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EVANGELISTA & CO v. ABAD SANTOS (G.R. No. 31684; June 28, 1973)
FACTS: On October 9, 1954 a co-partnership was formed under the name of "Evangelista & Co." On June 7, 1955 the Articles of Co-partnership was amended as to include herein respondent, Estrella Abad Santos, as industrial partner, with herein petitioners Domingo C. Evangelista, Jr., Leonardo Atienza Abad Santos and Conchita P. Navarro, the original capitalist partners, remaining in that capacity, with a contribution of P17,500 each. The amended Articles provided, inter alia, that "the contribution of Estrella Abad Santos consists of her industry being an industrial partner", and that the profits and losses "shall be divided and distributed among the partners ... in the proportion of 70% for the first three partners, Domingo C. Evangelista, Jr., Conchita P. Navarro and Leonardo Atienza Abad Santos to be divided among them equally; and 30% for the fourth partner Estrella Abad Santos." On December 17, 1963 herein respondent filed suit against the three other partners in the Court of First Instance of Manila, alleging that the partnership, which was also made a party-defendant, had been paying dividends to the partners except to her; and that notwithstanding her demands the defendants had refused and continued to refuse and let her examine the partnership books or to give her information regarding the partnership affairs to pay her any share in the dividends declared by the partnership. She therefore prayed that the defendants be ordered to render accounting to her of the partnership business and to pay her corresponding share in the partnership profits after such accounting, plus attorney's fees and costs. ISSUE: Whether or not Abad Santos is an industrial partner and is entitled to the shares of the partnership? HELD: Yes. It is not disputed that the provision against the industrial partner engaging in business for himself seeks to prevent any conflict of interest between the industrial partner and the partnership, and to insure faithful compliance by said partner with this prestation. That appellee has faithfully complied with her prestation with respect to appellants is clearly shown by the fact that it was only after filing of the complaint in this case and the answer thereto appellants exercised their right of exclusion under the codal art just mentioned by alleging in their Supplemental Answer, subsequent to the filing of defendants' answer to the complaint, defendants reached an agreement whereby the herein plaintiff been excluded from, and deprived of, her alleged share, interests or participation, as an alleged industrial partner, in the defendant partnership and/or in its net profits or income, on the ground plaintiff has never contributed her industry to the partnership, instead she has been and still is a judge of the City Court (formerly Municipal Court) of the City of Manila, devoting her time to performance of her duties as such judge and enjoying the privilege and emoluments appertaining to the said office, aside from teaching in law school in Manila, without the express consent of the herein defendants'. Having always knows as a appellee as a City judge even before she joined appellant company as an industrial partner, why did it take appellants many yearn before excluding her from said company as aforequoted allegations? And how can they reconcile such exclusive with their main theory that appellee has never been such a partner because "The real agreement was to grant the appellee a share of 30% of the net profits which the appellant partnership may realize from June 7, 1955, until the mortgage of P30,000.00 obtained from the Rehabilitation Finance Corporal shall have been fully paid.
The total price of the nets amounted to P532. The buyers. Yao and Petitioner Lim Tong Lim with a prayer for a writ of preliminary attachment. 2000) FACTS: Heirs of Tan Eng Kee filed a complaint against the decedent’s brother. The suit was brought against the three in their capacities as general partners. and that it was only later on that Tan Eng Kee came to work for him as an employee. They claimed that they were engaged in a business venture with Petitioner Lim Tong Lim. which constituted the main assets of the partnership. 136448. a partnership engaged in the fishing business. however. and winding up of the alleged partnership formed after World War 2 between the brothers. ISSUE: W/N a partnership was formed between brothers. fell under the term "common fund" under Article 1767. and no time fixed for the duration of the partnership. Each has the right to demand an accounting as long as the partnership exists. for forty years Tan Eng Kee never demanded for an accounting. had a right to share in the company's assets. which the sheriff enforced by attaching the fishing nets on board F/B Lourdes which was then docked at the Fisheries Port. there was no firm account. Inc. no firm letterheads. Most importantly.35 million. on the allegation that "Ocean Quest Fishing Corporation" was a nonexistent corporation as shown by a Certification from the Securities and Exchange Commission. Tan Eng Lay for the accounting. and that Tan Eng Kee was only an employee thereof. countered that he had his business and his brother (Tan Eng Kee) had his. Heirs of Tan Eng Kee vs. The complaint was amended later to implead Benguet Lumber Co. it is clear that there was. PHILIPPINE FISHING GEAR INDUSTRIES INC (G. The CA. These boats. and they agreed that the proceeds from the sales and operations thereof would be divided among them. however." Antonio Chua and Peter Yao entered into a Contract dated February 7. We have allowed a scenario wherein "[i]f excellent relations exist among the partners at the start of the business and all the partners are more interested in seeing the firm grow rather than get immediate . (herein respondent). however. financed by a loan secured from Jesus Lim who was petitioner's brother. the lower court ISSUEd a Writ of Preliminary Attachment. no agreement as to profits and losses. Tan Eng Lay. liquidation. 1999) FACTS: On behalf of "Ocean Quest Fishing Corporation. who however was not a signatory to the agreement. The trial court declared that Tan Eng Kee and Tan Eng Lay were joint adventurers and/or partners and ruled that petitioners-heirs of the deceased Tan Eng Kee. failed to pay for the fishing nets and the floats. HELD: There was no partnership between the brothers.. the purchase and the repair of which were financed with borrowed money. Chua and Yao. ruled that there was no partnership since Benguet Lumber was a sole proprietorship. Metro Manila. The essence of a partnership is that the partners share in the profits and losses.2 LIM TONG LIM v. On September 20. Yao and Lim had decided to engage in a fishing business. CA (October 3. it is clear that Chua. which they started by buying boats worth P3. Four hundred pieces of floats worth P68. November 3. with Tan Eng Lay as its representative.045. among petitioner. Except for a firm name. The contribution to such fund need not be cash or fixed assets. it could be an intangible like credit or industry. 1990. That the parties agreed that any loss or profit from the sale and operation of the boats would be divided equally among them also shows that they had indeed formed a partnership. no certificate of partnership. private respondents filed a collection suit against Chua. No. for the purchase of fishing nets of various sizes from the Philippine Fishing Gear Industries. hence. They purchased the boats. Given the preceding FACTS. ISSUE: Whether or not there was a partnership? HELD: Yes.000 were also sold to the Corporation. Navotas. 1990.R.
even the aforesaid circumstances when taken together are not persuasive indicia of a partnership. WHEREFORE. the petition must fail. No pronouncement as to costs. A person is presumed to take ordinary care of his concerns. The business establishment. Hence. if any. but in what capacity is unclear. such as his residence in the Benguet Lumber Company compound. It may even be that among his duties is to place orders with suppliers. even in a business organized and run as informally as Benguet Lumber Company. They only tend to show that Tan Eng Kee was involved in the operations of Benguet Lumber. Again. if not actual. on the other hand. but not necessarily a joint venture is limited to a single transaction. was never established by the appellees. with no firm name and no legal personality. specifically particular partnership which has for its object specific undertaking.3 returns. a deferment of sharing in the profits is perfectly plausible. a partnership generally relates to a continuing business of various transactions of a certain kind. and can be individually liable therefore. He would have moral. There being no partnership. in addition to the accumulation of real properties and to the fact that it is now a compound. We cannot discount the likelihood that as a member of the family. and 2. the petition is hereby denied. which it said is akin to a particular partnership. A particular partnership is distinguished from a joint adventure.000. Where circumstances taken singly may be inadequate to prove the intent to form a partnership. definitely exceeded P3. superiority over his fellow employees. the deferment. He would have enjoyed liberties otherwise unavailable were he not kin. prospered. the circumstances proffered by petitioners do not provide a logical nexus to the conclusion desired.00. The trial court determined that Tan Eng Kee and Tan Eng Lay had entered into a joint venture. the participating merchants can transact business under their own name. in the case at bench. it may however engage in a joint venture with others. which from the language of the appellees. usually. and the appealed decision of the Court of Appeals is hereby AFFIRMED in toto." But in the situation in the case at bar. had gone on too long to be plausible. although the business of pursuing to a successful termination may continue for a number of years. to wit: 1. he occupied a niche above the rank-and-file employees. a joint venture is a form of partnership. winding up or liquidation to speak of. it follows that there is no dissolution. The execution of a public instrument. The Supreme Court has however recognized a distinction between these 2 business forms and has HELD that although a corporation cannot enter into a partnership. . In a joint account. these are not inconsistent with the powers and duties of a manager. thereby entitling him to exercise powers of supervision. the collective effect of these circumstances may be such as to support a finding of the existence of the parties' intent. Yet. nevertheless. It would seem that under the Philippine law. a joint venture (an American concept similar to out joint account) is a sort of informal partnership.
000. llcd Furthermore. 13389470-B from the profits of the operation of the restaurant for the year 1974. the Equitable Banking Corporation. So Sia further testified that he himself received from the petitioner a similar receipt (Exhibit D) evidencing delivery of his own investment in another amount of P4. the private respondent received from the petitioner the amount of P12. the motion for reconsideration filed by the plaintiff.000. The private respondent identified the signature on the receipt as that of the petitioner (Exhibit A-3) because it was affixed by the latter in his (private respondents's) presence.00 covered by the latter's Equitable Banking Corporation Check No. FACTS: This case originated from a complaint filed by respondent Leung Yiu with the then Court of First Instance of Manila. petitioner. respondents. vs. The private respondent's evidence is summarized as follows: About the time the Sun Wah Panciteria started to become operational. namely Ah Heng and Maria Wong (Exhibits H. Chief of the Savings Department of the China Banking Corporation testified that said check (Exhibit B) was deposited by and duly credited to the private respondent's savings account with the bank after it was cleared by the drawee bank. Respondent Leung Yiu adduced evidence during the trial of the case to show that Sun Wah Panciteria was actually a partnership and that he was one of the partners having contributed P4. The signatures in Exhibits "A" and "D" when compared to the signature of the petitioner appearing in the pay envelopes of employees of the restaurant.00 (Exhibit B). the private respondent gave P4. He contested and impugned the genuineness of the receipt (Exhibit D). The Sun Wah Panciteria. 1955. the petitioner presented various government licenses and permits showing the Sun Wah Panciteria was and still is a single proprietorship solely owned and operated by himself alone.00 as his contribution to the partnership. located at Florentino Torres Street.00 as capital in establishing Sun Wah Panciteria. Plaintiff also asked for a motion for reconsideration which was granted by the court the pertinent portion reads as follows: "FOR ALL THE FOREGOING CONSIDERATIONS. a restaurant.00. HON. Witness Teodulo Diaz. the court ruled in favor of the private respondent. . was established sometime in October. He used his savings from his salaries as an employee at Camp Stotsenberg in Clark Field and later as waiter at the Toho Restaurant amounting to a little more than P2. INTERMEDIATE APPELLATE COURT and LEUNG YIU.000. An examination was conducted by the PC Crime Laboratory on orders of the trial court granting the private respondent's motion for examination of certain documentary exhibits. Witnesses So Sia and Antonio Ah Heng corroborated the private respondent's testimony to the effect that they were both present when the receipt (Exhibit "A") was signed by the petitioner. Sta. Hence.000.00 by affixing his signature thereto. This is evidenced by a receipt identified as Exhibit "A" wherein the petitioner acknowledged his acceptance of the P4. 13389470 B in the amount of P12.00 to its initial establishment.000.000. 1955 from petitioner Dan Fue Leung. Branch II to recover the sum equivalent to twenty-two percent (22%) of the annual profits derived from the operation of Sun Wah Panciteria since October. To bolster his contention that he was the sole owner of the restaurant.00. the trial court gave credence to that of the plaintiff's.000. His evidence is summarized as follows: The petitioner did not receive any contribution at the time he started the Sun Wah Panciteria. 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. As between the conflicting evidence of the parties. The petitioner denied having received from the private respondent the amount of P4. Fue Leung also flatly denied having ISSUEd to the private respondent the receipt (Exhibit G) and the Equitable Banking Corporation's Check No. Cruz. H-1 to H-24) showed that the signatures in the two receipts were indeed the signatures of the petitioner.000.4 DAN FUE LEUNG. Manila.
Rollo) The petitioner appealed the trial court's amended decision to the then Intermediate Appellate Court. 107. with the intention of dividing the profits among themselves".000. plus the sum of P5.00 per day from the time of judicial demand. plaintiff (private respondent) would be entitled to twenty-two percentum (22%) of the annual profit derived from the operation of the said panciteria.00 as and for attorney's fees and costs of suit. is hereby retained in full and affirmed in toto it being understood that the date of judicial demand is July 13. The dispositive portion of said decision should read now as follows: "WHEREFORE." (De Tavera v. given its ordinary meaning. v. make the private respondent and the petitioner partners in the establishment of Sun Wah Panciteria because Article 1767 of the Civil Code provides that "By the contract of partnership two or more persons bind themselves to contribute money. property or industry to a common fund. . 135 SCRA 37). ordering the latter to pay the former the sum equivalent to 22% of the net profit of P8. judgment is rendered in favor of the plaintiff and against the defendant. the private respondent alleged that when Sun Wah Panciteria was established. . While the dispositive portions merely ordered the payment of the respondent's share. ISSUE: Whether or not private respondent Leung Yiu is a partner of petitioner Dan Fue Leung in the establishment of the Sun Wah Panciteria and therefore should be entitled to 22% of the annual income of the restaurant as averred by the former HELD: In essence. the lower courts did not err in construing the complaint as one wherein the private respondent asserted his rights as partner of the petitioner in the establishment of the Sun Wah Panciteria.00 as and for attorney's fees and costs of suit'. . 150.. financial assistance 'is the giving out of money to another without the expectation of any returns therefrom'.00 per day from the time of judicial demand. Court of Appeals. he gave P4. 105-106. Rollo).000. . Inc. is hereby reiterated and the decision rendered by this Court on September 30." (p. plus the sum of P5. Both the trial court and the appellate court found that the private respondent is a partner of the petitioner in the setting up and operations of the panciteria. In the same resolution. there is no question from the factual findings that the respondent invested in the business as a partner. Inc. It connotes an ex gratia dole out in favor of someone driven into a state of destitution. nature of the action filed in court is determined by the FACTS alleged in the complaint as constituting the cause of action. The modified resolution of the appellate court is as follows: WHEREFORE. But this circumstance under which the P4.000.000. the motion for reconsideration filed by petitioner was denied. ordering the plaintiff (sic) and against the defendant. until fully 'paid.000. ordering the latter to pay to the former the sum equivalent to 22% of the net profit of P8. notwithstanding the use of the term financial assistance therein. Therefore.00 to the petitioner with the understanding that he would be entitled to twenty-two percent (22%) of the annual profit derived from the operation of the said panciteria.000." (p. These allegations. claims that this factual finding is erroneous. however. is hereby amended. 1978. We agree with the appellate court's observation to the effect that ". until fully paid. the two courts declared that the private petitioner is entitled to a share of the annual profits of the restaurant. Hence. . Philippine Tuberculosis Society. 99. judgment is hereby rendered.00 was given to the petitioner does not obtain in this case. which were proved. 1980. The petitioner." (pp. Rollo) The well-settled doctrine is that the ".5 which was granted earlier by the Court. 113 SCRA 243. Rollo) The complaint explicitly stated that "as a return for such financial assistance." (p. Alger Electric.
except where immovable property of real rights are contributed thereto. The requisites of a partnership which are — 1) two or more persons bind themselves to contribute money. Lilibeth Sunga Chan vs Lamberto Chua (G. his surviving wife. property. Yulo v. Respondent allegedly delivered his initial capital contribution of P100.00 and partially paid the same to respondent. Petitioner Lilibeth allegedly continued the operations of Shellite. under the name of Jacinto as a sole proprietorship. Petitioner Lilibeth allegedly informed respondent that the P200. in which case a public instrument shall necessary. in the distribution of Shellane Liquefied Petroleum Gas (LPG) in Manila.000. respondent and Jacinto allegedly agreed to register the business name of their partnership. No. converting to her own use and advantage its properties. income and profits they misapplied and converted to their own use and advantage. Yang Chiao Cheng. control. as gathered from the FACTS and ascertained from their language and conduct. such rights are irretrievably lost. or industry to a common fund. 143340 August 15. For business convenience. with a promise that the former would make the complete inventory and winding up of the properties of the business establishment. As stated by the respondent. custody.6 The private respondent is a partner of the petitioner in Sun Wah Panciteria. Upon Jacinto's death in the later part of 1989. Despite respondent's repeated demands upon petitioners for accounting. Trial court directed petitioner to render an accounting. Ratio Decidendi: A partnership may be constituted in any form. SHELLITE GAS APPLIANCE CENTER (hereafter Shellite).000. 1991. 1992.00 as his counterpart contribution. Despite such commitment.00 represented partial payment of the latter's share in the partnership. winding up and restitution of his net shares in the partnership. appraisal. The private respondent's cause of action is premised upon the failure of the petitioner to give him the agreed profits in the operation of Sun Wah Panciteria. and 2) intention on the part of the partners to divide the profits among themselves (Article 1767. based on the intention of the parties. ISSUES: WON there exists a partnership HELD: Decision is affirmed. petitioners allegedly failed to comply with their duty to account. 2001) FACTS: In 1977. to restitute to the partnership all properties. In effect the private respondent was asking for an accounting of his interests in the partnership. CA affirmed the decision. It would be incorrect to state that if a partner does not assert his rights anytime within ten years from the start of operations. If excellent relations exist among the partners at the start of business and all the partners are more interested in seeing the firm grow rather than get immediate returns. 110) — have been established.R.00 to Jacinto while the latter in turn produced P100. Civil Code. a partner shares not only in profits but also in the losses of the firm. father of petitioner. inventory. she disbursed out of the partnership funds the amount of P200. took over the operations. a verbal contract of partnership may . assets. a deferment of sharing in the profits is perfectly plausible. with the intention that the profits would be equally divided between them. ORDERING them to wind up the affairs of the partnership and terminate its business activities pursuant to law. disposition and management of Shellite without respondent's consent. to pay the plaintiff earned but unreceived income and profits from the partnership from 1988 to May 30. petitioners failed to comply. On March 31.000. and continued to benefit from the assets and income of Shellite to the damage and prejudice of respondent. petitioner Cecilia and particularly his daughter.000. 106 Phil. petitioner Lilibeth.6 Hence. respondent claimed that after petitioner Lilibeth ran out the alibis and reasons to evade respondent's demands. Lamberto Chua verbally entered into a partnership agreement with Jacinto L Sunga.
On December 20. 3. there was no partnership created by the actionable document because this was not a public instrument and immovable properties were contributed to the partnership. Eduardo et al. (G.. 2002. SR. Aurelio alleged that he and Eduardo agreed that in consideration of Aurelio's retaining his share in the remaining family businesses. vs. are brothers. whichever is greater. petitioner has changed his theory on appeal. Yang is described in the complaint as petitioner's and Eduardo's partner in their Odeon Theater investment.000. Aurelio will be given P1 Million or 10% equity in all these businesses. Part of Annex A-1 reads: You will be the only one left with the company. but these demands were not heeded.8 AURELIO K. 2005) FACTS: Petitioner Aurelio Litonjua. Jr. 2. Litonjua. December 13. and the complaint filed by Aurelio was dismissed. as evidenced by Annex A and A-1 and upon which petitioner solely predicates his right/s.R. We two will gamble the whole thing of what I have and what you are entitled to. Yang moved to dismiss on the ground that petitioner has no cause of action.000. as well as their motions for reconsideration. Acting on the separate motions. Sr. LITONJUA.7 The essential profits that must be proven to that a partnership was agreed upon are (1) mutual contribution to a common stock. Sometime in 1992. Yang filed a petition for certiorari with CA to nullify trial court orders. The CA annulled. the trial court denied the affirmative defenses. denying that petitioner and Eduardo entered into a contract of partnership. I will make sure that you get P1.7 arise. he and Eduardo entered into a joint venture/partnership for the continuation of their family business and common family funds. also sought relief from the CA via similar recourse. Eduardo and the corporate respondents filed a joint ANSWER With Compulsory Counterclaim. is void or legally inexistent. This joint venture/partnership agreement was contained in a memorandum (Annex A) addressed by Eduardo to his siblings. and the portion referring to Aurelio was submarked as Annex A-1. et al. JR. Aurelio filed a suit against Eduardo and Robert Yang and several corporations for specific performance and accounting.00 or 10% equity. EDUARDO K. 166299-300. whichever is greater. Petitioner claimed that he and Eduardo are into a joint venture/partnership arrangement in the Odeon Theater business which had expanded thru investment in several corporations. among us brothers and I will ask you to stay as I want you to run this office every time I am away…Whatever is left in the corporation. . Nos. LITONJUA. the relations between the brothers became sour so that Aurelio requested for an accounting and liquidation of his share in the joint venture/partnership. and respondent Eduardo K. since June 1973. parents and other relatives. and set aside the trial court's orders. the complaint stated no cause of action against Yang. ISSUES: The petitioner contended that the CA erred when it ruled that: 1. 4. HELD: the actionable document did not create a demandable right in favor of petitioner. Aurelio alleged that. For his part. The alleged partnership. reversed. The two cases were consolidated. and (2) a joint interest in the profits.
defendants filed a Petition to Modify Decision and/or Petition for Reconsideration. entered into a sales agreement to purchase gasoline on credit with Mobil Oil Philippines. GEMINIANO F. consisting of movie theaters.000. a Decision was rendered in favor of the Mobil Oil and against defendants. let alone registered with the Securities and Exchange Commission (SEC). Thereafter. the instant petition is DENIED and the impugned Decision and Resolution of the Court of Appeals AFFIRMED. Moreover. averring that (1) that there was no stipulation or agreement of the parties on the award of attorney's fees. Annex A-1 does not meet the public instrumentation requirements exacted under Article 1771 of the Civil Code. Mobil Oil filed a complaint in the Court of First Instance of Rizal against La Mallorca and its general partners.8 1. 4. This actionable contract is what is known as an innominate contract. Petitioner asserted that Annex A-1 established an actionable contract even though it may not be a partnership. COURT OF FIRST INSTANCE OF RIZAL. YABUT and AGUEDA ENRIQUEZ YABUT. an inventory of the contributed property duly signed by the parties should be attached to the public instrument. If no action can successfully be maintained against respondent Eduardo because no valid partnership existed between him and petitioner. petitioner embraced the innominate contract theory. WHEREFORE. Subsequently. INC. Yang could not have become a partner in an inexistent partnership. the action could not also prosper against Yang. not being a general partner. could not bind the partnership in the Sales Agreement he signed with Mobil Oil. through its partner Miguel Enriquez. Mobil Oil filed an Amended Complaint impleading the heirs of the deceased partners as defendants. The defense agreed to submit the case for decision solely on the basis of evidence adduced by plaintiff Mobil Oil but past interest in the amount of P150. from a joint venture/partnership theory which he adopted and consistently pursued in his complaint. the CFI ISSUEd an order declaring its previous decision favouring Mobil Oil as null and void. petitioner's contribution to the so-called "partnership/joint venture" was his supposed share in the family business. Hence.00 shall be excluded and that only nominal attorney's fees shall be awarded. 40457 May 8. the counsel of the defendant successfully bargained for a compromise agreement. being unsigned and referring to a partnership involving more than P3. which are immovable properties and real rights. As regards the inventory requirement under Article 1773. and (3) that defendant Geminiano Yabut already withdrew as partner and president of La Mallorca as of September 14. The appellate court's certiorari jurisdiction was circumscribed by what was alleged to have been the order/s ISSUEd by the trial court in grave abuse of discretion. as called for under the Article 1772. After Mobil Oil had presented its evidence. vs. respondents (G. 2. After the CA has ruled that the alleged partnership is inexistent.00 in money or property. 3. shipping and land development. But because the mentioned purchase remained unpaid. Annex A-1 cannot support the existence of the partnership sued upon and sought to be enforced. 1992) FACTS: The partnership La Mallorca. else there is legally no partnership to speak of. However.000. 1972. Thus. which included private respondents. MOBIL OIL PHILIPPINES. An ISSUE which was neither averred in the complaint cannot be raised for the first time on appeal. The ground for the decision is that there was no evidence to show that the counsel for the defendants had been duly . In sum. petitioner took a different tack. (2) that Miguel Enriquez. BRANCH VI. Annex A-1 is unsigned and undated. Annex A-1 cannot be presented for notarization. Consequently. petitioner. No. As an unsigned document.R..
in the introduction of certain evidence. or in argumentation are. as in the instant case. Article IV of the Articles of Co-Partnership of La Mallorca provides that: “If during the existence of this co-partnership. DRAGON. If at all. a compromise agreement or a confession judgment with Mobil Oil. the alleged non-active participation of respondent Agueda Yabut in the partnership cannot exempt her from the obligation. THE COMMISSIONER OF INTERNAL REVENUE and COURT OF TAX APPEALS.000. among others all mistakes of procedure.000. Mistakes of counsel as to the relevancy or irrelevancy of certain evidence or mistakes in the proper defense. respondents . except a nominal one. MARIANO P. 1972. ISSUE: Whether or not the sales agreement with Mobil Oil which was signed by Miguel Enriquez can bind the partnership. and they bind the clients. the debt was incurred long before his withdrawal as partner and his resignation as President of La Mallorca on September 14. and waiver of interest in the amount of P150. Hence. He automatically became a general partner of the partnership for being one of the heirs of the deceased general partner Mariano Enriquez. petitioners. let judgment be rendered in accordance with the evidence so far presented. a compromise agreement or a confession of judgement? HELD: Respondent court ISSUEd the following Order: Calling this case for hearing today. the co-partnership shall continue to exist amongst the surviving partners and the heir or heirs of the deceased partner or partners. because Miguel Enriquez is a general partner of La Mallorca. Active participation in a partnership is not a condition precedent for membership in a partnership so as to be entitled to its profits or be burdened with its liabilities. Finding the said motion in order. HELD: Yes.9 authorized by the partnership to enter into a stipulation of FACTS. PASCUAL and RENATO P. ISSUE: Does non-active participation in the partnership exempt a partner from liability? HELD: No. Parties are bound by the acts and mistakes of their counsel in procedural matters. this petition.” ISSUE: Whether or not the withdrawal of Yabut from the partnership will exempt him from liability.00 and the stipulated attorney's fees of 25% of the principal amount on the part of the plaintiff. Mobil Oil filed a Motion for Reconsideration and Clarification but it was denied. any of the herein partners should die. vs.00 and to award nominal attorney's fees. The foregoing Order is not a stipulation of FACTS nor a confession of judgment. Respondent Geminiano Yabut could not just withdraw unilaterally from the partnership to avoid his liability as a general partner to third persons like the petitioner in the instant case. The counsels of the parties in this case had the implied authority to do all acts necessary or incidental to the prosecution and management of the suit in behalf of their clients who were all present and never objected to the disputed order of the respondent court. HELD: No. there has been a mutual waiver by the parties of the right to present evidence in court on the part of the defendants on one hand. ISSUE: Was there a stipulation of FACTS. the parties pray the Court that they are submitting the case for decision on the basis of the evidence thus presented but to exclude past interest in the amount of about P150.
Hence. ISSUE receipts. Petitioners filed a petition for review with the respondent Court of Tax Appeals docketed as CTA Case No. 1979 asserting that they had availed of tax amnesties way back in 1974. 1979. The corresponding capital gains taxes were paid by petitioners in 1973 and 1974 by availing of the tax amnesties granted in the said years. the petitioners were required to pay the deficiency income tax assessed. from them. among others.D. 23. petitioners were assessed and required to pay a total amount of P107. 1970. collect. "It is evident that an isolated transaction whereby two or more persons contribute funds to buy certain real estate for profit in the absence of other circumstances showing a contrary intention cannot be considered a partnership.10 FACTS: On June 22. both of the National Internal Revenue Code. the Collector of Internal Revenue demanded the payment of income tax on a corporation. et al. and that the availment of tax amnesty under P. 1 that the unregistered partnership was subject to corporate income tax as distinguished from profits derived from the partnership by them which is subject to individual income tax. In the instant case. while the three parcels of land were sold by petitioners to Erlinda Reyes and Maria Samson on March 19. No. 1965. 1987. The character of habituality peculiar to business transactions engaged in for the purpose of gain was present. etc. they bought another three (3) parcels of land from Juan Roque. The character of habituality peculiar to business transactions for the purpose of gain was not present. as amended. In 1966. In due course. respondent Commissioner informed petitioners that in the years 1968 and 1970.00 in the sale made in 1970. Thus. rent. petitioners as co-owners in the real estate transactions formed an unregistered partnership or joint venture taxable as a corporation under Section 20(b) and its income was subject to the taxes prescribed under Section 24. the respondent court by a majority decision of March 30. In Evangelista. However. by petitioners relieved petitioners of their individual income tax liabilities but did not relieve them from the tax liability of the unregistered partnership. petitioners bought two (2) parcels of land in 1965. ISSUE: Whether or not the petitioners formed an unregistered partnership or there is merely a co-ownership HELD: The basis of the subject decision of the respondent court is the ruling of this Court in Evangelista. 2 affirmed the decision and action taken by respondent commissioner with costs against petitioners. Plana. . they bought another three (3) parcels of land from one seller.70. The first two parcels of land were sold by petitioners in 1968 to Marenir Development Corporation.000. The transactions were isolated. and on May 28. Petitioners realized a net profit in the sale made in 1968 in the amount of P165. petitioners borrowed a sum of money from their father which together with their own personal funds they used in buying several real properties. It ruled that on the basis of the principle enunciated in Evangelista. It was only 1968 when they sold the two (2) parcels of land after which they did not make any additional or new purchase. in a letter dated March 31. 1979 of then Acting BIR Commissioner Efren I. while they realized a net profit of P60. Petitioners protested the said assessment in a letter of June 26. 1966. They appointed their brother to manage their properties with full power to lease. there was a series of transactions where petitioners purchased twenty-four (24) lots showing that the purpose was not limited to the conservation or preservation of the common fund or even the properties acquired by them. In a reply of August 22.101.70 as alleged deficiency corporate income taxes for the years 1968 and 1970. 3 an unregistered partnership was in fact formed by petitioners which like a corporation was subject to corporate income tax distinct from that imposed on the partners. In the said case.224. petitioners bought two (2) parcels of land from Santiago Bernardino. They had the real properties rented or leased to various tenants for several years and they gained net profits from the rental income. 3045. The remaining three (3) parcels were sold by them in 1970. They did not sell the same nor make any improvements thereon.
p. they cannot be considered to have formed an unregistered partnership which is thereby liable for corporate income tax.12 Ct. the Lazatins informed Primelink that they had .R. And even assuming for the sake of argument that such unregistered partnership appears to have been formed. the Lazatins and Primelink. in his capacity as President. then petitioners can be HELD individually liable as partners for this unpaid obligation of the partnership. the petition is hereby GRANTED and the decision of the respondent Court of Tax Appeals of March 30. 35 L. by two. as petitioners have availed of the benefits of tax amnesty as individual taxpayers in these transactions. 1157. Ed. otherwise the appropriate action would be filed against it to protect their rights and interests.11 'Persons who contribute property or funds for a common enterprise and agree to share the gross returns of that enterprise in proportion to their contribution. demanded that Primelink comply with its obligations under the JVA. 1997. This impelled the officers of Primelink to meet with the Lazatins and enabled the latter to review its business records/papers. The two isolated transactions whereby they purchased properties and sold the same a few years thereafter did not thereby make them partners. They shared in the gross profits as co-owners and paid their capital gains taxes on their net profits and availed of the tax amnesty thereby. Lazatin-Magat and her brothers. T-108484 of the Register of Deeds of Tagaytay City. section 83. There is no adequate basis to support the proposition that they thereby formed an unregistered partnership. does not constitute a co-partnership in respect thereto. Mechem.) The sharing of returns does not in itself establish a partnership whether or not the persons sharing therein have a joint or common right or interest in the property. and no community of interest as principal proprietors in the business itself which the proceeds derived. machineries. entered into a Joint Venture Agreement5 (JVA) for the development of the aforementioned property into a residential subdivision to be known as "Tagaytay Garden Villas. 327. equipment. as the respondent commissioner proposes. through counsel.. 1994. In a Letter13 dated April 10. but who severally retain the title to their respective contribution. are co-owners of two (2) adjoining parcels of landlocated in Tagaytay City and covered by Transfer Certificate of Title (TCT) No. Primelink undertook to contribute money.' (Clark vs. In another Letter14 dated October 22. personnel. Under the circumstances. contractor’s pool. 1987 is hereby REVERSED and SET ASIDE and another decision is hereby rendered relieving petitioners of the corporate income tax liability in this case. Primelink v Lopez (G. 74. represented by Lopez. 7 However. They have no common stock or capital. the parties are only tenants in common. the existence of a juridical personality different from the individual partners. In the present case. (Elements of the Law of Partnership by Floyd D. 1997. and the freedom of each party to transfer or assign the whole property. Lopez is its President and Chief Executive Officer. Rafaelito W. marketing activities.S. WHEREFORE. labor. without pronouncement as to costs. managerial expertise and other needed resources to develop the property and construct therein the units for sale to the public. nor does an agreement to share the profits and losses on the sale of land create a partnership. there is clear evidence of co-ownership between the petitioners. On March 10. For its part. the Lazatin siblings obliged themselves to contribute the two parcels of land as their share in the joint venture." Under the JVA.) 'A joint purchase of land. Clara T. since there is no such existing unregistered partnership with a distinct personality nor with assets that can be HELD liable for said deficiency corporate income tax. 167379 June 27.3 Ma. 142 U. Sideway. are not thereby rendered partners. No. 2006) FACTS: Primelink Properties and Development Corporation (Primelink for brevity) is a domestic corporation engaged in real estate development. 682.. the Lazatins. 2nd Ed. There must be a clear intent to form a partnership. they are thereby relieved of any further tax liability arising therefrom.
. the relation of the parties in joint ventures is governed by their agreement. SPOUSES ISHWAR JETHMAL RAMNANI. hardly distinguishable from the partnership. in fact. and a particular partnership may have for its object a specific undertaking. Ishwar received US $150. and a mutual right of control.. the general principles of partnership may be resorted to. immediately restoring to the plaintiffs possession of the subject parcels of land.. a joint venture is a form of partnership and is to be governed by the laws of partnership. under Philippine law. petitioners. The Supreme Court has. 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. recognized a distinction between these two business forms.56 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.. SONYA JETHMAL RAMNANI and OVERSEAS HOLDING CO. ordering the defendants to render an accounting of all income generated as well as expenses incurred and disbursement made in connection with the project.00 from his father-in-law in Switzerland. LTD. it may.R.R. RAMNANI. vs.12 decided to rescind the JVA effective upon its receipt of the said letter. . 1991 SPOUSES ISHWAR JETHMAL RAMNANI AND SONYA JET RAMNANI. and has HELD that although a corporation cannot enter into a partnership contract. this observation is not entirely accurate in this jurisdiction. but it has been generally understood to mean an organization formed for some temporary purpose. a partnership may be particular or universal. When the RTC rescinded the JVA on complaint of respondents based on the evidence on record that petitioners willfully and persistently committed a breach of the JVA. LTD. 1991 CHOITHRAM JETHMAL RAMNANI AND/OR NIRMLA V. It would seem therefore that. When the agreement is silent on any particular ISSUE. and is thus of a temporary nature. PARTNERSHIP. since elements are similar – community of interest in the business. respondents. respondents. and OVERSEAS HOLDING CO. 85496 May 7. FACTS: Ishwar Jethmal Ramnani and his wife Sonya had their main business based in New York. 85494 May 7. a joint venture is a form of partnership and should thus be governed by the laws of partnership.COURT OF APPEALS. It has no precise legal definition. It is. the court thereby dissolved/cancelled the partnership. petitioners. No.. RAMNANI and MOTI G. however. Trial court rendered a decision rescinding the Joint Venture Agreement executed between the plaintiffs and the defendants. ORTIGAS & CO. vs. No. The main distinction cited by most opinions in common law jurisdictions is that the partnership contemplates a general business with some degree of continuity. G. Ratio Decidendi: As a general rule. the partnership is not terminated but continues until the winding up of partnership affairs is completed. while the joint venture is formed for the execution of a single transaction. CA affirmed trial court’s decision rulingthat.55 On dissolution. engage in a joint venture with others. since under the Civil Code. under Philippine law.000. The Lazatins demanded that Primelink cease and desist from further developing the property. sharing of profits and losses. G. LTD. however. The legal concept of a joint venture is of common law origin. THE HONORABLE COURT OF APPEALS. ISSUE: WON trial court erred in rescinding the JVA between the parties HELD: SC affirmed appellate court’s decision.54 With the rescission of the JVA on account of petitioners’ fraudulent acts.
spouses Ishwar filed a complaint in the Court of First Instance of Rizal against Choithram and spouses Nirmla and Moti (Choithram et al.000. In 1970 Ishwar asked Choithram to account for the income and expenses relative to these properties during the period 1967 to 1970. transferred all rights and interests of Ishwar spouses in favor of Nirmla Ramnani. Two of these buildings were later burned. the wife of Choitram’s son. The CA ruled that Choithram is also estopped in pais or by deed from claiming an interest over the properties. the CA reversed the decision and gave credence to Ishwar.00 to Choithram in two bank drafts of US$65. Moti. Ishwar also failed to corroborate this lone testimony and did not exhibit any commercial document as regard to the alleged remittances. empowering them to manage and conduct their business concerns in the Philippines.13 In 1965. Ltd. were duly notified by notice in writing of such revocation. and (3) the Contract of Lease . Choithram.. Ishwar Jethmal Ramnani sent the amount of US $150.. It states therein that Choithram reassures his brother that he is not after his money and that the revocation is hurting the reputation of Ishwar. Partnership (Ortigas Ltd. It was also registered with the Securities and Exchange Commission and published in The Manila Times. (2) the Agreements. It upHELD the validity of Ishwar’s testimony and gave cognizance to a letter written by Choihtram imploring Ishwar to renew the power of attorney after it was revoked.) and Ortigas Ltd. Choithram failed and refused to render such accounting which prompted Ishwar to revoke the general power of attorney. Upon appeal. Three buildings were constructed thereon and were leased out by Choithram as attorney-in-fact of spouses Ishwar. Choithram and Ortigas Ltd.048 square meters. as attorney-in-factr. Trial court dismissed the complaint ruling that the lone testimony of Ishwar regarding the cash remittance is unworthy of faith and credit because the cash remittance was made before the execution of the general power of attorney.) with a total area of approximately 10.000. spouses Ishwar executed a general power of attorney appointing Ishwar’s full blood brothers Choithram and Navalrai as attorneys-in-fact. then a British citizen. Because of Choitram’s admissions from (1) power of attorney. to purchase the properties in the name of Ishwar who was an American citizen and who was then qualified to purchase property in the Philippines under the then Parity Amendment. Choithram also made no mention of his claimed temporary arrangement in the letter. Ortigas also executed the corresponding deeds of sale in favor of Nirmla and the TCT ISSUEd in her favour. for reconveyance of said properties or payment of its value and damages. Nevertheless.000. Choithram as such attorney-in-fact of Ishwar.00 and US$85. Thus. entered into two agreements for the purchase of two parcels of land located in Pasig Rizal from Ortigas & Company. It believed the claim of Choitram that he and Ishwar entered into a temporary arrangement in order to enable Choithram.00 for the purpose of investing the same in real estate in the Philippines. Subsequently.
it must. Spouses Reyes FACTS: On June 13. After all. therefore. he paid in installments and used the balance of the capital entrusted to him. It should have required Choithram to secure another power of attorney from Ishwar. share in the latter's liability to Ishwar. Upholding the supposed "temporary arrangement" with Ishwar would be sanctioning the perpetration of an illegal act and culpable violation of the Constitution. blood is thicker than water. . Although the buildings were burned later. a lending business venture was launched by Fernando Santos (petitioner). However. The rest will receive 15% each. The Supreme Court affirms the findings of the Court of Appeals. He bought the two (2) parcels of land in question from Ortigas as attorney-in-fact of Ishwar. Ortigas is not entirely without fault. Both would stand to gain. Spouses Ishwar supplied the capital of $150.00 for the business. Zabat was replaced by the husband of Reyes because it was discovered that the latter was engaged in the same lending business in competition with their partnership.14 It furthermore HELD that Choithram's 'temporary arrangement. the scenario is clear. He rented them out and collected the rentals. While the primary blame should be laid at the doorstep of Choithram. 1986. Choithram was able to build two other buildings on the property. to assign the rights of petitioner Ishwar to Nirmla. We have a situation where two brothers engaged in a business venture. During the pendency of the case. Through the industry and genius of Choithram. Santos VS. plus a loan. One furnished the capital. as alleged attorney-in-fact of Ishwar. because Ortigas had several notices of the revocation. Choithram made several attempts to dispose of his properties by way of donation and also mortgaged the properties under litigation for 3 million USD to a shell partnership with a mere capital of 100 USD. by which he claimed purchasing the two (2) parcels in question in 1966 and placing them in the name of Ishwar who is an American citizen circumvents the disqualification provision of aliens acquiring real properties in the Philippines. They entrusted the money to Choithram to invest in a profitable business venture in the Philippines. For recklessly believing the pretension of Choithram that his power of attorney was still good. ISSUE: Whether or not Ortigas Ltd. Justice and equity dictate that the two share equally the fruit of their joint investment and efforts. Ortigas nevertheless acceded to the representation of Choithram. ISSUE: Whether or not there was a partnership between the brothers Ishwar and Choithram HELD: Yes. HELD: Yes. Ishwar's property was developed and improved into what it is now— a valuable asset worth millions of pesos. Perhaps this Solomonic solution may pave the way towards their reconciliation. Even without a written agreement. is liable. the other contributed his industry and talent. Nieves Reyes (respondent) and Meliton Zabat with the agreement that Santos will be the financer and will receive the lion’s share of 70% of the profit. Thereafter. Despite said notices. because of the devious machinations and schemes that Choithram employed he should pay moral and exemplary damages as well as attorney's fees to spouses Ishwar. Choithram in turn decided to invest in the real estate business.Instead of paying for the lots in cash. No one would end up the loser. to build two buildings.000. For this purpose they appointed Choithram as their attorney-in-fact.
there are signatories that they shall share the profits of the business in 70-15-15 manner. It did not consider the expenses sustained by the partnership. Since during only the weekends are the spouses able to go to Laguna. WON the CA is correct in granting the spouses Reyes’ counterclaim for their share in partnership and for damages. Under the contract of partnership. it stated that the accusation of “estafa” lacks enough credible evidentiary support to sustain a prima facie finding. with petitioner getting the lion’s share. The respondents’ exhibits did not reflect the complete financial condition of the money-lending business. there is an establishment of a partnership. ISSUE: WON there was a partnership established to engage in a money-lending business. There is a contract showing industrial relationship and contribution of money and industry to a common fund. 1987. Mercado convinced Angeles spouses to enter into a contract of antichresis (sanglaang-perde). the Angeles spouses contributed money to the partnership and not immovable property and the mere failure to register the contract of partnership does not affect the liability of the partnership. The said contract was to last for 5 years with P210. It was ruled that the crime of estafa cannot be sustained. Zabat filed a complaint for the recovery of sum of money from the spouses Reyes claiming that the latter misappropriated funds as employees. . property and industry to a common fund.000 as consideration. 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”. Failure to register the COP. 1986 until April 19. The spouses Reyes answered that they are not mere employees but partners of the petitioner. Mercado gave accounting only in 1993 and stopped in the year 1995. Of Justice FACTS: On November 1992. They discovered that Mercado had put the contract of sanglaang-perde under Mercado and his spouse’s names. The stipulation between the petitioner and the respondent spouses clearly shows that there is a partnership wherein the “Articles of Agreement”. two or more persons bind themselves to contribute money. Furthermore. he alleged that there was (sosyo industrial) or industrial partnership agreement between them and that the Angeles spouses are the financiers and Mercado and his spouse as industrial partners. the SC found a reason to disagree with CA. A partnership may exist even if the partners do not use the words “partner” or “partnership”. HELD: As to the first ISSUE. capital would come from the Angeles spouses while the profit would be divided evenly between Mercado and the Angeles spouses. In the ruling of the Provincial Prosecution Office.15 On June 5. As to the second ISSUE. The Angeles spouses appealed on the Secretary of Justice. 1987. does not affect the liability of the partnership’s juridical personality. covering 8 parcels of land planted with fruit-bearing lanzones trees located in Laguna and owned by Ivana Sazo. and the division of profits between Angeles spouses and Mercado. The trial court ruled in favor of Spouses Reyes and was affirmed by the Court of Appeals.429. exhibit “10-I” showed that the partnership earned a total income of P20. HELD: There was an establishment of partnership between Mercado and the Angeles spouses.520 for the period of June 13. Sec. The purpose of registration of the COP is to give notice to third parties. Mercado administered the lands and completed the necessary paper works. Angeles VS. Under the industrial agreement. ISSUE: WON a partnership existed between Mercado and the Angeles spouses. with the intention of dividing the profit among themselves. In Mercado’s counter affidavit.
Q A Q A Q A Q A . confirmed that petitioner Belo's presence in Geminesse Enterprise's meetings was merely as guarantor of the company and to help petitioner Tocao.1 On November 14. . sir2 The foregoing was neither refuted nor contradicted by respondent's evidence.You mentioned a while ago the name William Belo. Belo filed a Motion for Reconsideration of our Decision dated October 4.You mentioned a certain Peter Lo. what is the role of William Belo with Geminesse Enterprise? A Q . and respondent Nenita A. and that to adhere to its decision will cause injustice to a party litigant. indeed. petitioners Marjorie Tocao and William T. petitioner Belo acted merely as guarantor of Geminesse Enterprise. Now.What is the role of Peter Lo in the Geminesse Enterprise? . After a careful review of the evidence presented. ANAY. we are convinced that. respondent. This was categorically affirmed by respondent's own witness. Bantilan testified that it was Peter Lo who was the company's financier. Elizabeth Bantilan. . .16 MARJORIE TOCAO and WILLIAM T.What do you mean by guarantor? A . he is the financier.Yes. vs. Thus: Q .He is the one fixing our orders that open the L/C. Who is this Peter Lo? . It should be recalled that the business relationship created between petitioner Tocao and respondent Anay was an informal partnership. respondent's witness. and that the latter being merely an employee of petitioner Tocao. especially when in its honest opinion it has committed an error or mistake in judgment. petitioners. We can borrow money from him. during her cross-examination. on the one hand.And the defendant William Belo is merely the guarantor of Geminesse Enterprise.3 Again. Anay.William Belo is the friend of Marjorie Tocao and he was the guarantor of the company. who was after all petitioner Tocao's good friend and confidante.Peter Lo is based in Singapore. Elizabeth Bantilan. COURT OF APPEALS and NENITA A.Yes. As such. it was understandable that Belo. on the other hand. . 2000. They maintain that there was no partnership between petitioner Belo. which was not even recorded with the Securities and Exchange Commission. BELO. would occasionally participate in the affairs of the business. RESOLUTION The inherent powers of a Court to amend and control its processes and orders so as to make them conformable to law and justice includes the right to reverse itself.4 . Furthermore. am I correct? . 2001.You mean Peter Lo is the financier? . although never in a formal or official capacity.He guarantees the stocks that she owes somebody who is Peter Lo and he acts as guarantor for us.
inasmuch as petitioner Belo was not a partner in Geminesse Enterprise. respondents. Respondent used the loan to implement the Agreement. construction of roads. vs. 88509.00 should be deducted from whatever amount is finally adjudged in her favor on the basis of the formal account of the partnership affairs to be submitted to the Regional Trial Court. Hence. FACTS: This is a petition for Review on Certiorari for the decision of the Court of Appeals affirming the decision of the Trial Court in favour of herein respondent and denying reconsideration. and the land was subsequently foreclosed by the bank. who then had it registered in his name. The sum of P208. entered into a "joint venture agreement" with Respondent Manuel Torres for the development of a parcel of land into a subdivision. WHEREFORE.250. the Motion for Reconsideration of petitioners is PARTIALLY GRANTED. because petitioners and their relatives had separately caused the annotations of adverse claims on the title to the land.00 shall be deducted from whatever amount petitioner Marjorie Tocao shall be HELD liable to pay respondent after the normal accounting of the partnership affairs. Respondent claimed that the subdivision project failed. advertisement in the local newspaper. petitioner Tocao declared that petitioner Belo was not entitled to any share in the profits of Geminesse Enterprise. COURT OF APPEALS and MANUEL TORRES. petitioners refused to cause the clearing of the claims.00 and that. All three of them also agreed to share the proceeds from the sale of the subdivided lots. ANGELO TORRES. approval of the subdivision project with Lapu Lapu City Council. By mortgaging the property. her claim for damages should be barred to that extent. docketed as Civil Case No. . no evidence was presented to show that petitioner Belo participated in the profits of the business enterprise. as against petitioner William T. Sisters Antonia Torres and Emeteria Baring. we find that the said sum of P208. Respondent herself professed lack of knowledge that petitioner Belo received any share in the net income of the partnership. her act of withholding whatever stocks were in her possession and control was justified. They executed a Deed of Sale covering the said parcel of land in favor of respondent. this Petition. petitioner Belo cannot be deemed a partner since the essence of a partnership is that the partners share in the profits and losses. respondent had no cause of action against him and her complaint against him should accordingly be dismissed. based on the foregoing.7 Consequently. thereby forcing him to give up on the project. Given the circumstances surrounding private respondent's sudden ouster from the partnership by petitioner Tocao. However. however. among others are: effect the survey and subdivision of the lots. while we do not agree that the same renders private respondent in bad faith and should bar her claim for damages.000 which was to be used for the development of the subdivision. respondent obtained from Equitable Bank a loan of P40.250. Petitioners filed with the RTC a civil action against respondent. which eventually scared away prospective buyers. petitioners.250. and EMETERIA BARING. The project did not push through. We do not agree. petitioners argue that respondent should be deemed in bad faith for failing to account for stocks of Geminesse Enterprise amounting to P208.5 On the other hand. petitioners. and construction of 6 low cost housing units. if only to serve as security for her claims against the partnership. Belo only. accordingly.17 Furthermore. As regards the award of damages. The Regional Trial Court of Makati is hereby ordered to DISMISS the complaint.6 With no participation in the profits. Despite his requests. curbs and gutters. RTC ruled in favour of respondent and which was later affirmed by CA. ANTONIA TORRES assisted by her husband.
By the contract of partnership two or more persons bind themselves to contribute money.18 ISSUE: WON. they should have objected to it and insisted on the provisions they wanted. may be in keeping with good faith. 1767. the CA erred in concluding that the agreement entered between petitioners and respondent was that of a joint venture/partnership. the Petition is hereby DENIED and the challenged Decision AFFIRMED. the proceeds of which were used for the survey and the subdivision of the land and so on. Thus. Accordingly. claiming that respondent was solely responsible for the failure of the subdivision project. we find no reversible error in the CA's ruling that petitioners are not entitled to damages. Contracts are perfected by mere consent. Under the parties Agreement. the income from the said project would be divided according to the stipulated percentage. True. petitioners failed to give any reason why we should disregard the factual findings of the appellate court relieving him of fault. petitioners maintain that he should be made to pay damages equivalent to 60 percent of the value of the property. but also industry. 1315. In imputing the blame solely to him. while respondent would give. a partner may contribute not only money or property. usage and law. or industry to a common fund. Under Article 1767 of the Civil Code. We are not persuaded. with the intention of dividing the profits among themselves. petitioners would contribute property to the partnership in the form of land which was to be developed into a subdivision. WHEREFORE. the contract manifested the intention of the parties to form a partnership. It should be stressed that the parties implemented the contract. according to their nature. They cannot now disavow the relationship formed from such agreement due to their supposed misunderstanding of its terms. the amount needed for general expenses and other costs. Lastly. respondent caused the subject land to be mortgaged. and the fact that the contractual stipulations may turn out to be financially disadvantageous will not relieve parties thereto of their obligations. and from that moment the parties are bound not only to the fulfillment of what has been expressly stipulated but also to all the consequences which. . which was their share in the profits under the Joint Venture Agreement. Costs against petitioners. If it was not in consonance with their expectations. Clearly. Respondent's actions clearly contradict petitioners' contention that he made no contribution to the partnership. On the other hand. in addition to his industry. property. It is undisputed that petitioners are educated and are thus presumed to have understood the terms of the contract they voluntarily signed. But it also ruled that neither was respondent responsible therefor. Furthermore. Courts are not authorized to extricate parties from the necessary consequences of their acts. Art. the Court of Appeals HELD that petitioners' acts were not the cause of the failure of the project. HELD: Art. Moreover. petitioners transferred the title to the land to facilitate its use in the name of the respondent. petitioners contend that they cannot be bound by the contract.