JGSummitHoldingsINC.vs.CourtofAppealsG.R.No.

124293January31,2005(Reportedby
JoahnaPaulaDomingo)Facts:TheNationalInvestmentandDevelopmentCorporation(NIDC),a
governmentcorporation,enteredintoaJointVentureAgreement(JVA)withKawasakiHeavy
Industries,Ltd.ofKobe,Japan(KAWASAKI)fortheconstruction,operationandmanagementofthe
SubicNationalShipyardInc.,(SNS)whichsubsequentlybecamethePhilippineShipyardand
EngineeringCorporation(PHILSECO).UndertheJVA,theNDCandKAWASAKIwillcontribute
P330MforthecapitalizationofPHILSECOintheproportionof60%40%respectively.Oneofits
salientfeaturesisthegranttothepartiesoftherightoffirstrefusalshouldeitherofthemdecideto
sell,assignortransferitsinterestinthejointventure.NIDCtransferredallitsrights,titleandinterest
inPHILSECOtothePhilippineNationalBank(PNB).Suchinterestsweresubsequentlytransferred
totheNationalGovernmentpursuanttoanAdministrativeOrder.WhentheformerPresidentAquino
issuedProclamationNo.50establishingtheCommitteeonPrivatization(COP)andtheAsset
PrivatizationTrust(APT)totaketitleto,andpossessionof,conserve,manageanddisposeof
nonperformingassetsoftheNationalGovernment,atrustagreementwasenteredintobetweenthe
NationalGovernmentandtheAPTwhereinthelatterwasnamedthetrusteeoftheNational
GovernmentsshareinPHILSECO.Intheinterestofthenationaleconomyandthegovernment,the
COPandtheAPTdeemeditbesttoselltheNationalGovernmentsshareinPHILSECOtoprivate
entities.AfteraseriesofnegotiationsbetweentheAPTandKAWASAKI,theyagreedthatthe
lattersrightoffirstrefusalundertheJVAbeexchangedfortherighttotopby5%,thehighestbid
forthesaidshares.TheyfurtheragreedthatKAWASAKIwoul.dbeentitledtonameacompanyin
whichitwasastockholder,whichcouldexercisetherighttotop.KAWASAKItheninformedAPTthat
PhilyardsHoldings,Inc.(PHI)wouldexerciseitsrighttotop.Atthepublicbidding,petitionerJ.G.
SummitHoldingsInc.submittedabidofTwoBillionandThirtyMillionPesos(Php2,030,000,000.00)
withanacknowledgementofKAWASAKI/PHILYARDSrighttotop.Aspetitionerwasdeclaredthe
highestbidder,theCOPapprovedthesalesubjecttotherightofKawasakiHeavyIndustries,Inc./
PHILYARDSHoldingsInc.totopJGsbidby5%asspecifiedinthebiddingrules.Ontheother
hand,therespondentbyvirtueofrighttotopby5%,thehighestbidforthesaidsharestimely
exercisedthesame.Petitioners,intheirmotionforreconsideration,raised,interalia,theissueonthe
maintenanceofthe60%40%relationshipbetweentheNIDCandKAWASAKIarisingfromthe
ConstitutionbecausePHILSECOisalandholdingcorporationandneednotbeapublicutilitytobe
boundbythe60%40%constitutionallimitation.

ISSUE:Whetherornottherespondentisprohibitedtopossessthedisputedpropertyconsidering
theprohibitionstipulatedinthe1987Constitutionagainstforeignownedcompanies.

RULING:ThecourtupheldthevalidityofthemutualrightsoffirstrefusalundertheJVAbetween
KAWASAKIandNIDC.TherightoffirstrefusalisapropertyrightofPHILSECOshareholders,
KAWASAKIandNIDC,underthetermsoftheirJVA.Thisrightallowsthemtopurchasethesharesof
theircoshareholderbeforetheyareofferedtoathirdparty.Theagreementofcoshareholdersto
mutuallygrantthisrighttoeachother,byitself,doesnotconstituteaviolationoftheprovisionsofthe
ConstitutionlimitinglandownershiptoFilipinosandFilipinocorporations.AsPHILYARDScorrectly
putsit,ifPHILSECOstillownstheland,therightoffirstrefusalcanbevalidlyassignedtoaqualified
Filipinoentityinordertomaintainthe60%40%ration.Thistransferbyitself,doesnotamounttoa
violationoftheAntiDummyLaws,absentproofofanyfraudulentintent.Thetransfercouldbemade
eithertoanomineeorsuchotherpartywhichtheholderoftherightoffirstrefusalfeelsitcan

comfortablydobusinesswith.Alternatively,PHILSECOmaydivestofitslandholdings,inwhichcase
KAWASAKI,inexercisingitsrightoffirstrefusal,canexceed40%ofPHILSECOsequity.Infact,in
canevenbesaidthatiftheforeignshareholdingsofalandholdingcorporationexeeds40%,itisnot
theforeignstockholdersownershipoftheshareswhichisadverselyaffectedbutthecapacityofthe
corporationtowonlandthatis,thecorporationbecomesdisqualifiedtoownland.Thisfinds
supportunderthebasiccorporatelawprinciplethatthecorporationanditsstockholdersare
separatejudicialentities.Inthisvein,therightoffirstrefusaloversharespertainstothe
shareholderswhereasthecapacitytoownlandpertainstothecorporation.Hence,thefactthat
PHILSECOownslandcannotdeprivestockholdersoftheirrightoffirstrefusal.Nolawdisqualifiesa
personfrompurchasingsharesinalandholdingcorporationevenifthelatterwillexceedtheallowed
foreignequity,whatthelawdisqualifiesisthecorporationfromowningland.

TocaoandBelovsCourtofAppealsandAnay

BusinessOrganizationPartnership,Agency,TrustDissolutionofthePartnership
William Belo introduced Nenita Anay to his girlfriend, Marjorie Tocao. The three agreed to
form ajointventureforthesaleofcookingwares.BelowastocontributeP2.5millionTocao
also contributed some cash and she shall also act as president and general manager and
Anay shall be in charge of marketing. Belo and Tocao specifically asked Anay because of
her experience and connections as a marketer. They agreedfurtherthatAnayshallreceive
thefollowing:
1. 10%shareofannualnetprofits
2. 6%overridingcommissionforweeklysales
3. 30%ofsalesAnaywillmakeherself
4. 2%shareforherdemoservices
They operated under the name Geminesse Enterprise, this name was however registered
as a sole proprietorship with the Bureau of Domestic Trade under Tocao. The jointventure
agreementwasnotreducedtowritingbecauseAnaytrustedBelosassurances.
TheventuresucceededunderAnaysmarketingprowess.
But then the relationship between Anay and Tocao soured. One day, Tocao advisedoneof
the branch managers that Anay wasnolongerapartofthecompany.Anaythendemanded
thatthecompanybeauditedandhersharesbegiventoher.
ISSUE:W
hetherornotthereisapartnership.

HELD: Yes, even though it was not reduced towriting,forapartnershipcanbeinstitutedin

any form. The fact that it was registered as a sole proprietorship is of no moment for such
registrationwasonlyforthecompanystradename.
Anay was not even an employee because when they ventured into the agreement, they
explicitly agreed to profit sharing this is even though Anay was receiving commissions
becausethisisonlyincidentaltohereffortsasaheadmarketer.
The Supreme Court alsonotedthatapartnerwhoisexcludedwrongfullyfromapartnership
is an innocent partner. Hence, the guilty partner must givehimhisdueuponthedissolution
ofthepartnershipaswellasdamagesorshareintheprofitsrealizedfromtheappropriation
of the partnership business and goodwill. An innocent partner thus possesses pecuniary
interest in every existing contract that was incomplete and in the trade name of the
copartnershipandassetsatthetimehewaswrongfullyexpelled.
An unjustified dissolution by a partner can subject him to action for damages because by
the mutual agency that arises in a partnership, the doctrine ofdelectuspersonaeallowsthe
partnerstohavethep
ower,a
lthoughnotnecessarilyther ighttodissolvethepartnership.
Tocaos unilateral exclusion of Anay from the partnership is shown by her memo to the
Cubao office plainly stating that Anay was, as of October 9, 1987, no longer the
vicepresident for sales of Geminesse Enterprise. By that memo, petitioner Tocao effected
her own withdrawal from the partnership and considered herself as having ceased to be
associated with the partnership in the carrying on of the business. Nevertheless, the
partnershipwasnotterminatedtherebyitcontinuesuntilthewindingupofthebusiness.

Readfulltexthere.

NOTE: Motion for Reconsideration filed by Tocao and Belo decided by the SC on
September20,2001.
Belo is not a partner. Anay was not able to prove that Belo in fact receivedprofitsfromthe
company. Belo merely acted as a guarantor. Hisparticipationinthebusinessmeetingswas
not as a partner but as a guarantor. He in fact had only limited partnership. Tocao also

testified that Belo received nothing from the profits. The SupremeCourtalsonotedthatthe
partnership was yet to be registered in the Securities andExchangeCommission.Assuch,
it was understandable that Belo, who was after all petitioner Tocaos good friend and
confidante, would occasionally participate in the affairs of thebusiness,althoughneverina
formalorofficialcapacity.

TOCAOV.CA
G.R.No.127405October4,2000
Ponente:J.YnaresSantiago

FACTS:

Private respondent Nenita A. Anay met petitioner William T. Belo, then the
vicepresident for operations of Ultra Clean Water Purifier,throughherformeremployer
in Bangkok. Belo introduced Anay to petitioner Marjorie Tocao, who conveyed her
desire to enter into a joint venture with her for the importation and local distribution of
kitchencookwares

Under the joint venture, Belo acted as capitalist, Tocao as president and general
manager, and Anay as head of the marketing department and later, vicepresident for
sales

ThepartiesagreedthatBelo'snameshouldnotappearinanydocumentsrelatingto
theirtransactionswithWestBendCompany.Anayhavingsecuredthedistributorshipof
cookwareproductsfromtheWestBendCompanyandorganizedtheadministrativestaff
andthesalesforce,thecookwarebusinesstookoffsuccessfully.Theyoperatedunder
thenameofGeminesseEnterprise,asoleproprietorshipregisteredinMarjorieTocao's
name.

ThepartiesagreedfurtherthatAnaywouldbeentitledto:
(1)tenpercent(10%)oftheannualnetprofitsofthebusiness
(2)overridingcommissionofsixpercent(6%)oftheoverallweeklyproduction
(3)thirtypercent(30%)ofthesalesshewouldmakeand

(4)twopercent(2%)forherdemonstrationservices.Theagreementwasnotreducedto
writingonthestrengthofBelo'sassurancesthathewassincere,dependableand
honestwhenitcametofinancialcommitments.

On October 9, 1987, Anay learned that Marjorie Tocao had signed aletteraddressedto
the Cubao sales office to the effect that she was no longer the vicepresident of
GeminesseEnterprise.

Anay attempted to contact Belo. She wrote him twice to demand her overriding
commission for the period of January 8, 1988 to February 5, 1988 and the audit of the
companytodeterminehershareinthenetprofits.

Anaystillreceivedherfivepercent(5%)overridingcommissionuptoDecember1987.
Thefollowingyear,1988,shedidnotreceivethesamecommissionalthoughthe
companynettedagrosssalesofP13,300,360.00.

On April 5, 1988, Nenita A. Anay filed Civil Case No. 88509, a complaint for sum of
money with damages against Marjorie D. Tocao and William Belo before the Regional
TrialCourtofMakati,Branch140

Thetrialcourtheldthattherewasindeedan"oralpartnershipagreementbetweenthe
plaintiffandthedefendants.TheCourtofAppealsaffirmedthelowercourtsdecision.

ISSUE:

Whetherthepartiesformedapartnership

HELD:

Yes,thepartiesinvolvedinthiscaseformedapartnership

TheSupremeCourtheldthattobeconsideredajuridicalpersonality,apartnershipmust
fulfilltheserequisites:

(1)twoormorepersonsbindthemselvestocontributemoney,propertyorindustrytoa
commonfundand


(2)intentiononthepartofthepartnerstodividetheprofitsamongthemselves.Itmay
beconstitutedinanyformapublicinstrumentisnecessaryonlywhereimmovable
propertyorrealrightsarecontributedthereto.

Thisimpliesthatsinceacontractofpartnershipisconsensual,anoralcontractof
partnershipisasgoodasawrittenone.

In the case at hand, Belo acted as capitalist while Tocao as president and general
manager, and Anay as head of the marketing department and later, vicepresident for
sales.Furthermore,Anaywasentitledtoapercentageofthenetprofitsofthebusiness.

Therefore,thepartiesformedapartnership.