FRANCISCO BASTIDA, plaintiff-appellee, vs. MENZI & Co., INC., J.M. MENZI and P.C. SCHLOBOHM, defendants.

MENZI & CO. , appellant. Facts: That on April 27, 1922, the defendant Menzi & Co., Inc. through its president and general manager, J.M. Menzi, under the authority of the board of directors, entered into a contract with the plaintiff to engage in the business of exploiting prepared fertilizers. , the defendant Menzi & Co., Inc., was obliged to render annual balance sheets to be plaintiff upon the 30th day of June of each year; that the plaintiff had no intervention in the preparation of these yearly balances, nor was he permitted to have any access to the books of account; and when the balance sheets were shown him, he, believing in good faith that they contained the true statement of the partnership business, accepted and signed them, the last balance sheet having been rendered in the year 1926. when the plaintiff received the information mentioned in the preceding paragraph, he demanded that the defendants permit him to examine the books and vouchers of the business, which were in their possession, in order to ascertain the truth of the alleged false entries in the books and balance sheets submitted for his approval, but the defendants refused. That as a result of the partial examination of the books of account of the business, the plaintiff has, through his accountants, discovered that the defendants, conspiring and confederating together, presented to the plaintiff during the period covered by the partnership contract false and incorrect accounts. Defendants denied all the allegations of the amended complaint, except the formal allegations as to the parties. on or about November, 1921, the defendant, Menzi & CO., Inc., made and entered into an employment agreement with the plaintiff. That prior to the termination of the said agreement, the defendant, Menzi & Co., Inc., duly notified the plaintiff that it would not under any conditions renew his said agreement or continue his said employment with it after its expiration. ISSUE: Whether or not the plaintiff belongs to the partnership. HELD: The trial court relied on article 116 of the Code of Commerce, which provides that articles of association by which two or more persons obligate themselves to place in a common fund any property, industry, or any of these things, in order to obtain profit, shall be commercial, no matter what its class may be, provided it has been established in accordance with the provisions of this Code; but in the case at bar there was no common fund, that is, a fund belonging to the parties as joint owners or partners. The business belonged to Menzi & Co., Inc. The plaintiff was working for Menzi & Co., Inc. Instead of receiving a fixed salary or a fixed salary and a small percentage of the net profits.

G.R. No. L-18010

June 21, 1922

BASILIO BORJA, petitioner-appellee, vs. P. W. ADDISON, ADELINA FERRER, VITALIANA BELISARIO, EUGENIO BELISARIO, and AURENO BELISARIO,objectors-appellants. FACTS: Eulalio Belisario acquired the two parcels of land in question through information posesoria proceedings, instituted in accordance with the provisions of articles 19-21 of the Royal Decree of February 13, 1894, and recorded under the provision of the Mortgage Law. Paula Ira, the wife of Eulalio Belisario, died on February 13, 1913, leaving as her sole heir their son Maximo Belisario. After the death of the said Paula Ira, Eulalio and Maximo Belisario occupied and administered the two parcels of land in common. on August 25, 1913, and upon certain dates subsequent thereto, the lands in question were forfeited to and confiscated by the Government for the non-payment of taxes. , the aforesaid order and notice of attachment were served upon Maximo Belisario and Eulalio Belisario; and on August 5, 1916, but no entries appear to have been made in the book of the registry. on January 19, 1917, Eulalio Belisario executed in favor of Basilio Borja a deed of sale of the two parcels of land in question for P7,500, reserving the right to repurchase the lands for the same price within the term of eighteen months from the date thereof. On January 21, 1919, the Director of Lands authorized Peter W. Addison to repurchase the lands in question, which had been forfeited to an confiscated by the Government. ISSUE: Whether or not Eulio Belisario and his son can form a partnership. HELD: There is no reason in a law why the heirs of the deceased wife may not form a partnership with the surviving husband for the management and control of the community property of the marriage and conceivably such a partnership, or rather community of property, between the heirs and the surviving husband might be formed without a written agreement.

ALBERT F. KIEL, plaintiff-appellee, vs. ESTATE OF P. S. SABERT, defendant-appellant. FACTS: In 1907, Albert F. Kiel along with William Milfeil commenced to work on certain public lands situated in the municipality of Parang, Province of Cotabato, known as Parang Plantation Company. Kiel and P. S. Sabert entered into an agreement to develop the Parang Plantation Company. Sabert was to furnish the capital to run the plantation and Kiel was to manage it. They were to share and share alike in the property. It seems that this partnership was formed so that the land could be acquired in the name of Sabert, Kiel being a German citizen and not deemed eligible to acquire public lands in the Philippines. During the World War, he was deported from the Philippines. Sabert wrote Kiel that he had offered to sell all property that I have for P40,000 or take in a partner who is willing to develop the plantation, to take up the K. & S. debt. But Sabert's death came before any amicable arrangement could be reached and before an action by Kiel against Sabert could be. ISSUE: Whether or not there was a partnership. HELD: the rule of partnership that declares of one partner, not made in the presence of his copartner, are not competent to prove the existence of a partnership between them as against such other partner, and that the existence of a partnership cannot be established by general reputation, rumor, or hearsay.

EUFEMIA EVANGELISTA, MANUELA EVANGELISTA, and FRANCISCA EVANGELISTA , petitioners, vs. THE COLLECTOR OF INTERNAL REVENUE and THE COURT OF TAX APPEALS, respondents. FACTS: the petitioners borrowed from their father the sum of P59,1400.00 which amount together with their personal monies was used by them for the purpose of buying real properties and bought lot from Mrs. Josefina Florentino, Mrs. Josefa Oppus, Insular Investments Inc, and Mrs. Valentina Afable. They appointed their brother Simeon Evangelista to 'manage their properties with full power to lease; to collect and receive rents; to issue receipts therefor; in default of such payment, to bring suits against the defaulting tenants; to sign all letters, contracts, etc., for and in their behalf, and to endorse and deposit all notes and checks for them. 1954 respondent Collector of Internal Revenue demanded the payment of income tax on corporations ISSUE: whether petitioners are subject to the tax on corporations provided for in section 24 of Commonwealth Act. No. 466, otherwise known as the National Internal Revenue Code, HELD: The essential elements of a partnership are thefollowing: 1.An agreement to contribute money, property, or industry to a common fund 2.Intent to divide the profits among the contracting parties. Although, taken singly, they might not suffice to establish the intent necessary to constitute a partnership, the collective effect of these circumstance sis such as to leave no room for doubt of the existence of said intent in petitioners herein.*For purposes of the tax on corporations, our NIRC includes these partnerships with the exception only of general co-partnershipswithin the purview of the term corporation. It thus clear clear to our mind that petitioners herein constitute a partnership, insofar as the Code is concerned, and are subject to the income tax for corporations