v. de Luna G.R. No. L-45464, April 28, 1939, Villa-Real, J.

 

Facts:

 

Petitioner filed a complaint against respondent for damages as a result of the fraudulent administration of the partnership, “Centro Escolar de Senoritas” of which petitioner and the deceased Avelino Librada were members. For the purpose of adjudicating to plaintiff damages which he alleges to have suffered as a partner, it is necessary that a liquidation of the business be made that the end profits and losses maybe known and the causes of the latter and the responsibility of the defendant as well as the damages in which each partner may have suffered, maybe determined.

 

Issue: Whether the petitioner is entitled to damages.

 

Ruling:

 

According to the Supreme Court the complaint is not sufficient to constitute a cause of action on the part of the plaintiff as member of the partnership to collect damages from defendant as managing partner thereof, without previous liquidation. Thus, for a partner to be able to claim from another partner who manages the general co-partnership, allegedly suffered by him by reason of the fraudulent administration of the latter, a previous liquidation of said partnership is necessary.

Idos v. CA

Idos v. CA G.R. NO. 110782, September 25, 1998, Quisumbing, J.

 

 

Facts:

 

In 1985, Eddie Alarilla and Irma Idos formed a partnership which they decided to terminate after a year. To pay Alarilla’s share of the asset, Idos issued 4 post dated checks. Alarilla was able to encash the first, second and fourth checks but the third was dishonored for insufficiency of funds. He demanded payment but Idos failed to pay. She claimed that the checks were issued as assurance of Alarilla’s share in the assets of the partnership and that it was supposed to be deposited until the stocks were sold. He filed an information for violation of BP blg. 22 against Idos in which she was found guilty by the trial court.

 

Issue: Did the court confused and merged into one the legal concepts of dissolution, liquidation and termination of a partnership?

 

Ruling: The partners agreement to terminate the partnership did not automatically dissolved the partnership. They were in the process of winding-up when the check in question was issued. The best evidenceof the existence of the partnership, which was not yet terminated were the unsold goods and uncollected receivables which were presented to the trial court. Article 1829 of the Civil Code provides that “on dissolution the partnership is not terminated but continues until the winding-up of partnership affairs is completed. Since the partnership has not been terminated, Idos and Alarilla remained co-partners. The check was issued by petitioner to respondent as would a partner to another and not as a payment by debtor to creditor. Thus, absent the first element of the complained offense, the act is not punishable by the statute.

VILLAREAL V. RAMIREZ

VILLAREAL V. RAMIREZ

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 latter’s 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 RTC’s 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: W/N petitioners are liable to respondents for the latter’s share in the partnership?

 

Ruling:

 

No. Respondents have no right to demand from petitioner the return of their equity share. As found by the court petitioners did not personally hold its equity or assets. “The partnership has a juridical personality separate and distinct from that of each of the partners.” Since the capital was contributed to the partnership, not 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’ one-third share in the partnership cannot be determined until all the partnership assets will have been liquidated and all partnership creditors have been paid. CA’s computation of the amount to be refunded to respondents as their share was thus erroneous.

Rojas v. Maglana

Rojas v. Maglana

Facts:

Maglana and Rojas executed their Articles of Co-Partnership called Eastcoast Development Enterprises (EDE). It was a partnership with an indefinite term of existence. Maglana shall manage the business affairs while Rojas shall be the logging superintendant and shall manage the logging operation. They shall share in all profits and loss equally. Due to difficulties encountered they decided to avail of the sources of Pahamatong as industrial partners. They again executed their Articles of Co-Partnership under EDE. The term is 30 years. After sometime Pamahatong sold his interest to Maglana and Rojas including equipment contributed. After withdrawal of Pamahatong, Maglana and Rojas continued the partnership. After 3 months, Rojas entered into a management contract with another logging enterprise. He left and abandoned the partnership. He even withdrew his equipment from the partnership and was transferred to CMS. He never told Maglana that he will not be able to comply with the promised contributions and he will not work as logging superintendent. Maglana then told Rojas that the latter share will just be 20% of the net profits. Rojas took funds from the partnership more than his contribution. Thus, Maglana notified Rojas that he dissolved the partnership.

 

Issue: What is the nature of the partnership and legal relationship of Maglana and Rojas after Pahamatong retired from the second partnership

 

Ruling:

 

It was not the intention of the partners to dissolve the first partnership, upon the constitution of the second one, which they unmistakably called “additional agreement.” Otherwise stated even during the existence of the second partnership, all business transactions were carried out under the duly registered articles. No rights and obligations accrued in the name of the second partnership except in favor of Pahamatong which was fully paid by the duly registered partnership.  

Liwanag v. CA

Liwanag v. CA

Facts:

Liwanag and Tabligan went to the house of Rosales and asked her to join them in the business of buying and selling cigarettes. Convinced of the feasibility of the venture, Rosales readily agreed. Under their agreement, Rosales would give the money needed to buy the cigarettes while Liwanag and Tabligan would act as her agents, with a corresponding 40% commission to her if the goods are sold; otherwise the money would be returned to Rosales. Consequently, Rosales gave several cash advances to Liwanag and Tabligan amounting to P633,650.00. During the first two months, Liwanag and Tabligan made periodic visits to Rosales to report on the progress of the transactions. The visits, however, suddenly stopped, and all efforts by Rosales to obtain information regarding their business proved futile. Alarmed by this development and believing that the amounts she advanced were being misappropriated, Rosales filed a case of estafa against Liwanag.

 

Issue: WON Liwanag is guilty of estafa?

 

Ruling:

 

The language of the receipt indicates that the money delivered to Liwanag was for a specific purpose, that is, for the purchase of cigarettes, and in the event the cigarettes cannot be sold, the money must be returned to Rosales. Thus, even assuming that a contract of partnership was indeed entered into by and between the parties, we have ruled that when money or property have been received by a partner for a specific purpose (such as that obtaining in the instant case) and he later misappropriated it, such partner is guilty of estafa. Neither can the transaction be considered a loan, since in a contract of loan once the money is received by the debtor, ownership over the same is transferred. Being the owner, the borrower can dispose of it for whatever purpose he may deem proper. In the instant petition, however, it is evident that Liwanag could not dispose of the money as she pleased because it was only delivered to her for a single purpose, namely, for the purchase of cigarettes, and if this was not possible then to return the money to Rosales. Since in this case there was no transfer of ownership of the money delivered, Liwanag is liable for conversion under Art. 315, par. 1(b) of the Revised Penal Code.

Fortis vs. Hermanos

Fortis vs. Hermanos

Facts:

 

Plaintiff Fortis is an employee of defendant Gutierrez Hermanos. Theformer brought an action to recover a balance due him as salary forthe year 1902. He also alleged that he was entitled, as salary, to 5 percent of the net profits of the business of the defendants for said year. The complaint also contained a cause of action for the sum of 600pesos, money expended by plaintiff for the defendants during the year1903. The lower court ruled in favor of the plaintiff. The total judgmentrendered amounted to P13, 025.40, which was reduced to Philippinecurrency. The defendants moved for new trial but were denied. They brought the case in the SC thru bill of exceptions; the appellants(defendants) alleged that that the contract made the plaintiff acopartner of the defendants in the business, which they were carrying on.

 

Issue: WON the plaintiff is a co-partner of the defendants in the business.

 

Ruling:

 

NO. It was a mere contract of employment. The plaintiff had neithervoice nor vote in the management of the affairs of the company. Thefact that the compensation received by him was to be determined withreference to the profits made by the defendants in their business didnot in any sense make by a partner therein. The articles of partnershipbetween the defendants provided that the profits should be dividedamong the partners named in a certain proportion. The contract madebetween the plaintiff and the then manager of the defendantpartnership did not in any way vary or modify this provision of thearticles of partnership.

SY vs. COURT OF APPEALS

VICENTE SY, TRINIDAD PAULINO, 6B’S TRUCKING CORPORATION, and SBT TRUCKING CORPORATION, petitioners, vs. HON. COURT OF APPEALS and JAIME SAHOT, respondents. [G.R. No. 142293. February 27, 2003]

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 in names and for 36 years, private respondent continuously served the trucking business of petitioners. When Sahot was 59 years old, he incurred several absences due to various ailments. Particularly causing him pain was his left thigh, which greatly affected the performance of his task as a driver. He inquired about his medical and retirement benefits with the Social Security System (SSS) on April 25, 1994, but discovered that his premium payments had not been remitted by his employer.Sahot filed a week-long leave to get medical attention. He was treated for EOR, presleyopia, hypertensive retinopathy G II and heart enlargement. Because of such, Belen Paulino of the SBT Trucking Service management told him to file a formal request for extension of his leave. When Sahot applied for an extended leave, he was threatened of termination of employment should he refuse to go back to work. Eventually, Sahot was dismissed from employment which prompted the latter to file an illegal dismissal case with the NLRC. For 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. They add that it was not until the year 1994, when SBT Trucking Corporation was established, and only then did respondent Sahot become an employee of the company, with a monthly salary that reached P4,160.00 at the time of his separation. The NLRC and the CA ruled that Sahot was an employee of the petitioner.

 

 

ISSUE: Whether Sahot is an industrial partner

 

RULING:

 

No. Article 1767 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. On this point, the Court affirmed the findings of the appellate court and the NLRC. Private respondent Jaime Sahot was not an industrial partner but an employee of petitioners from 1958 to 1994. The existence of an employer-employee relationship is ultimately a question of fact and the findings thereon by the NLRC, as affirmed by the Court of Appeals, deserve not only respect but finality when supported by substantial evidence. Substantial evidence is such amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion.

SARDANE vs. CA

NOBIO SARDANE, petitioner, vs. THE COURT OF APPEALS and ROMEO J. ACOJEDO, respondents. G.R. No. L-47045 November 22, 1988

 

 

 

FACTS:

 

Petitioner brought an action in the collection of a sum of P5,217.25 based on promissory notes executed by the herein private respondent NobioSardane in favor of the herein petitioner. Petitioner based his right to collect on the promissory notes executed by respondent on different dates. It has been established in the trial court that on many occasions, the petitioner demanded the payment of the total amount of P5,217.25. The failure of the private respondent to pay the said amount prompted the petitioner to seek the services of lawyer who made a letter (Exhibit 1) formally demanding the return of the sum loaned. Because of the failure of the private respondent to heed the demands extrajudicially made by the petitioner, the latter was constrained to bring an action for collection of sum of money.During the scheduled day for trial, private respondent failed to appear and to file an answer. On motion of petitioner, he was granted to present evidence ex parte. Private respondent filed a motion to lift the order of default which was granted by the City Court in an order dated May 24, 1976, taking into consideration that the answer was filed within two hours after the hearing of the evidence presented ex-parte by the petitioner. The trial court favored plaintiff’s petition. One of the questions raised in the review was whether the oral testimony for the therein private respondent Sardane that a partnership existed between him and therein petitioner Acojedo are admissible to vary the meaning of the abovementioned promissory notes.

 

ISSUE: Whether a partnership exists between the parties

 

RULING: The Court of Appeals held, and agreed with by the Court, that even if evidence aliunde other than the promissory notes may be admitted to alter the meaning conveyed thereby, still the evidence is insufficient to prove that a partnership existed between the private parties hereto. As manager of the basnig Sarcado naturally some degree of control over the operations and maintenance thereof had to be exercised by herein petitioner. The fact that he had received 50% of the net profits does not conclusively establish that he was a partner of the private respondent herein. Article 1769(4) of the Civil Code is explicit that while 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, no such inference shall be drawn if such profits were received in payment as wages of an employee. Furthermore, herein petitioner had no voice in the management of the affairs of the Basnig. Under similar facts, this Court in the early case of Fortis vs. Gutierrez Hermanos, in denying the claim of the plaintiff therein that he was a partner in the business of the defendant, declared: This contention cannot be sustained. It was a mere contract of employment. The plaintiff had no voice nor vote in the management of the affairs of the company. The fact that the compensation received by him was to be determined with reference to the profits made by the defendant in their business did not in any sense make him a partner therein. ... Hence, there no partnership exists in the case.

Lim vs. Philippine Fishing Gear Industries Inc

Lim vs. Philippine Fishing Gear Industries Inc. [GR 136448, 3 November 1999]

FACTS: Lim Tong Lim requested Peter Yao and Antonio Chuato engage in commercial fishing with him. The three agreed to purchase two fishing boats but since they do not have the money they borrowed from one Jesus Lim the brother of Lim Tong Lim. Subsequently, they again borrowed money for the purchase of fishing nets and other fishing equipments. Yao and Chua represented themselves as acting in behalf of “Ocean Quest Fishing Corporation” (OQFC) and they contracted with Philippine Fishing Gear Industries (PFGI) for the purchase of fishing nets amounting to more than P500k. However, they were unable to pay PFGI and hence were sued in their own names as Ocean Quest Fishing Corporation is a non-existent corporation. Chua admitted his liability while Lim Tong Lim refused such liability alleging that Chua and Yao acted without his knowledge and consent in representing themselves as a corporation.

 

 

ISSUE: Whether Lim Tong Lim is liable as a partner

 

 

HELD: Yes. It is apparent from the factual milieu that the three decided to engage in a fishing business. Moreover, their Compromise Agreement had revealed their intention to pay the loan with the proceeds of the sale and to divide equally among them the excess or loss. The boats and equipment used for their business entails their common fund. 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. The principle of corporation by estoppel cannot apply in the case as Lim Tong Lim also benefited from the use of the nets in the boat, which was an asset of the partnership. Under the law on estoppel, those acting in behalf of a corporation and those benefited by it, knowing it to be without valid existence are held liable as general partners. Hence, the question as to whether such was legally formed for unknown reasons is immaterial to the case.

HEIRS OF TAN ENG KEE vs.CA

HEIRS OF TAN ENG KEE vs.CA 341 SCRA 740, G.R. No. 126881, October 3, 2000

FACTS:

 

After the second World War, Tan EngKee and Tan Eng Lay, pooling their resources and industry together, entered into a partnership engaged in the business of selling lumber and hardware and construction supplies. They named their enterprise "Benguet Lumber" which they jointly managed until Tan EngKee's death. Petitioners herein averred that the business prospered due to the hard work and thrift of the alleged partners. However, they claimed that in 1981, Tan Eng Lay and his children caused the conversion of the partnership "Benguet Lumber" into a corporation called "Benguet Lumber Company." The incorporation was purportedly a ruse to deprive Tan EngKee and his heirs of their rightful participation in the profits of the business. Petitioners prayed for accounting of the partnership assets, and the dissolution, winding up and liquidation thereof, and the equal division of the net assets of Benguet Lumber. The RTC ruled in favor of petitioners, declaring that Benguet Lumber is a joint venture which is akin to a particular partnership. The Court of Appeals rendered the assailed decision reversing the judgment of the trial court.

 

ISSUE: Whether the deceased Tan EngKee and Tan Eng Lay are joint adventurers and/or partners in a business venture and/or particular partnership called Benguet Lumber and as such should share in the profits and/or losses of the business venture or particular partnership

 

RULING:

 

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 Kee's 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. Also, the trial court determined that Tan EngKee and Tan Eng Lay had entered into a joint venture, which it said is akin to a particular partnership. A particular partnership is distinguished from a joint adventure, to wit:(a) A joint adventure (an American concept similar to our joint accounts) is a sort of informal partnership, with no firm name and no legal personality. In a joint account, the participating merchants can transact business under their own name, and can be individually liable therefor. (b) Usually, but not necessarily a joint adventure is limited to a SINGLE TRANSACTION, although the business of pursuing to a successful termination maycontinue for a number of years; a partnership generally relates to a continuing business of various transactions of a certain kind. A joint venture "presupposes generally a parity of standing between the joint co-ventures or partners, in which each party has an equal proprietary interest in the capital or property contributed, and where each party exercises equal rights in the conduct of the business. The evidence presented by petitioners falls short of the quantum of proof required to establish a partnership. In the absence of evidence, we cannot accept as an established fact that Tan EngKee allegedly contributed his resources to a common fund for the purpose of establishing a partnership. Besides, it is indeed odd, if not unnatural, that despite the forty years the partnership was allegedly in existence, Tan EngKee 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. A demand for periodic accounting is evidence of a partnership. During his lifetime, Tan EngKee appeared never to have made any such demand for accounting from his brother, Tang Eng Lay. We conclude that Tan EngKee was only an employee, not a partner since they did not present and offer evidence that would show that Tan EngKee received amounts of money allegedly representing his share in the profits of the enterprise. There being no partnership, it follows that there is no dissolution, winding up or liquidation to speak of.

Yu v. NLRC

Yu v. NLRC GR 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 Yu’s knowledge. Said new partnership continued operating under the same name and continued the business’s 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.

Ruling :

 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 preceeding 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.

Republic v. Tancinco G.R. No. 139256, December 27, 2002

Republic v. Tancinco G.R. No. 139256, December 27, 2002

Facts:

 The National Sugar Trading Corporation (NASUTRA), a domestic corporation created for the purpose of engaging in the trading of sugar, and a subsidiary of the Philippine Sugar Commission (Philsucom), an entity owned and controlled by the Philippine government, leased the warehouse of Sulpicio Tancinco in Cagayan de Oro City. The contract was for a period of 3 months starting November 23, 1984 renewable for another 3 years. On December 29, 1984, the eastern wall of the warehouse collapsed causing death and injuries to several persons and damage to houses within the area. Tancinco was constrained to incur expenses for the repair and restoration of the warehouse and indemnity for the victims. Due to NASUTRA’s refusal to reimburse Tancinco, the latter filed on March 28, 1985 a complaint for Damages with the Regional Trial Court of Cagayan de Oro City (Branch 23). NASUTRA filed its Answer disclaiming any liability. In the meantime, NASUTRA was converted into a private corporation called the Philippine Sugar Marketing Corporation (Philsuma), the sole marketing agency for the sugar industry to be owned completely by sugar producers. Thereafter, Philsucom was phased out by Executive Order No. 18 in 1986, at same time creating petitioner SRA. NASUTRA substituted petitioner SRA and filed on February 8, 1988, an Answer putting up the defenses that it cannot be liable for NASUTRA’s obligation as it was created after the incident took place and that it is a separate and distinct entity from the former.

Issue: Whether or not Tancinco or his heirs may recover NASUTRA’s adjudged liability from SRA.

 

Ruling:

 

 YES. There is no question that Executive Order No. 18 abolished the Philippine Sugar Commission (Philsucom) and created the Sugar Regulatory Administration (SRA). However, the abolition of NASUTRA and eventually Philsucom did not abate the pendency of the suits filed against them. The termination of the life of a juridical entity does not by itself cause the extinction or diminution of the rights and liabilities of such entity; specially in this case where, pursuant to the transitory provision of E.O. No. 18, Philsucom, under the supervision of SRA, was allowed to continue as a juridical entity for 3 years for the purpose of prosecuting and defending suits by or against it and enabling it to settle and close its affairs, to dispose of and convey its property; and to distribute its assets. If and when a pending action cannot be terminated within said 3-year period, SRA, which has been appointed by law to supervise the closing affairs of Philsucom, is considered a trustee which shall continue to prosecute and defend suits filed by or against it. It being the trustee, SRA must therefore continue the legal personality of the defunct NASUTRA and Philsucom until final judgment and execution stage of the case.

Antonio C. Goquilay, ET AL. vs. Washington Z. Sycip, ET AL.

Antonio C. Goquilay, ET AL. vs. Washington Z. Sycip, ET AL. GR NO. L-11840, December 10, 1963

FACTS:

 

 Tan Sin An and Goquiolay entered into a general commercial partnership under the partnership name “Tan Sin An and Antonio Goquiolay” for the purpose of dealing in real estate. The agreement lodged upon Tan Sin An the sole management of the partnership affairs. The lifetime of the partnership was fixed at ten years and the Articles of Co-partnership stipulated that in the event of death of any of the partners before the expiration of the term, the partnership will not be dissolved but will be continued by the heirs or assigns of the deceased partner. But the partnership could be dissolved upon mutual agreement in writing of the partners. Goquiolay executed a GPA in favor of Tan Sin An. The plaintiff partnership purchased 3 parcels of land which was mortgaged to “La Urbana” as payment of P25,000. Another 46 parcels of land were purchased by Tan Sin An in his individual capacity which he assumed payment of a mortgage debt for P35K. A downpayment and the amortization were advanced by Yutivo and Co. The two obligations were consolidated in an instrument executed by the partnership and Tan Sin An, whereby the entire 49 lots were mortgaged in favor of “Banco Hipotecario”
Tan Sin An died leaving his widow, Kong Chai Pin and four minor children. The widow subsequently became the administratrix of the estate. Repeated demands were made by Banco Hipotecario on the partnership and on Tan Sin An. 
Defendant Sing Yee, upon request of defendant Yutivo Sons , paid the remaining balance of the mortgage debt, the mortgage was cancelled Yutivo Sons and Sing Yee filed their claim in the intestate proceedings of Tan Sin An for advances, interest and taxes paid in amortizing and discharging their obligations to “La Urbana” and “Banco Hipotecario.” Kong Chai Pin filed a petition with the probate court for authority to sell all the 49 parcels of land. She then sold it to Sycip and Lee in consideration of P37K and of the vendees assuming payment of the claims filed by Yutivo Sons and Sing Yee. Later, Sycip and Lee executed in favor of Insular Development a deed of transfer covering the 49 parcels of land.
When Goquiolay learned about the sale to Sycip and Lee, he filed a petition in the intestate proceedings to set aside the order of the probate court approving the sale in so far as his interest over the parcels of land sold was concerned. Probate court annulled the sale executed by the administratrix w/ respect to the 60% interest of Goquiolay over the properties Administratrix appealed.
The decision of probate court was set aside for failure to include the indispensable parties. New pleadings were filed. The second amended complaint prays for the annulment of the sale in favor of Sycip and Lee and their subsequent conveyance to Insular Development. The complaint was dismissed by the lower court hence this appeal.

 

ISSUE/S: Whether or not a widow or substitute become also a general partner or only a limited partner. Whether or not the lower court err in holding that the widow succeeded her husband Tan Sin An in the sole management of the partnership upon Tan’s death Whether or not the consent of the other partners was necessary to perfect the sale of the partnership properties to Sycip and Lee?

 

 

HELD:

 

Kong Chai Pin became a mere general partner. By seeking authority to manage partnership property, Tan Sin An’s widow showed that she desired to be considered a general partner. By authorizing the widow to manage partnership property (which a limited partner could not be authorized to do), Goqulay recognized her as such partner, and is now in estoppel to deny her position as a general partner, with authority to administer and alienate partnership property. The articles did not provide that the heirs of the deceased would be merely limited partners; on the contrary, they expressly stipulated that in case of death of either partner, “the co partnership will have to be continued” with the heirs or assignees. It certainly could not be continued if it were to be converted from a general partnership into a limited partnership since the difference between the two kinds of associations is fundamental, and specially because the conversion into a limited association would leave the heirs of the deceased partner without a share in the management. Hence, the contractual stipulation actually contemplated that the heirs would become general partners rather than limited ones.

MACDONALD vs. NATIONAL CITY BANK OF NEW YORK

MACDONALD vs. NATIONAL CITY BANK OF NEW YORK [G.R. No. L-7991. May 21, 1956.]

 

 

 

Facts:

 

Stasikinocey is a partnership formed by da Costa, Gorcey, Kusik and Gavino. It was denied registration by the SEC due to a confusion between the partnership and Cardinal Rattan. Cardinal Rattan is the business name or style used by Stasikinocey. Da Costa and Gorcey are the general partners of Cardinal Rattan. Moreover, Da Costa is the managing partner of Cardinal Rattan. Stasikinocey had an overdaft account with Nationa City Bank, which was later converted into an ordinary loan due the partnership’s failure in paying its obligation. The ordinary loan was secured by a chattel mortgage over 3 vehicles. During the subsistence of the loan, the vehicles were sold to MacDonald and later on, MacDonald sold 2 of the 3 vehicles to Gonzales. The bank brought an action for recovery of its credit and foreclosure of the chattel mortgage upon learning of these transactions. Held: While an unregistered commercial partnership has no juridical personality, nevertheless, where two or more persons attempt to create a partnership failing to comply with all the legal formalities, the law considers them as partners and the association is a partnership in so far as it is a favorable to third persons, by reason of the equitable principle of estoppel. Where a partnership not duly organized has been recognized as such in its dealings with certain persons, it shall be considered as “partnership by estoppel” and the persons dealing with it are estopped from denying its partnership existence.

 

Issue: WON the partnership, Stasikinocey is estopped from asserting that it does not have juridical personality since it is an unregistered commercial partnership

 

Ratio: [YES] While an unregistered commercial partnership has no juridical personality, nevertheless, where two or more persons attempt to create a partnership failing to comply with all the legal formalities, the law considers them as partners and the association is a partnership in so far as it is a favorable to third persons, by reason of the equitable principle of estoppel. Da Costa and Gorcey cannot deny that they are partners of the partnership Stasikinocey, because in all their transactions with the National City Bank they represented themselves as such. McDonald cannot disclaim knowledge of the partnership Stasikinocey because he dealt with said entity in purchasing two of the vehicles in question through Gorcey and Da Costa. The sale of the vehicles to MacDonald being void, the sale to Gonzales is also void since a buyer cannot have a better right than the seller. As was held in Behn Meyer & Co. vs. Rosatzin, where a partnership not duly organized has been recognized as such in its dealings with certain persons, it shall be considered as “partnership by estoppel” and the persons dealing with it are estopped from denying its partnership existence. If the law recognizes a defectively organized partnership as de facto as far as third persons are concerned, for purposes of its de facto existence it should have such attribute of a partnership as domicile.

G.R. No. 117228 June 19, 1997

G.R. No. 117228 June 19, 1997 RODOLFO MORALES, represented by his heirs, and PRISCILA MORALES, petitioners, vs. COURT OF APPEALS (Former Seventeenth Division), RANULFO ORTIZ, JR., and ERLINDA ORTIZ, respondents.

 

FACTS:

 

The evidence adduced by the Plaintiffs discloses that the Plaintiffs are the absolute and exclusive owners of the premises in question having purchased the same from Celso Avelino. They later caused the transfer of its tax declaration in the name of the female plaintiff and paid the realty taxes thereon. Celso Avelino (Plaintiffs' predecessor in interest) purchased the land in question consisting of two adjoining parcels while he was still a bachelor and the City Fiscal of Calbayog City from Alejandra Mendiola and Celita Bartolome, through a "Escritura de Venta". After the purchase, he caused the transfer of the tax declarations of the two parcels in his name as well as consolidated into one the two tax declarations in his name. With the knowledge of the Intervenor and the defendant, Celso Avelino caused the survey of the premises in question, in his name, by the Bureau of Lands. He also built his residential house therein with Marcial Aragon (now dead) as his master carpenter who was even scolded by him for constructing the ceiling too low. When the two-storey residential house was finished, he took his parents, Rosendo Avelino and Juana Ricaforte, and his sister, Aurea, who took care of the couple, to live there until their deaths. He also declared this residential house in his tax declaration to the premises in question and paid the corresponding realty taxes, keeping intact the receipts which he comes to get or Aurea would go to Cebu to give it to him. After being the City Fiscal of Calbayog, Celso Avelino became an Immigration Officer and later as Judge of the Court of First Instance in Cebu with his sister, Aurea, taking care of the premises in question. While he was already in Cebu, the defendant, without the knowledge and consent of the former, constructed a small beauty shop in the premises in question. Inasmuch as the Plaintiffs are the purchasers of the other real properties of Celso Avelino, one of which is at Acedillo (now Sen. J.D. Avelino) street, after they were offered by Celso Avelino to buy the premises in question, they examined the premises in question and talked with the defendant about that fact, the latter encouraged them to purchase the premises in question rather than the property going to somebody else they do not know and that he will vacate the premises as soon as his uncle will notify him to do so. Thus, they paid the purchase price and Exh. "C" was executed in their favor. However, despite due notice from his uncle to vacate the premises in question, the defendant refused to vacate or demolish the beauty shop unless he is reimbursed P35,000.00 for it although it was valued at less than P5,000.00. So, the Plaintiffs demanded, orally and in writing to vacate the premises. The defendant refused. As the plaintiffs were about to undertake urgent repairs on the dilapidated residential building, the defendant had already occupied the same, taking in paying boarders and claiming already ownership of the premises in question, thus they filed this case. Plaintiffs, being the neighbors of Celso Avelino, of their own knowledge are certain that the premises in question is indeed owned by their predecessor-in-interest because the male plaintiff used to play in the premises when he was still in his teens while the female plaintiff resided with the late Judge Avelino. Besides, their inquiries and documentary evidence shown to them by Celso Avelino confirm this fact. Likewise, the defendant and Intervenor did not reside in the premises in question because they reside respectively in Brgy. Tarobucan and Brgy. Trinidad (Sabang), both of Calbayog City with their own residential houses there. Due to the damages they sustained as a result of the filing of this case, the plaintiffs are claiming P50,000.00 for mental anguish; monthly rental of the premises in question of P1,500.00 starting from March 1987; litigation expenses of P5,000.00 and P10,000.00 for Attorney's fees.

 

 

ISSUE: Whether or not the property acquired is a trust property?

 

RULING:

 

NO. A trust is the legal relationship between one person having an equitable ownership in property and another person owning the legal title to such property, the equitable ownership of the former entitling him to the performance of certain duties and the exercise of certain powers by the latter. The characteristics of a trust are: It is a relationship; it is a relationship of fiduciary character; it is a relationship with respect to property, not one involving merely personal duties; it involves the existence of equitable duties imposed upon the holder of the title to the property to deal with it for the benefit of another; and it arises as a result of a manifestation of intention to create the relationship. Trusts are either express or implied. Express trusts are created by the intention of the trustor or of the parties, while implied trusts come into being by operation of law, either through implication of an intention to create a trust as a matter of law or through the imposition of the trust irrespective of, and even contrary to, any such intention. In turn, implied trusts are either resulting or constructive trusts. Resulting trusts are based on the equitable doctrine that valuable consideration and not legal title determines the equitable title or interest and are presumed always to have been contemplated by the parties. They arise from the nature or circumstances of the consideration involved in a transaction whereby one person thereby becomes invested with legal title but is obligated in equity to hold his legal title for the benefit of another. On the other hand, constructive trusts are created by the construction of equity in order to satisfy the demands of justice and prevent unjust enrichment. They arise contrary to intention against one who, by fraud, duress or abuse of confidence, obtains or holds the legal right to property which he ought not, in equity and good conscience, to hold.

G.R. No. 101847

G.R. No. 101847 May 27, 1993 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.

 

 

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:

1. Whether or not there was a partnership that existed between the parties.

2. Whether the properties that were commonly used in the operation of Allied Air Freight belonged to the alleged partnership business.

 

RULING:

 

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 valuating the assets and not arising from the real operation of the business. In accounting procedures, strictly, this could not be profit but a net worth.

G.R. No. 135813 October 25, 2001 FERNANDO SANTOS, petitioner, vs. SPOUSES ARSENIO and NIEVES REYES, respondents. FACTS: In June 1986, Fernando Santos (70%), Nieves Reyes (15%), and Melton Zabat (15%) orally instituted a partnership with them as partners. Their venture is to set up a lending business where it was agreed that Santos shall be financier and that Nieves and Zabat shall contribute their industry. **The percentages after their names denote their share in the profit. Later, Nieves introduced Cesar Gragera to Santos. Gragera was the chairman of a corporation. It was agreed that the partnership shall provide loans to the employees of Gragera’s corporation and Gragera shall earn commission from loan payments. In August 1986, the three partners put into writing their verbal agreement to form the partnership. As earlier agreed, Santos shall finance and Nieves shall do the daily cash flow more particularly from their dealings with Gragera, Zabat on the other hand shall be a loan investigator. But then later, Nieves and Santos found out that Zabat was engaged in another lending business which competes with their partnership hence Zabat was expelled. The two continued with the partnership and they took with them Nieves’ husband, Arsenio, who became their loan investigator. Later, Santos accused the spouses of not remitting Gragera’s commissions to the latter. He sued them for collection of sum of money. The spouses countered that Santos merely filed the complaint because he did not want the spouses to get their shares in the profits. Santos argued that the spouses, insofar as the dealing with Gragera is concerned, are merely his employees. Santos alleged that there is a distinct partnership between him and Gragera which is separate from the partnership formed between him, Zabat and Nieves. The trial court as well as the Court of Appeals ruled against Santos and ordered the latter to pay the shares of the spouses. ISSUE: Whether or not the spouses are partners. HELD: Yes. Though it is true that the original partnership between Zabat, Santos and Nieves was terminated when Zabat was expelled, the said partnership was however considered continued when Nieves and Santos continued engaging as usual in the lending business even getting Nieves’ husband, who resigned from the Asian Development Bank, to be their loan investigator – who, in effect, substituted Zabat. There is no separate partnership between Santos and Gragera. The latter being merely a commission agent of the partnership. This is even though the partnership was formalized shortly after Gragera met with Santos (Note that Nieves was even the one who introduced Gragera to Santos exactly for the purpose of setting up a lending agreement between the corporation and the partnership). HOWEVER, the order of the Court of Appeals directing Santos to give the spouses their shares in the profit is premature. The accounting made by the trial court is based on the “total income” of the partnership. Such total income calculated by the trial court did not consider the expenses sustained by the partnership. All expenses incurred by the money-lending enterprise of the parties must first be deducted from the “total income” in order to arrive at the “net profit” of the partnership. The share of each one of them should be based on this “net profit” and not from the “gross income” or “total income”.

.R. No. 109248 July 3, 1995 GREGORIO F. ORTEGA, TOMAS O. DEL CASTILLO, JR., and BENJAMIN T. BACORRO, petitioners, vs. HON. COURT OF APPEALS, SECURITIES AND EXCHANGE COMMISSION and JOAQUIN L. MISA, respondents. 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. WON the partnership of Bito, Misa & Lozada (now Bito, Lozada, Ortega & Castillo)is a partnership at will 2. WON the withdrawal of Misa dissolved the partnership regardlessof his good or bad faith HELD: 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

G.R. No. 172690 March 3, 2010 HEIRS OF JOSE LIM, represented by ELENITO LIM, Petitioners, vs. JULIET VILLA LIM, Respondent. 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. Elfledo’s 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? HELD: It is Elfledo Lim based on the evidence presented regardless of Jimmy Yu’s 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 Norberto’s 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. But at any rate, the Supreme Court noted that based on the functions performed by Elfledo, he is the actual partner. The following circumstances tend to prove that Elfledo was himself the partner of Jimmy and Norberto: 1.) Cresencia testified that Jose gave Elfledo P50,000.00, as share in the partnership, on a date that coincided with the payment of the initial capital in the partnership; 2.) Elfledo ran the affairs of the partnership, wielding absolute control, power and authority, without any intervention or opposition whatsoever from any of petitioners herein; 3.) all of the properties, particularly the nine trucks of the partnership, were registered in the name of Elfledo; 4.) Jimmy testified that Elfledo did not receive wages or salaries from the partnership, indicating that what he actually received were shares of the profits of the business; and 5.) none of the heirs of Jose, the alleged partner, demanded periodic accounting from Elfledo during his lifetime. As repeatedly stressed in the case of Heirs of Tan Eng Kee, a demand for periodic accounting is evidence of a partnership. Furthermore, petitioners failed to adduce any evidence to show that the real and personal properties acquired and registered in the names of Elfledo and Juliet formed part of the estate of Jose, having been derived from Jose’s alleged partnership with Jimmy and Norberto. Elfledo was not just a hired help but one of the partners in the trucking business, active and visible in the running of its affairs from day one until this ceased operations upon his demise. The extent of his control, administration and management of the partnership and its business, the fact that its properties were placed in his name, and that he was not paid salary or other compensation by the partners, are indicative of the fact that Elfledo was a partner and a controlling one at that. It is apparent that the other partners only contributed in the initial capital but had no say thereafter on how the business was ran. Evidently it was through Elfredo’s efforts and hard work that the partnership was able to acquire more trucks and otherwise prosper.