Partnership Case Digests (Deans Office Syllabus) - E

1. Litong Lim vs Phil. Gear Industries, Inc.

(1999)
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: Yes. 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.
2. Yulo vs Yang Chiao Seng (1959)
Facts:
Facts: Yang Chiao Seng proposed to
form a partnership with Rosario Yulo to run and
operate a theatre on the premises occupied by
Cine Oro, Plaza Sta. Cruz, Manila, the principal
conditions of the offer being (1) Yang
guarantees Yulo a monthly participation of

P3,000 (2) partnership shall be for a period of 2

years and 6 months with the condition that if
the
land
is
expropriated,
rendered
impracticable for business, owner constructs a
permanent building, then Yulos right to lease
and partnership even if period agreed upon has
not yet expired; (3) Yulo is authorized to
personally conduct business in the lobby of the
building; and (4) after Dec 31, 1947, all
improvements placed by partnership shall
belong to Yulo but if partnership is terminated
before lapse of 1 and years, Yang shall have
right to remove improvements. Parties
established, Yang and Co. Ltd., to exist from
July 1, 1945 Dec 31, 1947.
In June 1946, they executed a
supplementary agreement extending the
partnership for 3 years beginning Jan 1, 1948
to Dec 31, 1950. The land on which the theater
was constructed was leased by Yulo from
owners, Emilia Carrion and Maria Carrion Santa
Marina for an indefinite period but that after 1
year, such lease may be cancelled by either
party upon 90-day notice. In Apr 1949, the
owners notified Yulo of their desire to cancel
the lease contract come July. Yulo and husband
brought a civil action to declare the lease for a
indefinite period. Owners brought their own
civil action for ejectment upon Yulo and Yang.
In 1950, Yulo demanded from Yang her share in
the profits of the business. Yang answered
saying he had to suspend payment because of
pending ejectment suit. Yulo filed present
action in 1954, alleging the existence of a
partnership between them and that Yang has
refused to pay her shares
Issue: Whether or not there is a partnership.
Held: No. The agreement was a sublease not a
partnership. The following are the requisites of
partnership: (1) two or more persons who bind
themselves to contribute money, property or
industry to a common fund; (2) the intention on
the part of the partners to divide the profits
among themselves (Article 1761, CC) Plaintiff
did not furnish the supposed P20,000 capital
nor did she furnish any help or intervention in
the management of the theatre. Neither has
she demanded from defendant any accounting
of the expenses and earnings of the business.
She was absolutely silent with respect to any of
the acts that a partner should have done; all
she did was to receive her share of P3,000 a
month which cannot be interpreted in any
manner than a payment for the use of

Partnership Case Digests (Deans Office Syllabus) - E

premises which she had leased from the
owners.
3. Heirs of Tan Eng Kee vs CA (2000)
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 or not there was a contract of
partnership.
Held: No. 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.
4. Aguila Jr. vs CA (1999)
Facts:
In April 1991, the spouses Ruben and Felicidad
Abrogar entered into a loan agreement with a
lending firm called A.C. Aguila & Sons, Co., a
partnership. The loan was for P200k. To secure
the loan, the spouses mortgaged their house
and lot located in a subdivision. The terms of
the loan further stipulates that in case of nonpayment, the property shall be automatically
appropriated to the partnership and a deed of
sale be readily executed in favor of the
partnership. She does have a 90 day
redemption period. Ruben died, and Felicidad
failed to make payment. She refused to turn
over the property and so the firm filed an

Partnership Case Digests (Deans Office Syllabus) - E

ejectment case against her (wherein she lost).
She also failed to redeem the property within
the period stipulated. She then filed a civil case
against Alfredo Aguila, manager of the firm,
seeking for the declaration of nullity of the
deed of sale. The RTC retained the validity of
the deed of sale. The Court of Appeals reversed
the RTC. The CA ruled that the sale is void for it
is a pactum commissorium sale which is
prohibited under Art. 2088 of the Civil Code
(note the disparity of the purchase price, which
is the loan amount, with the actual value of the
property which is after all located in a
subdivision).
Issue: Whether or not Felicidads suit will
prosper.
Held: No. Unfortunately, the civil case was
filed not against the real party in interest. As
pointed out by Aguila, he is not the real party
in interest but rather it was the partnership
A.C. Aguila & Sons, Co. The Rules of Court
provide that every action must be prosecuted
and defended in the name of the real party in
interest. A real party in interest is one who
would be benefited or injured by the judgment,
or who is entitled to the avails of the suit. Any
decision rendered against a person who is not
a real party in interest in the case cannot be
executed. Hence, a complaint filed against
such a person should be dismissed for failure
to state a cause of action, as in the case at bar.
Under Art. 1768 of the Civil Code, a partnership
has a juridical personality separate and
distinct from that of each of the partners. The
partners cannot be held liable for the
obligations of the partnership unless it is shown
that the legal fiction of a different juridical
personality is being used for fraudulent, unfair,
or illegal purposes. In this case, Felicidad has
not shown that A.C. Aguila & Sons, Co., as a
separate juridical entity, is being used for
fraudulent,
unfair,
or
illegal
purposes.
Moreover, the title to the subject property is in
the name of A.C. Aguila & Sons, Co. It is the
partnership, not its officers or agents, which
should be impleaded in any litigation involving
property registered in its name. A violation of
this rule will result in the dismissal of the
complaint.
5. Villareal vs Ramirez (2003)
Facts:
In 1984, Villareal, Carmelito Jose and
Jesus Jose formed a partnership with a capital
of P750,000for the operation of a restaurant

and catering business. Respondent Ramirez

joined as a partner in the business with the
capital contribution of P250,000. In 1987, Jesus
Jose withdrew from the partnership and within
the same time, Villareal and Carmelito Jose,
petitioners closed the business without prior
knowledge of respondents In March 1987,
respondents wrote a letter to petitioners
stating that they were no longer interested in
continuing the partnership and that they were
accepting the latters offer to return their
capital contribution. This was left unheeded by
the petitioners, and by reason of which
respondents filed a complaint in the RTC.RTC
ruled that the parties had voluntarily entered
into a partnership, which could be dissolved at
any time, and this dissolution was showed by
the fact that petitioners stopped operating the
restaurant. On appeal, CA upheld RTCs
decision that the partnership was dissolved
and it added that respondents had no right to
demand the return of their capital contribution.
However since petitioners did not give the
proper accounting for the liquidation of the
partnership, the CA took it upon itself to
compute their liabilities and the amount that is
proper to the respondent. The computation of
which was:(capital of the partnership
outstanding obligation) / remaining partners
=amount due to private respondent
Issue: Whether or not petitioners are liable to
respondents for the latters share in the
partnership.
Held: No. We hold that respondents have no
right to demand from petitioners the return of
their equity share. Except as managers of the
partnership, petitioners did not personally hold
its equity or assets. The partnership has a
juridical personality separate and distinct from
that of each of the partners. Since the capital
was contributed to the partnership, not to
petitioners, it is the partnership that must
refund the equity of the retiring partners.
As found by the court petitioners did
not personally hold its equity or assets. The
partnership has a juridical personality separate
and distinct from that of each of the partners.
Since the capital was contributed to the
partnership, not to petitioners, it is the
partnership that must refund the equity of the
retiring partners. However, before the partners
can be paid their shares, the creditors of the
partnership must first be compensated.
Therefore, the exact amount of refund
equivalent to respondents one-third share in

Partnership Case Digests (Deans Office Syllabus) - E

the partnership cannot be determined until all
the partnership assets will have been
liquidated and all partnership creditors have
been paid. CAs computation of the amount to
be refunded to respondents as their share was
thus erroneous.
6. Angeles vs Secretary of Justice (2005)
Facts:
A contract of antichresis was instituted
on eight parcels of land. Spouses Angeles
contributed P210,000, while Mercado was
tasked to admister the lands. Later on, Spouses
Angeles was demanding for the profits and
sued Mercado for estafa.
Issue: Is there a partnership?
Held: Yes. The Angeles spouses position that
there is no partnership because of the lack of a
public instrument indicating the same and a
lack of registration with the Securities and
Exchange Commission (SEC) holds no water.
First, the Angeles spouses contributed money
to the partnership and not immovable property.
Second, mere failure to register the contract of
partnership with the SEC does not invalidate a
contract that has the essential requisites of a
partnership. The purpose of registration of the
contract of partnership is to give notice to third
parties. Failure to register the contract of
partnership does not affect the liability of the
partnership and of the partners to third
persons. Neither does such failure to register
affect the partnerships juridical personality. A
partnership may exist even if the partners do
not use the words partner or partnership.
Indeed, the Angeles spouses admit to facts
that prove the existence of a partnership: a
contract showing a sosyo industrial or
industrial partnership, contribution of money
and industry to a common fund, and division of
profits between the Angeles spouses and
Mercado.
There is no estafa where money is
delivered by a partner to his co-partner on the
latters representation that the amount shall be
applied to the business of their partnership. In
case of misapplication or conversion of the
money received, the co-partners liability is civil
in nature.
7. Ortega vs CA (1995)
Facts:

Ortega, then a senior partner in the law firm

Bito, Misa, and Lozada withdrew from the said
firm. He filed with SEC a petition for dissolution
and liquidation of the partnership. The SEC en
banc ruled that withdrawal of Misa from the
firm had dissolved the partnership. Since it is
partnership at will, the law firm could be
dissolved by any partner at anytime, such as
by withdrawal therefrom, regardless of good
faith or bad faith, since no partner can be
forced to continue in the partnership against
his will.
Issue: Whether or not a partnership at will can
dissolved by any partner at any time
regardless of good or bad faith.
Held: Yes. The only effect of bad faith is that
the partner who caused the dissolution may be
liable for damages.
The birth and life of a partnership at will is
predicated on the mutual desire and consent of
the partners. The right to choose with whom a
person wishes to associate himself is the very
foundation and essence of that partnership. Its
continued existence is, in turn, dependent on
the constancy of that mutual resolve, along
with each partner's capability to give it, and
the absence of a cause for dissolution provided
by the law itself. Verily, any one of the partners
may, at his sole pleasure, dictate a dissolution
of the partnership at will. He must, however,
act in good faith, not that the attendance of
bad faith can prevent the dissolution of the
partnership but that it can result in a liability
for damages.
8. Liwanag vs CA (1997)
Facts:
Petitioner Carmen Liwanag (Liwanag)
and a certain Thelma Tabligan went to the
house of complainant Isidora Rosales (Rosales)
and asked her to join them in the business of
buying and selling cigarettes. Convinced of the
feasibility of the venture, Rosales readily
agreed. Under their agreement, Rosales would
give the money needed to buy the cigarettes
while Liwanag and Tabligan would act as her
agents, with a corresponding 40% commission
to her if the goods are sold; otherwise the
money would be returned to Rosales.
Consequently, Rosales gave several cash
advances to Liwanag and Tabligan amounting
to P633,650.00. During the first two months,
Liwanag and Tabligan made periodic visits to
Rosales to report on the progress of the

Partnership Case Digests (Deans Office Syllabus) - E

transactions. The visits, however, suddenly
stopped, and all efforts by Rosales to obtain
information regarding their business proved
futile. Alarmed by this development and
believing that the amounts she advanced were
being misappropriated, Rosales filed a case of
estafa against Liwanag.
Issue: Whether or not the prosecution for
estafa will prosper.
Held: Yes. Liwanag advances the theory that
the intention of the parties was to enter into a
contract of partnership, wherein Rosales would
contribute the funds while she would buy and
sell the cigarettes, and later divide the profits
between them.
The elements of estafa are as follows:
(1) that the accused defrauded another by
abuse of confidence or deceit; and (2) that
damage or prejudice capable of pecuniary
estimation is caused to the offended party or
third party, and it is essential that there be a
fiduciary relation between them either in the
form of a trust, commission or administration.
The language of the receipt could not
be any clearer. It indicates that the money
delivered to Liwanag was for a specific
purpose, that is, for the purchase of cigarettes,
and in the event the cigarettes cannot be sold,
the money must be returned to Rosales. Thus,
even assuming that a contract of partnership
was indeed entered into by and between the
parties, we have ruled that when money or
property have been received by a partner for a
specific purpose (such as that obtaining in the
instant case) and he later misappropriated it,
such partner is guilty of estafa.
9. Moran Jr vs CA (1984)
- See notes
10. Tai Tong Chuache
Commission (1988)

vs

Insurance

- See notes
11. Catalan vs Gatchalian (1959)
Facts:
Catalan and Gatchalian are partners.
They mortgaged two lots to Dr. Maravetogether
with the improvements thereon to secure a
credit from the latter. Thepartnership failed to
pay the obligation. The properties were sold to
Dr. Marave at apublic auction. Catalan

redeemed the property and he contends that

title should becancelled and a new one must
be issued in his name.
Issue: Whether or not Catalans redemption of
the partnerships property in his own capacity
made him the new absolute ownership of the
same.
Held: No. Under Article 1807 of the NCC every
partner becomes a trustee for hiscopartner
with regard to any benefits or profits derived
from his act as a partner.Consequently, when
Catalan redeemed the properties in question,
he became a trusteeand held the same in trust
for his copartner Gatchalian, subject to his
right to demandfrom the latter his contribution
to the amount of redemption.
12. Evangelista & Co vs Abad Santos
(1973)
- See notes
- Addendum: Industrial partners are not
allowed to engage in a different business,
unless consented to by the other partners. In
this case, the industrial partner was not only a
judge but also a teacher. The Court said that
being a judge cannot be characterized as a
business. But I think that statement is merely
an obiter, because the main ruling was that the
other partners was deemed to have consented
to what the industrial partners other
engagements as none of them questioned it
until after eight years.
13. Island Sales Inc vs United Pioneers
General Construction Company (1975)
Facts:
United Pioneers General Construction
Company is a general partnership formed by
Benjamin Daco, Daniel Guizona, Noel Sim,
Augusto Palisoc and Romulo Lumauig. In 1961,
United Pioneers purchased by installment a
motor vehicle from Island Sales, Inc. United
Pioneers defaulted in its payment hence it was
sued and the 5 partners were impleaded as codefendants.
Upon motion of Island Sales, Lumauig
was removed as a defendant. United Pioneers
lost the civil case and the trial court rendered
judgment ordering United Pioneers to pay the
outstanding balance plus interest and costs. It
further decreed that the remaining 4 codefendants shall pay Island Sales in case

Partnership Case Digests (Deans Office Syllabus) - E

United Pioneers property will not be enough to
satisfy its indebtedness to Island Sales.
Issue: What is the extent of the liability of the
partners considering that one partner was
removed as a co-defendant on motion of Island
Sales?
Held: Their liability is pro-rata pursuant to
Article 1816 of the Civil Code. But is should be
noted that since there were 5 partners when
the purchase was made in behalf of the
partnership, the liability of each partner should
be 1/5th (of the companys obligation) each.
The fact that the complaint against Lumauig
was dismissed, upon motion of the Island
Sales, does not unmake Lumauig as a general
partner in the company. In so moving to
dismiss the complaint, Island Sales merely
condoned Lumauigs individual liability to
them.
Note: The case didnt mention it, but the fact
that the Court applied Article 1816 could only
mean that the defendants partnership assets
were already exhausted.
14. Munasque vs CA (1985)
Facts:
Elmo Muasque, in behalf of Galan
and
Muasque
partnership
as
Contractor,entered into a written contract with
Tropical
Commercial
Co.,
through
its
branchmanager Ramon Pons, for remodelling of
Tropicals building in Cebu. Theconsideration
for the entire services is P25,000 to be paid:
30% upon signing of contract, and balance on
3 equal instalments of P6,000 every 15working
days.
First payment of check worth P7,000
was payable to Muasque, who indorsed it
toGalan for purposes of depositing the amount
and paying the materials already used.But
since
Galan
allegedly
misappropriated
P6,183.37
of
the
check
for
personal
use,Muasque refused to indorse the second
check worth P6,000. Galan then informed
Tropical of the misunderstanding between
him and Muasque and this prompted Tropical
to change the payee of the second check from
Muasque to Galan andAssociates (the duly
registered name of Galan and Muasque
partnership).Despite
the
misappropriation,
Muasque alone was able to finish the project.
Thetwo remaining checks were properly issued
to Muasque.

Muasque filed a complaint for

payment of sum of money plus damages
againstGalan, Tropical and Pons for the amount
covered by the first and second checks.Cebu
Southern Hardware Co and Blue Diamond Glass
Palace were allowed asintervenors having legal
interest claiming against Muasue and Galan
for materialsused.
Isses:
1.
2.
3.

W/N Muasque and Galan are partners?

W/N payment made by Tropical to
Galan was good payment?
W/N Galan should shoulder exclusively
the amounts payable to the intervenors
(granting he misappropriated the
amount from the two checks)?

Held:
yes-yes-no!
1.

YES. Tropical had every right to

presume
the
existence
of
the
partnership:
a. Contract states that agreement
was entered into by Galan and
Muasque
b. The first check issue in the name of
Muasque was indorsed to Galan
The relationship was made to appear
as a partnership.
2.

YES. Muasque and Galan were

partners when the debts to the
intervenors were incurred, hence, they
are also liable to third persons who
extended credit to their partnership.
There is a general presumption that
each individual partner is an authorized
agent for the firm and that he has
authority to bind the firm in carrying on
the partnership transactions.
The
presumption is sufficient to permit third
persons to hold the firm liable on
transactions entered into by one of the
members of the firm acting apparently
in its behalf and within the scope of his
authority

3.

NO. Article 1816 BUT

together with Article 1824.

construed

Art. 1816.
All partners, including
industrial ones, shall be liable pro rata
x x x for the contracts which may be
entered into the name and for the
account of the partnership, under its
signature and by a person authorized x
x x

Partnership Case Digests (Deans Office Syllabus) - E

Art. 1824. All partners are liable
solidarily with the partnership for
everything
chargeable
to
the
partnership under Articles 1822 and
1823
Art. 1822. Where, by any wrongful act
or omission of any partner acting in the
ordinary course of the business x x x or
with the authority of his co-partners,
loss or injury is caused to any person x
x x
Art. 1823. The partnership is bound to
make good the loss:
(1) Where one partner acting
within the scope of his
apparent authority receives
money or property of a
third person and misapplies
it, and
(2) Where the partnership in
the course of its business
receives money or property
of a third person x x x is
misapplied by any partner
while it is in the custody of
the partnership.
GR: In transactions entered into by the
partnership, the liability of the partners is
merely joint
Exception: In transactions involving
third persons falling under Articles
1822 and 1823, such third person may
hold any partner solidarily liable for the
whole obligation with the partnership.
Reason for exception: the law protects
him, who in good faith relied upon the
authority if a partner, whether real or
apparent.
However, as between Muasque and
Galan,
justice
also
dictates
reimbursement in favour of Muasque
as Galan was proven to be in bad faith
in his dealings with his partner.
14. Goquiolay vs Sycip (1963)
- See notes
15. J. Tiosejo Investment Corp vs Ang
(2010)
- Viewed in the light of the foregoing provision
of the JVA, petitioner cannot avoid liability by
claiming that it was not in any way privy to the
Contracts to Sell executed by PPGI and
respondents. As correctly argued by the latter,

moreover, a joint venture is considered in this

jurisdiction as a form of partnership and is,
accordingly,
governed
by
the
law
of
partnerships. Under Article 1824 of the Civil
Code of the Philippines, all partners are
solidarily liable with the partnership for
everything chargeable to the partnership,
including loss or injury caused to a third person
or penalties incurred due to any wrongful act or
omission of any partner acting in the ordinary
course of the business of the partnership or
with the authority of his co-partners. Whether
innocent or guilty, all the partners are solidarily
liable with the partnership itself.
16.
Primelink
Properties
and
Development Corporation vs LazatinMagat (2006)
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.

Partnership Case Digests (Deans Office Syllabus) - E

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.

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.
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.

17. Tocao vs CA (2000)

Issue: Whether or not theres a partnership.

Facts:

Held: Yes. 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.

Private respondent Nenita A. Anay met

petitioner William T. Belo, then the vicepresident 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

18. CIR vs Suter (1969)

- See notes