Yu v. NLRC GR No. 97212, June 30, 1993 Facts

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.
Issue: WON the partnership which had hired Yu as Asst. Gen. Manager had been
extinguished and replaced by a new partnership composed of Co and Zapanta; if indeed a
new partnership had come into existence, WON Yu could nonetheless assert his rights under
his employment contract with the old partnership as against the new partnership
Ruling :
Yes. 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.
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
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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.
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Gregorio Ortega, Tomas del Castillo, Jr. and Benjamin Bacorro v. CA, SEC and
Joaquin Misa
Facts:
Ortega, then a senior partner in the law firm Bito, Misa, and Lozada withdrew in said firm.
He filed with SEC a petition for dissolution and liquidation of partnership.
SEC en banc ruled that withdrawal of Misa from the firm had dissolved the partnership.
Reason: 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 regardless
of 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
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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
MARJORIE TOCAO and WILLIAM T. BELO, petitioners,

vs.
COURT OF APPEALS and NENITA A. ANAY, respondent.
FACTS
William Belo introduced Nenita Anay to his girlfriend, Marjorie Tocao. The three agreed to form a joint
venture for the sale of cooking wares. Belo was to contribute P2.5 million; Tocao 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 agreed further
that Anay shall receive the following:
1. 10% share of annual net profits

2. 6% overriding commission for weekly sales
3. 30% of sales Anay will make herself
4. 2% share for her demo services
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 joint venture agreement was not reduced
to writing because Anay trusted Belo’s assurances.
The venture succeeded under Anay’s marketing prowess.
But then the relationship between Anay and Tocao soured. One day, Tocao advised one of the branch
managers that Anay was no longer a part of the company. Anay then demanded that the company be audited
and her shares be given to her.
ISSUE
Whether the parties formed a partnership
HELD
Yes, the parties involved in this case formed a partnership. The Supreme Court held that to be considered a
juridical personality,
a partnership must fulfill these requisites:
(1) two or more persons bind themselves to contribute money, property or industry to a common fund; and
(2) intention on the part of the partners to divide the profits among themselves. It may be constituted in any
form; a public instrument is necessary only where immovable property or real rights are contributed thereto.
This implies that since a contract of partnership is consensual, an oral contract of partnership is as good as a
written one.
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, vice-president for sales. Furthermore, Anay was entitled to a
percentage of the net profits of the
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business. Therefore, the parties formed a partnership.
Kilosbayan Inc vs Teofisto Guingona, Jr.
232 SCRA 110

In 1993, the Philippine Charity Sweepstakes Office decided to put up an on-line lottery system which will
establish a national network system that will in turn expand PCSO’s source of income.
A bidding was made. Philippine Gaming Management Corporation (PGMC) won it. A contract of lease was
awarded in favor of PGMC.
Kilosbayan opposed the said agreement between PCSO and PGMC as it alleged that:
1. PGMC does not meet the nationality requirement because it is 75% foreign owned (owned by a Malaysian firm
Berjaya Group Berhad);
2. PCSO, under Section 1 of its charter (RA 1169), is prohibited from holding and conducting lotteries “in
collaboration, association or joint venture with any person, association, company or entity”;
3. The network system sought to be built by PGMC for PCSO is a telecommunications network. Under the law
(Act No. 3846), a franchise is needed to be granted by the Congress before any person may be allowed to set
up such;
4. PGMC’s articles of incorporation, as well as the Foreign Investments Act (R.A. No. 7042) does not allow it to
install, establish and operate the on-line lotto and telecommunications systems.
PGMC and PCSO, through Teofisto Guingona, Jr. and Renato Corona, Executive Secretary and Asst. Executive
Secretary respectively, alleged that PGMC is not a collaborator but merely a contractor for a piece of work,
i.e., the building of the network; that PGMC is a mere lessor of the network it will build as evidenced by the
nature of the contract agreed upon, i.e., Contract of Lease.
ISSUE: Whether or not Kilosbayan is correct.
HELD: Yes, but only on issues 2, 3, and 4.
1. On the issue of nationality, it seems that PGMC’s foreign ownership was reduced to 40%.
2. On issues 2, 3, and 4, Section 1 of R.A. No. 1169, as amended by B.P. Blg. 42, prohibits the PCSO from holding
and conducting lotteries “in collaboration, association or joint venture with any person, association, company
or entity, whether domestic or foreign.” There is undoubtedly a collaboration between PCSO and PGMC and
not merely a contract of lease. The relations between PCSO and PGMC cannot be defined simply by the
designation they used, i.e., a contract of lease. Pursuant to the wordings of their agreement, PGMC at its own
expense shall build, operate, and manage the network system including its facilities needed to operate a
nationwide online lottery system. PCSO bears no risk and all it does is to provide its franchise – in violation of
its charter. Necessarily, the use of such franchise by PGMC is a violation of Act No. 3846.
Antonia Torres vs Court of Appeals
5
In 1969, sisters Antonia Torres and Emeteria Baring entered into a joint venture agreement with Manuel
Torres. Under the agreement, the sisters agreed to execute a deed of sale in favor Manuel over a parcel of
land, the sisters received no cash payment from Manuel but the promise of profits (60% for the sisters and
40% for Manuel) – said parcel of land is to be developed as a subdivision.
Manuel then had the title of the land transferred in his name and he subsequently mortgaged the property.
He used the proceeds from the mortgage to start building roads, curbs and gutters. Manuel also contracted an
engineering firm for the building of housing units. But due to adverse claims in the land, prospective buyers
were scared off and the subdivision project eventually failed.
The sisters then filed a civil case against Manuel for damages equivalent to 60% of the value of the property,
which according to the sisters, is what’s due them as per the contract.
ISSUE: Whether or not there exists a partnership.
HELD: Yes. The joint venture agreement the sisters entered into with Manuel is a partnership agreement
whereby they agreed to contribute property (their land) which was to be developed as a subdivision. While on
the other hand, though Manuel did not contribute capital, he is an industrial partner for his contribution for
general expenses and other costs. Furthermore, the income from the said project would be divided according
to the stipulated percentage (60-40). Clearly, the contract manifested the intention of the parties to form a
partnership. Further still, the sisters cannot invoke their right to the 60% value of the property and at the
same time deny the same contract which entitles them to it.
At any rate, the failure of the partnership cannot be blamed on the sisters, nor can it be blamed to Manuel
(the sisters on their appeal did not show evidence as to Manuel’s fault in the failure of the partnership). The
sisters must then bear their loss (which is 60%). Manuel does not bear the loss of the other 40% because as an
industrial partner he is exempt from losses.
JARANTILLA, JR. vs. JARANTILLA

636 SCRA 299, G.R. No. 154486, December 1, 2010
FACTS: The present case stems from the complaintfiled by Antonieta Jarantilla against Buenaventura
Remotigue, Cynthia Remotigue, Federico Jarantilla, Jr., Doroteo Jarantilla and Tomas Jarantilla, for the
accounting of the assets and income of the co-ownership, for its partition and the delivery of her share
corresponding to eight percent (8%), and for damages. Antonieta claimed that in 1946, she had entered into
an agreement with the defendants to engage in business through the execution of a document denominated
as "Acknowledgement of Participating Capital”. Antonieta also alleged that she had helped in the
management of the business they co-owned without receiving any salary. Antonieta further claimed co-
ownership of certain properties (the subject real properties) in the name of the defendants since the only way
the defendants could have purchased these properties were through the partnership as they had no other
source of income. The respondents did not deny the existence and validity of the "Acknowledgement of
Participating Capital" and in fact used this as evidence to support their claim that Antonieta’s 8% share was
limited to the businesses enumerated therein. The respondents denied using the partnership’s income to
purchase the subject real properties.
During the course of the trial at the RTC, petitioner Federico Jarantilla, Jr., who was one of the original
defendants, entered into a compromise agreement17 with Antonieta Jarantilla wherein he supported
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Antonieta’s claims and asserted that he too was entitled to six percent (6%) of the supposed partnership in the
same manner as Antonieta was.
ISSUE: Whether or not the partnership subject of the Acknowledgement of Participating Capital funded the
subject real properties.
HELD: Under Article 1767 of the Civil Code, there are two essential elements in a contract of partnership: (a)
an agreement to contribute money, property or industry to a common fund; and (b) intent to divide the profits
among the contracting parties. The first element is undoubtedly present in the case at bar, for, admittedly, all
the parties in this case have agreed to, and did, contribute money and property to a common fund. Hence, the
issue narrows down to their intent in acting as they did. It is not denied that all the parties in this case have
agreed to contribute capital to a common fund to be able to later on share its profits. They have admitted this
fact, agreed to its veracity, and even submitted one common documentary evidence to prove such partnership
- the Acknowledgement of Participating Capital. The petitioner himself claims his share to be 6%, as stated in
the Acknowledgement of Participating Capital. However, petitioner fails to realize that this document
specifically enumerated the businesses covered by the partnership: Manila Athletic Supply, Remotigue Trading
in Iloilo City and Remotigue Trading in Cotabato City. Since there was a clear agreement that the capital the
partners contributed went to the three businesses, then there is no reason to deviate from such agreement
and go beyond the stipulations in the document. There is no evidence that the subject real properties were
assets of the partnership referred to in the Acknowledgement of Participating Capital. Petition denied.
Pioneer Insurance & Surety Corporation vs Court of Appeals

175 SCRA 668
Facts:
Jacob Lim was the owner of Southern Air Lines, a single proprietorship. In 1965, Lim convinced Constancio
Maglana, Modesto Cervantes, Francisco Cervantes, and Border Machinery and Heavy Equipment Company
(BORMAHECO) to contribute funds and to buy two aircrafts which would form part a corporation which will be
the expansion of Southern Air Lines. Maglana et al then contributed and delivered money to Lim. But instead
of using the money given to him to pay in full the aircrafts, Lim, without the knowledge of Maglana et al, made
an agreement with Pioneer Insurance for the latter to insure the two aircrafts which were brought in
installment from Japan Domestic Airlines (JDA) using said aircrafts as security. So when Lim defaulted from
paying JDA, the two aircrafts were foreclosed by Pioneer Insurance.
It was established that no corporation was formally formed between Lim and Maglana et al.
ISSUE: Whether or not Maglana et al must share in the loss as general partners.
HELD: No. There was no de facto partnership. Ordinarily, when co-investors agreed to do business through a
corporation but failed to incorporate, a de facto partnership would have been formed, and as such, all must
share in the losses and/or gains of the venture in proportion to their contribution. But in this case, it was
shown that Lim did not have the intent to form a corporation with Maglana et al. This can be inferred from
acts of unilaterally taking out a surety from Pioneer Insurance and not using the funds he got from Maglana et
al. The record shows that Lim was acting on his own and not in behalf of his other would-be incorporators in
transacting the sale of the airplanes and spare parts.
LIM TONG LIM, petitioner,

vs.
PHILIPPINE FISHING GEAR INDUSTRIES, INC., respondent.
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FACTS
Antonio Chua and Peter Yao entered into a contract in behalf of Ocean Quest Fishing Corporation for the
purchase of fishing nets from respondent Philippine Fishing Gear Industries, Inc. Chua and Yao claimed that
they were engaged in business venture with petitioner Lim Tong Lim, who, however, was not a signatory to
the contract. The buyers failed to pay the fishing nets. Respondent filed a collection against Chua, Yao and
petitioner Lim in their capacities as general partners because it turned out that Ocean Quest Fishing
Corporation is a non-existent corporation. The trial court issued a Writ of Preliminary Attachment, which the
sheriff enforced by attaching the fishing nets. The trial court rendered its decision ruling that respondent was
entitled to the Writ of Attachment and that Chua, Yao and Lim, as general partners, were jointly liable to pay
respondent. Lim appealed to the Court of Appeals, but the appellate court affirmed the decision of the trial
court that petitioner Lim is a partner and may thus be held liable as such. Hence, the present
petition. Petitioner claimed that since his name did not appear on any of the contracts and since he never
directly transacted with the respondent corporation, ergo, he cannot be held liable.
ISSUE
WON petitioner can be held liable as a general partner.
HELD
The Supreme Court denied the petition. The Court ruled that having reaped the benefits of the contract
entered into by Chua
and Yao, with whom he had an existing relationship, petitioner Lim is deemed a part of said association and is
covered by the doctrine
of corporation by estoppel. The Court also ruled that under the principle of estoppel, those acting on behalf of
a corporation and those
benefited by it, knowing it to be without valid existence, are held liable as general partners.
CASE I: REPUBLIC v. SUN LIFE

FACTS:
Sun Life Assurance Company of Canada (Sun Life) is a mutual life insurance company organized and existing
under the laws of Canada
Sun Life is registered and authorized by the Securities and Exchange Commission (SEC) and the Insurance
Commission (IC) to engaged in business in the Philippines as a mutual life insurance company
Sun Life filed with the Commissioner of Internal Revenue (CIR) its insurance premium tax return for the third
quarter of 1997, and paid the necessary premium taxes
Sun Life also filed with the CIR its documentary stamp tax (DST) declaration returns and paid the total
amount therefor
the Court of Tax Appeals (CTA) held in one case that mutual life insurance companies are purely cooperative
companies and are exempt from payment of premium tax and DST
Sun Life filed with the CIR an administrative claim for tax credit of its alleged erroneously paid premium tax
and DST
CIR failed to act upon the claim for tax credit
Sun Life filed with the CTA a petition for review, praying for the issuance of a tax credit certificate,
contending that it is a mutual life insurance company vested with all the characteristic features and elements
of a cooperative company/association (see Sec. 121, NIRC): (1) management and affairs, conducted by
members; (2) operated with money collected from members; (3) purpose = mutual protection of members,
and not profit or gain
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ISSUE: Was Sun Life a purely cooperative company/association under Sec. 121, NIRC, organized and conducted
solely by the members thereof for the exclusive benefit of each member and not for profit, and thus exempt
from having to pay premium tax and DST?
RULING: YES
NIRC's definition of a "cooperative": association conducted by the members thereof with the money
collected from among themselves and solely for their own protection and not for profit
SC: Sun Life is a cooperative engaged in a mutual life insurance business -- (1) it is managed by its members,
its management and affairs are conducted by member-policyholders; (2) it is operated with money collected
from its members[-policyholders]; and (3) it is licensed for the mutual protection of its members, not for the
profit of anyone
it does not follow that because respondent is registered as a non-stock corporation and thus exists for a
purpose other than profit, the company can no longer make any profits
earning profits is merely its secondary, not primary, purpose
it may, however, invest its corporate funds in order to earn additional income for paying its operating
expenses and meeting benefit claims
under the Tax Code, although respondent is a cooperative, registration with the Cooperative Development
Authority (CDA) is not necessary in order for it to be exempt from premium tax and DST
Joaquin Misa
Facts:
JARANTILLA, JR. vs. JARANTILLA

636 SCRA 299, G.R. No. 154486, December 1, 2010
9
FACTS: The present case stems from the complaintfiled by Antonieta Jarantilla against Buenaventura
Remotigue, Cynthia Remotigue, Federico Jarantilla, Jr., Doroteo Jarantilla and Tomas Jarantilla, for the
accounting of the assets and income of the co-ownership, for its partition and the delivery of her share
corresponding to eight percent (8%), and for damages. Antonieta claimed that in 1946, she had entered into
an agreement with the defendants to engage in business through the execution of a document denominated
as "Acknowledgement of Participating Capital”. Antonieta also alleged that she had helped in the
management of the business they co-owned without receiving any salary. Antonieta further claimed co-
ownership of certain properties (the subject real properties) in the name of the defendants since the only way
the defendants could have purchased these properties were through the partnership as they had no other
source of income. The respondents did not deny the existence and validity of the "Acknowledgement of
Participating Capital" and in fact used this as evidence to support their claim that Antonieta’s 8% share was
limited to the businesses enumerated therein. The respondents denied using the partnership’s income to
purchase the subject real properties.
During the course of the trial at the RTC, petitioner Federico Jarantilla, Jr., who was one of the original
defendants, entered into a compromise agreement17 with Antonieta Jarantilla wherein he supported
Antonieta’s claims and asserted that he too was entitled to six percent (6%) of the supposed partnership in the
same manner as Antonieta was.
ISSUE: Whether or not the partnership subject of the Acknowledgement of Participating Capital funded the
subject real properties.
HELD: Under Article 1767 of the Civil Code, there are two essential elements in a contract of partnership: (a)
an agreement to contribute money, property or industry to a common fund; and (b) intent to divide the profits
among the contracting parties. The first element is undoubtedly present in the case at bar, for, admittedly, all
the parties in this case have agreed to, and did, contribute money and property to a common fund. Hence, the
issue narrows down to their intent in acting as they did. It is not denied that all the parties in this case have
agreed to contribute capital to a common fund to be able to later on share its profits. They have admitted this
fact, agreed to its veracity, and even submitted one common documentary evidence to prove such partnership
- the Acknowledgement of Participating Capital. The petitioner himself claims his share to be 6%, as stated in
the Acknowledgement of Participating Capital. However, petitioner fails to realize that this document
specifically enumerated the businesses covered by the partnership: Manila Athletic Supply, Remotigue Trading
in Iloilo City and Remotigue Trading in Cotabato City. Since there was a clear agreement that the capital the
partners contributed went to the three businesses, then there is no reason to deviate from such agreement
and go beyond the stipulations in the document. There is no evidence that the subject real properties were
assets of the partnership referred to in the Acknowledgement of Participating Capital. Petition denied.
Fernando Santos vs Spouses Reyes
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.
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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”.
MARJORIE TOCAO and WILLIAM T. BELO, petitioners,

vs.
COURT OF APPEALS and NENITA A. ANAY, respondent.
FACTS
William Belo introduced Nenita Anay to his girlfriend, Marjorie Tocao. The three agreed to form a joint
venture for the sale of cooking wares. Belo was to contribute P2.5 million; Tocao 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 agreed further
that Anay shall receive the following:
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5. 10% share of annual net profits
6. 6% overriding commission for weekly sales
7. 30% of sales Anay will make herself
8. 2% share for her demo services
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 joint venture agreement was not reduced
to writing because Anay trusted Belo’s assurances.
The venture succeeded under Anay’s marketing prowess.
But then the relationship between Anay and Tocao soured. One day, Tocao advised one of the branch
managers that Anay was no longer a part of the company. Anay then demanded that the company be audited
and her shares be given to her.
ISSUE
Whether the parties formed a partnership
HELD
Yes, the parties involved in this case formed a partnership. The Supreme Court held that to be considered a
juridical personality,
a partnership must fulfill these requisites:
(1) two or more persons bind themselves to contribute money, property or industry to a common fund; and
(2) intention on the part of the partners to divide the profits among themselves. It may be constituted in any
form; a public instrument is necessary only where immovable property or real rights are contributed thereto.
This implies that since a contract of partnership is consensual, an oral contract of partnership is as good as a
written one.
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, vice-president for sales. Furthermore, Anay was entitled to a
percentage of the net profits of the
business. Therefore, the parties formed a partnership.
Heirs of Tan Eng Kee v. CA & Benguet Lumber Co. & Tan Eng Lay
Facts:
After Tan Eng Kee’s Death, his common-law wife Matilde Abuho and their children filed an action against his
brother, Tan Eng Lay for accounting, liquidation and winding up of the alleged partnership Tan Eng Kee had
with Tan Eng Lay.
The heirs claim that the two brothers were partners in Benguet Lumber Co. and had been partners since the
company was operating after the end of World War 2. Tan Eng Lay, the president of the company claims that
Tan Eng Kee was only an employee and presented documents showing that Tan Eng Kee was receiving salary
from the company payroll.
Issue:
Whether the two brothers were partners in Benguet Lumber Co.
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Held:
NO. They were never partners.
Ratio:
Tan Eng Kee, in his lifetime never executed any acts which would indicate that he was a partner.
1. He never demanded for periodic accountings of the common fund, which would be expected of a real
partner;
2. He never received any shares in the profits of Benguet Lumber, he only received salary as evidenced by
the payroll documents presented by Tan Eng Lay;
3. The Heirs were unable to prove that the brothers intended to divide the profits of the business
between themselves.
Even if Tan Eng Kee was granted certain privileges not given to regular employees, (such as being allowed to
live with his family on the grounds of the Lumber Compound, and having supervisory powers over the regular
employees) the Court found that these privileges were a result of being related to the owner of the company
and not because he was a partner.
 Tan Eng Kee never represented himself as a partner to any third person his actions, when he was alive,
taken together with how his brother treated him, strongly indicate that he was NOT a partner.
 Article 1825 is meant to protect third persons who were misled by a person acting as a partner even if he
really isn’t. Since Tan Eng Kee never represented himself as a partner, and there is no evidence or
documentation of him being a partner, then he is not a partner.
Doctrine: Where circumstances taken singly may be inadequate to prove the intent to form a partnership,
nevertheless, the collective effect of these circumstances may be such as to support a finding of existence of
the parties’ intent.
Gatchalian vs. Collector of Internal Revenue [G.R. No. L-45425, April 29, 1939]
Facts: Plaintiffs purchased, in the ordinary course of business, from one of the duly authorized agents of the
National Charity Sweepstakes Office one ticket for the sum of two pesos (P2), saidticket was registered in the
name of Jose Gatchalian and Company. The ticket won one of the third-prizes in the amount of P50,000.
Jose Gatchalian was required to file the corresponding income tax return covering the prize won. Defendant-
Collector made an assessment against Jose Gatchalian and Co. requesting the payment of the sum of
P1,499.94 to the deputy provincial treasurer of Pulilan, Bulacan. Plaintiffs, however through counsel made a
request for exemption. It was denied.
Plaintiffs failed to pay the amount due, hence a warrant of distraint and levy was issued. Plaintiffs paid under
protest a part of the tax and penalties to avoid the effects of the warrant. A request that the balance be paid
by plaintiffs in installments was made. This was granted on the condition that a bond be filed.
Plaintiffs failed in their installment payments. Hence a request forexecution of the warrant of distraint and
levy was made. Plaintiffs paid under protest to avoid the execution.
A claim for refund was made by the plaintiffs, which was dismissed, hence the appeal.
13
ISSUE:
Whether or not the plaintiffs formed partnership hence liable for income tax
HELD:
Yes, a partnership of a civil nature was formed. The appealed decision is affirmed, with the costs of the
instance to the plaintiff appellants.
RATIO DECIDENDI:
Under Article 1767 of the Civil Code, by 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. In the instant case, the plaintiffs organized a partnership of a civil nature because each of them
put up money to buy a sweepstakes ticket for the sole purpose of dividing equally the prize which they may
win, as they did in fact in the amount of P50,000. The partnership was not only formed, but upon the
organization thereof and the winning of the prize, Jose Gatchalian personally appeared in the office of the
Philippine Charity Sweepstakes, in his capacity as co-partner, as such collection the prize, the office issued the
check for P50,000 in favor of Jose Gatchalian and company, and the said partner, in the same capacity,
collected the said check. All these circumstances repel the idea that the plaintiffs organized and formed a
community of property only.
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’
familyowned 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
14
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.
15
AGASEN V. CA, G.R. NO. 115508
Facts:
Respondent Petra Bilog, assisted by her husband Felipe Bilog, filed acomplaint for Recovery of Possession and
Ownership1 with the RegionalTrial Court of Agoo, La Union, involving an Eight Thousand Four HundredSeventy Four (8,474)
square meter parcel of land registered in her name.She alleged that sometime in 1964 or 1965, petitioners took possession
andassumed ownership of the said property, appropriating the fruits therefrom.She alleged that despite demands on them to
vacate the land, petitionersrefused to do so and even filed a case for Annulment of TCT and/orReconveyance with
Damages before the same court, which case was,however, dismissed. Private respondent prayed that she be declared the
trueand absolute owner of the subject land and petitioners be ordered to turnover possession thereof to her.
Petitioners Alejandro Agasen and Fortunata Calonge-Agasen asserted thatthe subject land used to form part
of Lot No. 2192, a forty two thousand threehundred seventy two (42,372) square meter parcel of land owned in
commonby the five (5) Bilog siblings, private respondent Petra Bilog being one ofthem.
RTC favored petitioners declaring TCT of respondent null and void.
CA reversed the decision.

16
Issue:
whether or not the two (2) documents, relied upon by petitioners asbasis for their claim of ownership, are
valid?
Ruling: No.
The following circumstances all indicate the genuineness and due executionof the subject documents: (1) The
subject documents were duly notarizedpublic documents; (2) The documents enjoy the legal presumption of validity;(3) Their
genuineness and due execution were not specifically denied underoath by private respondent; (4) Private respondent's
signature thereon werefound genuine by the lower court upon a comparison of her signaturethereon with that in her
own documentary evidence; (5) The actualidentification and positive testimony of petitioner; and (6) The
testimony ofthe lawyer who had notarized one of the subject documents. Privaterespondent's bare denial of the same cannot,
by any measure, overcome theabove-mentioned evidence and legal presumptions in petitioners' favor.
Contracts are obligatory in whatever form they may have been entered intoprovided all essential requisites are present. The
provision of Article 1358 onthe necessity of a public document is only for convenience, not for validity
orenforceability. It is not a requirement for the validity of a contract of sale of aparcel of land that this be embodied
in a public instrument.
The Civil Code provides that contracts are perfected by mere consent. Fromthis moment, the parties are bound not only to the
fulfillment of what hasbeen expressly stipulated but also to all the consequences which, accordingto their nature, may be in
keeping with good faith, usage and law. A contractof sale is perfected at the moment there is a meeting of the minds
upon thething which is the object of the contract and upon the price. Beingconsensual, a contract of sale has the force of
law between the contractingparties and they are expected to abide in good faith by their
respectivecontractual commitments. Article 1358 of the Civil Code which requires theembodiment of certain
contracts in a public instrument, is only forconvenience, and registration of the instrument only adversely affects
thirdparties. Formal requirements are, therefore, for the benefit of third parties.Non-compliance therewith
does not adversely affect the validity of thecontract nor the contractual rights and obligations of the parties thereunder.
ANGELES v. SECRETARY OF JUSTICE (July 29, 2005)
DOCTRINE:The purpose of registration of the contract of partnership with the SEC is to give notice to third
parties. Failure to register the contract of partnership does not affect the liability of the partnership and of the
partners to third persons, nor does it affect the partnership’s juridical personality. A partnership may exist
even if the partners do not use the words “partner” or “partnership.”
FACTS:
Angeles spouses filed a criminal complaint for estafa against Mercado, their brother-in-law o Claimed that
Mercado convinced them to enter into a contract of antichresis, to last for 5 years, covering 8 parcels of land
planted with fruit-bearing lanzones trees in Nagcarlan, Laguna and owned by Juan Sanzo o The parties agreed
that Mercado would administer the ands and complete the necessary paperwork
17
After 3 years, the Angeles spouses asked for an accounting from Mercado, and they claim that only after this
demand for an accounting did thy discover that Mercado had put the contract of antichresis over the subject
land under Mercado and his spouse’s names
Mercado denied the Angeles spouses’ allegations o Claimed that there exists an industrial partnership,
colloquially known as sosyo industrial, between him and his spouse as industrial partners and the Angeles
spouses as financiers, and that this had existed since 1991, before the contract of antichresis over the subject
land o Mercado used his and his spouse’s earnings as part of the capital in the business transactions which he
entered into in behalf of the Angeles spouses.
During the barangay conciliation proceedings, Oscar Angeles stated that there was a written sosyo industrial
agreement: capital would come from the Angeles spouses while the profit would be divided evenly between
Mercado and the Angeles spouses
ISSUE:
WON a partnership existed between Mercado and the Angeles spouses - Yes
RATIO/RULING:
Angeles spouses allege that they had no partnership with Mercado, relying on Arts. 1771 to 1773 of the Civil
Code.
The Angeles spouses’ position that there is no partnership because of the lack of a public instrument indicating
the same and a lack of registration with the SEC holds no water
-The Angeles spouses contributed money to the partnership and not immovable property
- Mere failure to register the contract of partnership with the SEC does not invalidate a contract that has the
essential requisites of a partnership. The purpose of registration is to give notice to third parties.
Failure to register does not affect the liability of the partnership and of the partners to third persons, nor does
it affect the partnership’s juridical personality
The Angeles spouses admit to facts that prove the existence of a partnership: A contract showing a sosyo
industrial or industrial partnership , Contribution of money & industry to a common fund , Division of profits
between the Angeles spouses and Mercado
Fule v. CA
Facts:
Gregorio Fule, a banker and a jeweller, offered to sell his parcel of land to Dr. Cruz in exchange for P40,000
and a diamond earring owned by the latter. A deed of absolute sale was prepared by Atty. Belarmino, and on
18
the same day Fule went to the bank with Dichoso and Mendoza, and Dr. Cruz arrived shortly thereafter. Dr.
Cruz got the earrings from her safety deposit box and handed it to Fule who, when asked if those were alright,
nodded and took the earrings. Two hours after, Fule complained that the earrings were fake. He files a
complaint to declare the sale null and void on the ground of fraud and deceit.
ISSUE:
WON THE CONTRACT OF SALE IS VALID
HELD: YES.
RATIO:
Contract perfected by mere consent, binds parties to stipulation and all the consequences; Contract of sale
perfected upon meeting of minds upon the thing object of the contract and upon price; Embodiment of
contract in public instrument only for convenience, and registration only to affect third parties; Lack of formal
requirements does not invalidate the contract
The Civil Code provides that contracts are perfected by mere consent. From this moment, the parties are
bound not only to the fulfillment of what has been expressly stipulated but also to all the consequences
which, according to their nature, may be in keeping with good faith, usage and law.
Article 1358 of the Civil Code which requires the embodiment of certain contracts in a public instrument, is
only for convenience, and registration of the instrument only adversely affects third parties. Formal
requirements are, therefore, for the benefit of third parties. Noncompliance therewith does not adversely
affect the validity of the contract nor the contractual rights and obligations of the parties thereunder.
ROJAS V. MAGLANA
Facts: Maglana and Rojas executed their articles of co-partnership called EDE. It had an indefinite term, was
registered with the SEC, and had a Timer License. Later, Agustin Pahamitang became an industrial partner and
another articles of co-partnership was executed. The term of the second co-partnership was fixed to 30 years.
After some
time, the three executed a conditional sale of interest in the partnership where Magalana and Rojas shall
purchase the
interest, share, and participation of Pahamotang. It was agreed that, after payment of such including the loan
secured
by Pahamotang, the two shall become owners of all equipment contributed by Pahamotang. The two
continued
the partnership without any written agreement or reconstitution of the articles of partnership. Subsequently,
Rojas entered into a contarct with CMS Estate. Maglana reminded him of his contribution to the capital
investments
and his duties to the partnership. Rojas said he would not be able to comply. Maglana told Rojas that the
latter is only
19
entitled to 20% of the profits, which was the sharing from 1957-1959 without dispute. Rojas took funds from
the
partnership which was more than his share. Maglana notified Rojas that he had dissolved the partnership.
Rojas filed an
action against Magallana.
ISSUE: what is the nature of the partnership and legal relationship of M-R after P retired from the second
partnership? May M unilaterally dissolve the partnership?
Held: There was no intention to dissolve the first partnership upon the constitution of the second as
everything else was the same except for the fact that they took in an industrial partner: they pursued the
same purposes, the capital contributions call for the same amounts, all subsequent renewals of Timber
License were secured in favor of the first partnership, all businesses were carried out under the registered
articles. M and R agreed to purchase the interest, share and participation of P and after, they became owners
of the equipment contributed by P. Both considered themselves as partners as per their letters. It is not a
partnership de facto or at will as it was existing and duly registered. The letter of M dissolving the partnership
is in effect a notice of withdrawal and may be done by expressly withdrawing even before expiration of the
period with or without justifiable cause. As to the liquidation of the partnership it shall be divided “share and
share alike” after an accounting has been made. R is not entitled to any profits as he failed to give the amount
he had undertaken to contribute thus, had become a debtor of the partnership. M cannot be liable for
damages as R abandoned the partnership thru his acts and also took funds in an amount more than his
contribution.
Antonia Torres vs Court of Appeals
In 1969, sisters Antonia Torres and Emeteria Baring entered into a joint venture agreement with Manuel
Torres. Under the agreement, the sisters agreed to execute a deed of sale in favor Manuel over a parcel of
land, the sisters received no cash payment from Manuel but the promise of profits (60% for the sisters and
40% for Manuel) – said parcel of land is to be developed as a subdivision.
Manuel then had the title of the land transferred in his name and he subsequently mortgaged the property.
He used the proceeds from the mortgage to start building roads, curbs and gutters. Manuel also contracted an
engineering firm for the building of housing units. But due to adverse claims in the land, prospective buyers
were scared off and the subdivision project eventually failed.
The sisters then filed a civil case against Manuel for damages equivalent to 60% of the value of the property,
which according to the sisters, is what’s due them as per the contract.
ISSUE: Whether or not there exists a partnership.
HELD: Yes. The joint venture agreement the sisters entered into with Manuel is a partnership agreement
whereby they agreed to contribute property (their land) which was to be developed as a subdivision. While on
the other hand, though Manuel did not contribute capital, he is an industrial partner for his contribution for
general expenses and other costs. Furthermore, the income from the said project would be divided according
to the stipulated percentage (60-40). Clearly, the contract manifested the intention of the parties to form a
partnership. Further still, the sisters cannot invoke their right to the 60% value of the property and at the
same time deny the same contract which entitles them to it.
20
At any rate, the failure of the partnership cannot be blamed on the sisters, nor can it be blamed to Manuel
(the sisters on their appeal did not show evidence as to Manuel’s fault in the failure of the partnership). The
sisters must then bear their loss (which is 60%). Manuel does not bear the loss of the other 40% because as an
industrial partner he is exempt from losses.
Litonjua v. Litonjua, Sr.
FACTS
Aurelio and Eduardo are brothers. In 1973, Aurelio alleged that Eduardo entered into a contract of partnership
with him.
Aurelio showed as evidence a letter sent to him by Eduardo that the latter is allowing Aurelio to manage their
family business (if
Eduardo’s away) and in exchange thereof he will be giving Aurelio P1 million or 10% equity, whichever is
higher. A memorandum was
subsequently made for the said partnership agreement. The memorandum this time stated that in exchange
of Aurelio, who just got
married, retaining his share in the family business (movie theatres, shipping and land development) and some
other immovable
properties, he will be given P1 Million or 10% equity in all these businesses and those to be subsequently
acquired by them whichever
is greater.
In 1992 however, the relationship between the brothers went sour. And so Aurelio demanded an accounting
and the liquidation of his
share in the partnership. Eduardo did not heed and so Aurelio sued Eduardo.
ISSUE
Whether or not there exists a partnership.
HELD
No. The partnership is void and legally nonexistent. The documentary evidence presented by Aurelio, i.e. the
letter from
Eduardo and the Memorandum, did not prove partnership.
The 1973 letter from Eduardo on its face, contains typewritten entries, personal in tone, but is unsigned and
undated. As an
unsigned document, there can be no quibbling that said letter does not meet the public instrumentation
requirements exacted under
Article 1771 (how partnership is constituted) of the Civil Code. Moreover, being unsigned and doubtless
referring to a partnership
involving more than P3,000.00 in money or property, said letter cannot be presented for notarization, let
alone registered with the
Securities and Exchange Commission (SEC), as called for under the Article 1772 (capitalization of a partnership)
of the Code. And
inasmuch as the inventory requirement under the succeeding Article 1773 goes into the matter of validity
when immovable property is
contributed to the partnership, the next logical point of inquiry turns on the nature of Aurelio’s contribution, if
any, to the supposed
21
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.
Secuya v. Vda de Selma

G.R. No. 136021 February 22, 2000
Doctrine: Although there is no form required for a sale to be valid, a sale pertaining to land must be registered
in the Registry of Property. If it was not, and that it was only a private document, then the sale is valid as to
only the contracting parties, but not to 3rd parties.
FACTS: Maxima partitioned her land and sold it. Secuya eventually held possession of the land and cultivated
it. When he died, his siblings inherited it. A certain Selma came a long and bought a partition of the Maxima’s
land. In Selma’s title, the land in the possession of the Secuyas was within the boundary bought by Selma.
Selma now asserts ownership over the land and files a case of quieting of title. SC says in this case, Selma is
the owner because of the strength of his title. Maxima Caballero owned a land. She partitioned the land and
executed a deed selling 1/3 of the land to Pacencia Sabellona. Pacencia took possession of the parted 1/3
portion. Dalmacio Secuya bought the land from Pacenciaby means of a private document which was lost. Such
sale was confirmed by Ramon Sabellona, the only heir of Pacienca.
Pursuant to Pacencia’s will, Ramos inherited all Pacencia’s properties. After Secuya bought the land, Secuya
took possession of the land and cultivated it. A certain Edilberto Superales married Secuya’s neice..With
Secuya’s tolerance, Superales was able to build his house on the land and continuously lived there. Eventually,
Secuya died. Being single, his brothers and sisters took physical possession of the land. Then, a certain Selma
bought a portion of Lot 5679. The land in the Secuyas’ possession was a portion of Lot 5679 and is included
within the boundary of what Selma acquired. Selma is now asserting ownership over the land on the strength
of his title. RTC-Cebu decided in favor of Selma. CA affirmed.
ISSUE: Does the land belong to Selma?
HELD: Yes.
There is strength in his title. Since this is an action for quieting of title, it must first be established if the
Secuyas have the requisite title that would enable them to avail of the remedy of quieting of title. The Secuyas
contest their claim on the basis of 2 documents: the Agreement of Partition executed by Maxima Caballero
and Paciencia Sabellona, and The Deed of Confirmation of Sale executed by Ramon Sabellona.
Upon closer look, the SC says this Agreement is not one of partition, because there was no property to
partition, and the parties in the contract are not co-owners. This is one in the nature of a trust agreement.
Trust is the right to the beneficial enjoyment of property, while the legal title to land is vested in another.
Caballero merely entrusted the portion specified to Sabellona. It therefore does not constitute a title. Since
this is a trust agreement, it can be repudiated. This (right to) repudiation does not expire, and was therefore
exercised by the heirs of Caballeros, when they sold the land to a 3rd party buyer (Selma).
Decision affirmed.
Heirs of Tan Eng Kee v. CA & Benguet Lumber Co. & Tan Eng Lay
22
Facts:
After Tan Eng Kee’s Death, his common-law wife Matilde Abuho and their children filed an action against his
brother, Tan Eng Lay for accounting, liquidation and winding up of the alleged partnership Tan Eng Kee had
with Tan Eng Lay.
The heirs claim that the two brothers were partners in Benguet Lumber Co. and had been partners since the
company was operating after the end of World War 2. Tan Eng Lay, the president of the company claims that
Tan Eng Kee was only an employee and presented documents showing that Tan Eng Kee was receiving salary
from the company payroll.
Issue:
Whether the two brothers were partners in Benguet Lumber Co.
Held:
NO. They were never partners.
Ratio:
Tan Eng Kee, in his lifetime never executed any acts which would indicate that he was a partner.
1. He never demanded for periodic accountings of the common fund, which would be expected of a real
partner;
2. He never received any shares in the profits of Benguet Lumber, he only received salary as evidenced by
the payroll documents presented by Tan Eng Lay;
3. The Heirs were unable to prove that the brothers intended to divide the profits of the business
between themselves.
Even if Tan Eng Kee was granted certain privileges not given to regular employees, (such as being allowed to
live with his family on the grounds of the Lumber Compound, and having supervisory powers over the regular
employees) the Court found that these privileges were a result of being related to the owner of the company
and not because he was a partner.
 Tan Eng Kee never represented himself as a partner to any third person his actions, when he was alive,
taken together with how his brother treated him, strongly indicate that he was NOT a partner.
 Article 1825 is meant to protect third persons who were misled by a person acting as a partner even if he
really isn’t. Since Tan Eng Kee never represented himself as a partner, and there is no evidence or
documentation of him being a partner, then he is not a partner.
Doctrine: Where circumstances taken singly may be inadequate to prove the intent to form a partnership,
nevertheless, the collective effect of these circumstances may be such as to support a finding of existence of
the parties’ intent.
23
CIR VS. SUTER
FACTS:A limited partnership named William J. Suter 'Morcoin' Co., Ltd was formed 30September 1947 by
William J. Suter as the general partner, and Julia Spirig
And Gustav Carlson. They contributed, respectively, P20,000.00, P18,000.00 andP2,000.00. it was also duly
registered with the SEC. On 1948 Suter and Spirig got married and in effect Carlson sold his share to the
couple, the same was also registered with the SEC. The limited partnership had been filing its Income tax
returns as a corporation, without objection by the herein petitioner, Commissioner of Internal Revenue, until
in 1959 when the latter, in an assessment, consolidated the income of the firm and the individual incomes of
the partners-spouses Suter and Spirig resulting in a determination of a deficiency income tax against
respondent Suter in the amount of P2,678.06 for 1954 and P4,567.00 for 1955.
ISSUE:Whether or not the limited partnership has been dissolved after the marriage of Suter and Spirig and
buying the interest of limited partner Carlson.
RULING:
24
No, the limited partnership was not dissolved. “ A husband and a wife may not enter into a contract of general
co partnership, because under the Civil Code, which applies in the absence of express provision in the Code of
Commerce, persons prohibited from making donations to each other are prohibited from entering into
universal partnerships. (2Echaverri 196) It follows that the marriage of partners necessarily brings about the
dissolution of a pre-existing partnership.
“What the law prohibits was when the spouses entered into a general partnership. In the case at bar, the
partnership was limited
E. S. LYONS vs. C. W. ROSENSTOCK,

Executor of the Estate of Henry W. Elser, deceased
FACTS:
Henry W. Elser was engaged in buying, selling, and administering real estate. E. S. Lyons joined with him, the
profits being shared by the two in equal parts.
Lyons, whose regular vocation was that of a missionary or missionary agent, of the Methodist Episcopal
Church, went on leave to the United States and was gone for nearly a year and a half. Elser made written
statements showing that Lyons was, at that time, half owner with Elser of three particular pieces of real
property. Concurrently with this act Lyons execute in favor of Elser a general power of attorney empowering
him to manage and dispose of said properties at will and to represent Lyons fully and amply, to the mutual
advantage of both.
The attention of Elser was drawn to a piece of land, referred to as the San Juan Estate. He obtained the loan of
P50,000 to complete the amount needed for the first payment on the San Juan Estate. The lender insisted that
he should procure the signature of the Fidelity & Surety Co. on the note to be given for said loan. Elser
mortgaged to the Fidelity & Surety Co. the equity of redemption in the property owned by himself and Lyons
on Carriedo Street to secure the liability thus assumed by it.
The case for the plaintiff supposes that, when Elser placed a mortgage for P50,000 upon the equity of
redemption in the Carriedo property, Lyons, as half owner of said property, became, as it were, involuntarily
the owner of an undivided interest in the property acquired partly by that money; and it is insisted for him
that, in consideration of this fact, he is entitled to the four hundred forty-six and two-thirds shares of J. K.
Pickering & Company, with the earnings thereon, as claimed in his complaint.
ISSUE: W/N Lyons is a limited partner of Pickering by virtue of the Carriedo property, which was used as
security for the loan.
HELD: The contention of Lyons is untenable. The mortgage of the Carriedo property was specifically allowed
by Lyons. The risk he might have been exposed to is negligible considering that the shares issued to Lyons was
greater than what Elser owed him. Elser actually used only his own money to purchase the San Juan property
and no danger ever came to the investment of Lyons. What cannot be denied is that Elser and Lyons were
coparticipants in various real estate ventures in the past. However, in the case of the San Juan Estate venture,
no partnership between Lyons and Elser existed and the law cannot be distorted into a proposition which
would make Lyons a participant in this deal contrary to his express determination.
Joaquin Misa
Facts:
25
ROJAS V. MAGLANA
After some time, the three executed a conditional sale of interest in the partnership where Magalana and
Rojas shall purchase the interest, share, and participation of Pahamotang. It was agreed that, after payment of
such including the loan secured by Pahamotang, the two shall become owners of all equipment contributed by
Pahamotang. The two continued the partnership without any written agreement or reconstitution of the
articles of partnership. Subsequently, Rojas entered into a contarct with CMS Estate. Maglana reminded him
of his contribution to the capital investments and his duties to the partnership. Rojas said he would not be
able to comply. Maglana told Rojas that the latter is onlyentitled to 20% of the profits, which was the sharing
from 1957-1959 without dispute. Rojas took funds from the partnership which was more than his share.
Maglana notified Rojas that he had dissolved the partnership. Rojas filed an action against Magallana.
26
contribution.
Evangelista & Co. et.al. v. Estrella Abad Santos

FACTS:
On October 9, 1954, a co-partnership with herein petitioners as capitalist partners was formed under the
name “Evangelista & Co.” The Articles of Co-partnership was, however, amended on June 7, 1955 so as to
include herein respondent, Estrella Abad Santos, as an industrial partner.
Consequently, on December 17, 1963, Abad Santos filed suit against the 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:
Whether or not the Articles of Co-partnership shall be considered as a conclusive evidence of respondent’s
status as a limited partner?
HELD:
NO. The Court held that despite the genuineness of the Articles of Co-partnership the same did not
express the true intent and agreement of the parties, however, as the subsequent events and testimonial
evidences indicate otherwise, the Court upheld that respondent is an industrial partner of the company.
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.’ Since 1954 and until after the promulgation of the decision of the appellate court,
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.
27
Having always known the respondent is a City Judge even before she joined the partnership, why did it take
petitioners so many years before excluding her from said company? Furthermore, 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
respondent’s contribution to the common fund.
TUASON VS. BOLANOS
Facts:
Plaintiff’s complaint against defendant was to recover possession of a registered land. In the complaint, the
plaintiff is represented by its Managing Partner, Gregorio Araneta, Inc., another corporation. Defendant, in his
answer, sets up prescription and title in himself thru "open, continuous, exclusive and public and notorious
possession under claim of ownership, adverse to the entire world by defendant and his predecessors in
interest" from "time immemorial". After trial, the lower court rendered judgment for plaintiff, declaring
defendant to be without any right to the land in question and ordering him to restore possession thereof to
plaintiff and to pay the latter a monthly rent. Defendant appealed directly to the Supreme Court and
contended, among others, that Gregorio Araneta, Inc. can not act as managing partner for plaintiff on the
theory that it is illegal for two corporations to enter into a partnership
Issue:
Whether or not a corporation may enter into a joint venture with another corporation.
Ruling:
It is true that the complaint states that the plaintiff is "represented herein by its Managing Partner Gregorio
Araneta, Inc.", another corporation, but there is nothing against one corporation being represented by
another person, natural or juridical, in a suit in court. The contention that Gregorio Araneta, Inc. cannot act as
managing partner for plaintiff on the theory that it is illegal for two corporations to enter into a partnership is
without merit, for the true rule is that "though a corporation has no power to enter into a partnership, it may
nevertheless enter into a joint venture with another where the nature of that venture is in line with the
business authorized by its charter." (Wyoming-Indiana Oil Gas Co. vs. Weston, 80 A. L. R., 1043, citing 2.
Fletcher Cyc. of Corp., 1082.). There is nothing in the record to indicate that the venture in which plaintiff is
represented by Gregorio Araneta, Inc. as "its managing partner" is not in line with the corporate business of
either of them.
Munasque vs. CA
FACTS: Petitioner Elmo Muñasque in behalf of the partnership "Galan &Muñasque", as a Contractor, entered
into a written contract with respondent Tropical for remodeling of its Cebu Branch building. A totalamount of
P25,000 was to be paid under the contract for the entireservices of the Contractor. The first payment made by
Tropical was in theform of a check for P7,000 in the name of petitioner. Petitioner endorsedthe check in favor
of Galan to enable the latter to deposit it in the bankand pay for the materials and labor used. A
misunderstanding ensuedbetween Muñasque and Galan which came to the knowledge of Tropical,thus, the
second check issued by the latter was drawn in the name of "Galan and Associates" and was encashed by
Galan. Meanwhile, the construction continued through the sole efforts of petitioner, whichcaused him to
28
borrow money from a certain Mr. Espina. Two checks were subsequently given to petitioner pursuant to a
court order.Petitioner filed a complaint for payment of sum of money anddamages against the respondents
seeking to recover the amountscovered by the two checks and the additional expenses that petitioner
incurred in the construction.
ISSUE: Whether or not Petitioner Muñasque solidarily or jointly liable with Respondent Galan to pay the
credits of intervenors Blue Diamond Glass and Cebu Southern Hardware.
HELD: Petitioner is solidarily liable with respondent Galan to pay thecredits of the two intervenors. Therefore,
petitioner may recover fromrespondent Galan any amount that he pays, in his capacity as a partner,to the
above intervenors. Art. 1816 should be construed together with Article 1824 whichprovides that: "All partners
are liable solidarily with the partnership for everything chargeable to the partnership under Articles 1822 and
1823".The obligation is solidary because the law protects him, who in good faith relied upon the authority of a
partner, whether such authority is real or apparent. That is why under Article 1824 of the Civil Code all
partners,whether innocent or guilty, as well as the legal entity which is thepartnership, are solidarily liable.In
this case, Tropical, Blue Diamond and Cebu Hardware hadevery reason to believe that partnership existed
between petitioner andGalan, thus, it is fair that consequences of any wrongful act committed byany of the
partners therein should be answered solidarily by all thepartners and the partnership as a whole. As between
petitioner Muñasque and Galan, justice so dictates that Muñasque be reimbursed by Galan for the payments
made by theformer as it was satisfactorily established that Galan acted in bad faith inhis dealings with
Munasque as a partner.
J. Tiosejo Investment Corp. v. Spouses Benjamin and Eleanor Ang
Facts:
In this case, the petitioners seek the reversal of the CA’s Resolution declaring J. Tiosejo Investment Corp.
solidarily liable with Primetown Property Group, Inc. (PPGI) to pay Spouses Benjamin and Eleanor Ang their
refund for their payments plus legal interest until fully paid and damages. J. Tiosejo entered into a Joint
Venture Agreement with PPGI for the development of a residential condominium project known as Meditel in
Mandaluyong City. Petitioner contributed the lot while PPGI undertook to develop the condominium. The
parties further agreed to a 17%-83% sharing as to developed units. PPGI further undertook to use all proceeds
from pre-selling of its saleable units for the completion of the Condominium Project. Sometime in 1996, PPGI
executed a Contract to Sell with Spouses Ang on a certain condominium unit and parking slot for
P2,077,334.25 and P313,500.00, respectively. On July 1999, respondent Spouses filed before the Housing and
Land Use Regulatory Board(HLURB) a complaint for the rescission of the Contract to Sell, against J. Tiosejo and
PPGI. They claim that they were promised that the condo unit would be available for turn-over and occupancy
by December 1998, however the project was not completed as of the said date. Spouses Ang instructed
petitioner and PPGI to stop depositing the post-dated checks they issued and to cancel said Contracts to Sell.
Despite several demands, petitioner and PPGI have failed and refused to refund the P611,519.52 they already
paid under the circumstances.
Issue:
Whether or not J. Tiosejo Investment Corp. is exempt from liability by claiming it was not privy to the Contract
to Sell executed by its JV partner, PPGI and the Spouses Ang
Held:
29
The Supreme Court held that J. Tiosejo Investment Corp. “cannot avoid liability by claiming that it was not in
any way privy to the Contracts to Sell executed by PPGI and respondents.” It was stated in its ruling that a
“joint venture” is considered as a form of partnership, and as such, it should be governed by the law of
partnerships. Under Article 1824 of the Civil Code of the Philippines, all partners are solidarily liable with the
partnership for everything chargeable to the partnership, including loss or injury caused to a third person or
penalties incurred due to any wrongful act or omission of any partner acting in the ordinary course of the
business of the partnership or with the authority of his co-partners. Whether innocent or guilty, all the
partners are solidarily liable with the partnership itself.
Litton vs. Hill

Facts:
Litton sold and delivered to Ceron, one of the managing partners of Hill & Ceron, a certain number of mining
claims. By virtue of said transaction, Ceron delivered to plaintiff a document (receipt) acknowledging that he
received from Litton certain share certificates of Big Wedge Mining Company totalingP1870.Ceron paid to
Litton P1, 150 leaving a balance of P720. Litton was unable to collect the unpaid balance from Hill & Ceron or
from its surety. Litton filed a complaint against the defendants for the recovery of the balance. The court
ordered Ceron to personally pay the amount claimed and absolved the partnership, Hill and the surety.CA
affirmed the decision of the court.
Issue: WON Ceron’s act binds the partnership.
Held:
Yes, we reach the conclusion that the transaction made by Ceron with the plaintiff should be understood in
law as effected by Hill & Ceron and binding upon it.
In the first place, it is an admitted fact by Robert Hill when he testified at the trial that he and Ceron, during
the partnership, had the same power to buy and sell; that in said partnership Hill as well as Ceron made the
transaction as partners in equal parts; that on the date of the transaction, February 14, 1934, the partnership
between Hill and Ceron was in existence.
According to the articles of copartnership of ‘Hill & Ceron,’ a written contract of the firm can only be signed by
one of the partners if the other partner consented. Without the consent of one partner, the other cannot bind
the firm by a written contract. Now, assuming for the moment that Ceron attempted to represent the firm in
this contract with the plaintiff (the plaintiff conceded that the firm name was not mentioned at that time), the
latter has failed to prove that Hill had consented to such contract. Also, third persons, like the plaintiff, are not
bound in entering into a contract with any of the two partners, to ascertain whether or not this partner with
whom the transaction is made has the consent of the other partner. The public need not make inquires as to
the agreements had between the partners. Its knowledge, is enough that it is contracting with the partnership
which is represented by one of the managing partners.
30
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?
31
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.
Isabelo Moran vs Court of Appeals
In February 1971, Isabelo Moran and Mariano 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 Pecson’s monthly commissions; P7k as return of investment because the venture never took off; plus
interest.
ISSUE: Whether or not the CA judgment is correct.
32
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 (because base on 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 Pecson’s 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 Pecson’s contribution to the partnership plus P3k representing
Pecson’s 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.
Sison v. Helen McQuaid

December 29, 1953
Principle: Liquidation shall happen before a partner may claim his share of profit from the partnership.
Facts:
Plaintiff brought an action in the CFI against defendant. Defendant borrowed from him money (P 2,210) to
enable her to pay her obligations and to add to her capital in her lumber business. She could not pay so she
proposed to take plaintiff as a partner in her business, plaintiff to contribute the P 2,210 due him from
defendant.
Before the last World War, the partnership sold 230,000‐board ft. of lumbe rto the US Army for P 13,800.00.
Defendant refused to deliver ½ of it (P 6,900.00) to plaintiff despite his repeated demands. Plaintiff filed an
action to compel defendant to pay him his half of the profit from the partnership.
The case was dismissed upon the ground of prescription.
Issue: Whether or not plaintiff is entitled to the sum he claims
Held:
NO. Order of dismissal was affirmed, but on the ground that the complaint states no cause of action.
Ratio: It is not clear from the complaint just when the cause of action accrued. Thus the dismissal of the case is
erroneous. However order should be retained on the ground that the complaint has no cause of action.
Plaintiff seeks to recover from defendant one-half of the purchase price of lumber sold by the partnership to
the United States Army. But his complaint does not show why he should be entitled to the sum he claims. It
33
does not allege that there has been a liquidation of the partnership business and the said sum has been found
to be due him as his share of the profits. The proceeds from the sale of a certain amount of lumber cannot be
considered profits until costs and expenses have been deducted. Moreover, the profits of the business cannot
be determined by taking into account the result of one particular transaction instead of all the transactions
had. Hence, the need for a general liquidation before a member of a partnership may claim a specific sum as
his share of the profits.
Tan- Feu Leung vs Intermediate Appellate Court
Facts:The Sun WahPanciteria, a restaurant, located at Florentino Torres Street, Sta. Cruz, Manila, was
established sometime in October, 1955. It was registered as a single proprietorship and its licenses and
permits were issued to and in favor of petitioner Dan Fue Leung as the sole proprietor. Respondent Leung Yiu
adduced evidence during the trial of the case to show that Sun WahPanciteria was actually a partnership and
that he was one of the partners having contributed P4,000.00 to its initial establishment.
Issue:whether or not the private respondent is a partner of the petitioner in the establishment of
SunWahPanciteria.
Held: private respondent is a partner of the petitioner in Sun WahPanciteria. The requisites of a
partnershipwhich are 1) two or more persons bind themselves to contribute money, property, or industry to
acommon fund; and 2) intention on the part of the partners to divide the profits among themselves havebeen
established. As stated by the respondent, a partner shares not only in profits but also in the lossesof the firm.
If excellent relations exist among the partners at the start of business and all the partnersare more interested
in seeing the firm grow rather than get immediate returns, a deferment of sharingin the profits is perfectly
plausible. It would be incorrect to state that if a partner does not assert hisrights anytime within ten years
from the start of operations, such rights are irretrievably lost. Theprivate respondent's cause of action is
premised upon the failure of the petitioner to give him theagreed profits in the operation of Sun Wah
Panciteria. In effect the private respondent was asking for anaccounting of his interests in the partnership.
Hanlon vs. Haussermann and Beam

Facts:
This action was originally instituted by R. Y. Hanlon to compel the defendants, John W. Haussermann and A.
W. Beam, to account for a share of the profits gained by them in rehabilitating the plant of the Benguet
Consolidated Mining Company and in particular to compel them to surrender to the plaintiff 50,000 shares of
the stock of said company, with dividends paid thereon. It was initially agreed by Hanlon, Haussermann, Beam
and Sellner that P75,000.00 was needed to rehabilitate the mine; P50,000.00 would come from Hanlon by
securing and obtaining subscriptions for the company’s stocks, P25,000.00 would come from Haussermann
and Beam. They were to receive compensation in the form of shares of stock for the services rendered in
the flotation of this proposition. The funds were needed on a certain date. It was also stated in the contract that
Haussermann and Beam would be discharged if Sellner could not provide the amount due from him within the
time frame stipulated. Hanlon was unable to raise the P75,000.00, so that Haussermann and Beam made
arrangements to finance the rehabilitation of the mine. Because of this new arrangement, the
company became profitable that it was able to pay dividends. Because of this, the value of the
company’s stocks appreciated.
Issues:
34
WON Hanlon is not entitled to an accounting for his share in the profits of the company;
WON Haussermann and Beam are absolved.
Held:
Under the equitable doctrine, if the contracting parties have treated time as of the essence of
the contract, the delinquency will not be excused and specific performance will not be granted;
but on the other hand, if it appears that time has not been made of the essence of the contract,
equity will relieve from the delinquency and specific performance may be granted, due
compensation being made for the damage caused by the delay.
Time is of the essence of the contract for the sale of an option on mining property, or a contract
for the sale thereof, even though there is no express stipulation to that effect. The same idea is
clearly applicable to a contract like that now under consideration which provides for the
rehabilitation of a mining plant with funds to be supplied by the contractor within a limited period.
LIM TANHU v. HON. JOSE R. RAMOLETE
FACTS:
Tan alleged that she is the widow of Tee Hoon Lim Po Chuan, who was a partner in the commercial partnership, Glory
Commercial Company with Antonio Lim Tanhu and Alfonso Ng Sua".
Defendant Antonio Lim Tanhu, Alfonso Leonardo Ng Sua, Lim Teck Chuan, and Eng Chong Leonardo, through fraud and
machination, took actual and active management of the partnership and although Tee Hoon Lim Po Chuan was the
manager of Glory Commercial Company, defendants managed to use the funds of the partnership to purchase lands and
buildings in the cities of Cebu, Lapulapu, Mandaue, and the municipalities of Talisay and Minglanilla.
She alleged in her complaint that after the death of Tee Hoon Lim Po Chuan, the defendants, without liquidation,
continued the business of Glory Commercial Company, by purportedly organizing a corporation known as the Glory
Commercial Company, Incorporated and sometime in the month of November, 1967, defendants, particularly Antonio Lim
Tanhu, by means of fraud deceit, and misrepresentations did then and there, induce and convince her to execute a
quitclaim of all her rights and interests, in the assets of the partnership of Glory Commercial Company.
Thereafter, in the year 1968-69, the defendants who had earlier promised to liquidate the aforesaid properties and assets
in favor, among others of plaintiff and until the middle of the year 1970 when the plaintiff formally demanded from the
defendants the accounting of real and personal properties of the Glory Commercial Company, defendants refused and
stated that they would not give the share of the plaintiff.
ISSUE:
Whether Tan has a right over the liquidated properties of the partnership
35
HELD:
No, Tan has no right over the liquidated properties of the partnership
The Supreme Court held that there is no alternative but to hold that plaintiff Tan Put's allegation that she is the widow of
Tee Hoon Lim Po Chuan has not been satisfactorily established and that, on the contrary, the evidence on record
convincingly shows that her relation with said deceased was that of a common-law wife.
Moreover, the Supreme Court said that the lower courts committed an error by awarding 1/3 of the partnership properties
to Tan because there has been no liquidation proceedings yet. And if there has not yet been any liquidation of the
partnership, the only right plaintiff could have would be to what might result after much liquidation to belong to the
deceased partner (her alleged husband) and before this is finished, it is impossible to determine, what rights or interest, if
any the deceased had.
In other words, no specific amounts or properties may be adjudicated to the heir or legal representative of the deceased
partner without the liquidation being first terminated.
ROJAS V. MAGLANA
After some time, the three executed a conditional sale of interest in the partnership where Magalana and
Rojas shall purchase the interest, share, and participation of Pahamotang. It was agreed that, after payment of
such including the loan secured by Pahamotang, the two shall become owners of all equipment contributed by
Pahamotang. The two continued the partnership without any written agreement or reconstitution of the
articles of partnership. Subsequently, Rojas entered into a contarct with CMS Estate. Maglana reminded him
of his contribution to the capital investments and his duties to the partnership. Rojas said he would not be
able to comply. Maglana told Rojas that the latter is onlyentitled to 20% of the profits, which was the sharing
from 1957-1959 without dispute. Rojas took funds from the partnership which was more than his share.
Maglana notified Rojas that he had dissolved the partnership. Rojas filed an action against Magallana.
36
contribution.
37

Yu v. NLRC GR No. 97212, June 30, 1993 Facts

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Yu v. NLRC GR No. 97212, June 30, 1993 Facts

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Yu v. NLRC GR No.

97212, June 30, 1993

MARJORIE TOCAO and WILLIAM T. BELO, petitioners,

1. 10% share of annual net profits

Kilosbayan Inc vs Teofisto Guingona, Jr.

232 SCRA 110

Antonia Torres vs Court of Appeals

JARANTILLA, JR. vs. JARANTILLA

Pioneer Insurance & Surety Corporation vs Court of Appeals

LIM TONG LIM, petitioner,

CASE I: REPUBLIC v. SUN LIFE

JARANTILLA, JR. vs. JARANTILLA

Fernando Santos vs Spouses Reyes

MARJORIE TOCAO and WILLIAM T. BELO, petitioners,

RTC favored petitioners declaring TCT of respondent null and void.

CA reversed the decision.

ANGELES v. SECRETARY OF JUSTICE (July 29, 2005)

WON THE CONTRACT OF SALE IS VALID

Antonia Torres vs Court of Appeals

Litonjua v. Litonjua, Sr.

Secuya v. Vda de Selma

ISSUE: Does the land belong to Selma?

E. S. LYONS vs. C. W. ROSENSTOCK,

Evangelista & Co. et.al. v. Estrella Abad Santos

TUASON VS. BOLANOS

J. Tiosejo Investment Corp. v. Spouses Benjamin and Eleanor Ang

Litton vs. Hill

Issue: WON Ceron’s act binds the partnership.

Isabelo Moran vs Court of Appeals

ISSUE: Whether or not the CA judgment is correct.

Sison v. Helen McQuaid

Issue: Whether or not plaintiff is entitled to the sum he claims

Tan- Feu Leung vs Intermediate Appellate Court

Hanlon vs. Haussermann and Beam

LIM TANHU v. HON. JOSE R. RAMOLETE

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