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Facts: On the part of plaintiff Fernandez, he claims that he entered into a verbal agreement with defendant De
la Rosa to form a partnership for the purchase of cascoes with the undertaking that the defendant will buy the
cascoes and that each partner will furnish such amount as he could, while the profits will be divided
proportionately. Plaintiff furnished P300 for casco No. 1515 and P825 for casco No. 2089, both of which were
placed under the name of the defendant only. In April 1900, the parties undertook to draw up articles of their
partnership for the purpose of embodying it in an authentic document. The agreement however did not
materialize because defendant proposed articles which were materially different from their verbal agreement,
and he was also unwilling to include casco No. 2089 in the partnership. Because the cascoes were under the
management of the defendant, the plaintiff demanded an accounting over it to which the defendant refused
claiming that no partnership existed between them.

De la Rosa, on the other hand, admits that he desired to form a partnership with the plaintiff but denies that
any agreement was ever consummated. Moreover, he denied receiving any money furnished by plaintiff for
casco No. 1515, but claims that he merely borrowed the P300 on his individual account from the bakery
business in which plaintiff was a copartner. And as for the P825 furnished by the plaintiff, the defendant claims
that it was actually for casco No. 1515 and not for casco No. 2089. He also added that the repairs made on the
two cascoes were exclusively borne by him, and that he returned a sum of P1,125 to plaintiff with an express
reservation on his part of all his rights as a partner.

Issue: a) W/N a partnership existed between the parties. Yes.

a) The essential points upon which the minds of the parties must meet in a contract of partnership are 1)
mutual contribution and 2) joint interest in the profits.

The fact that the defendant received money furnished by the plaintiff for the purpose of using it to purchase the
cascoes establishes the first element of the partnership, mutual contribution to a common stock. For the
second element, the fact that the formation of partnership had been a subject of negotiation between them,
even before the purchase of the first casco, and that both parties intended to purchase the cascoes in common
satisfies the requirement that there should be an intention on the part of both parties to share the profits. With
these, a complete and perfect contract of partnership was entered into by the parties.

It must be noted however that this partnership was subject to a suspensive condition which is the execution of
a written agreement regarding the distribution of profits, character ofxpartnership, etc. But since the defendant
actually purchased the cascoes, it would seem that the partnership already existed. And as furthermore
provided by the Civil Code, a written agreement was not necessary in order to give efficacy to the verbal
agreement of the partnership because the contributions of the partners to the partnership were not in the form
of immovables.

b) W/N the partnership was terminated when the defendant returned the P1,125 to plaintiff. No.

b) During trial, the court was able to prove that plaintiff actually furnished some amount for the repair of the
cascoes and that it was presumed that a profit has been obtained by the defendant prior to the return of the
money. With these, the return of the
P1,125 fell short of the amount which the plaintiff has actually contributed to the partnership. For these
reasons, the acceptance by the plaintiff of the amount returned by the defendant did not have the effect of
terminating the legal existence of the partnership by converting it into a societas leonina.

The court also proved that there was no intention on the part of the plaintiff, in accepting the money, to
relinquish his rights as a partner. On the contrary he notified defendant that he waived none of his rights in the
partnership. Also the lack of recognition on the part of the defendant of the plaintiff’s right in the partnership
property and in the profits does not give the former the right to force a dissolution upon the later upon the terms
which the plaintiff is unwilling to accept. A partnership therefore existed between the two and cascoes No.
1515 and 2089 are partnership properties.