1. Evangelista v.

Abad Santos 51 SCRA 416

FACTS: A co-partnership was formed under the name Evangelista & Co. However, it was amended on to include Abad
Santos, as an industrial partner. Consequently, Abad Santos filed suit against three (3) capitalist partners, alleging that
the partnership, which was also made a party-defendant, had been paying dividends to the partners except to her. It was
further alleged that despite her requests that she be allowed to examine partnership books, to give her information
regarding the partnership affairs and to receive her share in the dividends declared by the partnership, the petitioners
refused and continued to refuse. She therefore prayed that the petitioners be ordered to render an accounting of the
partnership business and to pay her the corresponding share in the dividends.

ISSUE: WON the Articles of Co-partnership shall be considered as a conclusive evidence of respondents status as a
limited partner?

HELD: No. Despite the genuineness of the Articles of Co-partnership, it did not express the true intent and agreement of
the parties. Article 1789 provides that An industrial partner cannot engage in business for himself, unless the partnership
expressly permits him to do so; and if he should do so, the capitalist partners may either exclude him from the firm or
avail themselves of the benefits which he may have obtained in violation of this provision, with a right to damages in
either case. Abad Santos has served as a judge of the City Court of Manila and had been paid for services rendered
allegedly contributed by her to the partnership. Though being a judge of the City Court of Manila cannot be characterized
a business and/or may be considered an antagonistic business to the partnership, the petitioners, subsequent of
petitioners answer to the complaint, petitioners reached the decision that respondent be excluded from and deprived of
her alleged share in the interest or participation as an alleged industrial partner in the net profits or income of the
partnership. The act of exclusion is premised on the ground that respondent has always been a partner, an industrial
partner. In addition, the Court further held that with the consideration of Article 1767 that By 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 profits among themselves, the services rendered by respondent may legitimately be considered the
respondents contribution to the common fund.

2. Moran vs. CA 133 SCRA 98

Moran and Pecson entered into a partnership agreement where they agreed to contribute P15k each for the purpose of
printing 95k posters of the delegates to the then 1971 Constitutional Commission. Moran shall be in charge in managing
the printing of the posters. It was further agreed that Pecson will receive a commission of P1k a month starting from April
1971 to December 1971; that the partnership is to be liquidated on December 15, 1971.
Pecson partially fulfilled his obligation to the partnership when he issued P10k in favor of the partnership. He gave the
P10k to Moran as the managing partner. Moran however did not add anything and, instead, he only used P4k out of the
P10k in printing 2,000 posters. He only printed 2,000 posters because he felt that printing all 95k posters is a losing
venture because of the delay by the COMELEC in announcing the full delegates. All the posters were sold for a total of
P10k.
Pecson sued Moran. The trial court ordered Moran to pay Pecson damages. The Court of Appeals affirmed the decision of
the trial court but modified the same as it ordered Moran to pay P47.5k for unrealized profit; P8k for Pecsons monthly
commissions; P7k as return of investment because the venture never took off; plus interest.
ISSUE: WON Pecson is entitled to the P47.5k unrealized profit from their business venture with Moran.

HELD: No. The award of P47.5k for unrealized profit is speculative. There is no evidence whatsoever that the partnership
between the Moran and Pecson would have been a profitable venture due to the circumstances then i.e. the delay of the
COMELEC in proclaiming the candidates, profit is highly unlikely. In fact, it was a failure doomed from the start. There is
therefore no basis for the award of speculative damages in favor of Pecson. Further, there is mutual breach in this case,
Pecson only gave P10k instead of P15k while Moran gave nothing at all.
As for the P8k monthly commission, this is without basis. The agreement does not state the basis of the commission. The
payment of the commission could only have been predicated on relatively extravagant profits. The parties could not have
intended the giving of a commission inspite of loss or failure of the venture. Since the venture was a failure, Pecson is not
entitled to the P8k commission.
As for the P7k award as return for Pecsons investment, the CA erred in his ruling too. Though the venture failed, it did
took off the ground as evidenced by the 2,000 posters printed. Hence, return of investment is not proper in this case.
There are risks in any business venture and the failure of the undertaking cannot entirely be blamed on the managing
partner alone, specially if the latter exercised his best business judgment, which seems to be true in this case.
Moran must however return the unused P6k of Pecsons contribution to the partnership plus P3k representing Pecsons
profit share in the sale of the printed posters. Computation of P3k profit share is as follows: (P10k profit from the sale of
the 2,000 posters printed) (P4k expense in printing the 2k posters) = (P6k profit); Profit 2 = P3k each.

3. Commissioner of Internal Revenue vs. Willam J. Suter 27 SCRA 152

Facts: A limited partnership was formed Suter as the general partner and Spirig and Carlson, as the limited partners.
Suter and Spirig got married and, thereafter Carlson sold his share in the partnership to Suter and Spirig. The CIR
consolidated, in an assessment, the income of the firm and the individual incomes of the partner-spouses Suter and
Spirig resulting a deficiency of income tax against Suter. Suters protest was denied but reversed thereafter on appeal.
The CIR contended that the marriage of Suter and Spirig and their subsequent acquisition of the interest of Carlson in the
partnership dissolved the limited partnership.

Issue:
WON the partnership was dissolved after the marriage of Suter and Spirig and their subsequent acquisition of the interest
of Carlson in the partnership.

Held:
No. Jurisprudence provides that a husband and a wife may not enter into a contract of general co-partnership, because
persons prohibited from making donations to each other are prohibited from entering into universal partnerships. Thus,
it follows that the marriage of partners necessarily brings about the dissolution of a pre-existing partnership. The CIR has
failed to observe the fact that the partnership was not a universal partnership, but a particular one. Universal partnership
requires that all the present properties of the partners be contributed to a common fund. Thus, their partnership is not
within its meaning because they contributed a fixed sums of money. The CIRs view that by the marriage of both partners
the company became a single proprietorship, is equally erroneous. The capital contributions of partner Suter and Spirig
were separately owned and contributed by them before their marriage; and after they were joined in wedlock, such
contributions remained their respective separate property.

4. Involuntary insolvency of Campos Rueda & Co vs. Pacific Commercial Co. 18 SCRA 924

Facts: The limited partnership is indebted to the appellants in various sums amounting to not less than P1,000 which
were not paid more than thirty days prior to the date of the filing by the petitioners of the application for involuntary
insolvency. The trial court denied the petition because it was not proven, nor alleged, that the members of the aforesaid
firm were insolvent at the time the application was filed; and that was said partners are personally and solidarily liable for
the consequence of the transactions of the partnership, it cannot be adjudged insolvent so long as the partners are not
alleged and proven to be insolvent.

Issue: WON a limited partnership cannot be adjudged insolvent so long as the partners are not proven to be insolvent.
Held: No. The Philippine statutes consider a limited partnership as a juridical entity for all intents and purposes, which
personality is recognized in all its acts and contracts. Thus, the juridical personality of a limited partnership being
different from that of its members, it must, on general principle, answer for, and suffer, the consequence of its acts as
such an entity capable of being subject of rights and obligations. If the limited partnership of Campos Rueda & Co. failed
to pay its obligations with three creditors for a period of more than thirty days, which failure constitutes, under our
Insolvency Law, one of the acts of bankruptcy upon which an adjudication of involuntary insolvency can be predicated,
this partnership must suffer the consequence of such a failure, and must be adjudged insolvent.

5. Pascual and Dragon vs. The Commissioner of Internal Revenue 166 SCRA 560
Facts:
Petitioners bought 2 parcels of land and bought another 3 parcels of land in 1966. The 2 parcels of land were sold by
petitioners in 1968, while the 3 parcels of land were sold in 1970. Petitioners realized a net profit in both two sales. The
corresponding capital gains taxes were paid by petitioners in 1973 and in 1974 by availing of the tax amnesties granted in
the said years. However, the CIR required the petitioners to pay additional tax as alleged deficiency corporate income
taxes. The CIR alleged that petitioners as co-owners in the real estate transactions formed an unregistered partnership
taxable as a corporation and that their availment of tax amnesty did not relieve the from the tax liability of the
unregistered partnership.

Issue:
WON petitioners as co-owners in the real estate transactions formed an unregistered partnership.

Held:
No. When petitioners sold the parcels of land they bought in two different transactions, they did not make any
additional or new purchase. The transactions were isolated. The character of habituality peculiar to business transaction
for the purpose of gain was not present. A joint purchase of land does not constitute a co-partnership in respect thereto;
nor does an agreement to share the profits and losses on the sale of land create a partnership; the partners are only
tenants in common. The sharing of returns does not in itself establish a partnership whether or not the persons sharing
therein have a joint or common right or interest in the property. There must be a clear intent to form a partnership, the
existence of a juridical personality different from the individual partners, and the freedom of each party to transfer or
assign the whole property.

6. DELUAO v. CASTEEL 26 SCRA 475

FACTS:

Casteel unsuccessfully registered a fishpond in a big tract of swampy land in the then sitio of Malalag, municipality of
Padada, Davao for 3 consecutive times because the Bureau of Fisheries did not act upon his previous applications.
Despite the said rejection, Casteel did not lose interest. Because of the threat poised upon his position by the other
applicants who entered upon and spread themselves within the area, Casteel realized the urgent necessity of expanding
his occupation thereof by constructing dikes and cultivating marketable fishes. But lacking financial resources at that
time, he sought financial aid from his uncle Felipe Deluao. Moreover, upon learning that portions of the area applied for
by him were already occupied by rival applicants, Casteel immediately filed a protest. Consequently, two administrative
cases ensued involving the area in question. However, despite the finding made in the investigation of the above
administrative cases, the Director of Fisheries nevertheless rejected Casteel's application, required him to remove all the
improvements which he had introduced on the land, and ordered that the land be leased through public auction.

Inocencia Deluao (wife of Felipe Deluao) as party of the first part, and Nicanor Casteel as party of the second part,
executed a contract denominated a "contract of service". On the same date the above contract was entered into,
Inocencia Deluao executed a special power of attorney in favor of Jesus Donesa

The Director of Fisheries rejected the application filed by Felipe Deluao. Unfazed by this rejection, Deluao reiterated his
claim over the same area in the two administrative cases and asked for reinvestigation of the application of Nicanor
Casteel over the subject fishpond.
The Secretary of Agriculture and Natural Resources rendered a decision ordering Casteel to be reinstated in the area and
that he shall pay for the improvement made thereupon. Sometime in January 1951 Nicanor Casteel forbade Inocencia
Deluao from further administering the fishpond, and ejected the latter's representative (encargado), Jesus Donesa, from
the premises.

ISSUE: Whether the reinstatement of Casteel over the subject land constitute a dissolution of the partnership between
him and Deluao

HELD: Yes, the reinstatement of Casteel dissolved his partnership with Deluao. The Supreme Court ruled that the
arrangement under the so-called "contract of service" continued .This development, by itself, brought about the
dissolution of the partnership. Since the partnership had for its object the division into two equal parts of the fishpond
between the appellees and the appellant after it shall have been awarded to the latter, and therefore it envisaged the
unauthorized transfer of one half thereof to parties other than the applicant Casteel, it was dissolved by the approval of
his application and the award to him of the fishpond. The approval was an event which made it unlawful for the members
to carry it on in partnership. Moreover, subsequent events likewise reveal the intent of both parties to terminate the
partnership because each refused to share the fishpond with the other.

7. Agad vs Mabato 23 SCRA 1223

Facts: Agad claims that he and Mabato are partners in a fishpond business. As managing partner, Mabato yearly rendered the
accounts of the operations of the partnership. However, for the years 1957-1963, defendant failed to render the accounts
despite repeated demands. Mabato denied the existence of the partnership alleging that Agad failed to pay hisP1000 contribution. The lower
court dismissed the complaint finding a failure to state a cause of action predicated upon the theory that the contract
of partnership is null and void because an inventory of the fishpond referred in said instrument had not been attached thereto.

Issue: WON immovable property or real rights have been contributed to the partnership.

Held: A partnership was established to operate a fishpond", and not to "engage in a fishpond business. Thus, Mabatos
contention that it is really inconceivable how a partnership engaged in the fishpond business could exist without said
fishpond property (being) contributed to the partnership is without merit. Their contributions were limited to P1000 each and
neither a fishpond nor a real right thereto was contributed to the partnership. Therefore, Article 1773 of the Civil Code finds no application in the case
at bar.

8. Aurbach vs. Sanitary Wares 180 SCRA 130

Facts: American Standard Inc. was composed of foreign investors. The ASI Group and petitioner Salazar contend that
the actual intention of the parties should be viewed strictly on the Agreement wherein it is clearly stated that the parties'
intention was to form a corporation and not a joint venture. The parties had then disagreed on the terms and conditions
of the agreement as the business was prospering.

Issue: WON a joint venture or a corporation was established

Held: The main distinction cited by most opinions in common law jurisdictions is that the partnership contemplates a
general business with some degree of continuity, while the joint venture is formed for the execution of a single
transaction, and is thus of a temporary nature
.
9. Litonjua vs. Litonjua GR No. 166299-300, Dec. 13, 2005

Facts: Aurelio and Eduardo are brothers. 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.
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 non-existent. 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.

10. Marsman Drysdale Land Inc. vs. Philippine Geoanalytics, Inc.

G.R. No. 183374, G.R. No. 183374 June 29, 2010

FACTS
Marsman Drysdale Land, Inc. and Gotesco Properties, Inc entered into a Joint Venture for the construction and
development of an office building on a land owned by Marsman Drysdale in Makati City. The joint venture engaged the
services of Philippine Geoanalytics, Inc. to provide subsurface soil exploration, laboratory testing, seismic study and
geotechnical engineering for the project. PGI, was, however, able to drill only four of five boreholes needed to conduct its
subsurface soil exploration and laboratory testing, justifying its failure to drill the remaining borehole to the failure on the
part of the joint venture partners to clear the area where the drilling was to be made. PGI was able to complete its
seismic study though.

PGI then billed the joint venture for P284,553.50 representing the cost of partial subsurface soil exploration
and for P250,800 representing the cost of the completed seismic study. Despite repeated demands from PGI, the joint
venture failed to pay its obligations.

PGI subsequently filed a complaint for collection of sum of money and damages at the RTC of Quezon City
against Marsman Drysdale and Gotesco. In its Answer with Counterclaim and Cross-claim, Marsman Drysdale passed the
responsibility of paying PGI to Gotesco which, under the JVA, was solely liable for the monetary expenses of the project.

ISSUE
Which between joint venturers Marsman Drysdale and Gotesco bears the liability to pay PGI its unpaid claims

HELD:
The Court finds Marsman Drysdale and Gotesco jointly liable to PGI. PGI executed a technical service contract
with the joint venture and was never a party to the JVA. While the JVA clearly spelled out, inter alia, the capital
contributions of Marsman Drysdale (land) and Gotesco (cash) as well as the funding and financing mechanism for the
project, the same cannot be used to defeat the lawful claim of PGI against the two joint venturers-partners.
 A joint venture being a form of partnership, it is to be governed by the laws on partnership. Article 1797 of the
Civil Code provides that, The losses and profits shall be distributed in conformity with the agreement. If only the share of
each partner in the profits has been agreed upon, the share of each in the losses shall be in the same proportion.

In the JVA, Marsman Drysdale and Gotesco agreed on a 50-50 ratio on the proceeds of the project. They did not
provide for the splitting of losses, however, applying the above-quoted provision of Article 1797 then, the same ratio
applies in splitting the P535,353.50 obligation-loss of the joint venture.

Marsman Drysdale and Gotesco being jointly liable, there is no need for Gotesco to reimburse Marsman
Drysdale for 50% of the aggregate sum due to PGI. Allowing Marsman Drysdale to recover from Gotesco what it paid to
PGI would not only be contrary to the law on partnership on division of losses but would partake of a clear case of unjust
enrichment at Gotescos expense.

011. Realubit vs. Prosencio Jaso and Eden

G.R. No. 178782 September 21, 2011

FACTS
Petitioner Josefina Realubit entered into a Joint Venture Agreement with Francis Eric Amaury Biondo, a French
national, for the operation of an ice manufacturing business. With Josefina as the industrial partner and Biondo as the
capitalist partner, the parties agreed that they would each receive 40% of the net profit, with the remaining 20% to be
used for the payment of the ice making machine which was purchased for the business. For and in consideration of the
sum of P500,000.00, however, Biondo subsequently executed a Deed of Assignment transferring all his rights and
interests in the business in favor of respondent Eden Jaso, the wife of respondent Prosencio Jaso. With Biondos eventual
departure from the country, the Spouses Jaso caused their lawyer to send Josefina a letter apprising her of their
acquisition of said Frenchmans share in the business and formally demanding an accounting and inventory thereof as
well as the remittance of their portion of its profits.

Faulting Josefina with unjustified failure to heed their demand, the Spouses Jaso commenced the instant suit for
specific performance, accounting, examination, audit and inventory of assets and properties, dissolution of the joint
venture, appointment of a receiver and damages. The said complaint alleged that the Spouses Realubit had no gainful
occupation or business prior to their joint venture with Biondo and that aside from appropriating for themselves the
income of the business, they have fraudulently concealed the funds and assets thereof thru their relatives, associates or
dummies. The Spouses Realubit claimed that they have been engaged in the tube ice trading business under a single
proprietorship even before their dealings with Biondo.

ISSUES
1. Whether the joint venture is a contract of partnership
2. Whether Jaso acquired the title of being a partner based on the Deed of Assignment

HELD

1. Yes. Generally understood to mean an organization formed for some temporary purpose, a joint venture is likened to
a particular 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. The rule is settled that joint ventures are governed by the law on
partnerships which are, in turn, based on mutual agency or delectus personae.

2. No. It is evident that the 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 assignees 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. Since a partners interest in the partnership includes his share in the
profits, we find that the CA committed no reversible error in ruling that the Spouses Jaso are entitled to Biondos share in
the profits, despite Juanitas lack of consent to the assignment of said Frenchmans interest in the joint
venture. Although Eden did not, moreover, become a partner as a consequence of the assignment and/or acquire the
right to require an accounting of the partnership business, the CA correctly granted her prayer for dissolution of the joint
venture conformably with the right granted to the purchaser of a partners interest under Article 1831 of the Civil Code.