Heirs of Jose Lim vs Juliet Villa

Lim
In

1980,

the heirs

of Jose

Lim

alleged

that

Jose

Lim

entered

into

a partnership

agreement with Jimmy Yu and Norberto Uy. The three contributed P50,000.00 each and used
the funds to purchase a truck to start their trucking business. A year later however, Jose Lim
died. The eldest son of Jose Lim, Elfledo Lim, took over the trucking business and under his
management, the trucking business prospered. Elfledo was able to but real properties in his
name. From one truck, he increased it to 9 trucks, all truckswere in his name however. He
also acquired other motor vehicles in his name.
In 1993, Norberto Uy was killed. In 1995, Elfledo Lim died of a heart attack. Elfledos wife,
Juliet Lim, took over the properties but she intimated to Jimmy and the heirs of Norberto that
she could not go on with the business. So the properties in the partnership were divided
among them.
Now

the

other heirs

of Jose

Lim,

represented

by

Elenito

Lim,

required

Juliet to

do an accounting of all income, profits, and properties from the estate of Elfledo Lim as they
claimed that they are co-owners thereof. Juliet refused hence they sued her.
The heirs of Jose Lim argued that Elfledo Lim acquired his properties from the partnership
that Jose Lim formed with Norberto and Jimmy. In court, Jimmy Yu testified that Jose Lim was
the partner and not Elfledo Lim. The heirs testified that Elfledo was merely the driver of Jose
Lim.
ISSUE: Who is the partner between Jose Lim and Elfledo Lim?
HELD: It

is

Elfledo

Lim

based

on

the

evidence

presented

regardless

of

Jimmy

Yus testimony in court that Jose Lim was the partner. If Jose Lim was the partner, then the
partnership would have been dissolved upon his death (in fact, though the SC did not say so,
I believe it should have been dissolved upon Norbertos death in 1993). A partnership is
dissolved upon the death of the partner.

Further, no evidence was presented as to

the articles of partnership or contract of partnership between Jose, Norberto and Jimmy.
Unfortunately, there is none in this case, because the alleged partnership was never
formally organized.

But at any rate, the Supreme Court noted that based on the functions performed by Elfledo,
he is the actual partner.
The following circumstances tend to prove that Elfledo was himself the partner of Jimmy and
Norberto:
1.) Cresencia testified that Jose gave Elfledo P50,000.00, as share in the partnership, on a
date that coincided with the payment of the initial capital in the partnership;
2.) Elfledo ran the affairs of the partnership, wielding absolute control, power and authority,
without any intervention or opposition whatsoever from any of petitioners herein;
3.) all of the properties, particularly the nine trucks of the partnership, were registered in the
name of Elfledo;
4.) Jimmy testified that Elfledo did not receive wages or salaries from the partnership,
indicating that what he actually received were shares of the profits of the business; and
5.) none of the heirs of Jose, the alleged partner, demanded periodic accounting from Elfledo
during his lifetime. As repeatedly stressed in the case of Heirs of Tan Eng Kee, a demand for
periodic accounting is evidence of a partnership.
Furthermore, petitioners failed to adduce any evidence to show that the real and personal
properties acquired and registered in the names of Elfledo and Juliet formed part of the
estate of Jose, having been derived from Joses alleged partnership with Jimmy and Norberto.
Elfledo was not just a hired help but one of the partners in the trucking business, active and
visible in the running of its affairs from day one until this ceased operations upon his
demise. The extent of his control, administration and management of the partnership and its
business, the fact that its properties were placed in his name, and that he was not paid
salary or other compensation by the partners, are indicative of the fact that Elfledo was a
partner and a controlling one at that. It is apparent that the other partners only contributed
in the initial capital but had no say thereafter on how the business was ran. Evidently it was
through Elfredos efforts and hard work that the partnership was able to acquire more trucks
and otherwise prosper. Even the appellant participated in the affairs of the partnership by
acting as the bookkeeper sans salary.