ROJAS V.

MAGLANA
SUMMARY: Maglana and Rojas executed their articles o co!"artnershi" called #$#. %t
had an indeinite ter&' (as registered (ith the S#)' and had a *i&er License. Later'
Agustin +aha&itang ,eca&e an industrial "artner and another articles o co!"artnershi"
(as executed. *he ter& o the second co!"artnershi" (as ixed to -. /ears. Ater so&e
ti&e' the three executed a conditional sale o interest in the "artnershi" (here Magalana
and Rojas shall "urchase the interest' share' and "artici"ation o +aha&otang. %t (as
agreed that' ater "a/&ent o such including the loan secured ,/ +aha&otang' the t(o
shall ,eco&e o(ners o all e0ui"&ent contri,uted ,/ +aha&otang. *he t(o continued
the "artnershi" (ithout an/ (ritten agree&ent or reconstitution o the articles o
"artnershi". Su,se0uentl/' Rojas entered into a contarct (ith )MS #state. Maglana
re&inded hi& o his contri,ution to the ca"ital in1est&ents and his duties to the
"artnershi". Rojas said he (ould not ,e a,le to co&"l/. Maglana told Rojas that the
latter is onl/ entitled to 2.3 o the "roits' (hich (as the sharing ro& 4567!4565
(ithout dis"ute. Rojas too8 unds ro& the "artnershi" (hich (as &ore than his share.
Maglana notiied Rojas that he had dissol1ed the "artnershi". Rojas iled an action
against Magallana. *he )9% ruled that the "artnershi" o the t(o ater +aha&otang let
(as one de acto and at (ill. *he S) said that it (as not' considering that the irst
"artnershi" (as ne1er dissol1ed. :ith regard to the issue o unilateral dissolution' the
S) held that Maglana had the "o(er to do so.
$O)*R%N#: Under Article 4;-.' "ar. 2 o the )i1il )ode' e1en i there is a s"eciied
ter&' one "artner can cause its dissolution ,/ ex"ressl/ (ithdra(ing e1en ,eore the
ex"iration o the "eriod' (ith or (ithout justiia,le cause. O course' i the cause is not
justiied or no cause (as gi1en' the (ithdra(ing "artner is lia,le or da&ages ,ut in no
case can he ,e co&"elled to re&ain in the ir&. :ith his (ithdra(al' the nu&,er o
&e&,ers is decreased' hence' the dissolution. And in (hate1er (a/ he &a/ 1ie( the
situation' the conclusion is ine1ita,le that Rojas and Maglana shall ,e guided in the
li0uidation o the "artnershi" ,/ the "ro1isions o its dul/ registered Articles o )o!
+artnershi"< that is' all "roits and losses o the "artnershi" shall ,e di1ided =share and
share ali8e= ,et(een the "artners.
9A)*S: Maglana and Rojas executed their Articles o )o!"artnershi" called >#astcoast
$e1elo"&ent #nter"ises? @#$#A (hich had an indeinite ter& o existence and (as
registered (ith the S#) and had a *i&,er License. One o the #$#Bs "ur"oses (as to
a""l/ or secure ti&,er andCor "ri1ate orest lands and to o"erate' de1elo" and "ro&ote
such orests rights and concessions. Maglana shall &anage the ,usiness aairs (hile
Rojas shall ,e the logging su"erintendent. All "roits and losses shall ,e di1ided share and
share ali8e ,et(een the&.
Later on' the t(o a1ailed the ser1ices o Agustin +aha&otang as industrial "artner and
executed another articles o co!"artnershi" (ith the latter. *he "ur"ose o this second
"artnershi" (as to hold and secure rene(al o ti&,er license and the ter& o (hich (as
ixed to -. /ears.
Still later on' the three executed a conditional sale o interest in the "artnershi" (herein
Maglana and Rojas shall "urchase the interest' share and "artici"ation in the "artnershi"
o +aha&otang. %t (as also agreed that ater "a/&ent o such including a&ount o loan
secured ,/ +aha&otang in a1or o the "artnershi"' the t(o shall ,eco&e o(ners o all
e0ui"&ent contri,uted ,/ +aha&otang. Ater this' the t(o continued the "artnershi"
(ithout an/ (ritten agree&ent or reconstitution o their articles o "artnershi".
Su,se0uentl/' Rojas entered into a &anage&ent contract (ith )MS #state %nc. Maglana
(rote hi& regarding his contri,ution to the ca"ital in1est&ents as (ell as his duties as
logging su"erintendent. Rojas re"lied that he (ill not ,e a,le to co&"l/ (ith ,oth. Maglana
then told Rojas that the latterBs share (ill just ,e 2.3 o the net "roits. Such (as the
sharing ro& 4567 to 4565 (ithout co&"laint or dis"ute. Rojas too8 unds ro& the
"artnershi" &ore than his contri,ution. Maglana notiied Rojas that he dissol1ed the
"artnershi". Rojas iled an action against Maglana or the reco1er/ o "ro"erties and
accounting o the "artnershi" and da&ages.
)9% RUL%NG:
4. *he "artnershi" o Maglana and Rojas ater +aha&otang retired is one o de
acto and at (ill< the sharing o "roits and losses is on the ,asis o actual
contri,utions<
2. there is no e1idence these "ro"erties (ere ac0uired ,/ the "artnershi" unds
thus it should not ,elong to it<
-. neither is entitled to da&ages< the letter o Maglana in eect dissol1ed the
"artnershi"<
D. sale o orest concession is 1alid and ,inding and should ,e considered as
MaglanaBs contri,ution<
6. Rojas &ust "a/ or turn o1er to the "artnershi" the "roits he recei1ed ro& )MS
and "a/ his "ersonal account to the "artnershi"<
E. Maglana &ust ,e "aid ;68 (hich he shouldB1e recei1ed ,ut (as not "aid to hi&
and &ust ,e considered as his contri,ution
A)*%ON AN$ +RAY#R: NCA
%SSU#:
4. :ON the "artnershi" carried on ater the second "artnershi" (as a de acto
"artnershi" and at (ill.
2. :ON Magalana &a/ unilaterall/ dissol1e the "artnershi".
F#L$:
4. No.
2. Yes.
RA*%O:
4. *here (as no intention to dissol1e the irst "artnershi" u"on the constitution o
the second as e1er/thing else (as the sa&e exce"t or the act that the/ too8 in
an industrial "artner: the/ "ursued the sa&e "ur"oses' the ca"ital contri,utions
call or the sa&e a&ounts' all su,se0uent rene(als o *i&,er License (ere
secured in a1or o the irst "artnershi"' all ,usinesses (ere carried out under
the registered articles. *o all intents and "ur"oses thereore' the 9irst Articles o
+artnershi" (ere onl/ a&ended' in the or& o Su""le&entar/ Articles o )o!
+artnershi".
On the other hand' there is no dis"ute that the second "artnershi" (as
dissol1ed ,/ co&&on consent. Said dissolution did not aect the irst
"artnershi" (hich continued to exist. Signiicantl/' Maglana and Rojas agreed to
"urchase the interest' share and "artici"ation in the second "artnershi" o
+aha&otang and that thereater' the t(o @Maglana and RojasA ,eca&e the
o(ners o e0ui"&ent contri,uted ,/ +aha&otang. Maglana e1en re&inded
Rojas o his o,ligation to contri,ute either in cash or in e0ui"&ent' to the ca"ital
in1est&ent o the "artnershi" as (ell as his o,ligation to "eror& his duties as
BusOrg - Prior | 1
logging su"erintendent. *his re&inder cannot reer to an/ other ,ut to the
"ro1isions o the dul/ registered Articles o )o!+artnershi".
2. As there are onl/ t(o "arties (hen Maglana notiied Rojas that he dissol1ed the
"artnershi"' it is in eect a notice o (ithdra(al.
Under Article 4;-.' "ar. 2 o the )i1il )ode' e1en i there is a s"eciied ter&'
one "artner can cause its dissolution ,/ ex"ressl/ (ithdra(ing e1en ,eore the
ex"iration o the "eriod' (ith or (ithout justiia,le cause. O course' i the cause
is not justiied or no cause (as gi1en' the (ithdra(ing "artner is lia,le or
da&ages ,ut in no case can he ,e co&"elled to re&ain in the ir&. :ith his
(ithdra(al' the nu&,er o &e&,ers is decreased' hence' the dissolution. And in
(hate1er (a/ he &a/ 1ie( the situation' the conclusion is ine1ita,le that Rojas
and Maglana shall ,e guided in the li0uidation o the "artnershi" ,/ the
"ro1isions o its dul/ registered Articles o )o!+artnershi"< that is' all "roits and
losses o the "artnershi" shall ,e di1ided =share and share ali8e= ,et(een the
"artners.
Gut an accounting &ust irst ,e &ade and (hich in act (as ordered ,/ the trial
court and acco&"lished ,/ the co&&issioners a""ointed or the "ur"ose.
According to the )o&&issionersB re"ort' Rojas is not entitled to an/ "roits as he
ailed to gi1e the a&ount he had underta8en to contri,ute thus' had ,eco&e a
de,tor o the "artnershi". Maglana cannot ,e lia,le or da&ages as Rojas
a,andoned the "artnershi" thru his acts and also too8 unds in an a&ount &ore
than his contri,ution
$%S+OS%*%V#: +R#M%S#S )ONS%$#R#$' the assailed decision o the )ourt o 9irst
%nstance o $a1ao' Granch %%%' is here,/ MO$%9%#$ in the sense that the dul/ registered
"artnershi" o #astcoast $e1elo"&ent #nter"rises continued to exist until li0uidated and
that the sharing ,asis o the "artners should ,e on share and share ali8e as "ro1ided or in
its Articles o +artnershi"' in accordance (ith the co&"utation o the co&&issioners. :e
also here,/ A99%RM the decision o the trial court in all other res"ects.
)a&"os Rueda H )o 1 +aciic )o&&ercial @DD +hil 54EA
9acts:
)a&"os' Rueda H )o.' a li&ited "artnershi"' is inde,ted to the a""ellants: +aciic
)o&&ercial )o. ' Asiatic +etroleu& )o' and %nternational Gan8ing )or"oration a&ounting
to not less than +4'...... @(hich (ere not "aid &ore than -. da/s "rior to the date o the
iling ,/ "etitioners o the a""lication or 1oluntar/ insol1enc/A.
*he trial court denied their "etition on the ground that it (as not "ro1en' nor alleged' that
the &e&,ers o the ir& (ere insol1ent at the ti&e the a""lication (as iled. %t also held
that the "artners are "ersonall/ and solidaril/ lia,le or the conse0uences o the
transactions o the "artnershi".
%ssue:
:hether or not a li&ited "artnershi" &a/ ,e held to ha1e co&&itted an act o insol1enc/.
Feld:
Yes. A li&ited "artnershi"Bs juridical "ersonalit/ is dierent ro& the "ersonalit/ o its
&e&,ers. On general "rinci"le' the li&ited "artnershi" &ust ans(er or and suer the
conse0uence o its acts. Under our %nsol1enc/ La(' one o the acts o ,an8ru"tc/ u"on
(Cc an adjudication o in1oluntar/ insol1enc/ can ,e "redicated is the ailure to "a/
o,ligations.
*he ailure o )a&"os' Rueda H )o.' to "a/ its o,ligations constitutes an act (Cc is
s"eciicall/ "ro1ided or in the %nsol1enc/ La( or declaration o in1oluntar/ insol1enc/.
*he "etitioners ha1e a right to a judicial decree declaring the in1oluntar/ insol1enc/ o said
"artnershi".
*ai *ong )huache 1s %nsurance )o&&ission
9A)*S:
AIucena +alo&o ,ought a "arcel o land and ,uilding ro& Rolando GonIales
and assu&ed a &ortgage o the ,uilding in a1or o S.S.S. (hich (as insured
(ith S.S.S. Accredited Grou" o %nsurers
A"ril 45' 4576: AIucena +alo&o o,tained a loan ro& *ai *ong )huache %nc. in
the a&ount o +4..'... and to secure it' the land and ,uilding (as &ortgaged
June 44' 4576: +edro +alo&o secured a 9ire %nsurance +olic/ co1ering the
,uilding or +6.'... (ith Jenith %nsurance )or"oration
Jul/ 4E' 4576: another 9ire %nsurance "olic/ (as "rocured ro& +hili""ine
Gritish Assurance )o&"an/' co1ering the sa&e ,uilding or +6.'... and the
contents thereo or +7.'...
Geore the occurrence o the "eril insured against the +alo&os had alread/ "aid
their credit due the
Jul/ -4' 4576: ,uilding and the contents (ere totall/ raIed ,/ ire
+alo&o (as a,le to clai& +D4'6DE.75 ro& +hili""ine Gritish Assurance )o.'
+44';77.4D ro& Jenith %nsurance )or"oration and +6'5-E.67 ro& S.S.S.
Grou" o Accredited %nsurers ,ut *ra1ellers Multi!%nde&nit/ reused so it
de&anded the ,alance ro& the other three ,ut the/ reused so the/ iled
against the&
%nsurance )o&&ission' )9%: a,sol1ed *ra1ellers on the ,asis that Arsenio )ua
(as clai&ing and NO* *ai *ong )huache
+alo&o A""ealed
*ra1ellers reasoned that the "olic/ is endorsed to Arsenio )hua' &ortgage
creditor
*ai *ong )huache H )o. iled a co&"laint in inter1ention clai&ing the "roceeds
o the ire %nsurance +olic/ issued ,/ tra1ellers
air&ati1e deense o lac8 o insura,le interest that ,eore the occurrence o the
"eril insured against the +alo&os had alread/ "aid their credit due the "etitioner
%SSU#: :CN *ai *ong )huache H )o. has insura,le interest
BusOrg - Prior | 2
F#L$: Y#S. *ra1ellers Multi!%nde&nit/ )or"oration to "a/ *ai *ong )huache H )o.
(hen the creditor is in "ossession o the docu&ent o credit' he need not "ro1e
non!"a/&ent or it is "resu&ed
*he 1alidit/ o the insurance "olic/ ta8en , "etitioner (as not assailed ,/ "ri1ate
res"ondent. Moreo1er' "etitionerKs clai& that the loan extended to the +alo&os
has not /et ,een "aid (as corro,orated ,/ AIucena +alo&o (ho testiied that
the/ are still inde,ted to herein "etitioner
)hua ,eing a "artner o "etitioner *ai *ong )huache H )o&"an/ is an agent o
the "artnershi". Geing an agent' it is understood that he acted or and in ,ehal
o the ir&
U"on its ailure to "ro1e the allegation o lac8 o insura,le interest on the "art o
the "etitioner' *ra1ellers &ust ,e held lia,le
)o&&issioner o %nternal Re1enue Vs. Sutter
27 S)RA 462 G.R. No. L!266-2 9e,ruar/ 2;' 45E5
9acts:
A li&ited "artnershi"' na&ed =:illia& J. Suter KMorcoinK )o.' Ltd.'= (as or&ed ,/ herein
res"ondent :illia& J. Sutter as the general "artner' and Julia S"irig and Gusta1 )arlson'
as the li&ited "artners. *he "artners contri,uted' res"ecti1el/' +2.'......' +4;'......
and +2'...... to the "artnershi". *he ir& (as dul/ registered (ith the Securities and
#xchange )o&&ission and engaged in la(ul ,usiness. Later' Sutter and S"irig got
&arried (hile )arlson sold his share to the s"ouses. *he li&ited "artnershi" had ,een
iling its inco&e tax returns as a cor"oration' (ithout o,jection ,/ the herein "etitioner'
)%R' until in 4565 (hen the latter' in an assess&ent' consolidated the inco&e o the ir&
and the indi1idual inco&es o the "artners!s"ouses Sutter and S"irig resulting in a
deter&ination o a deicienc/ inco&e tax against res"ondent Sutter. Res"ondent Sutter
"rotested the assess&ent' and re0uested its cancellation and (ithdra(al' as not in
accordance (ith la(' ,ut his re0uest (as denied. Una,le to secure a reconsideration' he
a""ealed to the )*A' (hich ruled in a1or o Sutter.
%ssue:
:as the "artnershi" dissol1ed ,/ the &arriage o Sutter and S"irig and the
su,se0uent sale o )arlson o his share to the s"ousesL
Ruling:
No. *he a""ellantKs 1ie(' that ,/ the &arriage o ,oth "artners the co&"an/
,eca&e a single "ro"rietorshi"' is erroneous. *he ca"ital contri,utions o "artners :illia&
J. Sutter and Julia S"irig (ere se"aratel/ o(ned and contri,uted ,/ the& ,eore their
&arriage< and ater the/ (ere joined in (edloc8' such contri,utions re&ained their
res"ecti1e se"arate "ro"ert/ under the S"anish )i1il )ode @Article 4-5EA:
*he ollo(ing shall ,e the exclusi1e "ro"ert/ o each s"ouse:
@aA *hat (hich is ,rought to the &arriage as his or her o(n< ....
%t ,eing a ,asic tenet o the S"anish and +hili""ine la( that the "artnershi" has a juridical
"ersonalit/ o its o(n' distinct and se"arate ro& that o its "artners @unli8e A&erican and
#nglish la( that does not recogniIe such se"arate juridical "ersonalit/A' the ,/"assing o
the existence o the li&ited "artnershi" as a tax"a/er can onl/ ,e done ,/ ignoring or
disregarding clear statutor/ &andates and ,asic "rinci"les o our la(. *he li&ited
"artnershi"Ks se"arate indi1idualit/ &a8es it i&"ossi,le to e0uate its inco&e (ith that o
the co&"onent &e&,ers. *rue' section 2D o the %nternal Re1enue )ode &erges
registered general co!"artnershi"s @co&"aMias colecti1asA (ith the "ersonalit/ o the
indi1idual "artners or inco&e tax "ur"oses. Gut this rule is exce"tional in its disregard o a
cardinal tenet o our "artnershi" la(s' and can not ,e extended ,/ &ere i&"lication to
li&ited "artnershi"s.
As the li&ited "artnershi" under consideration is taxa,le on its inco&e' to re0uire
that inco&e to ,e included in the indi1idual tax return o res"ondent Sutter is to o1erstretch
the letter and intent o the la(. %n act' it (ould e1en conlict (ith (hat it s"eciicall/
"ro1ides in its Section 2D: or the a""ellant )o&&issionerKs stand results in e0ual
treat&ent' tax (ise' o a general co"artnershi" @co&"aMia colecti1aA and a li&ited
"artnershi"' (hen the code "lainl/ dierentiates the t(o. *hus' the code taxes the latter
on its inco&e' ,ut not the or&er' ,ecause it is in the case o co&"aMias colecti1as that
the &e&,ers' and not the ir&' are taxa,le in their indi1idual ca"acities or an/ di1idend or
share o the "roit deri1ed ro& the dul/ registered general "artnershi" @Section 2E'
N.%.R.).< AraMas' Anno. H Juris. on the N.%.R.).' As A&ended' Vol. 4' "". ;;!;5A.
#U9#M%A #VANG#L%S*A' MANU#LA #VANG#L%S*A' and 9RAN)%S)A
#VANG#L%S*A' "etitioners' 1s.
*F# )OLL#)*OR O9 %N*#RNAL R#V#NU# and *F# )OUR* O9*AN A++#ALS'
res"ondents.
G.R. No. L!555E' Octo,er 46' 4567

9acts:
+etitioners ,orro(ed su& o &one/ ro& their ather and together (ith their o(n "ersonal
unds the/ used said &one/ to ,u/ se1eral real "ro"erties. *he/ then a""ointed their
,rother @Si&eonA as &anager o the said real "ro"erties (ith "o(ers and authorit/ to sell'
lease or rent out said "ro"erties to third "ersons. *he/ realiIed rental inco&e ro& the
said "ro"erties or the "eriod 45D6!45D5.On Se"te&,er 2D' 456D res"ondent )ollector o
BusOrg - Prior | 3
%nternal Re1enue de&anded the "a/&ent o inco&e tax on cor"orations' real estate
dealerKs ixed tax and cor"oration residence tax or the /ears 45D6!45D5. *he letter o
de&and and corres"onding assess&ents (ere deli1ered to "etitioners on $ece&,er -'
456D' (hereu"on the/ instituted the "resent case in the )ourt o *ax A""eals' (ith a
"ra/er that =the decision o the res"ondent contained in his letter o de&and dated
Se"te&,er 2D' 456D= ,e re1ersed' and that the/ ,e a,sol1ed ro& the "a/&ent o the
taxes in 0uestion. )*A denied their "etition and su,se0uent MR and Ne( *rials (ere
denied. Fence this "etition.
%ssue:
:hether or not "etitioners ha1e or&ed a "artnershi" and conse0uentl/' are su,ject to the
tax on cor"orations "ro1ided or in section 2D o )o&&on(ealth Act. No. DEE' other(ise
8no(n as the National %nternal Re1enue )ode' as (ell as to the residence tax or
cor"orations and the real estate dealers ixed tax.
Feld: Y#S.
*he essential ele&ents o a "artnershi" are t(o' na&el/:
@aA An agree&ent to contri,ute &one/' "ro"ert/ or industr/ to a co&&on
und < and
@,A %ntent to di1ide the "roits a&ong the contracting "arties.
*he irst ele&ent is undou,tedl/ "resent in the case at ,ar' or' ad&ittedl/' "etitioners
ha1e agreed to' and did' contri,ute &one/ and "ro"ert/ to a co&&on und. U"on
consideration o all the acts and circu&stances surrounding the case' (e are ull/
satisied that their "ur"ose (as to engage in real estate transactions or &onetar/ gain
and then di1ide the sa&e a&ong the&sel1es' ,ecause o the ollo(ing o,ser1ations'
a&ong others:
@aA Said co&&on und (as not so&ething the/ ound alread/ in existence<
@,A *he/ in1ested the sa&e' not &erel/ in one transaction' ,ut in a series o
transactions<
@cA *he aoresaid lots (ere not de1oted to residential "ur"oses' or to other
"ersonal uses' o "etitioners herein.
Although' ta8en singl/' the/ &ight not suice to esta,lish the intent necessar/ to constitute
a "artnershi"' the collecti1e eect o these circu&stances is such as to lea1e no roo& or
dou,t on the existence o said intent in "etitioners herein.
9or "ur"oses o the tax on cor"orations' our National %nternal Re1enue )ode' includes
these "artnershi"s (ith the exce"tion onl/ o dul/ registered general co!"artnershi"s
(ithin the "ur1ie( o the ter& =cor"oration.= %t is' thereore' clear to our &ind that
"etitioners herein constitute a "artnershi"' insoar as said )ode is concerned and are
su,ject to the inco&e tax or cor"orations.
9#RNAN$#J VS. $# LA ROSA
9acts:
On the "art o "lainti 9ernandeI' he clai&s that he entered into a 1er,al agree&ent (ith
deendant $e la Rosa to or& a "artnershi" or the "urchase o cascoes (ith the
underta8ing that the deendant (ill ,u/ the cascoes and that each "artner (ill urnish such
a&ount as he could' (hile the "roits (ill ,e di1ided "ro"ortionatel/. +lainti urnished
+-.. or casco No. 4646 and +;26 or casco No. 2.;5' ,oth o (hich (ere "laced under
the na&e o the deendant onl/. %n A"ril 45..' the "arties undertoo8 to dra( u" articles o
their "artnershi" or the "ur"ose o e&,od/ing it in an authentic docu&ent. *he
agree&ent ho(e1er did not &aterialiIe ,ecause deendant "ro"osed articles (hich (ere
&ateriall/ dierent ro& their 1er,al agree&ent' and he (as also un(illing to include
casco No. 2.;5 in the "artnershi". Gecause the cascoes (ere under the &anage&ent o
the deendant' the "lainti de&anded an accounting o1er it to (hich the deendant reused
clai&ing that no "artnershi" existed ,et(een the&.
$e la Rosa' on the other hand' ad&its that he desired to or& a "artnershi" (ith the
"lainti ,ut denies that an/ agree&ent (as e1er consu&&ated. Moreo1er' he denied
recei1ing an/ &one/ urnished ,/ "lainti or casco No. 4646' ,ut clai&s that he &erel/
,orro(ed the +-.. on his indi1idual account ro& the ,a8er/ ,usiness in (hich "lainti
(as a co!"artner. And as or the +;26 urnished ,/ the "lainti' the deendant clai&s that
it (as actuall/ or casco No. 4646 and not or casco No. 2.;5. Fe also added that the
re"airs &ade on the t(o cascoes (ere exclusi1el/ ,orne ,/ hi&' and that he returned a
su& o +4'426 to "lainti (ith an ex"ress reser1ation on his "art o all his rights as a
"artner.
%ssue:
@aA :CN a "artnershi" existed ,et(een the "arties. Yes.
@,A :CN the "artnershi" (as ter&inated (hen the deendant returned the
+4'426 to "lainti. No.
Feld:
@aA *he essential "oints u"on (hich the &inds o the "arties &ust &eet in a
contract o "artnershi" are 4A &utual contri,ution and 2A joint interest in the
"roits.
*he act that the deendant recei1ed &one/ urnished ,/ the "lainti or the
"ur"ose o using it to "urchase the cascoes esta,lishes the irst ele&ent o the
"artnershi"' &utual contri,ution to a co&&on stoc8. 9or the second ele&ent'
the act that the or&ation o "artnershi" had ,een a su,ject o negotiation
,et(een the&' e1en ,eore the "urchase o the irst casco' and that ,oth "arties
intended to "urchase the cascoes in co&&on satisies the re0uire&ent that
there should ,e an intention on the "art o ,oth "arties to share the "roits. :ith
these' a co&"lete and "erect contract o "artnershi" (as entered into ,/ the
"arties.
BusOrg - Prior | 4
%t &ust ,e noted ho(e1er that this "artnershi" (as su,ject to a sus"ensi1e
condition (hich is the execution o a (ritten agree&ent regarding the
distri,ution o "roits' character o "artnershi"' etc. Gut since the deendant
actuall/ "urchased the cascoes' it (ould see& that the "artnershi" alread/
existed. And as urther&ore "ro1ided ,/ the )i1il )ode' a (ritten agree&ent
(as not necessar/ in order to gi1e eicac/ to the 1er,al agree&ent o the
"artnershi" ,ecause the contri,utions o the "artners to the "artnershi" (ere
not in the or& o i&&o1a,les.
@,A $uring trial' the court (as a,le to "ro1e that "lainti actuall/ urnished so&e
a&ount or the re"air o the cascoes and that it (as "resu&ed that a "roit has
,een o,tained ,/ the deendant "rior to the return o the &one/. :ith these' the
return o the +4'426 ell short o the a&ount (hich the "lainti has actuall/
contri,uted to the "artnershi". 9or these reasons' the acce"tance ,/ the "lainti
o the a&ount returned ,/ the deendant did not ha1e the eect o ter&inating
the legal existence o the "artnershi" ,/ con1erting it into a societas leonina.
*he court also "ro1ed that there (as no intention on the "art o the "lainti' in
acce"ting the &one/' to relin0uish his rights as a "artner. On the contrar/ he
notiied deendant that he (ai1ed none o his rights in the "artnershi". Also the
lac8 o recognition on the "art o the deendant o the "laintiBs right in the
"artnershi" "ro"ert/ and in the "roits does not gi1e the or&er the right to orce
a dissolution u"on the later u"on the ter&s (hich the "lainti is un(illing to
acce"t. A "artnershi" thereore existed ,et(een the t(o and cascoes No. 4646
and 2.;5 are "artnershi" "ro"erties.
*ocao 1s )A
:illia& Gelo introduced Nenita Ana/ to his girlriend' Marjorie *ocao. *he three agreed to
or& a joint 1enture or the sale o coo8ing (ares. Gelo (as to contri,ute +2.6 &illion<
*ocao also contri,uted so&e cash and she shall also act as "resident and general
&anager< and Ana/ shall ,e in charge o &ar8eting. Gelo and *ocao s"eciicall/ as8ed
Ana/ ,ecause o her ex"erience and connections as a &ar8eter. *he/ agreed urther that
Ana/ shall recei1e the ollo(ing:
4.3 share o annual net "roits
E3 o1erriding co&&ission or (ee8l/ sales
-.3 o sales Ana/ (ill &a8e hersel
23 share or her de&o ser1ices

*he/ o"erated under the na&e Ge&inesse #nter"rise' this na&e (as ho(e1er registered
as a sole "ro"rietorshi" (ith the Gureau o $o&estic *rade under *ocao. *he joint 1enture
agree&ent (as not reduced to (riting ,ecause Ana/ trusted GeloBs assurances.
*he 1enture succeeded under Ana/Bs &ar8eting "ro(ess.
Gut then the relationshi" ,et(een Ana/ and *ocao soured. One da/' *ocao ad1ised one
o the ,ranch &anagers that Ana/ (as no longer a "art o the co&"an/. Ana/ then
de&anded that the co&"an/ ,e audited and her shares ,e gi1en to her.
%SSU#: :hether or not there is a "artnershi".
F#L$: Yes' e1en though it (as not reduced to (riting' or a "artnershi" can ,e instituted
in an/ or&. *he act that it (as registered as a sole "ro"rietorshi" is o no &o&ent or
such registration (as onl/ or the co&"an/Bs trade na&e.
Ana/ (as not e1en an e&"lo/ee ,ecause (hen the/ 1entured into the agree&ent' the/
ex"licitl/ agreed to "roit sharing this is e1en though Ana/ (as recei1ing co&&issions
,ecause this is onl/ incidental to her eorts as a head &ar8eter.
*he Su"re&e )ourt also noted that a "artner (ho is excluded (rongull/ ro& a
"artnershi" is an innocent "artner. Fence' the guilt/ "artner &ust gi1e hi& his due u"on
the dissolution o the "artnershi" as (ell as da&ages or share in the "roits >realiIed ro&
the a""ro"riation o the "artnershi" ,usiness and good(ill.? An innocent "artner thus
"ossesses >"ecuniar/ interest in e1er/ existing contract that (as inco&"lete and in the
trade na&e o the co!"artnershi" and assets at the ti&e he (as (rongull/ ex"elled.?
An unjustiied dissolution ,/ a "artner can su,ject hi& to action or da&ages ,ecause ,/
the &utual agenc/ that arises in a "artnershi"' the doctrine o delectus "ersonae allo(s
the "artners to ha1e the "o(er' although not necessaril/ the right to dissol1e the
"artnershi".
*ocaoBs unilateral exclusion o Ana/ ro& the "artnershi" is sho(n ,/ her &e&o to the
)u,ao oice "lainl/ stating that Ana/ (as' as o Octo,er 5' 45;7' no longer the 1ice!
"resident or sales o Ge&inesse #nter"rise. G/ that &e&o' "etitioner *ocao eected her
o(n (ithdra(al ro& the "artnershi" and considered hersel as ha1ing ceased to ,e
associated (ith the "artnershi" in the carr/ing on o the ,usiness. Ne1ertheless' the
"artnershi" (as not ter&inated there,/< it continues until the (inding u" o the ,usiness.
#S*AN%SLAO' JR. VS. )OUR* O9 A++#ALS
9acts:
*he "etitioner and "ri1ate res"ondents are ,rothers and sisters (ho are co!o(ners o
certain lots at the in OueIon )it/ (hich (ere then ,eing leased to SF#LL. *he/ agreed to
o"en and o"erate a gas station thereat to ,e 8no(n as #stanislao Shell Ser1ice Station
(ith an initial in1est&ent o +h+46'...... to ,e ta8en ro& the ad1ance rentals due to
the& ro& SF#LL or the occu"anc/ o the said lots o(ned in co&&on ,/ the&. A joint
aida1it (as executed ,/ the& on A"ril 44' 45EE. *he res"ondents agreed to hel" their
,rother' "etitioner therein' ,/ allo(ing hi& to o"erate and &anage the gasoline ser1ice
station o the a&il/. %n order not to run counter to the co&"an/Bs "olic/ o a""ointing onl/
one dealer' it (as agreed that "etitioner (ould a""l/ or the dealershi". Res"ondent
BusOrg - Prior | 5
Re&edios hel"ed in co!&anaging the ,usiness (ith "etitioner ro& Ma/ 45EE u" to
9e,ruar/ 45E7.
On Ma/ 45EE' the "arties entered into an Additional )ash +ledge Agree&ent (ith SF#LL
(herein it (as reiterated that the +46'...... ad1ance rental shall ,e de"osited (ith
SF#LL to co1er ad1ances o uel to "etitioner as dealer (ith a "ro1iso that said agree&ent
>cancels and su"ersedes the Joint Aida1it.?
9or so&eti&e' the "etitioner su,&itted inancial state&ent regarding the o"eration o the
,usiness to the "ri1ate res"ondents' ,ut thereater "etitioner ailed to render su,se0uent
accounting.
Fence' the "ri1ate res"ondents iled a co&"laint against the "etitioner "ra/ing a&ong
others that the latter ,e ordered:
@aA *o execute a "u,lic docu&ent e&,od/ing all the "ro1isions o the
"artnershi" agree&ent the/ entered into<
@,A *o render a or&al accounting o the ,usiness o"eration 1eering the "eriod
ro& Ma/ E' 45EE u" to $ece&,er 24' 45E;' and ro& Januar/ 4' 45E5 u"
to the ti&e the order is issued and that the sa&e ,e su,ject to "ro"er audit<
@cA *o "a/ the "laintis their la(ul shares and "artici"ation in the net "roits o
the ,usiness< and
@dA *o "a/ the "laintis attorne/Bs ees and costs o the suit.
%ssue: )an a "artnershi" exist ,et(een &e&,ers o the sa&e a&il/ arising ro& their joint
o(nershi" o certain "ro"ertiesL
*rial )ourt: *he co&"laint @o the res"ondentsA (as dis&issed. Gut u"on a &otion or
reconsideration o the decision' another decision (as rendered in a1or o the
res"ondents.
)A: Air&ed in toto
+etitioner: *he )A erred in inter"reting the legal i&"ort o the Joint Aida1it 1is!P!1is the
Additional )ash +ledge Agree&ent. Gecause o the sti"ulation cancelling and
su"erseding the Joint Aida1it' (hate1er "artnershi" agree&ent there (as in said
"re1ious agree&ent had there,/ ,een a,rogated. Also' the )A erred in declaring that a
"artnershi" (as esta,lished ,/ and a&ong the "etitioner and the "ri1ate res"ondents as
regards the o(nershi" and Cor o"eration o the gasoline ser1ice station ,usiness.
Feld: *here is no &erit in the "etitionerBs contention that ,ecause o the sti"ulation
cancelling and su"erseding the "re1ious joint aida1it' (hate1er "artnershi" agree&ent
there (as in said "re1ious agree&ent had there,/ ,een a,rogated. Said cancelling
"ro1ision (as necessar/ or the Joint Aida1it s"ea8s o +46'...... ad1ance rental
starting Ma/ 26' 45EE (hile the latter agree&ent also reers to ad1ance rentals o the
sa&e a&ount starting Ma/ 2D' 45EE. *here is thereore a du"lication o reerence to the
+46'...... hence the need to "ro1ide in the su,se0uent docu&ent that it >cancels and
su"ersedes? the "re1ious none. %ndeed' it is true that the latter docu&ent is silent as to
the state&ent in the Join Aida1it that the 1alue re"resents the >ca"ital in1est&ent? o the
"arties in the ,usiness and it s"ea8s o the "etitioner as the sole dealer' ,ut this is as it
should ,e or in the latter docu&ent' SF#LL (as a signator/ and it (ould ,e against their
"olic/ i in the agree&ent it should ,e stated that the ,usiness is a "artnershi" (ith "ri1ate
res"ondents and not a sole "ro"rietorshi" o the "etitioner.
9urther&ore' there are other e1idences in the record (hich sho( that there (as in act
such "artnershi" agree&ent ,et(een "arties. *he "etitioner su,&itted to the "ri1ate
res"ondents "eriodic accounting o the ,usiness and ga1e a (ritten authorit/ to the "ri1ate
res"ondent Re&edios #stanislao to exa&ine and audit the ,oo8s o their >co&&on
,usiness? @a&ing negos/oA. *he res"ondent Re&edios' on the other hand' assisted in the
running o the ,usiness. %ndeed' the "arties hereto or&ed a "artnershi" (hen the/ ,ound
the&sel1es to contri,ute &one/ in a co&&on und (ith the intention o di1iding the "roits
a&ong the&sel1es.
YULO V. YANG )F%AO S#NG
9acts:
Yang )hiao Seng "ro"osed to or& a "artnershi" (ith Rosario Yulo to run and o"erate a
theatre on the "re&ises occu"ied ,/ )ine Oro' +laIa Sta. )ruI' Manila' the "rinci"al
conditions o the oer ,eing:
@aA Yang guarantees Yulo a &onthl/ "artici"ation o +-'...<
@,A "artnershi" shall ,e or a "eriod o 2 /ears and E &onths (ith the condition
that i the land is ex"ro"riated' rendered i&"ractica,le or ,usiness' o(ner
constructs a "er&anent ,uilding' then YuloBs right to lease and "artnershi"
e1en i "eriod agreed u"on has not /et ex"ired<
@cA Yulo is authoriIed to "ersonall/ conduct ,usiness in the lo,,/ o the
,uilding< and
@dA Ater $ec -4' 45D7' all i&"ro1e&ents "laced ,/ "artnershi" shall ,elong to
Yulo ,ut i "artnershi" is ter&inated ,eore la"se o 4 and Q /ears' Yang
shall ha1e right to re&o1e i&"ro1e&ents.
+arties esta,lished' >Yang and )o. Ltd.?' to exist ro& Jul/ 4' 45D6 R $ec -4' 45D7.
%n June 45DE' the/ executed a su""le&entar/ agree&ent extending the "artnershi" or -
/ears ,eginning Jan 4' 45D; to $ec -4' 456..
*he land on (hich the theater (as constructed (as leased ,/ Yulo ro& o(ners' #&ilia
)arrion and Maria )arrion Santa Marina or an indeinite "eriod ,ut that ater 4 /ear' such
lease &a/ ,e cancelled ,/ either "art/ u"on 5.!da/ notice. %n A"r 45D5' the o(ners
notiied Yulo o their desire to cancel the lease contract co&e Jul/. Yulo and hus,and
BusOrg - Prior | 6
,rought a ci1il action to declare the lease or a indeinite "eriod. O(ners ,rought their o(n
ci1il action or eject&ent u"on Yulo and Yang.
)9%: *(o cases (ere heard jointl/< )o&"laint o Yulo and Yang dis&issed declaring
contract o lease ter&inated.
)A: Air&ed the judg&ent.
%n 456.' Yulo de&anded ro& Yang her share in the "roits o the ,usiness. Yang
ans(ered sa/ing he had to sus"end "a/&ent ,ecause o "ending eject&ent suit.
Yulo iled "resent action in 456D' alleging the existence o a "artnershi" ,et(een the&
and that Yang has reused to "a/ her shares.
$eendantBs +osition: *he real agree&ent ,et(een "lainti and deendant (as one o
lease and not o "artnershi"< that the "artnershi" (as ado"ted as a su,teruge to get
around the "rohi,ition contained in the contract o lease ,et(een the o(ners and the
"lainti against the su,lease o the "ro"ert/.
*rial )ourt: $is&issal. %t is not true that a "artnershi" (as created ,et(een the& ,ecause
deendant has not actuall/ contri,uted the su& &entioned in the Articles o +artnershi" or
an/ other a&ount. *he agree&ent is a lease ,ecause "lainti didnBt share either in the
"roits or in the losses o the ,usiness as re0uired ,/ Art 47E5 @))A and ,ecause "lainti
(as granted a >guaranteed "artici"ation? in the "roits ,elies the su""osed existence o a
"artnershi".
%ssue: :as the agree&ent a contract a lease or a "artnershi"L
Ruling:
$is&issal. *he agree&ent (as a su,lease not a "artnershi". *he ollo(ing are the
re0uisites o "artnershi": @4A t(o or &ore "ersons (ho ,ind the&sel1es to contri,ute
&one/' "ro"ert/ or industr/ to a co&&on und< @2A the intention on the "art o the "artners
to di1ide the "roits a&ong the&sel1es @Article 47E4' ))A
+lainti did not urnish the su""osed +2.'... ca"ital nor did she urnish an/ hel" or
inter1ention in the &anage&ent o the theatre. Neither has she de&anded ro& deendant
an/ accounting o the ex"enses and earnings o the ,usiness. She (as a,solutel/ silent
(ith res"ect to an/ o the acts that a "artner should ha1e done< all she did (as to recei1e
her share o +-'... a &onth (hich cannot ,e inter"reted in an/ &anner than a "a/&ent
or the use o "re&ises (hich she had leased ro& the o(ners.
Ar,es 1s +olistico
9A)*S:
*his is an action to ,ring a,out li0uidation o the unds and "ro"ert/ o the association
called =*urnuhan +olistico H )o.= *he "laintis (ere &e&,ers or shareholders' and the
deendants (ere designated as "resident!treasurer' directors and secretar/ o said
association.
G/ agree&ent o the "arties' the court a""ointed a co&&issioner to exa&ine all the ,oo8s'
docu&ents' and accounts o =*urnuhan +olistico H )o. *he co&&issioner rendered his
re"ort' sho(ing a ,alance o the cash on hand inthe a&ount o +2D'E.7.;.. *he trial court
in acce"ting the re"ort' rendered judg&ent' holding that the association =*urnuhan
+olistico H )o.= is unla(ul' and sentencing the deendants jointl/ and se1erall/ to return
the a&ount o +2D'E.7.;.'as (ell as the docu&ents sho(ing the uncollected credits o the
association' to the "laintis in this case' and to the rest o the &e&,ers o the said
association re"resented ,/ said "laintis.
*here is no 0uestion that =*urnuhan +olistico H )o.= is an unla(ul "artnershi"' ,ut the
a""ellants allege that ,ecause it is so' so&e charita,le institution to (ho& the "artnershi"
unds &a/ ,e ordered to ,e turned o1er' should ,e included' as a "art/ deendant. *he
a""ellants reer to article 4EEE o the )i1il )ode' "articularl/ the second "aragra"h' (hich
"ro1ides:
>:hen the dissolution o an unla(ul "artnershi" is decreed' the "roits shall ,e
gi1en to charita,le institutions o the do&icile o the "artnershi"' or' in deault o
such' to those o the "ro1ince.?
%SSU#:
:F#*F#R OR NO* A )FAR%*AGL# %NS*%*U*%ON %S A N#)#SSARY +AR*Y %N
*F%S)AS#.
RUL%NG:
NO' no charita,le institution is a necessar/ "art/ in the "resent case o deter&ination o
the rights o the "arties. *he action (hich &a/ arise ro& said article' in the case o
unla(ul "artnershi"' is that or the reco1er/ o the a&ounts "aid ,/ the &e&,er ro&
those in charge o the ad&inistration o said "artnershi"' and it is not necessar/ or the
said "arties to ,ase their action to the existence o the "artnershi"' ,ut on the act that o
ha1ing contri,uted so&e &one/ to the "artnershi" ca"ital. Fence' the charita,le institution
o the do&icile o the "artnershi"' and in the deault thereo' those o the "ro1ince are not
necessar/ "arties in this case.
%n so ruling' the court had the occasion o ex"laining the sco"e and s"irit o the "ro1ision
o Article 4EEE o the )i1il )ode @no( Article 477. o the Ne( )i1il )odeA.
:ith regard to )ontri,utions o an %llegal +artnershi": *he court holds that R
@4A *he "artner (ho li&its hi&sel to de&anding onl/ the a&ount contri,uted ,/ hi& need
not resort to the "artnershi" contract on (hich to ,ase his action since said contract does
not exist in the e/es o the la(' the "ur"ose ro& (hich the contri,ution (as &ade has not
co&e into existence' and the ad&inistrator o the "artnershi" holding said contri,ution
retains (hat ,elongs to others' (ithout an/ consideration< or (hich reason he is not
,ound to return it and he (ho has "aid in his share is entitled to reco1er it.
BusOrg - Prior | 7
@2A Our )ode does not state (hether' u"on the dissolution o the unla(ul "artnershi"' the
a&ounts contri,uted are to ,e returned ,/ the "artners' ,ecause it onl/ deals (ith the
dis"osition o the "roits< ,ut the act that said contri,utions are not included in the
dis"osal "rescri,ed "roits' sho(s that in conse0uences o said exclusion' the general la(
&ust ,e ollo(ed' and hence the "artners should rei&,urse the a&ount o their res"ecti1e
contri,utions.
@-A An/ other solution is i&&oral' and the la( (ill not consent to the latter re&aining in the
"ossession o the &anager or ad&inistrator (ho has reused to return the&' ,/ den/ing to
the "artners the action to de&and the&.
:ith regard to +roits o an %llegal +artnershi": *he court holds that R
@4A *he article cited a,o1e "er&its no action or the "ur"ose o o,taining the earnings
&ade ,/ the unla(ul "artnershi"' during its existence as result o the ,usiness in (hich it
(as engaged' ,ecause or the "ur"ose' the "artner (ill ha1e to ,ase his action u"on the
"artnershi" contract' (hich is to annul and (ithout legal existence ,/ reason o its
unla(ul o,ject< and it is sel!e1ident that (hat does not exist cannot ,e a cause o action.
@2A +roits earned in the course o the "artnershi"' ,ecause the/ do not constitute or
re"resent the "artnerKs contri,ution ,ut are the result o the industr/' ,usiness or
s"eculation (hich is the o,ject o the "artnershi"' and thereore' in order to de&and the
"ro"ortional "art o the said "roits' the "artner (ould ha1e to ,ase his action on the
contract (hich is null and 1oid' since this "artition or distri,ution o the "roits is one o the
juridical eects thereo.
@-A 9urther&ore' it (ould ,e i&&oral and unjust or the la( to "er&it a "roit ro& an
industr/ "rohi,ited ,/ it.
LYONS VS. ROS#NS*O)S
9acts:
$uring his lieti&e' Fenr/ #lser got engaged in the real estate ,usiness. +etitioner L/ons'
on the other hand' joined #lser in so&e o his 1entures and the/ e0uall/ di1ided "roits
gained ro& these. %n 4545' L/ons needed to go ,ac8 to the United States or a /ear and a
hal and ,/ reason o (hich he executed a general "o(er o attorne/ in a1or o #lser'
e&"o(ering the latter to &anage and dis"ose the "ro"erties o(ned ,/ the&.
%n 452.' #lser (as dra(n to a "iece o land' the San Juan #state' and he "ercei1ed an
o""ortunit/ to de1elo" it into a su,ur,an co&&unit/. *he #state (as oered ,/ its o(ners
or +67.'... (ith an initial "a/&ent o +46.'.... %n Ma/ 452.' #lser (rote a letter to
L/ons inducing the latter to join hi& in this 1enture and to li8e(ise su""l/ the &eans
necessar/ or the ulill&ent o this "roject. %n the &eanti&e' #lser raised +42.'... ro&
his o(n unds and loaned +6.'... ro& U/ Siolong to "a/ or the initial "a/&ent. Fo(e1er
in order to o,tain the loan he had to gi1e a "ersonal note signed ,/ hi&sel' ,/ his other
associates and ,/ the 9idelit/ and Suret/ )o&"an/. *hen again' in order to o,tain the
signature o the 9idelit/ and Suret/ )o&"an/ #lser had to execute a &ortgage on one o
the "ro"erties o(ned ,/ hi& and L/ons on )arriedo Street.
L/ons re"lied to the letter o #lser onl/ in Jul/ 452. and he ex"ressed in it his
un(illingness to join the latter in this 1enture. Gecause o this #lser relie1ed the )arriedo
"ro"ert/ o the encu&,rance (hich he had "laced u"on it and re0uested the 9idelit/ and
Suret/ )o&"an/ to allo( hi& to su,stitute another "ro"ert/ or it. Fo(e1er the release o
the old &ortgage and the recording o the ne( (ere ne1er registered ,ecause in
Se"te&,er 452.' (hen L/ons returned to Manila' he allo(ed the &ortgage to re&ain on
the )arriedo "ro"ert/. Gut in Januar/ 4524' #lser (as a,le to "a/ the note executed ,/
hi& to U/ Siolong (hich ena,led the release o the )arriedo +ro"ert/.
%ssue:
:CN L/ons' as hal o(ner o the )arriedo "ro"ert/' in1oluntaril/ ,eca&e the o(ner or a
co!"artner o an undi1ided interest in the San Juan #state' (hich (as ac0uired "artl/ ,/
the &one/ o,tained through an encu&,rance "laced on the )arriedo "ro"ert/. No.
Feld:
Under our la(' a trust does not necessaril/ attach (ith res"ect to "ro"ert/ ac0uired ,/ a
"erson (ho uses &one/ ,elonging to another. %n the case at ,ar' there (as clearl/ no
general relation o "artnershi" ,et(een L/ons and #lser and the &ost that can ,e said is
that the/ had ,een co!"artici"ants in 1arious transactions in1ol1ing real estate. %t is clear
the #lser' in ,u/ing the San Juan #state' (as not acting or an/ "artnershi" co&"osed or
hi&sel and L/ons' es"eciall/ that the latter ex"ressl/ co&&unicated his desire not to
"artici"ate in this 1enture. Lastl/' it should ,e noted that no &one/ ,elonging to L/ons or
an/ "artnershi" co&"osed ,/ L/ons and #lser (as in act used ,/ the latter in the
"urchase o the San Juan #state.
+ascual 1s )%R
9A)*S:
+etitioners ,ought t(o "arcels o land and another - "arcels the ollo(ing /ear. *he 2
"arcels (ere sold in 45E; (hile the other - (ere sold in 457..RealiIing "roits ro& the
sale' "etitioners iled ca"ital gains tax. Fo(e1er' the/ (ere assessed (ith deicienc/ tax
or cor"orate inco&e taxes.
%SSU#:
:hether or not "etitioners or&ed an unregistered "artnershi" there,/ assessed (ith
cor"orate inco&e tax.
RUL%NG:
G/ the contract o "artnershi"' t(o or &ore "ersons ,ind the&sel1es to contri,ute &one/'
industr/ or "ro"ert/ to a co&&on und (ith the intention o di1iding "roits a&ong
the&sel1es. *here is no e1idence though' that "etitioners entered into an agree&ent to
contri,ute M+% to a co&&on und and that the/ intend to di1ide "roits a&ong the&sel1es.
*he "etitioners "urchased "arcels o land and ,eca&e co!o(ners thereo. *heir
BusOrg - Prior | 8
transactions o selling the lots (ere isolated cases. *he character o ha,itualit/ "eculiar to
the ,usiness transactions or the "ur"ose o gain (as not "resent.
*he sharing o returns oes not in itsel esta,lish a "artnershi" (hether or not the "ersons
sharing therein ha1e a joint or co&&on right or interest in the "ro"ert/. *here &ust ,e a
clear intent to or& "artnershi"' the existence o a juridical "ersonalit/ dierent ro& the
indi1idual "artners' and the reedo& o each "art/ to transer or assign the (hole "ro"ert/.
BusOrg - Prior | 9