3. G.R. No. 101847 May 27, 1993 LOURDES NAVARRO AND MENARDO NAVARRO, petitioners, vs.

COURT
OF APPEALS, JUDGE BETHEL KATALBAS-MOSCARDON, Presiding Judge, Regional Trial Court of Bacolod
City, Branch 52, Sixth Judicial Region and Spouses OLIVIA V. YANSON AND RICARDO B.
YANSON,respondents.

FACTS:

Private respondent Olivia V. Yanson and Petitioner Lourdes Navarro were engaged in the business of Air
Freight Service Agency. Pursuant to the Agreement which they entered, they agreed to operate the said
Agency; It is the Private Respondent Olivia Yanson who supplies the necessary equipment and money
used in the operation of the agency. Her brother in the person of Atty. Rodolfo Villaflores was the
manager thereof while petitioner Lourdes Navarro was the Cashier; In compliance to her obligation as
stated in their agreement, private respondent brought into their business certain chattels or movables or
personal properties. However, those personal properties remain to be registered in her name; Among
the provisions stipulated in their agreement is the equal sharing of whatever proceeds realized from
their business; However, sometime on July 23, 1976, private respondent Olivia V. Yanson, in order for her
to recovery the above mentioned personal properties which she brought into their business, filed a
complaint against petitioner Lourdes Navarro for "Delivery of Personal Properties With Damages and
with an application for a writ of replevin. Private respondents' application for a writ of replevin was later
approved/granted by the trial court. For her defense, petitioner Navarro argue that she and private
respondent Yanson actually formed a verbal partnership which was engaged in the business of Air
Freight Service Agency. She contended that the decision sustaining the writ of replevin is void since the
properties belonging to the partnership do not actually belong to any of the parties until the final
disposition and winding up of the partnership.

ISSUE:

1. Whether or not there was a partnership that existed between the parties.

2. Whether the properties that were commonly used in the operation of Allied Air Freight belonged to
the alleged partnership business.
RULING:

Article 1767 of the New Civil Code defines the contract of partnership: Art. 1767. By the contract of
partnership two or more persons bind themselves to contribute money, property, or industry to a
common fund, with the intention of dividing the proceeds among themselves. A cursory examination of
the evidences presented no proof that a partnership, whether oral or written had been constituted. In
fact, those movables brought by the plaintiff for the use in the operation of the business remain
registered in her name. While there may have been co-ownership or co-possession of some items and/or
any sharing of proceeds by way of advances received by both plaintiff and the defendant, these are not
indicative and supportive of the existence of any partnership between them. Art. 1769 par. 2 provides:
Co-ownership or co-possession does not of itself establish a partnership, whether such co-owners or co-
possessors do or do not share any profits made by the use of the property” Besides, the alleged profit
was a difference found after valuating the assets and not arising from the real operation of the business.
In accounting procedures, strictly, this could not be profit but a net worth.

______

4. VILLAREAL V. RAMIREZ

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 latter’s 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 RTC’s 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: W/N petitioners are liable to respondents for the latter’s share in the partnership?

Ruling:

No. Respondents have no right to demand from petitioner the return of their equity share. 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 the partnership cannot be determined until all the partnership assets will have been liquidated and all
partnership creditors have been paid. CA’s computation of the amount to be refunded to respondents as
their share was thus erroneous.