SARDANE VS.

COURT OF APPEALS
FACTS:
Petitioner Sardane is the owner of a Sardane Trucking Services. One day Sardane borrowed money from the other guy by making
promises and issuing several promissory notes. On the due date the other guy wanted his money back but instead of paying Sardane
apologized for his failure to pay on time, and he promised the other guy that he would pay him next time. After so many failed
attempts to collect his money the other guy got mad and finally decided to seek the intervention of the court. Now after so many
failed attempts to collect the promised payment, the other guy, Mr.Acojedo (Private Respondent), with so much hate on his heart,
finally filed a collection case against Sardane. Even during the scheduled date of the trial, Sardane, as usual he did not show up. On
motion by the petitioner(herein private respondent), the Court issued an order declaring the Sardane in default and eventually after
presentation of evidence ex parte, the court rendered judgment by default in favor of the petitioner. Sardane then appealed to the CFI,
and he claimed that the promissory notes were his contribution to the partnership; and that there is no contract of loan; thus he is not
indebted to the other guy. The CFI, believing the arguments of Sardane, ruled on his favor thereby reversing the decision of the lower
court by dismissing the complaint and ordered the plaintiff-appellee Acojedo to pay said defendant-appellant P500.00 for moral
damages
ISSUE:
whether or not a partnership existed?
HELD:
NONE .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, denied the claim of the plaintiff therein that he was a partner in the
business of the defendant. The same rule was reiterated in Bastida vs. Menzi & Co., Inc., et al. which involved the same factual and
legal milieu.

Business Organization Partnership, Agency, Trust Partner Periodic Accounting Profit Sharing
In 1980, the heirs of Jose Lim alleged that Jose Lim entered into a partnership agreement with
Jimmy Yu and Norberto Uy. The three contributed P50,000.00 each and used the funds to
purchase a truck to start their trucking business. A year later however, Jose Lim died. The eldest
son of Jose Lim, Elfledo Lim, took over the trucking business and under his management, the
trucking business prospered. Elfledo was able to but real properties in his name. From one truck,
he increased it to 9 trucks, all trucks were in his name however. He also acquired other motor
vehicles in his name.
In 1993, Norberto Uy was killed. In 1995, Elfledo Lim died of a heart attack. Elfledos wife, Juliet
Lim, took over the properties but she intimated to Jimmy and the heirs of Norberto that she could
not go on with the business. So the properties in the partnership were divided among them.
Now the other heirs of Jose Lim, represented by Elenito Lim, required Juliet to do an accounting of
all income, profits, and properties from the estate of Elfledo Lim as they claimed that they are
co-owners thereof. Juliet refused hence they sued her.
The heirs of Jose Lim argued that Elfledo Lim acquired his properties from the partnership that
Jose Lim formed with Norberto and Jimmy. In court, Jimmy Yu testified that Jose Lim was the
partner and not Elfledo Lim. The heirs testified that Elfledo was merely the driver of Jose Lim.
ISSUE: Who is the partner between Jose Lim and Elfledo Lim?
HELD: It is Elfledo Lim based on the evidence presented regardless of Jimmy Yus testimony in
court that Jose Lim was the partner. If Jose Lim was the partner, then the partnership would have
been dissolved upon his death (in fact, though the SC did not say so, I believe it should have
been dissolved upon Norbertos death in 1993). A partnership is dissolved upon the death of the
partner. Further, no evidence was presented as to the articles of partnership or contract of
partnership between Jose, Norberto and Jimmy. Unfortunately, there is none in this case, because
the alleged partnership was never formally organized.
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 Joses 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 Elfredos efforts
and hard work that the partnership was able to acquire more trucks and otherwise prosper. Even
the appellant participated in the affairs of the partnership by acting as the bookkeeper sans
salary.