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LIM TONG LIM, petitioner,

vs.
PHILIPPINE FISHING GEAR INDUSTRIES, INC., respondent.

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.
PRIMELINK PROPERTIES AND DEVELOPMENT CORPORATION and RAFAELITO W. LOPEZ, Petitioners,
vs.
MA. CLARITA T. LAZATIN-MAGAT, JOSE SERAFIN T. LAZATIN, JAIME TEODORO T. LAZATIN and JOSE MARCOS T.
LAZATIN, Respondents.
FACTS
In 1994, Primelink Properties and the Lazatin siblings entered into a joint venture agreement whereby the Lazatins shall
contribute a huge parcel of land and Primelink shall develop the same into a subdivision. For 4 years however, Primelink failed to
develop the said land. So in 1998, the Lazatins filed a complaint to rescind the joint venture agreement with prayer for preliminary
injunction. In said case, Primelink was declared in default or failing to file an answer and for asking multiple motions for extension. The
trial court eventually ruled in favor of the Lazatins and it ordered Primelink to return the possession of said land to the Lazatins as well
as some improvements which Primelink had so far over the property without the Lazatins paying for said improvements. This decision
was affirmed by the Court of Appeals. Primelink is now assailing the order; that turning over improvements to the Lazatins without
reimbursement is unjust; that the Lazatins did not ask the properties to be placed under their possession but they merely asked for
rescission.

ISSUE
Whether or not the improvements made by Primelink should also be turned over under the possession of the Lazatins.

HELD
Yes. In the first place, even though the Lazatins did specifically pray for possession the same (placing of improvements under
their possession) is incidental in the relief they prayed for. They are therefore entitled possession over the parcel of land plus the
improvements made thereon made by Primelink.
In this jurisdiction, joint ventures are governed by the laws of partnership. Under the laws of partnership, when a partnership is
dissolved, as in this case when the trial court rescinded the joint venture agreement, the innocent party has the right to wind up the
partnership affairs.

With the rescission of the JVA on account of petitioners fraudulent acts, all authority of any partner to act for the partnership is
terminated except so far as may be necessary to wind up the partnership affairs or to complete transactions begun but not yet
finished. On dissolution, the partnership is not terminated but continues until the winding up of partnership affairs is
completed. Winding up means the administration of the assets of the partnership for the purpose of terminating the business and
discharging the obligations of the partnership.
It must be stressed, too, that although the Lazatins acquired possession of the lands and the improvements thereon, the said
lands and improvements remained partnership property, subject to the rights and obligations of the parties, inter se, of the creditors and
of third parties and subject to the outcome of the settlement of the accounts between the parties, absent any agreement of the parties
in their JVA to the contrary (here no agreement in the JVA as to winding up). Until the partnership accounts are determined, it cannot
be ascertained how much any of the parties is entitled to, if at all.

EMILIO EMNACE, petitioner,


vs.
COURT OF APPEALS, ESTATE OF VICENTE TABANAO, SHERWIN TABANAO, VICENTE WILLIAM TABANAO, JANETTE
TABANAO DEPOSOY, VICENTA MAY TABANAO VARELA, ROSELA TABANAO and VINCENT TABANAO, respondents.

FACTS
Emilio Emnace, Jacinto Divinagracia and Vicente Tabanao formed a partnership engaged in the fishing industry. In 1986,
Jacinto decided to leave the partnership hence they agreed to dissolve the partnership. At that time, the partnership has an estimated
asset amounting to P30,000,000.00.
HOWEVER, until the death of Vicente Tabanao in 1994, Emnace never rendered an accounting either to Vicente or his heirs.
Emnace reneged on his promise to turn over Tabanaos share which is 1/3 of the P30M. The heirs of Tabanao then sued Emnace.
Emnace argued, among others, that the heirs are barred by prescription hence they can no longer demand an accounting. He contends
that the partnership was dissolved in 1986 and that was the time when Tabanaos (and his heirs) right to inquire into the business
affairs accrued; that said right has expired in 1990 or 4 years after. So beyond 1990, they can no longer inquire.

ISSUE
Whether or not Emnace is correct.
HELD
No. Prescription has not run in this case, it has never begun. The three final stages of partnership are: a) dissolution, b)
winding up, and c) termination. In this case, Emnace and his partners dissolved their partnership but such did not perfect the dissolution
because no accounting took place. The partnership, although dissolved, continues to exist and its legal personality is retained, at which
time it completes the winding up of its affairs, including the partitioning and distribution of the net partnership assets to the partners. For
as long as the partnership exists, any of the partners (or legal representative in this case the heirs of Tabanao) may demand an
accounting of the partnerships business. Prescription of the said right starts to run only upon the dissolution of the partnership when
the final accounting is done.
When a final accounting is made, it is only then that prescription begins to run. In the case at bar, no final accounting has
been made, and that is precisely what the heirs are seeking in their action before the trial court, since Emnace has failed or refused to
render an accounting of the partnerships business and assets. Hence, the said action is not barred by prescription.

NOTE: Under Article 1809 of the Civil Code, right to demand an accounting may also be invoked under certain agreements these are
just one of the exceptions. General Rule: Accounting only when there is dissolution. Exception: Article 1807 and 1809

LUZVIMINDA J. VILLAREAL, DIOGENES VILLAREAL and CARMELITO JOSE, petitioners,


vs.
DONALDO EFREN C. RAMIREZ and Spouses CESAR G. RAMIREZ JR. and CARMELITA C. RAMIREZ,respondents.

FACTS
In 1984, Villareal, Carmelito Jose and Jesus Jose, formed a partnership for the purpose of operating a restaurant. Each
contributed P250,000.00. In 1984, Ramirez was added as a partner after he contributed P250,000.00. In 1987, Jesus withdrew from the
partnership and his capital share of P250k was returned to him as agreed upon by the other partners.
Thereafter, the restaurant suffered losses. Without informing Ramirez, Villareal and Carmelito shut down the restaurant. They then
turned over the restaurant equipments to Ramirez.
Later, Ramirez sent a letter to Villareal and Carmelito telling them hes no longer interested in being a partner and that hes demanding
his shares in the partnership. Villareal and Carmelito ignored the request of Ramirez hence the latter sued them.
In their defense, Villareal and Carmelito said that the restaurant equipments served as payment to Ramirez when they were delivered
to them; that Ramirez cannot ask for share in equity because the restaurant incurred debts (P240,658.00) and irreversible business
losses. Ramirez argued by saying that the equipments were merely placed in their house for storage as the two partners allegedly
searched for a better restaurant location; that he was not aware of any losses or any indebtedness because he never took part in the
management of the restaurant.
The trial court ruled in favor of Ramirez. The Court of Appeals affirmed the trial court and it further ordered Villareal and Carmelito to
pay Ramirez P253,114.00. The computation was done as follows: (Original Partnership Capital Partnership Debt = Partnership Asset)
Number of partners; hence: (P1,000,000.00 P240,658.00 = P759,342.00) 3 = P253,114.00.
ISSUE
Whether or not the Court of Appeals is correct.
HELD
No. It is impossible that the said P1,000,000.00 original capital did not fluctuate. It could not have remained stagnant. Further,
the Court of Appeals missed to note that one partner left and his contribution was returned (Jesus Jose). Generally, in the pursuit of a
partnership business, its capital is either increased by profits earned or decreased by losses sustained. It does not remain static and
unaffected by the changing fortunes of the business.
The Supreme Court also noted that Ramirez cannot demand his equity shares from Villareal and Carmelito because it
should be the partnership the partners and the partnership has a separate and distinct personality.
In determining Ramirez share in the equity, losses must be accounted for. He cannot ask for an amount equivalent to his capital
contribution especially in this case where the partnership incurred debts and losses. At any rate, Ramirez share is 1/3 of whatever
assets the partnership still has after debts and losses are deducted. Hence there is a need for a proper proceeding for the accounting,
liquidation, and distribution of the remaining partnership assets. A share in a partnership can be returned only after the completion of
the latters dissolution, liquidation and winding up of the business.
On the issue of whether or not the turning over of the restaurant equipments to Ramirez served as payment of the latters
share, it is wrong for Villarreal and Carmelito to assert that it served as a payment. Ramirez was merely made to believe that said
equipments are being stored in his place and not being given to him as payment.

AURELIO K. LITONJUA, JR., Petitioner,


vs.
EDUARDO K. LITONJUA, SR., ROBERT T. YANG, ANGLO PHILS. MARITIME, INC., CINEPLEX, INC., DDM GARMENTS, INC.,
EDDIE K. LITONJUA SHIPPING AGENCY, INC., EDDIE K. LITONJUA SHIPPING CO., INC., LITONJUA SECURITIES, INC.
(formerly E. K. Litonjua Sec), LUNETA THEATER, INC., E & L REALTY, (formerly E & L INTL SHIPPING CORP.), FNP CO., INC.,
HOME ENTERPRISES, INC., BEAUMONT DEV. REALTY CO., INC., GLOED LAND CORP., EQUITY TRADING CO., INC., 3D
CORP., "L" DEV. CORP, LCM THEATRICAL ENTERPRISES, INC., LITONJUA SHIPPING CO. INC., MACOIL INC., ODEON REALTY
CORP., SARATOGA REALTY, INC., ACT THEATER INC. (formerly General Theatrical & Film Exchange, INC.), AVENUE REALTY,
INC., AVENUE THEATER, INC. and LVF PHILIPPINES, INC., (Formerly VF PHILIPPINES),Respondents.

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
Eduardos away) and in exchange thereof he will be giving Aurelio P1 million or 10% equity, whichever is higher. A memorandum was
subsequently made for the said partnership agreement. The memorandum this time stated that in exchange of Aurelio, who just got
married, retaining his share in the family business (movie theatres, shipping and land development) and some other immovable
properties, he will be given P1 Million or 10% equity in all these businesses and those to be subsequently acquired by them whichever
is greater.
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 Aurelios contribution, if any, to the supposed
partnership.
The Memorandum is also not a proof of the partnership for the same is not a public instrument and again, no inventory was made of the
immovable property and no inventory was attached to the Memorandum. Article 1773 of the Civil Code requires that if immovable
property is contributed to the partnership an inventory shall be had and attached to the contract.

HEIRS OF TAN ENG KEE, petitioners,


vs.
COURT OF APPEALS and BENGUET LUMBER COMPANY, represented by its President TAN ENG LAY,respondents.

FACTS
After the second World War, Tan EngKee and Tan Eng Lay, pooling their resources and industry together, entered into a
partnership engaged in the business of selling lumber and hardware and construction supplies. They named their enterprise "Benguet
Lumber" which they jointly managed until Tan EngKee's death. Petitioners herein averred that the business prospered due to the hard
work and thrift of the alleged partners. However, they claimed that in 1981, Tan Eng Lay and his children caused the conversion of the
partnership "Benguet Lumber" into a corporation called "Benguet Lumber Company." The incorporation was purportedly a ruse to
deprive Tan EngKee and his heirs of their rightful participation in the profits of the business. Petitioners prayed for accounting of the
partnership assets, and the dissolution, winding up and liquidation thereof, and the equal division of the net assets of Benguet Lumber.
The RTC ruled in favor of petitioners, declaring that Benguet Lumber is a joint venture which is akin to a particular partnership. The
Court of Appeals rendered the assailed decision reversing the judgment of the trial court.
ISSUE
Whether the deceased Tan EngKee and Tan Eng Lay are joint adventurers and/or partners in a business venture and/or
particular partnership called Benguet Lumber and as such should share in the profits and/or losses of the business venture or particular
partnership
HELD
There was no partnership whatsoever. Except for a firm name, there was no firm account, no firm letterheads submitted as
evidence, no certificate of partnership, no agreement as to profits and losses, and no time fixed for the duration of the partnership.

There was even no attempt to submit an accounting corresponding to the period after the war until Kee's death in 1984. It had no
business book, no written account nor any memorandum for that matter and no license mentioning the existence of a partnership. Also,
the trial court determined that Tan EngKee and Tan Eng Lay had entered into a joint venture, which it said is akin to a particular
partnership. A particular partnership is distinguished from a joint adventure, to wit:(a) A joint adventure (an American concept similar to
our joint accounts) is a sort of informal partnership, with no firm name and no legal personality. In a joint account, the participating
merchants can transact business under their own name, and can be individually liable therefor. (b) Usually, but not necessarily a joint
adventure is limited to a SINGLE TRANSACTION, although the business of pursuing to a successful termination maycontinue for a
number of years; a partnership generally relates to a continuing business of various transactions of a certain kind. A joint venture
"presupposes generally a parity of standing between the joint co-ventures or partners, in which each party has an equal proprietary
interest in the capital or property contributed, and where each party exercises equal rights in the conduct of the business. The evidence
presented by petitioners falls short of the quantum of proof required to establish a partnership. In the absence of evidence, we cannot
accept as an established fact that Tan EngKee allegedly contributed his resources to a common fund for the purpose of establishing a
partnership. Besides, it is indeed odd, if not unnatural, that despite the forty years the partnership was allegedly in existence, Tan
EngKee never asked for an accounting. The essence of a partnership is that the partners share in the profits and losses .Each has the
right to demand an accounting as long as the partnership exists. A demand for periodic accounting is evidence of a partnership. During
his lifetime, Tan EngKee appeared never to have made any such demand for accounting from his brother, Tang Eng Lay. We conclude
that Tan EngKee was only an employee, not a partner since they did not present and offer evidence that would show that Tan EngKee
received amounts of money allegedly representing his share in the profits of the enterprise. There being no partnership, it follows that
there is no dissolution, winding up or liquidation to speak of.

LILIBETH SUNGA-CHAN and CECILIA SUNGA, petitioners,

vs.
LAMBERTO T. CHUA, respondent.

FACTS
In 1977, Chua and Jacinto Sunga verbally agreed to form a partnership for the sale and distribution of Shellane LPGs. Their
business was very profitable but in 1989 Jacinto died. Upon Jacintos death, his daughter Lilibeth took over the business as well as the
business assets. Chua then demanded for an accounting but Lilibeth kept on evading him. In 1992 however, Lilibeth gave Chua P200k.
She said that the same represents a partial payment; that the rest will come after she finally made an accounting. She never made an
accounting so in 1992, Chua filed a complaint for Winding Up of Partnership Affairs, Accounting, Appraisal and Recovery of Shares
and Damages with Writ of Preliminary Attachment against Lilibeth.
Lilibeth in her defense argued among others that Chuas action has prescribed.
ISSUE
Whether or not Chuas claim is barred by prescription.
HELD
No. The action for accounting filed by Chua three (3) years after Jacintos death was well within the prescribed period. The
Civil Code provides that an action to enforce an oral contract prescribes in six (6) years while the right to demand an accounting for a
partners interest as against the person continuing the business accrues at the date of dissolution, in the absence of any contrary
agreement. Considering that the death of a partner results in the dissolution of the partnership, in this case, it was after Jacintos death
that Chua as the surviving partner had the right to an account of his interest as against Lilibeth. It bears stressing that while Jacintos
death dissolved the partnership, the dissolution did not immediately terminate the partnership. The Civil Code expressly provides that
upon dissolution, the partnership continues and its legal personality is retained until the complete winding up of its business,
culminating in its termination.

MARJORIE TOCAO and WILLIAM T. BELO, petitioners,


vs.
COURT OF APPEALS and NENITA A. ANAY, respondent.

FACTS
Private respondent Nenita A. Anay met petitioner William T. Belo, then the vice-president for operations of Ultra Clean Water
Purifier, through her former employer in Bangkok. Belo introduced Anay to petitioner Marjorie Tocao, who conveyed her desire to enter
into a joint venture with her for the importation and local distribution of kitchen cookwares
Under the joint venture, Belo acted as capitalist, Tocao as president and general manager, and Anay as head of the marketing
department and later, vice-president for sales
The parties agreed that Belo's name should not appear in any documents relating to their transactions with West Bend
Company. Anay having secured the distributorship of cookware products from the West Bend Company and organized the
administrative staff and the sales force, the cookware business took off successfully. They operated under the name of Geminesse
Enterprise, a sole proprietorship registered in Marjorie Tocao's name.
The parties agreed further that Anay would be entitled to:
(1) ten percent (10%) of the annual net profits of the business;
(2) overriding commission of six percent (6%) of the overall weekly production;
(3) thirty percent (30%) of the sales she would make; and
(4) two percent (2%) for her demonstration services. The agreement was not reduced to writing on the strength of
Belo's assurances that he was sincere, dependable and honest when it came to financial commitments.
On October 9, 1987, Anay learned that Marjorie Tocao had signed a letter addressed to the Cubao sales office to the effect
that she was no longer the vice-president of Geminesse Enterprise. Anay attempted to contact Belo. She wrote him twice to demand
her overriding commission for the period of January 8, 1988 to February 5, 1988 and the audit of the company to determine her share
in the net profits. Anay still received her five percent (5%) overriding commission up to December 1987. The following year, 1988, she
did not receive the same commission although the company netted a gross sales of P 13,300,360.00.
On April 5, 1988, Nenita A. Anay filed Civil Case No. 88-509, a complaint for sum of money with damages against Marjorie D.
Tocao and William Belo before the Regional Trial Court of Makati, Branch 140
The trial court held that there was indeed an "oral partnership agreement between the plaintiff and the defendants. The Court
of Appeals affirmed the lower courts decision.

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.